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Tue Aug 20, 2019, 10:29 PM

Owner of Frederick Payroll Processing Business Pleads Guilty to Federal Fraud and Tax Charges

Owner of Frederick Payroll Processing Business Pleads Guilty to Federal Fraud and Tax Charges Related to a Fraud Scheme With Losses of More Than $1.6 Million


Baltimore, Maryland – David Richison, age 64, of Frederick, Maryland, who owned and operated a payroll processing business, pleaded guilty today to federal charges of wire fraud and aiding in the filing of a false tax return, in connection with a fraud scheme in which he took funds from his clients’ tax escrow account and used them to pay his own personal expenses.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

According to his plea agreement, Richison owned and operated a Frederick-based payroll processing business, Period Financial, doing business as Period Payroll. Period Payroll provided payroll processing and payroll tax payment services to businesses in Maryland and Virginia, using special software specifically designed by Richison. In addition to printing paychecks for client employees, Period Payroll was responsible for calculating the employment taxes owed to federal and state taxing authorities by the client companies and those companies’ employees, as well as preparing and filing the client companies’ employment tax returns.

Period Payroll clients entrusted Richison with the authority to remove funds directly from their bank accounts to pay their federal and state taxes, as well as to pay fees to Period Payroll. Richison’s practice was to send the clients a copy of the tax return to be filed and an accounting of the funds to be removed from their accounts and subsequently paid over. Funds removed from client accounts were placed into an escrow account, which Richison used to make electronic payments to the IRS, generating a unique number for each wire sent on behalf of a client.

Read more: https://www.justice.gov/usao-md/pr/owner-frederick-payroll-processing-business-pleads-guilty-federal-fraud-and-tax-charges

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