Related Federal Cases
Defense Contractor Pleads Guilty To Theft Of Employee Payroll Taxes
A San Diego defense contractor, Alpha Machining Products & Development Inc. (“Alpha”), has pleaded guilty to failing to pay over to the United States payroll taxes that were withheld from the paychecks of Alpha employees. Ildiko Pinero, the owner and Chief Financial Officer of Alpha, pled guilty to the charges before United States Magistrate Judge Nita L. Stormes.
As an employer, Alpha was required to withhold employment taxes from the wages it paid to its workers, including federal income taxes and the employees’ share of Federal Insurance Contributions Act taxes (Social Security and Medicare taxes). These withheld employment taxes are commonly referred to as “trust fund taxes,” because an employer holds these funds in trust for its employees. After collecting these trust fund taxes, Alpha was required to pay them over to the Internal Revenue Service (“IRS”). In addition, Alpha was required to account for and pay over its own “employer’s share” of the Social Security and Medicare taxes resulting from employing these workers.
As Pinero admitted during her guilty plea, from January 2006 through September 2008, she withheld payroll taxes from the paychecks of Alpha’s employees. These taxes included over $110,000 in withholdings for federal income tax, plus the employees’ share of Medicare and Social Security taxes. Despite withholding these sums from the employees’ paychecks, Pinero refused to pay the taxes to the Internal Revenue Service. Similarly, Pinero also failed to pay over Alpha’s share of Social Security and Medicare taxes, in the amount of approximately $57,000.
United States Attorney Laura E. Duffy emphasized that, “When an employer withholds federal taxes from the paychecks of its hard-working employees, that money isn’t the employer’s to spend. Failing to pass along those withheld funds to the IRS amounts to stealing. This applies to defense contractors like Alpha, just like any other employer.”
Ildiko Pinero, the owner and Chief Financial Officer of Alpha Machining Products & Development Inc., is facing up to five years in prison, a fine of $250,000, and a term of supervised release of three years, as well as restitution.
The guilty plea is subject to final acceptance by United States District Judge Dana M. Sabraw. Sentencing in this case is currently scheduled for April 19, 2013, at 9:00 a.m., before Judge Sabraw.
The investigation was conducted by the IRS Criminal Investigation, the Defense Criminal Investigative Service, Immigration and Customs Enforcement, and Army Criminal Investigation Division.
Key Facts
- State: California
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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