Recently, William Brent Stephens and his son, Zackary Sulpizi, entered guilty pleas on charges of tax evasion, failing to collect, account for and pay over payroll taxes, bankruptcy fraud, bank fraud, and providing false statements to the IRS. The charges arose from the management of Stephens Contracting, Inc., a landscaping and contracting business located in Elmer, New Jersey.
The Stephens-Sulpizi case is a study in intertwined business activity, lack of tax compliance, and the use of various schemes and types of fraud with which to pad one’s pockets. According to court documents, prosecutors alleged the following conduct between 2019 and 2022:
Sulpizi withheld but failed to pay over employee wage withholding to the IRS. While he paid cash wages of $446,573, he did not submit another $34,162 in payroll taxes on behalf of his employees.
Stephens paid $718,237 in cash wages to his employees while failing to pay approximately $54,946 in payroll taxes to the IRS.
As with the payroll taxes, both father and son significantly underreported their income. Stephens failed to report $1,165,268, while Sulpizi failed to report $389,540. The resulting unpaid taxes were $288,297 and $74,920, respectively.
Sulpizi fraudulently applied for a loan through the Paycheck Protection Program (PPP), submitting false statements regarding payroll expenses to obtain a loan in the amount of $16,935.
As part of a bankruptcy proceeding, Stephens concealed business assets and also admitted to lying to an IRS Special Agent during an IRS criminal tax investigation of his failure to pay income and payroll taxes.
You get the idea. Each of these men made good use of the tools of their trade. Unfortunately, those methods were illegal. Displaying a wide familiarity with questionable business practices, each engaged in a prolonged effort to extract financial benefit through tax crime. For a better understanding of the differences between tax evasion, tax fraud, and other tax crimes, read our guide to common tax law questions and answers.
Both men pleaded guilty, agreed to pay restitution, and face potential prison sentences. Stephens is scheduled to be sentenced in August, and Sulpizi in October 2026.
For individuals involved in payroll tax fraud, tax evasion, or pandemic-relief fraud, the consequences can be severe and may include criminal charges and significant penalties. Anyone facing questions about payroll tax compliance, tax fraud, or a criminal IRS investigation should seek experienced legal guidance as early as possible. Early intervention can significantly affect how a case proceeds.
If you have questions regarding tax fraud, payroll tax problems, or IRS investigations, contact Robert J. Fedor, L.L.C. at 440-250-9709. The firm advises clients on matters involving tax crime and related enforcement actions. With offices in Cleveland and Chicago, the firm serves clients throughout the U.S. and internationally.