Ohio CEO Convicted of 401(k) Fraud

Attevo Inc.’s Charles Snyder allegedly used funds to support ‘lavish lifestyle.’

A jury has convicted the CEO of a Cleveland-based technology consulting firm on six charges related to embezzling $126,000 from an employee retirement fund and collecting nearly $860,000 from workers without paying the money to the IRS.

Attevo, Inc. CEO Charles Snyder was convicted on one count of embezzling from an employee pension fund, and five counts of failure to pay over taxes. He is also chairman and primary shareholder of Ruralogic, Inc., an IT firm headquartered in Bryan, Ohio.

According to the US Attorney’s Office of the Northern District of Ohio, Snyder created a 401(k) and profit-sharing plan for Attevo employees in 2009, which was funded through employee payroll deferrals. He added Ruralogic to the plan in 2010. Between 2010 and 2012, Snyder failed to pay into the plan approximately $126,000 in contributions and loan repayments withheld from Attevo and Ruralogic employee wages, according to court documents.

In 2011, Snyder and the IRS agreed to a monthly payment plan of more than $48,000 per month to repay the company’s outstanding payroll tax liabilities. However, Attevo made 10 payments totaling $483,500, then made no additional payments, said court documents.

Snyder allegedly withheld payroll tax from employees, but failed to pay it to the IRS, and also didn’t pay nearly $330,000 of employees’ portion of payroll taxes in 2010, and more than $530,000 in 2012.

“Instead of paying the taxes of the IRS, he used the stolen money to pay for his vacation home, pool renovation, and otherwise fund his own lavish lifestyle,” US Attorney Justin E. Herdman said in a release.

According to court documents and trial testimony, Snyder used the funds to pay $20,000 per month in rent for his personal residence, and a vacation home in Chautauqua, New York, as well as leases on four vehicles, and other personal expenses. He also was accused of using Attevo’s American Express to pay personal expenses, including clothing at Ann Taylor and Nieman-Marcus, beauty supplies at Oro Gold in Las Vegas, travel to resorts in Florida, and for pool and spa renovations.

“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service,” added IRS Special Agent Ryan Korner. “The failure to pay over withheld taxes results in the loss of tax revenue to the United States government and the loss of future Social Security or Medicare benefits for employees.”

Snyder, 61, is scheduled to be sentenced Oct. 9.

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