John Degan, Tax Evasion, New Jersey 2024

Gloucester City, New Jersey – In a shocking turn of events, John Degan, 69, of Philadelphia, Pennsylvania, was sentenced to 30 months in prison for failing to pay over $600,629 in payroll taxes to the IRS, failing to file personal income tax returns, and fraudulently obtaining a Paycheck Protection Program (PPP) loan.

The sentencing took place in Camden federal court on [no specific date mentioned] before U.S. District Judge Robert B. Kugler. Degan, the owner and operator of Companion Services Group Inc., a building maintenance and restoration service company in Gloucester City, had previously pleaded guilty to one count of failing to collect, account for, and pay over payroll taxes, one count of failure to file income tax returns with the IRS, and one count of bank fraud.

According to documents filed in this case and statements made in court, Degan admitted to willfully failing to file payroll tax returns and failing to pay over $600,629 in withheld employment taxes on behalf of his employees for tax years 2016 through 2020. He also attempted to conceal over $4.4 million in wages that he paid to himself and his employees by not filing and submitting Forms W-2 or Form W-3 to the Social Security Administration (SSA).

Degan’s fraudulent activities did not stop there. He willfully failed to file his federal income tax returns for tax years 2016 through 2020, and has not filed a tax return since 2003. He also failed to file the corporate tax returns for Companion, a business that generated more than $1.4 million in gross receipts yearly.

In addition to his tax evasion, Degan submitted a fraudulent application to a lender to obtain a PPP loan. In April 2020, Degan submitted a PPP application for Companion in which he falsely represented to the lender that Companion had employees and payroll expenses. Based on Degan’s misrepresentations, the lender approved the PPP loan and disbursed $193,407 in federal COVID-19 emergency relief funds.

In addition to the prison term, Judge Kugler sentenced Degan to three years of supervised release. Restitution will be determined at a later date. U.S. Attorney Philip R. Sellinger credited special agents of the IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark, with the investigation leading to today’s sentencing.

The government is represented by Jason M. Richardson, Attorney in Charge of the U.S. Attorney’s Office in Camden. Degan’s crimes have left a trail of financial devastation in their wake, and it is only fitting that he faces the consequences of his actions.

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