Florida Man Pleads Guilty To Southside Manufacturing Corp. Fraud
Patrick Crowe Sentenced To Ten (10) Years In Federal Prison For His Theft Of Employee Funds
DANVILLE, VIRGINIA – A Florida man, who was previously convicted of similar theft charges, pled guilty Monday, August 25, 2014, in the United States District Court for the Western District of Virginia in Danville to charges related to his theft of employee pension plan contributions and failing to pay the IRS the federal employment taxes withheld from employee paychecks.
Patrick Vincent Crowe, 62, most recently a resident of Florida, waived his right to be indicted and pled guilty to a two-count Information charging him with one count of theft or embezzlement from employee benefit plan and one count of failure to truthfully account for and pay withheld federal payroll taxes. As part of his plea agreement, Crowe was sentenced the same day to ten (10) years of federal incarceration.
“Mr. Crowe stole from his employees and ran a thriving local business into the ground,” United States Attorney Timothy J. Heaphy said today. “The United States Attorney’s Office will continue to pursue those like Mr. Crowe who fail to pay required federal taxes.”
According to a statement of facts entered into the record during the guilty plea hearing by Assistant United States Attorney Jennie L.M. Waering, Crowe was convicted in 2009 of two counts of theft and embezzlement from an employee benefit plan in Rhode Island and two counts of failing to pay over withheld employee taxes. As a result, he served 48 months in prison and, upon his release, was prohibited by the Employee Retirement Income Security Act of 1874, from serving any employee benefit plan as an administrator or representative in any capacity.
Prior to his release on February 28, 2012, Crowe filed articles of incorporation for The Loyola Fund, Inc., listing himself as Vice President. On February 29, 2012, the day after his release from federal incarceration, Crowe amended his articles of incorporation to list himself as President of The Loyola Fund, Inc., and almost immediately began to pursue the purchase of Southside Manufacturing Corporation in Danville, Virginia, for $2,922,780, a purchase which was completed on April 5, 2013.
Following the sale of Southside Manufacturing to Crowe, office bookkeepers continued to prepare 401(K) plan contribution checks, but Crowe would not release the funds. When confronted about the missing contributions, Crowe said that the checks fell out of his briefcase. In subsequent months, Crowe refused to sign similar checks. Others were returned with insufficient funds, despite the fact that Crowe was still paying himself $1,000 per week in salary.
In addition, upon the purchase of Southside manufacturing, Crowe ceased paying payroll taxes and often missed payments on the company’s employee medical plan. In December 2013, after Southside defaulted on their loans, creditors exercised their rights to take possession of Southside’s collateral, which included the premises and equipment. As a result, Southside Manufacturing closed its doors and more than 40 employees lost their jobs.
The federal employee tax withholding not paid by Crowe was $109,536, and the unpaid employer portion was $49,225.00. The pension plan theft loss totaled $8,765.79. The health plan theft loss was $6,421.86. The total restitution Crowe was ordered by the Court to pay was $173,949.01.
The investigation of the case was conducted by the United States Department of Labor, Office of Inspector General and the Employee Benefits Security Administration, the United States Internal Revenue Service, Criminal Investigations Division, and the Pittsylvania County Sheriff’s Office. Assistant United States Attorney Jennie L.M. Waering prosecuted the case for the United States.