Owner of Oklahoma City Employer Organization Sentenced for $22.8 Million Tax Scheme

[nitpicker]

https://www.justice.gov/usao-wdok/pr/owner-oklahoma-city-employer-organization-sentenced-three-years-federal-prison-228

Department of Justice
U.S. Attorney’s Office
Western District of Oklahoma

FOR IMMEDIATE RELEASE
Tuesday, May 30, 2017

Owner of Oklahoma City Employer Organization Sentenced to Three Years in Federal Prison for $22.8 Million Tax Scheme

Oklahoma City, Oklahoma – A federal judge has sentenced JANIS ANN EDWARDS, of Oklahoma City, to 36 months in federal prison for tax evasion, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma. According to an indictment filed in June 2016, Edwards was the sole owner of Corporate Resource Management, Inc., and a number of related companies with their principal place of business in Oklahoma City. These companies operated as "professional employer organizations," or "PEOs." In essence, they served small businesses in several states in the central part of the United States by, among other things, taking on responsibilities for paying their employees’ payroll and collecting and paying payroll taxes to the IRS. The employees of small businesses became employees of one of Edwards’s entities, and their payroll taxes were to be paid under the tax identification number of one of those entities.

According to the indictment, Edwards failed to pay substantial amounts of payroll taxes collected from small businesses that had contracted with one of the CRM-related entities. The 23 counts related to quarterly payroll tax returns filed by Oklahoma Corporate Resource, Inc.; Missouri Corporate Resource, Inc.; and Texas Corporate Resource, Inc., for various quarters in 2010 and 2011. The indictment alleged Edwards regularly and intentionally directed her own employees to alter these quarterly tax returns to reflect less payroll tax liability than what was actually owed.

On January 6, 2017, Edwards pled guilty to one count of tax evasion, including causing the filing of a federal payroll tax return she knew was false. In a plea agreement, she agreed she would be held responsible in this criminal case for failing to pay between $3.5 million and $25 million in payroll taxes.

Today U.S. District Judge David L. Russell ordered Edwards to serve 36 months in the custody of the Bureau of Prisons, to be followed by three years of supervised release. In determining the sentence, the court found she obstructed justice by testifying falsely in March 2016 at a bankruptcy proceeding concerning the tax obligations of four of her companies. The court also ordered Edwards to pay $22,720,242.04 in restitution to the IRS.
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