Former ThermoEnergy Executive Indicted on Mail Fraud and Employment Tax Charges
|U.S. Attorney’s Office April 02, 2014|
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Nashville Field Office, announced today that a federal grand jury has indicted Andrew Thurman Melton, age 67, a resident of Pulaski County, Arkansas, on 12 counts of mail fraud and five counts of failing to truthfully account for and pay over employment taxes to the IRS.
“Corporate executives have a responsibility to withhold income taxes for their employees and then remit those taxes to the IRS,” said Special Agent in Charge Christopher A. Henry with IRS-Criminal Investigation. “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.”
According to the superseding indictment, Melton was a certified public accountant and the executive vice president, chief financial officer (CFO), and treasurer for ThermoEnergy Corporation at the time of the alleged offenses. Melton’s wages were supposed to be garnished as a result of a judgment against him personally. However, Melton allegedly caused checks to be issued from ThermoEnergy to pay the judgment and expensed those payments on ThermoEnergy’s financials as if the payments were legitimate business expenses of the company. The superseding indictment alleges that between, in or about August 2006 and April 2009, through this scheme, he obtained approximately $109,575.80.
Additionally, the superseding indictment charges that during the calendar years 2005 through 2009, ThermoEnergy withheld tax payments from its employees’ paychecks. However, beginning in approximately October 2005, ThermoEnergy made no payroll tax payments to the IRS and failed to file quarterly employment tax returns (Forms 941) with the IRS. Altogether, ThermoEnergy failed to account for and pay over approximately $1.9 million in payroll taxes. As the executive vice president, CFO, and treasurer, Melton was responsible to collect, truthfully account for, and pay over ThermoEnergy’s payroll taxes.
The statutory penalty for mail fraud is not more than 20 years’ imprisonment and/or not more than a $250,000 fine with not more than three years of supervised release. The statutory penalty for employment tax fraud is not more than five years’ and/or not more than a $250,000 fine with not more than three years’ supervised release.
The investigation was conducted by the Federal Bureau of Investigation and IRS-Criminal Investigation.
An indictment is a form of accusation and is not evidence of guilt. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.