KANSAS CITY, Mo. - Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former owner of a Grandview, Mo., business that provided residential treatment for children while in state custody pleaded guilty in federal court today to failing to pay both the payroll taxes he collected from his employees and his personal income taxes, resulting in a total tax loss of more than $750,000.
Jason Rudolph, 47, of Kingsville, Mo., waived his right to a grand jury and pleaded guilty before U.S. District Judge Beth Phillips to failure to pay over withholding taxes and willfully failing to file federal income tax returns.
Rudolph owned and operated Jay’s Residential, which provided residential psychiatric care for children at several locations in Grandview.
By pleading guilty today, Rudolph admitted that he did not deposit the employees’ Federal Insurance Contributions Act and Medicare (“FICA") taxes and income taxes that he withheld from his employees’ wages and did not pay the employer portion of FICA. Instead, Rudolph used the money to gamble, pay personal bills, and purchase vehicles. In addition to failing to pay over his employment taxes, Rudolph admitted he did not file personal income tax returns for the tax years 2008 through 2011.
The total tax harm from Rudolph’s criminal conduct is $755,643. Rudolph admitted that he failed to pay over $149,944 in employee payroll taxes and $344,902 in personal income taxes, for a tax loss of $494,845. The tax loss increases to $570,491 after including the employer portion of FICA, and to $755,643 including earlier employment tax periods and the employment tax owed to the state of Missouri.
While having substantial employment taxes due, according to today’s plea agreement, Rudolph frequently went to casinos and paid personal expenses with Jay’s Residential’s funds. An analysis of bank records and records obtained from Ameristar Casino reveal that Rudolph withdrew more than $1.1 million from Jay’s Residential’s bank account at the casino from 2008 to 2011.
Although Rudolph failed to file his personal federal individual income tax return for the tax years 2008 through 2011, the plea agreement says, his wife filed her personal federal individual income tax return using the filing status of married and filing separately.
Under federal statutes, Rudolph is subject to a sentence of up to six years in federal prison without parole, plus a fine up to $500,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by IRS-Criminal Investigation.
Source: U.S. Department of Justice, Office of the United States Attorneys
