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Date: 04-21-2017
Case Style:
United States of America v. James R. Cheek and Herschel J. Breig, Sr.
Federal Courthouse - Fort Smith, Arkansas
Case Number: 4:15-cr-40020-SOH
Judge: Susan O. Hickey
Court: United States District Court for the Western District of Arkansas (Miller County)
Plaintiff's Attorney: Candace Taylor and Jonathan D. Ross
Defendant's Attorney: Craig Henry for James R. Cheek
John Pickett for Herschel J. Breig, Sr.
Description: Texarkana, AR - Men Sentenced to Federal Prison and Ordered to Pay Over $6 Million Restitution for Tax Fraud at Hope Hospital
Two men were sentenced on one count each of Failure to Collect or Pay Over Tax. James R. Cheek, age 68, of Waleska, Georgia and Herschel J. Breig, Sr., age 69, of Nixa, Missouri were each sentenced to 36 months in federal prison followed by three years of supervised release. Restitution of $6,000,000 is ordered jointly and severally between the two defendants. Judge Susan O. Hickey presided over the sentencing hearings in the United States District court in Texarkana.
According to court records, as principals of Hope Medical Park Hospital, both Cheek and Breig were responsible to collect, truthfully account for, and pay over the hospital’s payroll taxes to the Internal Revenue Service during the calendar years 2009, 2010, 2011, and 2012. They failed to pay approximately $6,000,000 in payroll taxes as was required.
Both men were indicted by a federal grand jury in July, 2015 and both pleaded guilty in September, 2016.
"Corporate executives have a responsibility to withhold federal income taxes for their employees and then remit those taxes to the IRS on their behalf. Employment tax evasion not only results in the loss of tax revenue to the United States government, employees also lose future social security or Medicare benefits” stated Tracey D. Montaño, Special Agent in Charge. "Failure to pay over withheld taxes is a serious offense, and continues to be an investigative priority for IRS Criminal Investigation."
This case was investigated by the Internal Revenue Service - Criminal Investigation Division and the Federal Bureau of Investigation.
Outcome: Defendant were each sentenced to 36 months in federal prison followed by three years of supervised release and ordered to pay $6 million in restitution.
Plaintiff's Experts:
Defendant's Experts:
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