RICHMOND, Va. – Mark S. Holpe, 61, of Midlothian, Va., was sentenced today to 18 months in prison and a $40,000 fine for evading the payment of federal Employment Taxes on unreported cash wages he paid employees of Nature’s Way Landscaping, Inc.  Holpe had previously pled guilty to evading the assessment of $326,196 of employment taxes. 

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Rick A. Raven, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office, made the announcement of the sentence imposed by United States District Judge John A. Gibney.

“Employers who do not withhold employment taxes are victimizing legitimate businesses by creating an unfair competitive advantage over those businesses that lawfully pay their fair share of employment taxes,” said IRS SAC Raven. “Paying employees in cash to evade taxes is a crime. Today’s sentencing is a reminder to employers who practice this method of paying salaries that IRS Criminal Investigation will continue to support the U.S. Justice Department with employment tax enforcement.”

            Holpe worked for Nature’s Way, a business that did residential and commercial landscaping in the Richmond metro area.  He was originally the President, but became the Treasurer in 2007 when he sold a portion of the business.  

            In entering his plea, Holpe acknowledged that Nature’s Way had two groups of employees during tax years 2006 through 2009.  One group of approximately 12 employees was leased from an employee leasing company that accounted for the employment taxes and paid the employees approximately $1,184,216 in wages over the four-year period.  Approximately 30 additional individuals were employed directly by Nature’s Way, which paid them $2,132,000 in wages during the same period.  The work and services performed by the two groups of employees was indistinguishable.  

            Holpe admitted that he paid the second group in cash, without withholding social security taxes.  He also did not issue them Forms W-2 or 1099, or file Employer’s Quarterly Tax Returns for them.  He further admitted that, when supplying expense information to the company’s tax preparer for years 2006 through 2009, he did not identify the employees who were paid in cash. 

            The case is being investigated by the Criminal Investigation Division of the Internal Revenue Service.  Assistant United States Attorney David T. Maguire prosecuted the case on behalf of the United States. 

A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

 

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