Owner of Sports Memorabilia Stores Pleads Guilty to Failing to Pay Employment Taxes

          The owner of two Pierce County sports memorabilia and card gaming shops pleaded guilty today in U.S. District Court in Tacoma to failing to pay employment taxes on more than 50 employees, announced U.S. Attorney Annette L. Hayes.  DONALD A. KNUTSEN, 54, owned Northwest Sportscards, which had locations in Tacoma and University Place, Washington.  In his plea agreement, KNUTSEN admits that between 2008 and 2016 he withheld a total of $234,769 in income, Social Security, and Medicare taxes from the paychecks of at least 51 different employees, but failed to accurately report and pay the tax withholdings and an additional $122,350 in employer-owed taxes to the Internal Revenue Service.  KNUTSEN agreed to pay the taxes and any interest imposed by the IRS.  KNUTSEN faces up to five years in prison when sentenced by U.S. District Judge Robert J. Bryan on July 20, 2018.

          According to records filed in the case, KNUTSEN operated the two sports cards and memorabilia stores for more than 27 years.  The investigation revealed that as early as 2002, KNUTSEN stopped paying employment taxes, including Social Security and Medicare taxes on his employees.  KNUTSEN withheld the money from the employee paychecks but never paid it to the IRS or filed the required forms accounting for the payments.  Instead, KNUTSEN used the money to acquire inventory and promote his business.  In addition, KNUTSEN failed to file any personal income tax returns after 2000.

          Because KNUTSEN was not filing tax forms or paying taxes to the IRS, the employees working at the shops failed to accrue individual Social Security benefits.

          The case is being investigated by the Internal Revenue Service Criminal Investigation.  The case is being prosecuted by Assistant United States Attorney Steven Masada.