Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.
Case Number: 2:23-cr-00013
Court: United States District Court for the Western District of Washington (King County)
Plaintiff's Attorney: United States Attorney’s Office in Seattle
Description: Seattle, Washington criminal defense lawyer represented Defendant charged with willful failure to pay over taxes.
Keovilayvanh Rinthalukay, 62, pleaded guilty in February 2023, admitting that between 2015 and 2019 he withheld Medicare, Social Security, and federal income taxes from his employees’ paychecks, but instead of paying the taxes to the government, he pocketed the money for his own benefit. At the sentencing hearing, U.S. District Judge James L. Robart said the amount withheld “is not a small number – it’s a lot of money. And the defendant didn’t find it necessary to pay his taxes for a number of years – it shows no respect for the law.”
“The failure to turn over payroll taxes is simply theft from employees who trust their employer to make those payments for their future well-being,” said U.S. Attorney Nick Brown. “In this case, Mr. Rinthalukay has committed to aggressively pay back more than $926,000 in tax debt. The prison sentence brings home the need to do right by workers and their future Social Security, Medicare, and federal unemployment benefits.”
According to records filed in the case, between 2015 and 2019, the Tukwila restaurant employed dozens of people. Over that same period the restaurant failed to pay over the taxes withheld from paychecks, as well as the employer’s share of the payroll and federal unemployment taxes. In all, Rinthalukay failed to pay at least $926,092. Instead, he used the money for his personal expenses including buying property, paying private school tuition for his children, and buying a motorcycle. Judge Robart noted at today’s hearing that Rinthalukay currently owns two homes in Western Washington that together are valued at well over $2 million.
As relevant conduct, the government noted that Rinthalukay has not paid his personal federal income taxes since 1998. The IRS is still reviewing that matter.
Prosecutors described Rinthalukay’s history of misconduct in their sentencing memo. “Rinthalukay has a long history of disregard for his tax obligations, both personally and as a business owner. The criminal conduct here is not some momentary aberration but rather part of a decades-long pattern. And his conduct harmed not only the United States Treasury, but also the employees at his restaurant. Employees risk losing credit with the Social Security system when their payroll taxes are not turned over to the IRS,” Assistant U.S. Attorney Philip Kopczynski wrote in the sentencing memo.
“Restaurant employees deal with a lot: long hours, irate customers, and exhausting work. One thing they shouldn’t have to worry about – their employer stealing from them,” said Acting Special Agent in Charge Adam Jobes, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Mr. Rinthalukay has owned and operated a restaurant for a long time and knows how important it is for his staff to provide good customer service. Today’s sentence is a strong reminder that business owners must play by their own rules and provide good service to their employees. Remitting tax withholdings and not stealing from their workers is a solid start.”
As of today, Rinthalukay has paid $550,000 of the taxes owed. The judgment imposed by Judge Robart will require prompt repayment of the remainder, including having Rinthalukay liquidate assets if needed.
The case was investigated by the Internal Revenue Service Criminal Investigation.
The case was prosecuted by Assistant United States Attorney Philip Kopczynski.
Willful Failure to Pay Over Tax - 26:7202
Outcome: Defendant is committed to the custody of the Bureau of Prisons for a term of 18 months. Upon release from custody, defendant is subject to 3 years of supervised release with the standard and special conditions as set forth in the judgment. $100.00 special assessment imposed; fine waived; restitution in the amount of $926,092.89.