Leader of $181 million payroll tax scheme admits guilt [United States v. Amodeo, DC FL, Case No. 6:08-cr-176-Orl-28GJK
Frank Amodeo, the former head of Mirabilis Ventures Inc., has pleaded guilty to federal charges that he and his co-conspirators knowingly failed to remit payroll taxes to the IRS totaling between $172 million and $181 million. (The government says it’s $181 million. Amodeo agrees that it’s at least $172 million.) The unremitted payroll taxes included $129 million in FICA and withholding taxes. According to a Department of Justice press release on Aug. 7, 2008, Amodeo and his co-conspirators controlled a web of one public and several private companies, including multiple employee leasing companies, also known as professional employer organizations (PEOs). The press release says that Amodeo conspired with his co-conspirators to absolve themselves, and the companies they controlled, of the responsibility for existing payroll tax liabilities, and to divert payroll tax funds paid by the PEO clients to the PEOs that Amodeo and his co-conspirators controlled.
In early 2005, Amodeo and others were in contact with the IRS regarding one of the company’s tax liabilities. However, they withheld information about the company’s tax liabilities until February 2006, by means that included the late filing of Forms 941. At the time, the company’s payroll tax liabilities exceeded $100 million. In June of 2006, a co-conspirator advised the IRS that the payroll tax money not paid to the IRS was used to purchase two other companies. However, it turned out the money was used to purchase, among other things, several companies, cars, a plane, and real estate. In August 2006, Amodeo communicated a revised version of his account to the IRS, in an attempt to obstruct and impede the IRS‘s investigation, after being advised by a co-conspirator that it may expose them to prosecution for federal offenses. In August 2008, Amodeo was indicted on charges of conspiracy, failure to remit payroll taxes, wire fraud, and obstruction of an agency proceeding.
Under the plea deal, Amodeo could face up to 25 years imprisonment and a $1.25 million fine. However, it was Amodeo who pleaded guilty, and not Mirabilis Ventures Inc. In May of 2008, the company filed for bankruptcy protection and it has other creditors besides the federal government. It is yet to be determined whether the government will be able to recover any of the unpaid taxes from the company.