Mayfield Heights Man Faces Additional Charges of Tax Violations at Daycare Centers He Operated
|U.S. Attorney’s Office July 14, 2014|
New tax charges were filed against a Mayfield Heights man who earlier this year pleaded guilty to his role in defrauding a Cleveland Heights charter school out of more than $400,000, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Kathy Enstrom Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Joel B. Friedman, 66, is accused of withholding more than $293,000 in payroll taxes from employees at four daycare centers Friedman operated. But he kept the money for himself instead of paying it over to the IRS, according to a supplemental criminal information.
Friedman operated four daycare centers – A Child’s View, Bass Lake Child Care of Kirtland, Bass Lake Child Care of Chardon (also known as Barney Enterprises) and Bass Lake Child Care of Mentor (also known as Bryce Road Enterprises).
In that position, he was responsible for the daycare centers’ business and financial operations, including payroll and employment tax operations.
Between 2008 and 2011, Friedman deliberately failed to pay over to the IRS approximately $293,248 in taxes that were withheld from employees, according to the criminal information.
Friedman pleaded guilty earlier this year to five counts of mail fraud, two counts of wire fraud and two counts of conspiracy to commit money laundering for activities that took place at Greater Heights Academy, a charter school in Cleveland Heights.
Friedman served as chairman of the school and was part of a group that conspired to submit and approve more than $400,000 worth of fraudulent invoices, with a portion of the payments then being returned to Friedman, according to court documents.
“Not only did Friedman violate the trust of taxpayers and the students of Greater Heights Academy, he violated the trust of his employees by failing to pay over their withheld payroll taxes,” Enstrom said. “The failure to pay over withheld taxes is a serious offense. IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes.”
This case is being prosecuted by Assistant United States Attorney Robert J. Patton. The case was investigated by the Internal Revenue Service – Criminal Investigations and the Federal Bureau of Investigation.
If convicted, the defendant’s sentence will be determined by the court after consideration of the Federal Sentencing Guidelines which depend upon a number of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.