Former Daycare Owner Sentenced for Failing to Pay $891,000 in Taxes
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former owner of two daycare businesses in Parkville, Mo., and Platte City, Mo., was sentenced in federal court today for failing to pay $891,572 in payroll and other taxes to the Internal Revenue Service.
Lynn Jordan, 47, of Parkville, Mo., was sentenced by U.S. District Judge Howard F. Sachs to two years in federal prison without parole. The court also ordered Jordan to pay $891,572 in restitution.
On Feb. 22, 2016, Jordan pleaded guilty to failing to pay over taxes to the IRS. Jordan operated daycare businesses at two locations. The first daycare business, Growing Places, Inc., in Parkville, opened in 1999 and closed in 2011, after which Jordan opened South Platte Early Educational Center, LLC, using the same business location, clients, assets, employees, etc. Jordan closed this business in 2012. The second daycare business, Growing Places Platte City, Inc., in Platte City, opened in 2006 and closed in 2009, after which Jordan opened GPPC, Inc., using the same business location, clients, assets and employees, but with a different employer identification number. She did this because she was having problems paying business expenses, owed a lot of money to the IRS and needed a fresh start. Jordan closed this business in 2010.
Jordan failed to pay over to the IRS approximately $891,572 in employment taxes withheld from her employees paychecks from 2009-2012. Instead, she used the money to pay for her own personal expenses and expenses of her family.
From 2009 to 2012, Jordan withheld employment taxes from her employees’ paychecks totaling $211,704. But Jordan failed to pay over the trust fund taxes she collected from her employees to the IRS. Jordan also failed to pay over the employer’s portion of Social Security tax and Medicare tax from 2009 to 2012, totaling $123,906. Additionally, Jordan failed to pay over employment taxes from 2004 to 2008 totaling $506,588. She also failed to pay over federal unemployment taxes from 2004 to 2012 totaling $22,294. In addition to the payroll taxes, Jordan failed to file tax returns for three years from 2009 to 2012. The balance due on those tax returns totals $27,079.
During this time, Jordan spent a total of $320,738 on a large number of personal expenses from the business bank accounts. Jordan withdrew more than $150,000 in cash and paid more than $50,000 on the mortgage of her personal residence from the business bank accounts. She made large ATM withdrawals and personal charges, including for lunches, salons, manicures, pedicures, travel, credit card and loan payments, checks and transfers to her personal bank accounts (in addition to her paychecks), retail stores, vehicle expenses, gas station purchases, clothing stores, medical and health expenses, restaurants, travel, expenses related to her children and credit score companies.
This case was prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by IRS-Criminal Investigation.