Lansing Home Health Business Owner Sentenced To Prison For Obstructing The Irs By Evading Payment And Falsifying Quarterly Tax Returns Totalling Over $250,000.00
GRAND RAPIDS, MICHIGAN – U.S. Attorney Patrick Miles announced today that George Adatsi, age 49, of Lansing, Michigan, was sentenced to eighteen months imprisonment after pleading guilty to a felony tax offense of obstructing the IRS. U.S. Attorney Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service (IRS) Criminal Investigation Division.
At the sentencing hearing, U.S. States District Judge Janet T. Neff also imposed restitution of $204,406.00; a fine of $4,000.00; and one year of supervised release following imprisonment. Adatsi was the owner of two companies, Health Staffers, Inc. (HSI) and Health Staffers of Michigan, Inc. (HSMI) that employed nurses and home health aides who provided health care services in private homes and nursing homes. During the 2001 through 2003 tax years, Adatsi failed to pay over to the IRS the Social Security and Medicare (commonly referred to as “FICA”) taxes withheld from the employees of HSI. Adatsi admitted that he did not forward to the IRS $121,214 of FICA taxes withheld from his employees from 2001 through 2003 and that he later intentionally hid assets from the IRS to avoid payment of this amount.
Adatsi further admitted that from 2004 through 2008 he filed false Form 941 Quarterly Federal Tax Returns that under reported HSMI’s gross wages paid to its employees and, consequently, under reported both the income taxes and FICA taxes withheld from the HSMI employees. Adatsi acknowledged that the total of the underreported employment taxes was an additional $129,929.
“Adatsi grossly under reported the wages of his employees. He hid assets from the IRS and claimed he did not have the money to pay the taxes which he had already collected from his employees,” said Special Agent in Charge Erick Martinez. “The law is clear on the issue of employers’ responsibility to accurately report and forward withholding taxes and to deal honestly with the IRS.”
The investigation of this case was conducted by the IRS, and prosecuted by Assistant U.S. Attorney Ray Beckering.