Lake County man Michael Roberts was the executive director of home care business Progressive Alternatives, which provided services to individuals with disabilities in Ashtabula and Lake counties. Roberts co-owned the business with his spouse, Larry Gildersleeve, and resided in Mentor, Ohio.
Deposit and reporting of employer taxes is a required aspect of business ownership in the United States. Employee wage withholdings fund important social programs, including Medicare, federal unemployment and Social Security. Over time, the payments qualify workers for benefits when they retire or become unemployed.
Because of the ease of employment tax fraud, business owners can sometimes cross the line into theft of wage withholdings, either for personal use, or to soften the bottom line of a failing business.
Gildersleeve purchased Progressive Alternatives in 2011. By 2014, Roberts assumed responsibility for operating the business and managing payroll.. While checks and W-2 forms issued to employees reflected wage withholding, Roberts did not submit those funds to the IRS, nor did he file required W-2 forms with the agency. According to the IRS, this activity occurred between 2017 and 2019.
By 2017, a retiring employee was alerted by the Social Security Administration that the company had not paid over the required payroll taxes. When Roberts became aware that withheld taxes had not been submitted to the IRS, he apparently chose not to remit the payments. While the full circumstances are unknown, early involvement with an experienced criminal tax attorney may have altered the trajectory of the case.
Once charged, Roberts took the matter to trial and was found guilty following a two-day trial on two counts of failing to account for and turn over wage withholdings to the IRS. Gildersleeve pleaded guilty to eight counts of the same offense. Both Roberts and Gildersleeve were sentenced to two years in prison. Roberts and Gildersleeve were ordered to pay $322,718.56 and $692,697.50, respectively.
Employer payroll taxes are a frequent source of criminal exposure for business owners and those responsible for collecting, reporting and paying wage withholding to the IRS. Unlike many financial missteps, payroll tax violations directly affect employees and federal benefit programs, making them a consistent enforcement priority. When businesses face financial pressure, diverting payroll taxes may appear to offer temporary relief, but it often accelerates criminal liability rather than preventing it.
Payroll tax issues rarely resolve themselves and typically worsen once the IRS becomes involved. As a business owner, you need to understand regulatory requirements to keep your company compliant. Early legal guidance can significantly affect how an investigation unfolds and whether criminal exposure can be limited.
The legal group at Robert J. Fedor, Esq., L.L.C., advise business owners facing employment tax scrutiny and related compliance challenges. Contact us at 440-250-9709 to speak with our knowledgeable tax attorneys. We serve clients across the U.S. and internationally from our offices in Cleveland and Chicago.
For a resource to better understand employment tax fraud, download our free ebook, "Employment Tax Fraud: What Every Business Owner Needs to Know."