Five Star Rating

351

The five star rating system is used across many industries to signify something is exceptional. We tend to think of a five star hotel as one that is posh and pricey. A five star rating on Amazon means that customers are satisfied with a product, while five stars means that a restaurant has good food and excellent customer service. A Las Vegas, Nevada businesswoman picked the name “Five Star” for her home healthcare business, but if it were up to the Internal Revenue Service (IRS), she’d ironically get a rating of zero for committing business tax fraud.

The “Five Star” home healthcare business owner was responsible for collecting and paying income, social security and Medicare taxes withheld from her employees’ paychecks. But, over five years, she neglected to pay the employment taxes withheld. (Instead, she built up a pretty nice slush fund for herself.)

When the IRS found out about the tax evasion, the government agency assessed trust fund recovery penalties (TFRPs) against her. (This means she was personally liable for the unpaid employment taxes.)

But, instead of complying with the IRS’ wishes, she concealed her income and assets, so she could avoid paying the TFRPs. She also obstructed the agency’s efforts to collect the outstanding taxes. Furthermore, she lied about her ability to pay back the TFRPs, changed the name of her business, placed her company in the name of someone else, had employees cash checks for her and also bought a home under someone else’s name. (She definitely went to great lengths to try to hide her crime.)

The 55-year-old Las Vegas, Nevada home healthcare business owner was convicted of business tax fraud and was sentenced to one year and one day in prison for evading payment of employment taxes and penalties. In addition to the time behind bars, she must serve three years of supervised release and pay $1,153,633.50 in restitution to the IRS for evading more than $1.6 million in taxes.

So much for being a “Five Star” rated company. If the business owner neglected to operate with integrity by evading taxes, what do you think her standards of care for her patients were?

Today’s “Fraud of the Day” is based on an article entitled, Nevada Home Health Care Owner Gets Prison Time For Tax Fraud,” posted on LasVegas.CBSLocal.com on January 24, 2018.

LAS VEGAS (KXNT) – A Las Vegas business owner was sentenced Wednesday to a year and one day in prison for evading payment of employment taxes and penalties, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Dayle Elieson of the District of Nevada.

55 year old Maria Larkin was convicted of tax evasion by a federal jury in Las Vegas in June. According to the evidence presented at trial, Larkin owned and operated Five Star Home Health Care Inc. (Five Star). Larkin was responsible for collecting and paying over income, social security, and Medicare tax withheld from her employees’ wages. From 2004 through 2009, Larkin failed to pay over to the Internal Revenue Service (IRS) the employment taxes she withheld. As a result, the IRS assessed trust fund recovery penalties (TFRP’s) against Larkin for these years, which made her personally liable for the unpaid employment taxes.

SHARE
Previous articleFraud Disabled
Next articleWhat a Dumbbell

Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.