Two Corporate Execs Sentenced To Federal Prison In $630,000 Tax Evasion Scheme
CHARLESTON, W.Va. – U.S. Attorney Booth Goodwin announced today that two top senior executives of an employment staffing agency that operated in West Virginia were sentenced to prison for failing to pay more than $630,000 in federal employment taxes. Daniel Hovis, owner and president of Career Search One, Inc., was sentenced to two years in prison. Hovis, 60, of Whittier, NC, previously pleaded guilty in May for failing to pay trust fund taxes to the Internal Revenue Service (IRS). The corporation’s vice president and director of counseling, Janice Hensley, 62, of Charleston, was sentenced today to one year and eight months in prison. Hensley also previously pleaded guilty in May to federal tax evasion.
The sentences were handed down by United States District Judge Thomas E. Johnston in Charleston. Hovis and Hensley together failed to pay more than $600,000 in federal employment taxes that were owed to the IRS.
From 2004 through the first quarter of 2010, Hovis and Hensley withheld trust fund taxes from many employees’ paychecks. The trust fund taxes were monies that were owed to the IRS. Hovis and Hensley each failed to report or pay over trust fund taxes that they had previously withheld from employees’ wages. Trust fund taxes are withheld federal income and Federal Insurance Contribution Act (“FICA”) taxes, which also include Social Security and Medicare taxes. Career Search One, Inc. only partially paid these taxes.
Career Search One, Inc. specialized in providing employees to client businesses for a fee. The corporation’s primary bookkeeping offices were based in Charleston and Wheeling, West Virginia. Hovis and Hensley both worked out of the Charleston location.
From 2004 through the first quarter of 2010, Hovis and Hensley failed to report and pay over approximately $630,158.94 in trust fund taxes to the IRS on behalf of Career Search One, Inc.’s employees. Instead, Hovis and Hensley used the monies for personal expenses. Both executives knew that the corporate funds should have been used for the payment of trust fund taxes.
At sentencing, the Court ordered the defendants to pay restitution in the amount of $630,158.94.
The Internal Revenue Service’s Criminal Investigative Division conducted the investigation. Assistant United States Attorney Meredith George Thomas handled the prosecutions.