Business owner indicted for $493,000 employment tax scheme
January 11, 2014
Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., business owner was indicted by a federal grand jury today for a scheme to defraud the government by failing to pay over to the Internal Revenue Service more than $260,000 that he collected from his employees in employment taxes. Along with more than $232,000 that he allegedly failed to pay as his employer portion of the taxes, the total loss to the government was more than $493,000.
Joseph Patrick Balano, 52, of Kansas City, Mo., was charged in a four-count indictment returned by a federal grand jury in Kansas City, Mo.
According to the indictment, Balano was the owner of Global Employment Group, Inc., doing business as Staffing Connections (Global Employment) in Grandview, Mo., and Kansas City, Mo.
Two earlier businesses – Labor Connections and Labor Connections II – were dissolved in 2006, the indictment says, ostensibly because of employment tax issues. In their place, Balano formed Global Employment in December 2006.
Employees who had been working for Labor Connections and Labor Connections II began working for Global Employment. Business operations stayed in the same location.
January 7, 2014 indictment alleges that Balano withheld employment taxes from his employees; however, instead of paying over those taxes to the government, Balano allegedly kept most of those taxes for his own personal use.
The total allegedly withheld from employees but not paid to the IRS from April 2008 to April 2009 was $260,770. In addition, Balano allegedly failed to pay the employer portion of the taxes to the IRS as well, in the amount of $232,672. The total amount of loss to the government was $493,443.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by IRS-Criminal Investigation.