Not so Fussy; that’s a wrap; at sea, in the air and on the road; and other highlights of recent tax cases.
Rochester, New York: Business owner Scott Reeves, of Victor, New York, has pleaded guilty to tax evasion.
Reeves owns Fussy Contracting Inc., a.k.a. Mr. Fussy, a roofing business that operated out of Rochester during tax years 2017 through 2022. After providing roofing services to residential and commercial customers, Fussy was paid primarily with checks that Reeves deposited to bank accounts and cashed at a local check casher.
For 2017 through 2022, Reeves failed to file his individual income tax returns, as well as the returns for the corporation, which resulted in no taxes being paid on the profits; he failed to report gross receipts totaling $5,398,008.27. After paying material expenses, labor expenses and check cashing fees, he kept the remaining $1,538,215, resulting in a tax loss of $248,394 to the IRS.
Sentencing is March 3. The charge carries a maximum of five years in prison and a $250,000 fine.
Medford, Oregon: Steven Shirley has been sentenced to two years in prison and five years of supervised release for illegally producing marijuana and filing false returns with the IRS.
Beginning in 2012, Shirley began purchasing properties in Cave Junction, Oregon, as president and minister of Earth Peoples Park, a religious nonprofit. Shirley leased the land to third parties and used profits from the lease to purchase additional properties. By 2019, Shirley, through Earth Peoples, owned or co-owned 21 properties in Josephine County, Oregon, and received at least $400,000 a year through leases.
In September 2019, investigators from the Josephine Marijuana Enforcement Team identified 16 of the properties as having large, unlicensed marijuana operations. Law enforcement later seized more than 15,000 marijuana plants and nine firearms and determined that a portion of Bureau of Land Management lands were used for these operations.
Investigators learned Shirley not only employed and directed staff to illegally grow and harvest marijuana, but he also sold and delivered the marijuana. In 2021, agents executed search warrants on 11 Earth Peoples properties and discovered Shirley continued to illegally manufacture and sell marijuana; agents also seized additional firearms.
IRS agents also reviewed the religious organization’s tax-exempt status and Shirley’s personal tax records from 2015 to 2018. They determined that Earth Peoples did not qualify as a religious organization and that Shirley used it as a for-profit land-management company. Agents also learned that Shirley intentionally underreported lease income by more than $1 million, resulting in more than $290,000 in unpaid taxes.
Shirley, who pleaded guilty in March, was also ordered to pay $290,291 in restitution to the IRS and $12,896 in restitution to the Bureau of Land Management.
Cedar Hills, Utah: Former resident and film company owner Paul Kenneth Cromar has been sentenced to six years in prison for tax evasion and for forcibly retaking property that had been seized to pay outstanding tax debt.
He owned a home in Cedar Hills and operated Blue Moon Productions, a freelance film and media production company. From 1999 through 2005, he filed no federal income tax returns and paid no tax. In 2005, the IRS audited and assessed him $703,266.96 in taxes, interest and penalties.
For more than a decade after, Cromar made no payments towards his debt and instead took steps to obstruct the IRS collection of his taxes. In 2019, a judge ordered that Cromar’s home be sold at auction to satisfy his tax obligations, which by then had ballooned to over $1 million.
Cromar filed false documents on the property’s title and with the IRS, including a false promissory note, and tried to intimidate potential buyers of the home and harassed IRS personnel by filing frivolous personal lawsuits. Shortly before the sale closed, Cromar broke into the home and attempted to reclaim it. With the help of others, he occupied the home unlawfully for five months, fortifying it with firearms, sandbags and wooden boards.
Cromar, who was
Stuart, Florida: Businessman Matthew Brown has pleaded guilty to not paying employment taxes withheld from his employees’ pay, and to filing a false return.
Brown owned and operated area businesses including Elite Payroll, which provided services including withholding Social Security, Medicare and federal income taxes from the wages of clients’ employees and then paying over those funds to the IRS.
Between 2014 and 2022, Brown did not pay more than $20 million in taxes withheld from clients of Elite Payroll and from other businesses he controlled. He charged his clients the full amount of their tax liabilities, filed federal returns substantially underreporting those liabilities and pocketed the difference, buying real estate, including his multimillion-dollar home, and such luxury items as a yacht, an aircraft and high-end cars.
The federal tax loss exceeded $22 million. Brown faces up to five years in prison, a period of supervised release, restitution and monetary penalties.
Verona, Virginia: Former business owner Richard E. Moore has pleaded guilty to not accounting for and paying employment taxes to the IRS.
Moore was executive vice president and part owner of Nexus Services, which offered bond securitization and other services to immigrants detained by U.S. Immigration and Customs Enforcement. Moore was responsible for withholding taxes from Nexus employees’ wages and paying the money over to the IRS and for filing quarterly employment tax returns.
For many quarters between 2015 and 2024, he withheld the funds but did not pay them over to the IRS and did not file the returns, causing a federal tax loss of some $3.1 million.
He faces a maximum of five years in prison for each count of failing to pay employment taxes, as well as a period of supervised release, restitution and monetary penalties.
San Antonio: Business owner Belinda Jo Juarez, of Boerne, Texas, has been sentenced to three years in prison for embezzling employee insurance premiums and for tax evasion.
Juarez was the majority owner and CEO of Superior Home Health Service, a health care company that offered employees the option to enroll in an employee health insurance plan. Beginning around August 2017, Juarez knowingly caused her company to stop remitting insurance payments to the providers but continued to withhold contributions from employee paychecks, even after insurance providers canceled their contracts as the result of non-payment. The employees, some of whom had incurred medical bills, were not informed that their insurance coverage had been cancelled or was inactive.
As part of the sentence, Juarez was ordered to pay $617,738.65 in restitution to former employees for improperly withheld premiums and resultant medical debts.
Juarez was also sentenced on one count of willful failure to collect or pay over tax for withholding federal payroll tax contributions from her employees’ paychecks and failing to remit the funds to the IRS for periods between 2016 and 2019. The sentence accounted for more than $1 million in personal income tax liability.
In total, Juarez was sentenced to pay $3,667,098.88 in restitution to the IRS. She was also fined $20,000 and will serve three years of supervised release.
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