IRS Criminal Investigation

22/07/2024 | Press release | Archived content

Former CEO of startup software company pleads guilty to payroll tax fraud scheme

Date: July 22, 2024

Contact: [email protected]

A New Hampshire man pleaded guilty today to not paying more than $14 million in employment taxes and not filing personal tax returns.

According to court documents and statements made in court, Andrew Park of Bedford, was the co-founder and CEO of a startup technology company. Park was responsible for all financial matters related to the company, including for filing the company's quarterly employment tax returns and collecting and paying over Social Security, Medicare and income taxes withheld from the employees' wages to the IRS, as well as the Social Security and Medicare taxes the company owed.

He was also responsible for collecting and paying over state and local employment taxes to those respective governments. From the company's founding in 2014 through the third quarter of 2021, Park withheld these federal, state and local taxes from the employees' wages but did not pay them over as required by law. He also did not pay over the portion of the employment taxes that the company owed. Park did so even though a payroll service company that he hired to process the employees' payroll regularly notified him that the taxes were due and in more than one instance was notified by an employee that the amount paid to Social Security listed on her W-2 did not match what was reported by the Social Security Administration.

From 2013 through 2020, Park also did not file individual tax returns as required by law, despite the fact that he paid himself a salary of approximately $250,000 each year.

In total, Park caused a tax loss to the IRS exceeding $14 million, as well as additional losses to state and local taxing authorities.

He is scheduled to be sentenced on Nov. 14 and faces a maximum penalty of five years in prison for the charge of willful failure to account for and pay over payroll taxes, and one year in prison for the charge of willful failure to file a tax return. Park also faces additional penalties including supervised release and fines, as well as the payment of restitution to the IRS and other taxing entities. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department's Tax Division, and U.S. Attorney Jane E. Young for the District of New Hampshire made the announcement.

IRS Criminal Investigation (IRS CI) is investigating the case.

Assistant Chief Eric Powers of the Tax Division and Assistant U.S. Attorney Matthew Hunter for the District of New Hampshire are prosecuting the case.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.