Richard J. Morgan, 54, of Shavertown, Pennsylvania, is headed to federal prison for 38 months after admitting to stealing nearly $450,000 from clients and obstructing an IRS investigation. The owner of Wilkes-Barre Bookkeeping LLC, Morgan betrayed the trust of local businesses and a defunct nonprofit, funneling payroll taxes and asset sale proceeds into his own pockets while feeding victims lies to cover his tracks.
Morgan was sentenced by U.S. District Judge James M. Munley, who handed down the 38-month prison term followed by five years of supervised release. The judge also ordered Morgan to pay $494,618.85 in restitution—$376,224.85 to defrauded clients and $68,172 siphoned from a nonprofit’s wind-down proceeds. On top of that, Morgan owes the IRS approximately $50,222 in unpaid taxes on the stolen funds.
Between March 2010 and October 2016, Morgan failed to file IRS Form 941 for three clients and never remitted their employment tax liabilities. Instead, he pocketed the money, all while falsely assuring clients their obligations were being met. Payroll taxes, meant for employee withholdings, were rerouted to fund Morgan’s personal expenses—luxuries bought on the backs of small businesses relying on his honesty.
The fraud deepened when Morgan served as Treasurer for a nonprofit that shuttered in February 2010. Tasked with settling debts and distributing remaining assets, he paid legitimate bills but kept $68,172 in residual sale proceeds. That money, intended for rightful stakeholders, vanished into Morgan’s private accounts.
When the IRS launched a criminal investigation, Morgan didn’t come clean—he doubled down. He invented fake IRS contacts, claiming to be cooperating with officials who didn’t exist. He forged bank statements and falsified accounting records in a desperate bid to mislead federal agents. His attempts to stall and deceive only piled on charges for obstructing the administration of tax laws.
The Internal Revenue Service, Criminal Investigation Division, led the probe. Assistant U.S. Attorney Phillip J. Caraballo prosecuted the case. In sentencing, Judge Munley condemned Morgan’s prolonged deceit, noting he continued to steal from a client even after learning of the federal probe. ‘This wasn’t mismanagement,’ the judge said. ‘This was calculated theft.’
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Key Facts
- State: Pennsylvania
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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