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Press Release

Business Owner Sentenced for $493,000 Employment Tax Scheme

For Immediate Release
U.S. Attorney's Office, Western District of Missouri

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., business owner was sentenced in federal court today for a scheme to defraud the government by failing to pay over to the Internal Revenue Service more than $260,000 that he collected from his employees in employment taxes. Along with more than $232,000 that he failed to pay as his employer portion of the taxes, the total loss to the government was more than $493,000.

 

Joseph Patrick Balano, 54, of Kansas City, Mo., was sentenced by U.S. District Judge Gary A. Fenner to two years and three months in federal prison without parole. The court also ordered Balano to pay $493,443 in restitution. Balano has been in federal custody since his pretrial release was revoked in June 2014 after he committed two crimes involving thefts.

 

Balano, who pleaded guilty on Aug. 3, 2015, was the owner of Global Employment Group, Inc., doing business as Staffing Connections (Global Employment) in Grandview, Mo., and Kansas City, Mo. Two earlier businesses – Labor Connections and Labor Connections II – were dissolved in 2006, ostensibly because of employment tax issues. In their place, Balano formed Global Employment in December 2006. Employees who had been working for Labor Connections and Labor Connections II began working for Global Employment. Business operations stayed in the same location.

 

Balano admitted that he withheld employment taxes from his employees, but instead of paying over those taxes to the government, Balano kept most of those taxes for his own personal use. Balano used the money to finance his own personal expenses and expenses for family members, including gambling, mortgage payments (residence and lake house) and car payments.

 

The total amount withheld from employees but not paid to the IRS from April 2008 to April 2009 was $260,770. In addition, Balano failed to pay the employer portion of the taxes to the IRS as well, in the amount of $232,672. The total amount of loss to the government was $493,443.

 

This case was prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by IRS-Criminal Investigation.

Updated February 4, 2016

Topic
Tax