Two Tennessee Residents Indicted for Conspiracy to Defraud United States

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A federal grand jury has indicted two Tennessee residents for conspiring to defraud the United Sates as well as failing to account for and pay over employment tax.

Mark and Jayton Stinson were arrested Tuesday. The Stinsons operated a temporary staffing company that aided businesses in the state and elsewhere from 2005 to 2015, according to the indictment. Within their standard contract, the company was responsible for withholding employment tax from its employees’ wages and paying over the amounts withheld to the Internal Revenue Service (IRS).

The Stinsons allegedly failed to pay more than $2.8 million in employment tax to the IRS. They also failed to timely file employment tax returns and filed false employment tax returns. Despite providing the same business to essentially the same customers for years, the indictment alleges that they restructured the company and changed its name numerous times after accumulating employment tax liabilities.

The indictment also alleges that the Stinsons conspired to impede IRS collection efforts of the company's payroll tax liabilities. They allegedly falsely represented to the IRS their control of the company and their knowledge of their responsibility to truthfully account for and pay over the employment taxes. The Stinsons allegedly placed their company in the names of nominees who did not have control over the operations, and set up payment arrangements intended to impede an IRS levy placed on their customer payments.

Further more, The Stinsons allegedly use withheld funds to pay for personal expenses such as a Mercedes-Benz, a Cadillac Escalade, mortgage payments, and private school tuition for their children.

Both men were charged with one count of conspiring to defraud the United States and five counts of failing to truthfully account for and pay over payroll taxes. Mark Stinson was also charged with five counts of filing false tax returns, one count of theft of government funds, and one count of aggravated identity theft.

If convicted, the Stinsons will face a statutory maximum sentence of five years in prison for the conspiracy count and for each count of failure to pay over employment taxes. Mark Stinson will also face a statutory minimum sentence of three years in prison for each false return count, 10 years in prison for theft of government funds, and a mandatory sentence of two years in prison for aggravated identity theft charge, which will be in addition to any other imprisonment term he receives. Both defendants also face a period of supervised release and monetary penalties.


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