Payroll Administrator Sentenced for Tax Evasion Scheme for Diverting Employees’ Wage Payments into her Personal Bank Account and Not Reporting the Money to the IRS

A payroll administrator was sentenced to 42 months in prison, followed by three years of supervised release for her participation in a tax evasion scheme where she diverted employees’ wage payments into bank accounts under her control and failed to report the money as gross income to the Internal Revenue Service (IRS).

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Rodolfo Llanes, Chief, Miami Police Department (MPD), made the announcement.

Marilyn McDaniel, 67, of Garner, North Carolina, previously pled guilty to one count of attempting to evade or defeat tax, in violation of Title 26, United States Code, Section 7201.

According to court documents, McDaniel was the payroll administrator for a company and her sole responsibility was to report the employee hours and pay to the company’s payroll service provider. In early 2010, a former employee contacted the company’s accountant regarding a letter from the IRS indicating that the individual worked at the company in 2008 and that the individual failed to pay taxes on that income. The company’s payroll records revealed that in 2008 there were wage payments being made to the employee, but the wage payments were not deposited into the employee’s account.  Instead, the wages were deposited into McDaniel’s personal bank account.

In addition, the company’s payroll records also showed that McDaniel had submitted false wage reports on behalf of sixteen other former employees and that approximately $1.7 million in wage payments in the names of those former employees were diverted from the company’s bank accounts into accounts controlled by McDaniel and her daughter. The company’s employees did not give McDaniel permission to have checks issued in their names or have those checks deposited into her personal bank account.

McDaniel did not report or pay taxes on the stolen money that was diverted from the company into her and her daughter’s account, as she failed to file an individual tax return with the IRS for calendar year 2009. In total, McDaniel’s total tax due and owing is $547,792.14.

Mr. Ferrer commended the investigative efforts of IRS-CI, Miami Police Department and Miami-Dade State Attorney’s Office.  This case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.