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U.S. Attorney’s Office: Belgrade company owner to pay $2.8M for unpaid taxes

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U.S. Attorney’s Office: Belgrade company owner to pay $2.8M for unpaid taxes

Aug 10, 2022 | 6:08 pm ET
By Keila Szpaller
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U.S. Attorney’s Office: Belgrade company owner to pay $2.8M for unpaid taxes
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A Belgrade construction company owner was sentenced Wednesday to pay more than $2.8 million in restitution and spend 30 months in prison after she admitted to failing to pay the IRS employee and employer taxes and instead spent money on personal items such as a motorhome, according to a news release from the U.S. Attorney’s Office District of Montana.

“Those who evade our federal and state tax laws by cheating taxpaying Americans out of their hard-earned dollars, especially those who are entitled to their Medicare and Social Security payments, will be held accountable for their criminal conduct,” U.S. Attorney Jesse Laslovich said in a statement from the DOJ.

Melissa Lynne Horner, 43, of Bozeman, pleaded guilty in April to failing to properly account for and pay withholding and FICA taxes, or federal income, Social Security and Medicare taxes, a felony, said the news release. The DOJ said Horner also pleaded guilty to failing to file employer’s quarterly return and pay tax, a misdemeanor. 

In addition to prison time, U.S. District Judge Dana L. Christensen ordered Horner, co-owner of H&H Earthworks, to serve three years of supervised release following incarceration and pay $2,878,522 in restitution, the news release said. Horner was allowed to self-report to the Bureau of Prisons.

“Horner’s sentence shows that those who fraudulently refuse to pay taxes that every employer is required to pay will face criminal prosecution by our office,” Laslovich said in his statement. “The people of our state and nation deserve nothing less.”

The government alleged that Horner managed finances for H&H Earthworks, which it said employed 20 to 60 people from 2014 through 2019, according to the news release. In that period of roughly five years, the DOJ said Horner had Earthworks pay hundreds of thousands of dollars of expenditures for her personal benefit instead of paying over to the IRS payroll tax required to be withheld from Earthworks’ employees’ paychecks. 

“Horner used the money for personal expenses, including, more than $100,000 on motorsport vehicles, $90,000 to a real estate title company in Bozeman, at least $50,000 on home renovations and $20,000 for a motorhome,” the news release said.

The government also alleged that Horner withdrew FICA taxes from the wages paid to employees and failed to pay the trust fund taxes to the IRS, the news release said. Horner additionally failed to pay over Earthworks’ portion of the FICA taxes and to file quarterly Forms 941, Employer’s Quarterly Federal Tax Returns, prior to being notified of the criminal investigation — even though she knew she was required to pay over the employment taxes and file the forms, the DOJ said.

“Business owners have an obligation to their employees and the IRS to pay over payroll and employment taxes,” said Andy Tsui, special agent in charge, IRS Criminal Investigation Denver Field Office, in a statement from the DOJ. “By withholding these taxes for her personal gain, Ms. Horner not only defrauded the federal government, but also all honest taxpayers, and today’s sentencing is a direct reflection of the seriousness of her crime.”

Assistant U.S. Attorney Karla E. Painter prosecuted the case, which was investigated by the IRS Criminal Investigation, according to the news release.