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Rehab Owner Fails to Pay $1.69M in Taxes
Baltimore, MD – In a shocking case of tax evasion, Harshe Shende, 57, the owner of Progressive Rehab Services, LLC, was sentenced to 15 months in federal prison for willfully failing to pay over $1.69 million in federal employment and employer taxes.
Chief U.S. District Judge James K. Bredar handed down the sentence on July 23, 2021, and ordered Shende to pay restitution in the amount of $1,690,000 to the IRS. Shende’s failure to pay taxes resulted in the IRS pursuing collection activities against Progressive Rehab.
According to Shende’s guilty plea, he was the sole owner and resident agent of Progressive Rehab Services, LLC, which employed physical and occupational therapists who provided services to patients in nursing homes. Shende accrued large liabilities for Progressive Rehab by filing forms with the IRS that showed the amount of income tax withholding he collected from his employees, but failed to pay the employment taxes to the IRS.
Shende’s scheme involved causing his employees to perform the same work, but billing for their work using the name Progressive Health Group, Inc. He then paid their salaries using Progressive Health’s bank account, while withholding payroll taxes from their paychecks, including federal income taxes, Medicare, and Social Security taxes. However, Shende failed to pay the taxes withheld from Progressive Health’s employees’ wages to the IRS, nor did he pay the employer’s portion of the employment taxes.
As a result of Shende’s actions, he failed to pay to the IRS a total of $155,838.15 in employment taxes withheld in tax years 2014 and 2015, and failed to pay the IRS a total of $103,066.85, which was the employer’s share of employment taxes for tax years 2014 and 2015.
Acting United States Attorney Jonathan F. Lenzner commended the IRS-CI for its work in the investigation and thanked Assistant U.S. Attorney Joyce K. McDonald, who prosecuted the case. Shende’s sentence serves as a reminder of the consequences of tax evasion and the importance of paying one’s taxes.
Key Facts
- State: Maryland
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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