NEWPORT NEWS, Va. - A Virginia Beach man was sentenced Monday to 48 months in prison for defrauding the IRS out of more than $2.5 million of taxes by hiding assets, making false statements about his ability to pay, using a nominee company to conduct business and diverting huge sums of money to pay creditors instead of the IRS, among other things.
Court documents say 53-year-old Richard Yanek has owned and operated a credit card processing business since at least 1995. Between 2013 and 2018, Yanek reportedly withheld employment taxes from his employees, but officials say he failed to consistently pay more than a million dollars of those withholdings to the IRS.
According to records, each year, Yanek provided false employment tax forms to his employees, who filed their own taxes and mistakenly believed that the amounts withheld from their wages had been paid to the Social Security program.
Until recently, officials say he had 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.
Yanek reportedly had his personal tax returns prepared by his accountant for the years 2011 through 2016, all of which reported substantial taxes due and owing. However, court documents say he intentionally chose not to file these returns with the IRS and that he later made false statements to the IRS and law enforcement when asked why those returns had not been filed.
“The defendant has been held accountable for attempting to evade the payment of over $2.5 million in tax obligations while he was earning and spending millions of dollars on personal luxury expenses and the mortgage for his oceanfront home in Virginia Beach,” said Raj Parekh, acting U.S. attorney for the Eastern District of Virginia. “The sentence imposed in this case should send a clear message of deterrence to others who may be considering unlawfully enriching themselves at the expense of the American taxpayer.”
“Yanek betrayed his employees’ trust and violated U.S. tax laws for personal financial gain,” said Darrell J. Waldon, acting Special Agent in Charge of the IRS-Criminal Investigation (IRS-CI) Washington, D.C. Field Office. “He deliberately chose not to pay over employment taxes he withheld from his employees, instead opting to use those monies to fund a life of opulence. For years, he spent millions of dollars on luxury items. Today, justice was served.”