Belgrade construction company co-owner admits not paying $2.8 million in taxes for employees and employers | USAO-MT

MISSOULA — The co-owner of H&H Earthworks, Inc., a Belgrade-based construction company that does commercial site development work in four states, has admitted to failing to pay the IRS about $2.8 million in employee and employer taxes, and instead spent some of the money on personal expenses, including recreational and motorsport vehicles, U.S. Attorney Leif M. Johnson said today. .

Melissa Lynne Horner, 42, of Bozeman, pleaded guilty April 8 to one count of failing to account for and faithfully pay withholding and FICA taxes, a felony and one count of default to file the employer’s quarterly return and pay tax, a misdemeanor, at an arraignment and plea change hearing. Horner faces a maximum of five years in prison, a $250,000 fine and three years of felony probation. Horner was charged in a 34-count information.

A plea agreement reached by the parties calls for the government to seek the dismissal of the remaining 32 counts and for Horner to be liable for full restitution of $2,878,522 if the court accepts the agreement when determining the penalty.

U.S. Magistrate Judge Kathleen L. DeSoto presided. Sentencing was set for August 10 before U.S. District Judge Dana L. Christensen. The court will determine any sentence after considering US sentencing guidelines and other statutory factors. Horner was released pending further proceedings.

“As Earthworks’ chief financial officer, Horner withheld nearly $3 million from employee salaries to cover payroll taxes, health insurance and social security. Rather than pay those amounts to the IRS as required by law, Horner spent the money on personal expenses like motorcycles, an RV, and home renovations. As the tax filing deadline approaches, the public should know that people like Horner who willfully violate tax laws will be investigated and charged with tax crimes that could result in significant penalties, including prison sentences, fines and restitution. said attorney Johnson.

“Wage tax evasion is not only a crime against the United States government, but also a crime that affects Earthworks employees because it results in the reduction of their benefits.” said Andy Tsui, Special Agent in Charge of IRS Criminal Investigations, Denver Field Office. “IRS Criminal Investigation will vigorously pursue anyone who collects these taxes and uses these funds for their own personal gain.”

In court documents filed in the case, the government alleged that H&H Earthworks, Inc. is a Belgrade-based family business co-founded in 2004 by Horner, who is responsible for the financial side of the business. Earthworks is a full-service commercial site development company whose projects include schools, shopping centers, hospitals and residential developments in Montana, North Dakota, Wyoming and Idaho. The company employed between 20 and 60 employees from 2014 to 2019.

For approximately five years, from March 2014 to 2019, Horner demanded that Earthworks pay hundreds of thousands of dollars in expenses for his personal benefit while, at the same time, he failed to pay the payroll tax of the IRS that was to be withheld from Earthworks. ‘ employee paychecks. Horner has spent over $100,000 buying and maintaining personal motorsports vehicles, including dirt bikes and snowmobiles, $90,000 on a Bozeman land titles company, at least $50,000 on personal renovations and $20,000 for an RV.

The government further alleged that Horner withdrew Federal Insurance Contribution Act (FICA) taxes from salaries paid to Earthworks employees and failed to pay trust fund taxes to the IRS. Horner also failed to pay Earthworks’ share of FICA taxes (Social Security and Medicare taxes). Additionally, Horner did not file Quarterly Forms 941, the employer’s quarterly federal income tax returns, until he was notified of the criminal investigation. Horner then filed the overdue forms; however, she did not pay any of the unpaid taxes for them. Horner knew that she was required to report and pay employment taxes and file quarterly 941 forms and deliberately chose to violate this requirement.

Assistant United States Attorney Karla E. Painter is prosecuting the case, which has been investigated by the IRS Criminal Investigation.

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