The owner of a Houston staffing company was sentenced to three years in prison for failing to pay approximately $18 million in employment taxes, the US Department of Justice reported. 

Richard Floyd Tatum Jr. pleaded guilty in March to one count of failing to pay employment taxes. In addition to the prison term, he was ordered to serve three years of supervised release and to pay $18,298,604 in restitution to the Internal Revenue Service.

Tatum owned Associated Marine & Industrial Staffing Inc., an industrial staffing company that provided temporary labor to businesses in Texas and other states. Tatum employed approximately 1,000 people, including internal employees and external employees.

From March 2008 through December 2009, Tatum filed false employment tax returns which did not report the company’s external employees, according to documents filed with the court. In May 2013, he filed delinquent returns for the quarters ending in March 2010 through December 2012, reporting external employees but making no payments of the taxes owed. Tatum withheld from his employees approximately $12 million in payroll taxes from March 2008 through December 2012, but did not pay over any of this money to the IRS. Tatum also failed to pay $6 million of his company’s required share of social security and Medicare taxes during the same quarters. Instead, he used the money for his personal benefit, the Department of Justice reported.

Tatum admitted that he caused a tax loss of more than $18 million.

“He cheated his employees, the US Treasury and his honest competitors who paid their taxes and sought to compete on a level playing field,” said Acting Deputy Assistant Attorney General Goldberg. “Employment tax enforcement remains a top priority for the Tax Division, and Tatum’s prison sentence today sends a strong message that those who divert such payments for their personal benefit will be held accountable.”