DENVER (LAWFUEL) – William C. Crabbe, age 59, of Kersey, Colorado, was sentenced today by U.S. District Court Judge Marcia S. Krieger to serve 37 months in federal prison for tax fraud, Troy A. Eid, United States Attorney for the District of Colorado, and Christopher M. Sigerson, IRS Special Agent in Charge of IRS Criminal Investigation, announced. Following his release from federal prison, Crabbe will be on supervised release for 1 year. Crabbe was also ordered to pay restitution to the IRS in the amount of $2,194,331.86. Judge Krieger ordered Crabbe to report to a facility designated by the Bureau of Prison on or before November 12, 2008.
William Crabbe was indicted by a federal grand jury in Denver on July 25, 2006 on charges of failure to pay employee federal payroll taxes, and filing false employment tax returns. He was found guilty on March 7, 2008, following a three week jury trial. A co-defendant, James S. Rowan, had earlier pled guilty to tax evasion relating to his failure to pay employee federal payroll taxes.
According to the facts presented during the trial, Crabbe was co-owner and principal officer of Columbine Health Care Systems, a now defunct national nurse-staffing agency which operated in 35 states throughout the United States. Columbine would charge its clients a fee for placing nurses in such places as hospitals, healthcare facilities, and doctor’s offices. Columbine would then pay wages to the nurses. The company’s corporate offices were located in Greeley, Colorado, with a few small sales offices located in other states.
Crabbe was required to withhold federal income tax, Social Security taxes, and Medicare taxes from his employees’ pay checks. From June 30, 2000 through December 31, 2001, the defendant deducted and collected these taxes from his employees, but only paid these taxes for his corporate employees, and not for their nurses. From March 31, 2002 through December 31, 2002, Crabbe collected these taxes but did not pay them to the federal government for either his corporate employees or his nurses. Lastly, Crabbe was found guilty of filing false income tax returns for quarters ending March 31, 1999 through December 31, 2001.
“Businesses that fail to withhold taxes gain an unfair and illegal advantage over their competitors,” said U.S. Attorney Troy A. Eid.
“IRS Criminal Investigation is working diligently to protect the employees of those businesses who may find at retirement that their social security benefits have been reduced because their income was not reported by their employers,” said Christopher M. Sigerson, IRS Special Agent in Charge of the Denver Field Office.
This case was investigated by the Internal Revenue Service Criminal Investigation Division. The trial was handled by Assistant United States Attorneys Tim Neff and Jaime Pena.