The founder of a staffing firm was sentenced to 52 months in prison Sept. 17 and ordered to pay more than $38.9 million in restitution to the IRS, the US attorney’s office announced.

Ronald James Paolucci, 55, of Frisco, Texas, had pleaded guilty in February 2023 to conspiracy to defraud the US and making and subscribing a false tax return, the office reported.

Paolucci was founder of American Management Staffing. He withheld payroll taxes from employees’ paychecks from 2014 through 2020; however, American Management Staffing did not make any payments to the IRS, according to the office.

“Nearly 70% of total US revenues collected by the IRS are collected through employment taxes,” Christopher J. Altemus Jr., special agent in charge IRS criminal investigation, Dallas Field Office, said in a press release.

“When the employer withholds the payroll taxes but fails to pay the taxes over to the IRS, they may be criminally investigated and prosecuted for failing to withhold, collect and pay over the tax,” Altemus said. “This was the case with Mr. Paolucci. His failure to remit withheld taxes is not only a breach of trust but a serious crime with severe consequences.”

Paolucci also failed to report his personal compensation, Altemus said.

Paolucci’s attorney, David Coffin, said he did not have comment on this case.

USA v. Paolucci; US District Court Northern District of Texas; 3:23-cr-00008-L-1