Businessman didn’t pay employees’ Social Security and dodged $2.5M in taxes, feds say

0


A Virginia businessman told an IRS agent in 2018 he couldn’t afford to make payments on the more than $1 million he owed in unpaid taxes, federal prosecutors said in court documents.

The next day he dropped over $1,100 on tickets to a Washington Nationals baseball game, prosecutors say, just one example of the lavish lifestyle he lived.

Now 52-year-old Richard Yanek is facing up to 5 years in prison on charges of tax evasion. Yanek, who owns a credit card processing business in Virginia Beach, pleaded guilty to the scheme on Thursday in the Eastern District of Virginia.

Authorities say he owes $2.5 million in taxes, both personal and business.

“The government’s lengthy and exhaustive investigation into Mr. Yanek’s tax history resulted in a plea to a single count of tax evasion,” Yanek’s defense attorney told McClatchy News on Friday. “Consistent with his willingness to resolve this matter, Mr. Yanek has already been working for months to begin the process of meeting all of his tax obligations and will continue to do so.”

Yanek is accused of failing to pay his personal income taxes as well as business taxes for a number of years, starting in 2010, as well as using his company’s bank accounts to pay off “huge sums” of personal debt, prosecutors said.

According to a statement accompanying his plea agreement, Yanek has owned a credit card processing business known as Cardservice of Virginia Inc. or Merchant Central Inc. since 1995.

But from 2013 to 2018, prosecutors said Yanek failed to pay over $1 million in taxes on that business.

His 18 employees received W2s during that time, according to court filings, but Yanek didn’t “consistently” pay the IRS the withholding amounts shown on the forms.

“His employees, believing that the tax forms were correct, filed their own tax returns with the belief that the funds withheld from their wages by their employer each year were being placed in their Social Security accounts for them to access in retirement,” prosecutors said.

Yanek is also accused of failing to file individual income taxes since 2010 despite having the returns prepared by his accountant for multiple years.

During that time, prosecutors said he earned and spent “millions of dollars on the mortgage for his oceanfront home, personal credit cards, private school tuition, and golf and yacht club dues.”

Yanek also used one of the unfiled tax returns prepared by his accountant to get a lower mortgage payment by changing a “7” to a “1” in his total income, making it appear as though he earned $133,435 instead of $733,435, the government said.

He’s also accused of using his business accounts to pay more than $231,000 on his mortgage as well as $577,000 on a Citibank credit card and nearly $5 million on an American Express.

“Certain charges on these credit cards reflect purchases of luxury retail items, travel, international resorts, plastic surgery, and high-end dining totaling thousands of dollars per night,” the government said.

From 2015 to 2019, prosecutors said Yanek spent an additional $479,147 on private school tuition and $153,191 on golf and yacht club dues.

In March 2018, one day after telling an IRS agent he couldn’t make payments on the employment taxes he owed, Yanek is accused of spending $1,178.50 on Washington Nationals baseball tickets.

Throughout the alleged fraud, prosecutors said Yanek lied to IRS agents about his ability to make payments, how many bank accounts he used and why he hadn’t filed any tax returns for nearly a decade. He now owes the government $810,549 in personal taxes and $1.7 million in business taxes.

Yanek was charged by criminal information on May 6, court documents show. He waived his right to an indictment and pleaded guilty to one count of evading income tax payments on Thursday and is scheduled to be sentenced Sept. 27.

Scammers racked up $143 million in bogus medical claims by exploiting COVID, feds say

Widowed Marine raising son was really scammer targeting women on dating apps, feds say

Wichita tax preparer who defrauded IRS of $100,000 sentenced to 18 months in prison



Source link

Leave A Reply

Your email address will not be published.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More