United States Attorney Richard G. Frohling announced that on April 27, 2022, Patrick Souter (age: 57) of Racine, WI was sentenced to one year and one day in prison on charges that he willfully failed to account for and pay over payroll taxes to the Internal Revenue Service, in violation of Title 26, United States Code, Section 7202.
According to documents filed in court, federal law requires employers to collect payroll taxes (which include federal income taxes, Social Security taxes, and Medicare taxes) from the wages paid to its employees, and to pay over these taxes to the United States through the Internal Revenue Service (“IRS”). The taxes withheld from wages paid to employees are commonly referred to as the “trust fund” portion of payroll taxes. Federal law also requires employers to pay additional payroll taxes to the IRS in an amount equal to the employees’ share of Social Security and Medicare taxes. These taxes are referred to as the “matching” portion of payroll taxes.
According to court filings, Souter is the vice president and a 50 percent shareholder of Kenwood Keys. Beginning in 2006 and continuing through 2020, Souter regularly failed to pay over to the IRS all or a portion of trust fund payroll taxes that he had withheld from employees’ wages. During that same time period, Souter also regularly failed to pay to the IRS all or a portion of the matching part of payroll taxes owed by Kenwood Keys. Records show that for the fifteen years from 2006 through 2020, Souter failed to pay a total of $559,249.82 in payroll taxes.
United States District Judge Lynn Adelman, who earlier this year had accepted Souter’s guilty plea, today sentenced Souter to a prison term of one year and one day and ordered him to pay $559,249.82 in restitution to the IRS.
The IRS Criminal Investigation division in Milwaukee investigated this case, which was prosecuted by Assistant United States Attorney Gregory J. Haanstad.
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