Date: 03-02-2018

Case Style:

Case Number: 2:16-cr-20247-JTF

Judge: John T. Fowlkes

Court: United States District Court for the Western District of Tennessee (Shelby County)

Plaintiff's Attorney: Damon Griffin and Nathan Brooks

Defendant's Attorney: Arthur E. Quinn

Description: Memphis, TN - Tennessee Staffing Company Owners Sentenced to Prison for Payroll Tax Fraud
Used Funds Withheld from the IRS to Pay for Luxury Cars and Private School

Two former Memphis staffing company owners were sentenced to prison for payroll tax fraud.

Mark Stinson, who was convicted in December 2017 at trial of conspiring to defraud the United States, failing to pay over payroll taxes, filing false tax documents, theft of government funds, and aggravated identity theft, was sentenced to 75 months in prison. His wife, Jayton Stinson, previously pleaded guilty to conspiring to defraud the United States, and was sentenced to one year in prison.

According to court documents and trial testimony, from 2005 through 2015, Mark and Jayton Stinson operated a temporary staffing company in Memphis that provided services to businesses in Tennessee and elsewhere. The staffing company’s standard contract with its customers provided that the staffing company was responsible for withholding employment tax from its employees’ wages and paying over the amounts withheld to the Internal Revenue Service (IRS).

The Stinsons failed to pay over $2.8 million in withholdings and other employment taxes due to IRS, failed to timely file employment tax returns and filed false employment tax returns. In an effort to avoid making payments to the IRS, the Stinsons changed the name and structure of the company multiple times after accumulating employment tax liabilities, operating as Jayton Stinson Connex Staffing & Janitorial Service, Connexx Staffing Services LLC, Connexx Staffing Services Inc., and Complete Employment Agency.

The Stinsons also conspired to impede efforts by the IRS to collect on the employment tax liabilities owed by their companies. For example, the Stinsons made false representations to the IRS about their control of the staffing company and their knowledge of the requirement to truthfully account for and pay over the employment taxes, falsely identified multiple family members as company executives, placed the staffing company in the names of nominees who did not have control over the business operations, and established payment arrangements intended to impede an IRS levy placed on their customer payments. The Stinsons used the withheld funds to pay for personal expenses, including a Mercedes-Benz, a Cadillac Escalade, mortgage payments, and private school tuition for their children.

Mark Stinson also filed a fraudulent tax return for a relative that included a false dependent seeking a refund to which the relative was not entitled. Stinson received a substantial portion of the fraudulent refund.

Outcome: Defendant was sentenced to 75 months in prison.

In addition to the terms of imprisonment, U.S. District Court Judge John T. Fowlkes, Jr. ordered the Stinsons to serve terms of supervised release and to pay restitution of $ 2.8 million.

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Defendant's Experts:

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