DENVER – LAWFUEL – Law News Network – Bill Leone, United States Attorney for the District of Colorado, and Terry L. Stuart, Special Agent In Charge of the IRS-Criminal Investigation, Denver Field Office, announced that WILLIAM C. CRABBE, age 56, of Kersey, Colorado, and JAMES S. ROWAN, age 54, of Greeley, Colorado, owners of Columbine Health Care Systems, Inc. of Greeley, Colorado, were indicted by a federal grand jury in Denver on Tuesday, July 25, 2006, for failure to pay federal payroll taxes, failure to pay taxes, and tax evasion. CRABBE was also charged with filing false tax returns. Both defendants received summons to appear in U.S. District Court in Denver on August 10, 2006 at 2:00 pm, where they will be advised of the charges against them. Columbine Health Care Systems went out of business in June 2003.
According to the indictment, CRABBE and ROWAN were the owners and principal officers of Columbine Health Care Systems, a national nurse-staffing agency. 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.
The defendants were required to withhold federal income tax, Social Security taxes, and Medicare taxes from their employees’ pay checks. The indictment alleges that from June 30, 2000 through December 31, 2001, the defendants deducted and collected these taxes from their employees, but only paid these taxes for their corporate employees, and not for their nurses. From March 31, 2002 through December 31, 2002, the defendants allegedly collected these taxes but did not pay them to the federal government for either their corporate employees or their nurses. In total, CRABBE failed to pay $4,244,433 in taxes. ROWAN failed to pay a total of $4,236,531 in taxes.
In addition, the indictment alleges that both defendants evaded the IRS in 2001 by concealing their income of approximately $200,000 by using a shell company, Global Management LLC, thus avoiding paying the IRS over $70,000 in taxes owed. CRABBE is also charged with filing false income tax returns for quarters ending March 31, 1999 through December 31, 2001.
WILLIAM CRABBE faces 11 counts of failure to pay over employee federal payroll taxes, 11 counts of failure to pay taxes, 2 counts of filing false tax returns, and 1 count of tax evasion.
JAMES ROWAN faces 11 counts of failure to pay over employee federal payroll taxes, 11 counts of failure to pay taxes, and 1 count of tax evasion.
Failure to pay over employee federal payroll taxes carries a penalty of not more than 5 years in federal prison, and/or a $10,000 fine per count.
Failure to pay taxes carries a penalty of not more than 1 year in prison, and/or a $10,000 fine per count. Filing false tax returns carries a penalty of not more than 3 years in federal prison, and/or a $100,000 fine per count. Tax evasion carries a penalty of not more than 5 years imprisonment, and/or a $100,000 fine. The defendants could be ordered to pay restitution.
“Although it might seem like common sense for most of us, the fact remains that if you neglect to be truthful with the government regarding your taxes, you must be prepared to suffer the consequences,” said Terry L. Stuart, Special Agent in Charge, of the IRS Criminal Investigation Division, Denver Field Office.
This case was investigated by the Internal Revenue Service Criminal Investigation Division. The case is being prosecuted by Assistant United States Attorney Valeria Spencer.
The charges are only allegations, and the defendants are presumed innocent unless and until proven guilty.