DENVER - Lucilious J. Ward, age 63, of Denver, Colorado, pled guilty before U.S. District Court Judge Lewis T. Babcock today to one count of failure to account for and pay over the employment taxes withheld from his employees’ paychecks and one count of making a false claim against the United States, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Ward, who is free on a bond, is scheduled for further sentencing proceedings before Judge Babcock on Feb. 3, 2014. Ward was indicted by a federal grand jury on Oct. 2, 2012. On September 8, 2011, Special Agents with IRS Criminal Investigation executed a search warrant on Ward’s business, Global Access, LLC, dba, Global Transportation (“Global Access"), located at 5455 East 52nd Avenue, Commerce City, Colorado.
According to the facts contained in the Indictment as well as the stipulated facts contained in the plea agreement, since at least 2004, Ward has owned and operated Global Access. Global Access has provided public and private transportation services including hotel and airport shuttles, para transit services, and charter bus tours. Its largest client has been the Regional Transportation District (“RTD"), which contracted with Global Access to provide a portion of RTD’s Access-a-Ride bus services. RTD has paid Global Access more than $35,000,000 during the period 2003 through 2012, and Global Access incurred substantial costs under the RTD contract. During this time, the Internal Revenue Code required Global Access to withhold its employees' shares of Federal Insurance Contribution Act taxes ("FICA" or social security and Medicare taxes) and income taxes (collectively referred to as "employment taxes") from the salaries or wages of its employees, and to account for and pay over the withheld amounts to the IRS.
From January 2005 through the second quarter in 2011, Ward withheld employment taxes from Global Access’s employees’ paychecks. Ward knowingly and willfully failed to file with the IRS Forms 941 (employment tax forms) as required by law and failed to pay to the IRS the employment taxes that Ward had withheld from their paychecks. With the exception of the first quarter of 2008 which was paid in part and filed automatically by a payroll company Ward hired. Ward also failed to pay the required employer’s matching portion of FICA. Rather than paying the IRS the employment taxes owed by Global Access, Ward kept that money in Global Access’s bank account(s) and spent it on a variety of expenses.
At the end of 2008 Global Access’s office manager recommended to Ward that he elect to have a payroll company take care of paying the employment taxes for Global Access; however, defendant Ward declined. Furthermore, a CPA who performed various accounting functions for Global Access and Ward repeatedly told Ward about Global Access’s growing employment tax liability, he needed to pay these taxes, and about the consequences associated with not paying these taxes.
Additionally, in 2010, Ward filed with the IRS an amended personal tax return (Form 1040X) for the tax year 2007 which falsely claimed that $76,479.44 of federal income tax withholdings had been withheld from his paychecks by Global Access and paid to the IRS. At the time Ward filed this Form 1040X, he knew that he and Global Access had not paid to the IRS the $76,479.44. Ward intentionally filed this false return so that he would be assessed a refund of $76,479 to which he was not legitimately entitled.
The government asserts that the employment tax due and owing for restitution purposes is approximately $5,955,866
Failure to account for and pay over employment taxes and filing a false claim against the United States both carry a penalty of not more than 5 years in federal prison, and a fine of up to $250,000, per count.
This case was investigated by IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorneys Pegeen Rhyne and Anna Edgar. #
Source: U.S. Department of Justice, Office of the United States Attorneys
