NORFOLK, Va. – In a shocking turn of events, Michael Popina, a 61-year-old Virginia Beach man, pleaded guilty today to failing to pay nearly $1 million in payroll taxes to the IRS.
According to the statement of facts filed with the plea agreement, Popina, the president and owner of Chesapeake Coatings & Decks, Inc., a painting and sandblasting company hired primarily by government contractors and marine businesses, had a duty to withhold from its employees’ paychecks certain federal taxes and pay the monies over to the IRS. However, during tax years 2010-2013, Popina failed to pay to the IRS approximately $130,000 in these withheld payroll taxes.
But that’s not all – investigators discovered that Popina utilized an additional scheme to avoid paying payroll taxes. He would spread his employees’ regular pay into two separate checks. The first payroll check was sent to Popina’s payroll company, taxes were withheld, and the income was reported to the IRS. However, the second payroll check was not sent to the payroll company, taxes were not withheld and the income was not reported to the IRS.
The court records indicate that Popina utilized this system because his business was poorly managed and that he used the tax savings to continue keeping the business in operation. Investigators concluded that Popina failed to account for approximately $4 million using this system and that he failed to pay to the IRS a total of approximately $950,000 in payroll taxes.
Popina pleaded guilty to failure to pay over payroll tax, a charge that carries a maximum penalty of 5 years in prison when sentenced on October 2. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
A total of $5 million in unpaid taxes is the net result of Popina’s tax evasion scheme, with $1 million of that being unpaid in 2010-2013. Popina’s business, Chesapeake Coatings & Decks, Inc., had a duty to withhold from its employees’ paychecks certain federal taxes and pay the monies over to the IRS.
Assistant U.S. Attorney Joseph L. Kosky is prosecuting the case, with U.S. Magistrate Judge Lawrence R. Leonard accepting the plea. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-68.
Key Facts
- State: Virginia
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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