Washington County Businessman Admits Defrauding the IRS and Making a False Declaration in a Bankruptcy Proceeding
PITTSBURGH –A resident of Washington County, Pennsylvania pleaded guilty in federal court to charges of conspiracy to defraud the Internal Revenue Service and of false bankruptcy declaration, United States Attorney Scott W. Brady announced today.
George Retos, Jr. 70, of Washington, Pa., pleaded guilty before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that Retos agreed with another individual to defraud the Internal Revenue Service (IRS) by failing to pay over to the IRS payroll and employer taxes of Prime Plastics, Inc. and Plastic Power, Inc., two companies controlled by Retos. Specifically, to avoid ongoing collection efforts by the IRS related to unpaid taxes of Prime Plastics, Inc., Retos and his co-conspirator arranged for employees of Prime Plastics, Inc. to be transferred to Plastic Power, Inc., which, in turn, also failed to pay employer and payroll taxes to the IRS. The unpaid employer and payroll taxes totaled more than $250,000.
At Retos’ direction, Prime Plastics, Inc. filed for bankruptcy and, in its court filings, stated that there had been no withdrawals from the entity outside the normal course of business during the preceding two years. In fact, Retos was responsible for numerous such expenditures, including thousands of dollars belonging to Prime Plastics, Inc. spent by Retos at casinos in Las Vegas, Nevada and elsewhere.
In addition, Retos accepted responsibility for a charge of wire fraud in connection with a scheme to fraudulently obtain unemployment compensation from the Commonwealth of Pennsylvania for employees of Prime Plastics, Inc. and, later, employees of Plastic Power, Inc. Retos reduced the salaries of numerous employees and instructed them to seek unemployment from the Commonwealth of Pennsylvania to make up the difference, knowing full well that the employees were ineligible for such unemployment compensation. During the execution of the scheme, Retos siphoned company funds for his personal benefit.
Judge Schwab scheduled sentencing for March 20, 2019 at 9:30 a.m. The law provides for a total sentence of 10 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Retos on bond.
Assistant United States Attorneys Mary McKeen Houghton and Eric G. Olshan are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation; the Department of Labor, Office of Inspector General; and the Internal Revenue Service, Criminal Investigation, conducted the investigation that led to the successful prosecution of Retos.