Co-owner of Puyallup steel fabrication business pleads guilty to tax fraud | USAO-WDWA

Tacoma – The co-owner and financial manager of a Puyallup, Washington steel fabrication business pleaded guilty today in US District Court in Tacoma to nine counts of failing to pay over employment taxes, announced US Attorney Nick Brown. Donna Powell, 56, co-owns and operates Pinnacle Steel Fabricators, a company that makes steel parts. Donna Powell serves as the Secretary/Treasurer and Accounting Manager for the business. The Indictment alleges that, between 2010 and 2018, the company withheld approximately $1,167,891 in payroll taxes from employees’ paychecks and failed to pay any of those funds over to the Internal Revenue System (IRS). Powell is scheduled for sentencing on November 7, 2022.

According to records filed in the case, the company has 15-20 employees. Between 2010 and 2018, Powell withheld the employees’ share of employment taxes from their paychecks but failed to pay the withheld funds over to the government as required by law. Each quarter, Powell was required by law to file Forms 941 with the IRS disclosing the amount of payroll taxes withheld. Powell failed to file any Forms 941 for the period between 2010 and the first quarter of 2018. Instead of paying the taxes, Powell and her husband spent on personal interests such as travel ($32,000+), gambling at casinos ($41,000+), online gaming ($33,000+) and approximately $7,400 on spa and pool-related purchases.

“Like in the movies, illegal pool parties are all fun and games until they aren’t,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Ms. Powell had ill-intentions for her employees’ payroll withholdings and stole these amounts to pay for her own globe-trotting vacations, to fund her gambling, and to help pay for a pool. While paying federal income taxes along with paying into Medicare and Social Security is not as fun as going on vacation or putting in a pool, honest people understand the need for these payroll withholdings and pay their fair share. Today’s guilty plea marks Ms. Powell’s recognition of this critical life lesson.”

Failure to pay over the taxes ultimately hurts the employees whose earnings records are incomplete for Social Security, Medicare, and unemployment benefits. Employees can report concerns about federal withholding to the IRS and records can be corrected with documentation.

Willful failure to pay over employment taxes is punishable by up to five years in prison.

The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS:CI).

The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

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