William P. Danielczyk Jr., Theft of Employee Payroll Taxes and Pension Plan Contributions, Virginia 2013

A former Virginia-based defense contractor has been sentenced to 18 months in prison for his role in the theft of employee payroll taxes and pension plan contributions. William P. Danielczyk Jr., 53, of Oakton, Virginia, was sentenced in Alexandria, Virginia federal court on May 31, 2013, for failing to collect and pay over $2.2 million in employee payroll taxes and theft of over $186,000 from an employee pension plan.

According to court documents, from March 2009 until December 2011, Danielczyk was the executive chairman of Innolog Holdings Corporation, which acquired Innovative Logistics Technology Inc. in March 2009. Innovative operated in the government services industry and provided technology-supported logistics services to the U.S. military and various defense organizations.

From mid-2009 through the end of 2011, Danielczyk was responsible for collecting, accounting for and paying appropriate payroll tax amounts to the IRS. Although payroll taxes were withheld from the wages of Innovative’s employees, Danielczyk failed to pay both the employee withholdings amounts and the employer’s matching portions to the IRS. The total tax loss during this time period was $2,232,781.

According to court documents, Innovative’s employees were allowed to contribute money from their bi-weekly paychecks to a qualified pension plan that was administered by an asset custodian. Danielczyk, however, was the person responsible for authorizing payments to the asset custodian, and he failed to send these payments over the course of three years. From 2009 through 2011, this conduct led to a total loss of $186,263.

Instead of paying Innovative’s employment taxes and pension plan contributions, Danielczyk made a variety of purchases from company accounts. Those purchases included $505,871 for the use of an executive suite in the FedEx Field football stadium in Landover, Maryland, along with $40,000 to sponsor the Virginia Gold Cup, a series of Steeple Chase horse races held in northern Virginia.

Danielczyk was sentenced to 18 months in prison, to be served consecutively to the 28 months in prison he is already serving for committing campaign finance violations during the 2008 presidential primary and a 2006 U.S. Senate campaign. He was also ordered to serve three years of supervised release after his prison sentence and to pay more than $1.6 million in restitution to the IRS.

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