NOVEMBER 11, 2015

Cave Creek Business Owner sentenced to prison for misappropriating more then $860,000 in Federal Payroll Taxes that had been withheld from employees

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PHOENIX – Today, David Leon Barker, Jr., 51, of Cave Creek, Ariz., was sentenced by Senior United States District Judge James A. Teilborg to 15 months in prison for failing to remit to the IRS the federal payroll taxes he had withheld from his employees’ paychecks. Barker previously pleaded guilty to Willful Failure to Pay Over Taxes.

Barker was the corporate president and operator of a medical supply company that did business under several names between 1995 and 2012, most recently as Barker Healthcare, Inc. Barker’s company operated in many states and employed numerous persons as delivery drivers, office staff, and site managers. As an employer, Barker was required by law to withhold federal taxes from the paychecks of his employees and then remit those withheld funds to the IRS on a quarterly basis. Barker admitted that, between 2000 and 2012, he withheld and failed to pay over more than $862,000. Additionally, Barker failed to pay his employer’s share of payroll taxes for a substantial period of time, making his total tax liability $1,415,570.

In addition to the 15-month prison sentence, Barker was ordered to serve two years of supervised release upon his release from prison and to fully cooperate with the IRS in the determination and collection of taxes, penalties, and interest due and owing.

“The investigation found that the defendant accrued over a million dollars in unpaid payroll taxes and that he took numerous steps to thwart the IRS’s efforts to collect the taxes while, all the while, living a luxurious lifestyle. IRS-Criminal Investigation (IRS-CI) will continue its efforts to detect and investigate this type of tax fraud in order to minimize the propensity of such activity by others and to provide honest business owners with the comfort of knowing that they are doing the right thing by complying with the law,” stated IRS-CI Special Agent in Charge Ismael Nevarez Jr.

The investigation in this case was conducted by the Internal Revenue Service-Criminal Investigation. The prosecution was handled by Assistant U.S. Attorney Frank T. Galati.

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