Downstate Corporate Secretary Pleads Guilty to Willfully Failing to Pay Over $930,000 in Payroll Taxes Withheld from Employees
David C. Weiss, U.S. Attorney for the District of Delaware, announced that a Harrington, Delaware woman pleaded guilty today to intentionally failing to pay employment taxes on behalf of a local business. U.S. District Court Judge Leonard P. Stark accepted the plea.
According to court documents, Sara Collins, 49, served as the Corporate Secretary of a plumbing, heating, and air conditioning business for over twenty years. Collins was responsible for overseeing payroll disbursement and filing tax documents on behalf of the business. Each pay period, the business withheld taxes from its employees’ paychecks, including federal income taxes and Medicare and Social security taxes. Beginning in the first quarter of 2013 through the last quarter of 2019, Collins failed to file quarterly forms with the Internal Revenue Service (“IRS”) and paid fewer than $37,000 in payroll taxes for that entire six-year period. In total, Collins failed to pay over $930,000 owed to the IRS by the business.
Collins pleaded guilty to five counts of willful failure to pay over tax and faces a maximum penalty of five years in federal prison for each count when sentenced on November 17, 2021. Actual sentences for federal crimes are typically less than the maximum penalties. Judge Stark will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Weiss stated, “Ms. Collins abused her position of trust by diverting employee tax obligations to line her own pockets. In so doing, she put her employer and fellow employees at risk. My office is committed to working with IRS Criminal Investigation to prosecute those who evade legal responsibilities to their employees and the federal government by misdirecting paycheck withholdings for personal gain.”
“Ms. Collins was entrusted to file the company’s payroll tax returns and remit the relevant taxes and she purposely failed to do so,” said Joleen Simpson, Acting Special Agent in Charge of IRS-Criminal Investigation. “This is a serious offense that results in the loss of significant tax revenue to the United States government each year.”
This case is the result of an investigation conducted by the IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Ruth Mandelbaum.