Allegedly Misappropriated Taxes, for his own use, that he Withheld from his Employees
A federal grand jury in Detroit, Michigan, returned an indictment today charging a Farwell, Michigan, businessman with failing to pay payroll taxes to the Internal Revenue Service (IRS) and failing to file his own returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew Schneider for the Eastern District of Michigan.
According to the indictment, Dale Thrush was the owner and operator of 402 N. Mission St. LLC (Mission Street), a Mount Pleasant, Michigan, company that provided payroll tax services to employers, including withholding taxes and forwarding the funds due to the IRS. The indictment alleges that from 2014 through 2016, Thrush withheld payroll taxes from Mission Street employees’ paychecks, but only paid a portion of the funds due to the IRS. Instead, Thrush allegedly used nearly $400,000 from Mission Street’s payroll account, including the withheld taxes, to cover expenses for his other businesses and to fund remodeling and construction costs for his wife’s business. It is also alleged that from 2013 through 2016, Thrush did not file personal tax returns reporting the income he earned from his businesses.
If convicted, Thrush faces a maximum sentence of five years in prison for each of the ten counts of failing to pay over payroll taxes, and a maximum sentence of one year in prison for each of the four counts of failing to file his own return. Thrush also faces a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Schneider commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Mark McDonald of the Tax Division and Assistant U.S. Attorney Jules DePorre, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.