VIRGINIA BEACH, Va. (WVEC) -- A businessman pleaded guilty Friday to failing to pay nearly $1 million in payroll taxes to the IRS.
Michael Popina, 61, was the president and owner of Chesapeake Coatings & Decks Inc., a painting and sandblasting company hired primarily by government contractors and marine businesses.
He pleaded guilty to failure to pay over payroll tax and faces a maximum penalty of five years in prison when sentenced on October 2.
According to the statement of facts filed with the plea agreement, CCD had a duty to withhold from its employees' paychecks certain federal taxes and pay the monies over to the IRS.
During tax years 2010-2013, Popina failed to pay to the IRS approximately $130,000 in these withheld payroll taxes.
IRS agents also learned that Popina utilized an additional scheme to avoid paying payroll taxes.
He would spread his employees' regular pay into two separate checks.
The first payroll check was sent to Popina’s payroll company, taxes were withheld, and the income was reported to the IRS. However, the second payroll check was not sent to the payroll company, taxes were not withheld and the income was not reported to the IRS.
Court records indicate that Popina utilized this system because his business was poorly managed and that he used the tax savings to continue keeping the business in operation.
Investigators then concluded that Popina failed to account for approximately $4 million using this system and that he failed to pay to the IRS a total of approximately $950,000 in payroll taxes.