Randy Less, Employment Tax Evasion, Iowa 2016

CEDAR RAPIDS, IA – In a shocking turn of events, two Iowa businessmen have been charged with federal employment tax violations. Randy Less, a resident of Hopkinton, Iowa, and Darrell Smith, a resident of Forest City, Iowa, are each facing multiple counts of willfully failing to collect, truthfully account for and pay over federal income, Social Security, and Medicare taxes that were withheld from the wages of the employees of Permeate Refining, Inc.

According to the indictment, Less was the majority owner, a general partner, and the general manager of Permeate Refining, Inc. in Hopkinton, Iowa. Less had the responsibility to collect, truthfully account for, and pay over to the Internal Revenue Service (IRS) federal employment, Social Security, and Medicare taxes withheld from the wages of his employees. From approximately the fourth quarter of 2009 and continuing through the fourth quarter of 2010, Less is alleged to have willfully failed to pay over to the IRS more than $116,000 in withheld taxes.

The indictment further alleges that a company called Algae Energae purchased an ownership interest in Permeate in September 2009. After that purchase, it is alleged that Smith, a corporate officer and manager of Algae Energae, also had the responsibility to collect, truthfully account for, and pay over to the IRS taxes withheld from the wages of Permeate’s employees. From approximately the first quarter of 2011 and continuing through the third quarter of 2012, both Less and Smith are alleged to have willfully failed to pay over to the IRS more than $307,000 in withheld taxes.

If convicted, the defendants face a statutory maximum sentence of 5 years in prison and a $250,000 fine for each count.

An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.

The case is being investigated by special agents of IRS Criminal Investigation, the FBI, the U.S. Postal Inspection Service, and the U.S. Environmental Protection Agency. Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division are prosecuting the case.

For more information, visit the court file at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 16-CR-2002-LRR. Follow us on Twitter @USAO_NDIA.

Mandatory Facts:

Defendant: Randy Less
Criminal Charges: Multiple counts of willfully failing to collect, truthfully account for and pay over federal income, Social Security, and Medicare taxes
City and State: Cedar Rapids, Iowa
Exact Date: January 21, 2016
Sentence/Outcome: Statutory maximum sentence of 5 years in prison and a $250,000 fine for each count
Dollar Amounts: $116,000 in withheld taxes from 2009-2010, $307,000 in withheld taxes from 2011-2012

Related Federal Cases