Lanny C. McCandles, Employment Tax Evasion, Texas 2014

HOUSTON, Texas – Former Chief Financial Officer Lanny C. McCandles is headed to prison after pleading guilty to failing to pay employment taxes, announced U.S. Attorney Kenneth Magidson along with Lucy Cruz, special agent in charge of Internal Revenue Service-Criminal Investigation (IRS-CI).

On September 2, 2014, McCandles admitted to embezzling funds withheld from employee paychecks rather than paying them to the IRS as required. He also admitted to attaching fabricated and false IRS W-2 forms to his individual income tax returns as well as returns he prepared and filed on behalf of his girlfriend.

As Chief Financial Officer of Complete Care Medical Inc. (CCMI) in January 2007, McCandles was tasked with keeping CCMI’s books, handling its payroll, and preparing and filing its corporate tax returns. CCMI withheld appropriate federal income, Medicare, and Social Security taxes from the paychecks of its approximately 30 employees pursuant to federal law.

McCandles did not deposit the taxes with the IRS nor did he file CCMI’s quarterly tax returns. Instead, he embezzled the funds CCMI withheld from employee paychecks and used them to pay personal expenses. To carry out and conceal his scheme, McCandles prepared a bi-weekly spreadsheet listing employee payroll expenses for the head of CCMI who then transferred funds to McCandles to cover employee paychecks and withholding.

The charges are the result of an investigation by IRS-CI and the Treasury Inspector General for Tax Administration. Assistant U.S. Attorney Stephen L. Corso prosecuted the case.

U.S. District Judge Kenneth Hoyt, who accepted the guilty plea, handed McCandles an 18-month sentence to be immediately followed by three years of supervised release. He was also ordered to pay $262,791.28 in restitution.

McCandles was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

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