Jury convicts Rocky River business executive of embezzlement, tax crimes
A jury convicted Rocky River business executive C. David Snyder on six charges related to embezzling $126,000 from an employee retirement fund and collecting nearly $860,000 from his employees but not paying the money to the IRS.
Snyder, 61, is scheduled to be sentenced Oct. 9. He was convicted on one count of embezzling from an employee pension fund and five counts of failure to pay over taxes. He was acquitted on two tax charges.
Snyder served as chairman, president and chief executive officer of Attevo, Inc., a technology consulting company headquartered in Cleveland. He also served as chairman and primary shareholder at Ruralogic, Inc., headquartered in Bryan, Ohio.
Attevo employees prepared financial records and schedules, quarterly and annual returns and reports for Attevo, at Snyder’s direction. Snyder ranked Attevo’s payables in order of importance, according to court documents.
Snyder, on behalf of Attevo, and the IRS in 2011 agreed to a monthly payment plan of $48,350 per month to repay the company’s outstanding payroll tax liabilities. Attevo made 10 payments totaling $483,500 then made no further payments, according to court documents.
Snyder withheld payroll tax from employees but failed to pay it to the IRS. Snyder failed to pay over approximately $328,355 of employee’s portion of payroll taxes in 2010 and approximately $530,778 in 2012, according to court documents.
Snyder created a 401(k) and profit-sharing plan for Attevo employees in 2009. Ruralogic was added to the plan in 2010. The plan was funded through employee payroll deferrals. Between 2010 and 2012, Snyder failed to pay into the plan approximately $126,000 in contributions and loan repayments withheld from Attevo and Ruralogic employee wages, according to court documents.
During the time of his criminal conduct, instead of paying Attevo’s employment taxes, Snyder paid $20,000 per month for the rental of a personal residence in Lakewood and his vacation home in Chautauqua, New York, leases on four vehicles and other personal expenses, according to trial testimony and court documents.
He also used Attevo’s American Express to pay personal expenses, including women’s clothing at Ann Taylor, Nieman-Marcus and other stores, beauty supplies at Oro Gold in Las Vegas, travel to resorts in Florida and for pool/spa renovations, according to trial testimony and court documents.
Snyder earned income from Attevo totaling approximately $1.6 million between 2009 and 2012, according to the court documents and trial testimony.
U.S. Attorney Justin E. Herdman said: “A jury found this defendant embezzled money from his employees. He also took taxes out of their paychecks, but instead of paying the taxes of the IRS, he used the stolen money to pay for his vacation home, pool renovation and otherwise fund his own lavish lifestyle.”
“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service,” said IRS Special Agent in Charge Ryan Korner. “The failure to pay over withheld taxes results in the loss of tax revenue to the United States government and the loss of future Social Security or Medicare benefits for employees.”
“Charles Snyder embezzled retirement savings from his employees’ 401(k) accounts, and used the money for his personal benefit. We will continue to work with our law enforcement and other partners to protect retirement assets covered by the Employee Retirement Income Security Act," said James Vanderberg, Special Agent-in-Charge, Chicago Region, U. S. Department of Labor Office of Inspector General.
This case was investigated by the Internal Revenue Service – Criminal Investigations and the U.S. Department of Labor – Office of Inspector General. It is being prosecuted by Assistant U.S. Attorneys Michael L. Collyer and Megan R. Miller.