Virginia Beach Businessman Sentenced for $2.5 Million Tax Fraud

5 mins read

IRS,Tax Check,Filing Taxes,Tax Deadline
IRS,Tax Check,Filing Taxes,Tax Deadline

NEWPORT NEWS, Va. – A Virginia Beach man was sentenced yesterday to 48 months in prison for defrauding the IRS out of more than $2.5 million of taxes by, among other things, hiding assets, making false statements about his ability to pay, using a nominee company to conduct business, and diverting huge sums of money to pay creditors instead of the IRS.

“The defendant has been held accountable for attempting to evade the payment of over $2.5 million in tax obligations while he was earning and spending millions of dollars on personal luxury expenses and the mortgage for his oceanfront home in Virginia Beach,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “The sentence imposed in this case should send a clear message of deterrence to others who may be considering unlawfully enriching themselves at the expense of the American taxpayer.”

According to court documents, Richard Yanek, 53, has owned and operated a credit card processing business since at least 1995. Between 2013 and 2018, Yanek withheld employment taxes from his employees, but he failed to consistently pay more than a million dollars of those withholdings to the IRS. Each year, Yanek provided false employment tax forms to his employees, who filed their own taxes and mistakenly believed that the amounts withheld from their wages had been paid to the Social Security program.

“Yanek betrayed his employees’ trust and violated U.S. tax laws for personal financial gain,” said Darrell J. Waldon, Acting Special Agent in Charge of the IRS-Criminal Investigation (IRS-CI) Washington, D.C. Field Office. “He deliberately chose not to pay over employment taxes he withheld from his employees, instead opting to use those monies to fund a life of opulence. For years, he spent millions of dollars on luxury items. Today, justice was served.”

Until recently, Yanek had not filed a personal income tax return or paid personal income taxes since 2010, despite earning and spending millions of dollars on the mortgage for his oceanfront home, personal credit cards, private school tuition, and golf and yacht club dues. Yanek had his personal tax returns prepared by his accountant for the years 2011 through 2016, all of which reported substantial taxes due and owing. However, Yanek intentionally chose not to file these returns with the IRS, and he later made false statements to the IRS and law enforcement when asked why those returns had not been filed.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, and Darrell J. Waldon, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.

Assistant U.S. Attorney Mack Coleman and former Assistant U.S. Attorney Howard Zlotnick prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:21-cr-26.

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