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Bay Area Business Owner Pleads Guilty To Defrauding United States Of More Than $500,000 Of Employment Taxes

SAN FRANCISCO – Herminigilda Manuel pleaded guilty today in federal court to willfully failing to account for and pay over federal employment taxes, announced United States Attorney David L. Anderson and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Kareem Carter.  The plea was accepted by the Honorable Richard Seeborg, U.S. District Judge.  

Manuel, 62, of San Leandro, Calif., is the former owner of three assisted living facilities in the San Francisco Bay Area.  In pleading guilty, Manuel admitted that from 2010 through 2013, she willfully failed to account for and pay more than $500,000 of employment taxes (i.e., federal income, Social Security, and Medicare taxes) that were owed by the assisted living facilities.  Further, Manuel admitted that to conceal her fraud, she caused her assisted living facilities to keep two sets of payroll accounting records.  One set of records consisted of wages paid to employees and taxes withheld from those wages that were reported to the IRS.  The second set of accounting records consisted of additional wages paid to employees that were not reported to the IRS.  The employment taxes due on the additional wages totaled $512,000.  

Manuel was charged by information on February 8, 2019, with twelve counts of willful failure to account for and pay over employment taxes, in violation of 26 U.S.C. § 7202. Under the plea agreement, Manuel pleaded guilty to one count; if Manuel complies with the plea agreement, the remaining counts will be dismissed at sentencing.

Judge Seeborg scheduled Manuel’s sentencing hearing for June 11, 2019 at 2:30 p.m.  The maximum statutory penalty for a violation of 26 U.S.C. § 7202 is five years in prison and a fine of $250,000.  Additional periods of supervised release, fines, and restitution also may be imposed, however, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.   

Assistant U.S. Attorney Jose A. Olivera is prosecuting the case.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation. 
 

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