California business owner, Luis Perez, has been charged with tax evasion for failing to pay almost 30 million dollars in wages he withheld from employee paychecks. Perez, the owner of four staffing agencies, deducted the taxes from his employees’ paychecks but failed to pay the money to the IRS. These taxes, often called ‘trust fund taxes’ include income taxes and FICA taxes that fund Social Security and Medicare. Perez did not pay the taxes for seven years and the money he owes includes interest and the Trust Fund Recovery Penalty.
The IRS came to collect in 2007 but Perez kept them in the dark for almost a decade by concealing the purchase of luxury items, including several cars and a boat. He did this by placing the ownership titles in the names of other individuals or his companies. His purchases included a $135,000 Ferrari, a $224,000 Rolls Royce Phantom and a $340,000 Lamborghini Aventador.
Perez is also accused of underreporting his income and making other false statements to the IRS in order to evade their collection efforts.
This is not the first time Perez has been charged with a crime. Last year the Orange County District Attorney filed charges against Perez and two associates for workers comp fraud for failing to report wages to the Employment Development Department, withhold payroll taxes or pay employment taxes for 36 employees.
If convicted on the tax evasion charges Perez could face up to five years in federal prison.