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Case Number: 2:19-cr-00618-MAK
Judge: Mark A. Kearney
Court: United States District Court for the Eastern District of Pennsylvania (Philadelphia County)
Plaintiff's Attorney: Terrie A. Marinari
Description: Philadelphia, PA - The United States of America charged Charlie Klien with tax fraud, failing to pay employment taxes and filing false tax returns.
Charlie Kien, 45, of King of Prussia, PA, was sentenced to six months’ imprisonment, three years’ supervised release, and ordered to pay a $10,000 fine.
The defendant pleaded guilty in October 2019 to charges of failing to pay employment taxes and filing false tax returns in connection with the operation of his former Philadelphia-based labor leasing company, CK’s Business Services. The company had contracts to provide temporary employees to two local businesses: a flag manufacturer and military bandage manufacturer. In preparing and filing IRS Form 941 for both of these contracts, Kien failed to account for the correct number of the company’s employees and wages paid, and also failed to file IRS Form W-2 for the unclaimed employees.
Further, the defendant paid many of his employees in cash – failing to collect and pay employment taxes to the IRS. For the tax years 2010 through 2012, the total amount of lost employment tax (employer and employee) was approximately $565,872. Kien also filed false personal income tax returns: for tax years 2010 through 2012, he failed to pay approximately $474,059 in taxes.
“Knowingly falsifying documents to avoid reporting income to the IRS is a crime,” said Deputy U.S. Attorney Lappen. “Dishonest business owners like the defendant use a variety of methods to cheat the government and all honest taxpayers. Our Office will continue to work with our federal partners to hold accountable those who commit tax fraud.”
The case was investigated by the Internal Revenue Service, Criminal Investigations Service.
Z26:7202 - WILLFUL FAILURE TO COLLECT, ACCOUNT FOR AND PAY OVER EMPLOYMENT TAXES
26:7206(1) - SUBSCRIBING TO FALSE TAX RETURN
Outcome: IMPRISONMENT: 6 MONTHS; SUPERVISED RELEASE: 3 YEARS; FINE: $10,000; RESTITUTION: $1,416,041.88; SPECIAL ASSESSMENT: $200