Dive Brief:
- A federal court in New York sentenced Patrick White, owner of R & L Construction, Inc., to prison for six months, plus one year of home confinement, for committing payroll tax fraud through his Yonkers-based construction business.
- From 2005 to 2011, White under-reported employees’ wages to the IRS. As a result, White’s company accumulated $3.8 million in unpaid, and unreported, payroll tax liabilities, according to prosecutors.
- Prosecutors said White diverted the funds to pay for homes, gambling and other personal expenses. He has also been ordered to sell property in order to pay back the IRS in full.
Dive Insight:
This case is the latest in a string of government crackdowns on contractor-related fraud.
At the time of White’s guilty plea, IRS Special Agent in Charge Shantelle P. Kitchen said, "When business owners deliberately fail to pay their fair share of payroll taxes, American taxpayers and businesses have to make up the difference. Additionally, they hurt their own workforce by potentially depriving their workers of future benefits to which they may be entitled."
Manhattan U.S. Attorney Preet Bharara added, "The victims in this scheme are the American taxpayers. But the ultimate loser will be the defendant Mr. White who gambled his liberty and his reputation on his tax fraud scheme not being found out."
