New Hampshire CEO Pleads Guilty to $14.3M Federal Payroll Tax Fraud Over Several Years
Andrew Park, the former CEO of CarNow, pleaded guilty to withholding but failing to pay more than $14 million. Photo by Fintech Finance News.
From 2014 to late 2021, CarNow Inc. co-founder and then-CEO Andrew Park withheld federal, state and local tax deductions from employees’ paychecks but never paid the governments what they were owed, including the company’s share of payroll taxes, the Department of Justice said in a press release. Under a June 10 plea agreement, Park pled guilty in U.S. District Court in New Hampshire on July 22 to failing to pay more than $14.3 million in employment taxes and for not filing personal tax returns from 2013 to 2020.
Andrew Park Pleaded Guilty to Failing File Income and Payroll Taxes
Park, 49, of Bedford, is to be sentenced Nov. 14 and faces up to five years in prison for failure to account for and pay payroll taxes and one year for failure to file a tax return. Park also faces three years of supervised release after he serves his sentence, fines of up to $250,000 for the payroll tax violation and $100,000 for personal tax violation and a requirement to pay restitution to the IRS and other state and local taxing authorities, according to the DOJ and his indictment.
Park was “responsible for all financial matters related to the company, including for filing the company’s quarterly employment tax returns and collecting and paying over Social Security, Medicare and income taxes withheld from the employees’ wages to the IRS, as well as the Social Security and Medicare taxes the company owed,” the DOJ noted. “He was also responsible for collecting and paying over state and local employment taxes to those respective governments.”
A payroll service company notified Park regularly that taxes were due. At least one employee also told him that the amount paid to Social Security listed on her W-2 did not match what was reported by the Social Security Administration.
Plea Agreement Details
The June 3 plea agreement, reviewed by The Daily Muck, states that in return for the guilty plea the prosecutors will recommend Park be sentenced at the lower end of the sentencing range – but added that the court will make the final determination on sentencing based on the facts of the case. The agreement specifically notes that it does not apply to any actions other taxing authorities may take, only to federal charges.
The government said the amount owed is $14,333,946 in federal payroll taxes and $434,665 in personal income taxes. Park will also be required to pay “the full amount of applicable state and local tax losses, which will be determined by the parties before sentencing or by the court at sentencing.”
A CarNow spokesperson confirmed Park was the co-founder and had been CEO but has had no association with the company since he left in April 2023, according to a July 2 article in the New Hampshire Union Leader.
“The company discovered the failure to remit payroll taxes in late 2021 and immediately took steps to correct the problem and to submit the withholdings on its own, before the government’s investigation was even known,” the spokesman told the Union Leader. “All of the monies owed have been remitted to the government and the employees are not at risk.”
Under New Leadership
CarNow is considered to be a leader in automotive retailing, serving over 5,000 dealerships nationwide. Its new CEO is Kayne Grau, according to a company statement.
The company says it strives to “create simple, real-time experiences that streamline dealership operations and facilitate the transaction between dealers and their clients,” according to its website.
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