Chesterfield business owner sentenced after he kept over $460,000 from IRS

CHESTERFIELD COUNTY, Va. (WRIC) -- A Chesterfield business owner was sentenced on Tuesday after he collected nearly a half of a million dollars in various taxes from his employees but did not give said funds to the IRS.

According to the U.S. Department of Justice (DOJ), 63-year-old David Neel of the Chester area was sentenced on Tuesday, Feb. 25 to two years in prison for failing to account for or pay over employment taxes.

Neel was the owner and operator of several Central Virginia sleep disorder centers, including Siesta Health LLC, Healthy Sleep LLC and Health Sleep Partners LLC.

According to court documents, he withheld federal trusts fund taxes from his employees' wages, but did not report the withholdings or pay them to IRS, instead keeping the money for personal use.

The DOJ said that Neel did not file an Employer's Quarterly Federal Tax Return (IRS Form 941) in the name of any of his sleep disorder businesses from the first quarter of 2015 all the way through the last quarter of 2020. He also did not make any trust fund tax payments to the IRS.

Neel issued W-2s to his employees mentioning that he had withheld a total of $311,985 in trust fund taxes for that time period. In addition, he failed to pay the employer's share of Medicare and Social Security contributions for those quarters, as well as other quarters -- totaling to $148,558.

The total amount Neel did not pay the IRS is at least $460,543.

According to DOJ, during the time periods that Neel failed to pay employee withholdings, he had access to a large amount of company money where he used it to provide a lavish personal life, including:

• A 215-acre home and horse farm, with the monthly rent of $5,000 -- totaling to more than $220,000.
• A budget of $500 to $1,000 or work on his home -- totals to approximately $30,000.
• Close to $40,000 paid for life insurance
• Tuition and educational expenses for the Neel's significant other's daughter.
• Purchased a new Ford F600 truck.

If you have reason to believe a business is not complying with tax law, you can report that potential fraud online or via mail. For more information on how to do that, click here.