United States v. Maynard.
No. 19-1304. D.Colo. Judge Briscoe. Tax Evasion—US Sentencing Guidelines—Sufficiency of Evidence—Mandatory Victims Restitution Act Calculations—Plain Error.
December 28, 2020
Defendant was a former chief executive officer of two related telecommunications companies. At defendant’s direction, both companies deducted payroll taxes from employee paychecks but failed to pay them to the Internal Revenue Service (IRS). Defendant and the chief financial officer, an Australian citizen, moved money from the corporate bank account to defendant’s personal bank account to shield it from IRS levies. They also thwarted IRS collection efforts by failing to provide a full list of customers. Defendant also stopped forwarding health insurance premiums to the insurers, despite collecting the premium payments from employee paychecks. Further, defendant diverted employees’ 401(k) contributions, and the company failed to make promised matching contributions to the employees’ accounts.
Defendant was convicted of failing to pay corporate payroll taxes to the IRS and impeding the government’s investigation into the unpaid taxes (counts 1 and 2), conspiracy to steal or embezzle employee benefit plan and health care contributions that were made by employees (count 3), theft or embezzlement of employee benefit plan contributions (counts 4 through 13), and theft or embezzlement of employee health care contributions (counts 14 through 26). The district court sentenced him to 78 months’ imprisonment. It also ordered him to pay restitution of $4,970,694.91 to the IRS; and $111,974.04 on the 401(k) counts, and $185,921.91 on the health insurance-related counts, to the employees.
On appeal, defendant argued that the district court erred in calculating his offense level for counts 1 and 2 when it determined that the loss amount under the sentencing guidelines was the total amount of taxes owed by the two companies. Here, the district court properly found that defendant’s litany of conduct was similar to tax evasion or willful failure to pay taxes. And though the payroll taxes were the legal obligation of the companies, defendant exercised complete control over both companies and took actions to prevent the IRS from levying corporate funds to recover the unpaid payroll taxes. Therefore, the court did not err.
Defendant also argued that his convictions on counts 14 through 26 were not supported by sufficient evidence. However, the evidence clearly established that defendant effectively stole withheld employee premium payments for healthcare. Defendant did not establish any error, let alone one that was plain.
Defendant further argued that the district court plainly erred in calculating the restitution award for counts 4 through 13. The Mandatory Victims Restitution Act, 18 USC § 3663A, limits restitution to the actual loss caused by the defendant’s offense of conviction. Here, the district court properly included both the amounts withheld from paychecks and the amounts that the employees expected to receive from employer matching funds, because the employees were enticed to participate in the 401(k) program by the promise of the employer match.
Lastly, defendant contended that the district court plainly erred in calculating the restitution award for counts 14 through 26. However, the restitution amount properly included the amount of premium withholdings deducted from employee paychecks and the total amount of unpaid claims from the insurers.
The convictions and sentence were affirmed.