California Business Owner Faces Prison Time for $1.1 Million Tax Evasion

A high-ranking executive at a Campbell home health care company is facing serious consequences after pleading guilty to failing to pay over $1.1 million in employment taxes. Shane Brightpath Mike, 52, of Whittier, California, admitted to withholding taxes from his employees’ wages but instead using the funds for personal expenses.

According to court documents, Mike, the President and Chief Operating Officer of Excel Behavioral Services, Inc., withheld Social Security, Medicare, and income taxes from his employees’ wages and was responsible for paying those funds to the IRS. However, from the fourth quarter of 2014 through the third quarter of 2015, Mike failed to pay any of the withheld taxes to the IRS, with the total tax loss reaching $1,177,947.

Mike also filed false personal income tax returns for tax years 2014 and 2015, claiming credit for federal tax withholdings from wages he received from Excel, knowing they had not been paid to the IRS. The investigation by IRS Criminal Investigation revealed that Mike used the company’s funds to pay his personal expenses, leaving his employees without the tax payments they were entitled to.

The 52-year-old Whittier resident pleaded guilty to one count of Failure to Pay Over Employment Tax in violation of 26 U.S.C. § 7202. The maximum statutory penalty for the charge is 5 years in prison, a fine of $250,000, and restitution of at least $1,177,947.

Mike is currently out on bond and is scheduled to be sentenced on September 24, 2024, at 9:00 a.m. before Judge Beth Labson Freeman in the United States District Court in San Jose.

Assistant U.S. Attorney Sarah E. Griswold and Assistant Chief Matthew J. Kluge of the Justice Department’s Tax Division are prosecuting the case with the assistance of Lynette Dixon. The investigation was led by IRS Criminal Investigation, highlighting the importance of tax enforcement in preventing financial crimes.

As the case moves forward, it serves as a reminder of the consequences of tax evasion and the importance of holding individuals accountable for their actions. The Grimy Times will continue to provide updates on this developing story.”