Jessica D. Aber, U.S. Attorney | U.S. Attorney for the Eastern District of Virginia
A Chester business owner, David Neel, has been sentenced to two years in prison for willfully failing to account for or pay over employment taxes. The sentencing was announced by Erik S. Siebert, U.S. Attorney for the Eastern District of Virginia, and Kareem A. Carter, IRS Criminal Investigation Special Agent in Charge of the Washington D.C. Field Office.
Court documents reveal that Neel, 63, owned several sleep disorder centers in central Virginia under the names Siesta Health LLC, Healthy Sleep LLC, and Healthy Sleep Partners, LLC. He withheld federal trust fund taxes from his employees' wages but did not report these withholdings or pay them to the Internal Revenue Service (IRS). Instead, he used the funds for personal expenses.
Neel failed to file an IRS Form 941 (Employer’s Quarterly Federal Tax Return) from at least the first quarter of 2015 through the last quarter of 2020 and did not make any trust fund tax payments during this period. Despite issuing W-2s indicating withheld taxes totaling at least $311,985, he also neglected to pay over the employer’s share of Medicare and Social Security contributions amounting to at least $148,558.
The total unpaid amount to the IRS reached at least $460,543. During this time, Neel used company funds for personal expenses such as monthly rent on a horse farm totaling over $220,000 and almost $40,000 on life insurance.
Assistant U.S. Attorney Carla Jordan-Detamore prosecuted the case.
For those suspecting non-compliance with tax obligations by businesses, reports can be made online or via mail using IRS Form 3949-A. Further information on reporting tax fraud is available on the IRS website.
The press release is available on the U.S. Attorney’s Office for the Eastern District of Virginia's website. Related court documents can be found on the District Court for the Eastern District of Virginia's website or through PACER under Case No. 3:24-cr-107.
