Larry Thornton, Employment Tax Evasion, Tennessee 2023
Grimy Times Exclusive:
A notorious Germantown, Tennessee, resident and business owner, Larry Thornton, 67, has been sentenced to one year in prison and ordered to pay more than $10 million in restitution for failing to pay over employment taxes to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo and U.S. Attorney Edward L. Stanton III of the Western District of Tennessee.
Thornton, the majority owner, president and chief executive officer (CEO) of Software Earnings, Inc. (SEI), a Memphis company that produced and installed check processing, and First Touch Payment Solutions, LLC (First Touch), a Memphis company that provided merchant services for credit card processing, had ultimate and final decision-making authority regarding SEI’s and First Touch’s business activities and had authority to exercise significant control over SEI’s financial affairs.
Beginning in the second quarter of 2007, Thornton caused SEI to stop paying over the taxes required to be withheld from SEI’s employees’ paychecks and caused SEI to stop timely filing Employer’s Quarterly Federal Tax Returns, Forms 941, with the IRS. Beginning in the first quarter of 2010, Thornton caused First Touch to stop paying over the taxes required to be withheld from First Touch’s employees’ paychecks and caused First Touch to fail to timely file Forms 941 with the IRS.
Between 2007 and 2011, Thornton collected more than $6.8 million in employment taxes from SEI and First Touch employees’ paychecks, but failed to pay those collected taxes over to the IRS. Thornton also failed to pay his companies’ matching share of FICA taxes during those years.
During the same years in which Thornton failed to comply with his employment tax obligations, Thornton spent more than $6.2 million from the business bank accounts on personal expenses, including house and condominium payments; vehicle, yacht and motorcycle loan payments; personal travel; and start-up funding for his wife’s beauty boutique.
According to court documents, Thornton also failed to file personal and corporate income tax returns. As part of the guilty plea, Thornton admitted that his illegal conduct caused a tax loss of more than $8.9 million to the IRS.
“Larry Thornton’s efforts to conceal from IRS millions of dollars generated by his businesses afforded him a plush lifestyle for several years,” said U.S. Attorney Stanton. “But his illegal and illicit acts also have earned him a stint in federal prison and a multimillion-dollar restitution fee. We will continue to work with our law enforcement partners to pursue and bring to justice anyone who violates the nation’s tax laws.”
Mandatory Facts:
- Defendant: Larry Thornton
- Criminal Charges: Failing to Pay Over $8 Million in Employment Taxes
- City and State: Germantown, Tennessee
- Date: Today
- Sentence: One Year in Prison and More Than $10 Million in Restitution
- Dollar Amounts: $8.9 Million in Tax Loss to the IRS, $6.2 Million in Personal Expenses, $6.8 Million in Employment Taxes Collected but Not Paid Over
Key Facts
- State: Tennessee
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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