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Employer That Failed To Remit Payroll Tax Withholdings Guilty Of Embezzlement

Published by on March 19, 2008

In George v. Commonwealth, Court of Appeals Virginia, Record No. 0332-06-4 (Jan. 15, 2008), the Virginia Court of Appeals found that an employer that withheld taxes from employee paychecks but did not pay the Commonwealth the withheld taxes was guilty of embezzlement. The defendant, a physician, owned and operated a medical practice in Luray, Virginia.  He […]

In George v. Commonwealth, Court of Appeals Virginia, Record No. 0332-06-4 (Jan. 15, 2008), the Virginia Court of Appeals found that an employer that withheld taxes from employee paychecks but did not pay the Commonwealth the withheld taxes was guilty of embezzlement.

The defendant, a physician, owned and operated a medical practice in Luray, Virginia.  He withheld funds from his employees’ salaries representing income taxes owed to the Commonwealth and deposited the withheld funds in a bank account that he used for both personal and business expenses.  He failed to file quarterly withholding tax returns required by Virginia state law and did not remit the withheld funds to the Commonwealth.  After the available balance in his bank account fell below the total amount of funds withheld from his employees to pay the state income taxes, the defendant was charged and convicted of violating Virginia Code § 18.2-111 for embezzling money belonging to the Commonwealth.  The defendant appealed and the Court of Appeals sustained the conviction.  The fact that the defendant continued to use the money as if it were his own was a deciding factor in the finding of embezzlement.

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