A Hot Springs Village business owner pleaded guilty this week to one count of willful failure to pay more employment taxes and one count of failure to file a tax return .
U.S. District Chief Justice Susan O. Hickey presided over the plea hearing in Hot Springs, in which Donald Lee Owen, 61, withdrew the grand jury charge and brought pleaded guilty to a criminal investigation accusing him of violating two different federal laws.
According to court documents, Owen owned and operated National Golf Classics, Inc., also known as All American Classics, located in Hot Springs Village. The company produced sports memorabilia for use in charity auctions and organized charity work
auctions. From 2010 to 2018, Owen’s company paid salaries to employees and withheld employment taxes on those salaries. These taxes included federal income tax, social security tax and medicare, also known as the “trust fund” tax. Owen hired an accounting firm to calculate taxes owed and to prepare IRS 941, Employers Quarterly Federal Tax Return forms, to report those taxes to the IRS.
However, Owens did not actually file these forms with the IRS, as he was required to do, nor did he pay the employment taxes owed to the IRS.
From 2010 to 2018, Owen willfully failed to file 941 forms with the IRS and pay at least $ 818,158 in employment taxes to the IRS, despite having sufficient funds to do so.
Court documents also reveal that during the period when employment taxes were to be paid to the IRS, Owen chose to pay millions of dollars to his company’s creditors, $ 800 per month for real estate land that had no real estate. nothing to do with the business and transferred $ 1,000 a month to a family member to pay their share on a cabin they were buying on the Buffalo River.
Additionally, Owen failed to pay $ 430,000 of the employer’s share of employment taxes and federal unemployment tax. Owen also failed to pay the state of Arkansas $ 169,883 which was withheld from his employees’ salaries. This negatively impacted several employees who did not receive credit from the Social Security Administration for wages earned and taxes withheld. At the same time, Owen used the additional funds to support a lavish lifestyle, including the purchase and improvement of a luxury home in Hot Springs Village, the purchase of 32.6 acres in County of Newton, a cabin on the Buffalo River, a 2017 GMC Yukon SUV for which he paid $ 64,206 and a 2016 Tiffin Allegro 39-foot RV with a list price of $ 188,099.
When he was audited by the Arkansas Department of Finance on two separate occasions – September 19, 2013 and July 19, 2018 – Owen falsely told auditors that he did not have regular employees, but that instead he used his family and friends to help him during the peak season. .
However, when approached by employees who had not received credit from the Social Security Administration for wages earned and employment taxes withheld, Owen admitted that he did not report or paid more employment taxes to the IRS.
Owen’s second charge relates to his willful failure to file a federal personal income tax return for the year 2018. Owen admitted that he knew he was required to file a tax return and that he willfully failed to file a tax return. to do. Additionally, Owen failed to report and pay $ 301,544 of his federal income tax and $ 69,405 of his Arkansas state income tax for the years 2008 to 2018. Finally, Owen has also failed to report federal corporate income tax on his business for the years 2014 to 2018.
Following his guilty plea, Owen can be sentenced to a maximum of six years in prison. The court will determine his sentence at a later date, after considering a pre-sentence investigative report prepared by the US Probation Office and taking into account US sentencing guidelines and other statutory factors.
Acting US attorney David Clay Fowlkes of the Western District of Arkansas made the announcement.
The Internal Revenue Service-Criminal Investigations is investigating the case.
Assistant US Attorney Steven Mohlhenrich is pursuing the case for the United States.