Virginia Beach businessman pleads guilty to $2.5 million tax fraud

Virginia Beach

FILE – This July 24, 2018, file photo shows a portion of the 1040 U.S. Individual Income Tax Return form. It’s the time of year to start thinking about taxes – what’s ahead and what can be done now to manage. But the upcoming tax filing season is going to be trickier for many Americans due to rampant unemployment, working from home and general upheaval due to COVID-19. (AP Photo/Mark Lennihan, File)

VIRGINIA BEACH, Va. (WAVY) — According to the Department of Justice, a Virginia Beach man plead guilty on Thursday to defrauding the IRS out of more than $2.5 million in taxes.

Court documents show that Richard Yanek, 52, hid assets, made false statements about his ability to pay, used a nominee company to conduct business and diverted huge sums of money to pay creditors instead of the IRS.

“The defendant attempted to evade the payment of over $2.5 million in taxes and instead used his ill-gotten gains for personal expenses such as an oceanfront home, luxury travel, and yacht club dues,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “EDVA is committed to holding accountable those who try to defraud the system rather than paying their fair share.”

Yanek has owned and operated a credit card processing business since at least 1995. For part of that time, between 2013 and 2018, he withheld employment taxes from his employees but failed to consistently pay more than a million dollars of those withholdings to the IRS. He also provided false employment tax forms to his employees.

Officials say he has not filed a personal income tax return or paid personal income taxes since 2010, despite earning and spending millions of dollars on the mortgage for his oceanfront home, personal credit cards, private school tuition, and golf and yacht club dues.

He has also made false statements to the IRS and law enforcement when asked why he has not filed.

Yanek is scheduled to be sentenced on September 27. He faces a maximum penalty of five years in prison.

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