Grain Valley Resident Pleads Guilty in Federal Case

| November 9, 2013 | 8:43 am
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A Grain Valley businessman has admitted to stealing money from his clients.  Geoffrey Carter, 42, pleaded guilty in federal court on Tuesday to five counts of failure to account for and pay employment taxes.  Carter, who operated Carter’s Tax Service, admitted to collecting more than $82,000 from five small business clients.  The money was “supposed to be used to submit payments to the Internal Revenue Service, but the money was kept for personal use,” according to court documents.

Carter is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000, on each of the five counts. A sentencing hearing will be scheduled at a later time.

Press Release from the Office of United States Attorney Tammy Dickinson

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Grain Valley, Mo., man who previously operated a payroll services company has pleaded guilty in federal court to failing to pay employment taxes on behalf of his clients, and instead stealing those funds for himself.

Geoffrey Scott Carter, 42, of Grain Valley, waived his right to a grand jury and pleaded guilty before U.S. District Judge Howard F. Sachs on Tuesday, Nov. 5, 2013, to a federal information that charges him with five counts of failure to account for and pay over employment taxes.

Carter admitted that he collected $82,580 in employment taxes from five small business clients, which he was supposed to submit to the IRS. Instead, Carter kept the money for his own personal use.

Carter began operating his own business, known as Carter’s Tax Service, in 2001. In the early years, Carter only prepared income tax returns, but starting in 2005 he also began providing payroll services to his small business customers. In 2008 he began only providing payroll services.

The services Carter provided to his clients included preparing and filing Forms 940 and 941 and cutting payroll checks for his clients’ employees. In order to perform these services, Carter was given access to his clients’ bank accounts. To pay his clients’ employment taxes, Carter transferred money from their accounts into his Carter’s Tax Service business bank account, where he commingled the funds, and then submitted the appropriate Forms 940 and 941 to the IRS. He was supposed to submit the payment due along with the Forms 940 and 941.

From 2007 through 2010, Carter deducted and collected from the bank accounts of his clients a total of $82,580 in federal employment taxes, which he failed to pay to the IRS but instead kept and used for personal purposes.

Under federal statutes, Carter is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution, on each of the five counts. 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 Linda Parker Marshall. It was investigated by IRS-Criminal Investigation.

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