Businessman Gets Prison for Not Paying Worker Taxes

CLEVELAND — The CEO of a Leavittsburg company was sentenced today to six months in prison and ordered to pay $160,000 in restitution to the Internal Revenue Service for failing to pay employment taxes that he withheld from his employees’ paychecks.

Jonathan M. Lawrence, 58, pleaded guilty earlier this year to 10 counts of failure to truthfully account for and pay employment taxes. He was president and CEO of Laurenco Systems of Ohio LLC, a company he established in 2006 with an office in Leavittsburg.

For four years, Lawrence collected nealry $350,000 in employment taxes (income taxes and Medicare and Social Security taxes, commonly referred to as “FICA” taxes) from his employees that he failed to then pay over to the IRS, according to U.S. Justice Department. He also failed to pay the employer’s share of FICA taxes – approximately $111,000.

“In essence, the defendant stole several hundred thousand dollars from his employees by telling them he was withholding that money to pay their employment taxes, which he did not do,” said Carole S. Rendon, acting U.S. attorney for the Northern District of Ohio. “We will continue to prosecute people who violate their tax obligations and their fiduciary responsibilities to their employees.”

Following his release from prision, Judge Sara Lioi, U.S. District Court for the Northern District of Ohio, ordered Lawrence serve six months of house arrest with electronic monitoring. The restitution she ordered is in addition to approximately $140,000 that the IRS already obtained from Lawrence.

Lioi deferred to the IRS Civil Division to determine what additional amounts, if any, Lawrence must pay, including any civil tax penalties and interest.

Copyright 2024 The Business Journal, Youngstown, Ohio.