U.S. Department of Justice

05/20/2019 | Press release | Distributed by Public on 05/20/2019 18:57

Former Owner and Operator of 16 Michigan Adult Foster Care Homes Convicted of Payroll Tax Fraud and Obstructing the IRS

A Grand Blanc, Michigan, man, who previously operated adult foster care homes, was convicted today of payroll tax fraud, obstructing the Internal Revenue Service (IRS), and failure to file tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department's Tax Division and U.S. Attorney Matthew Schneider for the Eastern District of Michigan.

According to court documents and the evidence presented at trial, Jeremiah Cheff owned and controlled the financial and business operations of 16 foster care homes that cared for individuals with mental illnesses and developmental and physical disabilities, including Hunter's Home, Nico's Place, Harmony Manor, Hilltop Estates, and Deerwood Manor. From September 2010 through September 2014, Cheff withheld payroll taxes from employees' paychecks, but failed to timely file payroll tax returns and failed to pay over the withheld funds to the IRS. The jury found Cheff guilty of 60 counts of payroll tax fraud for this misconduct.

Cheff was also convicted of corruptly endeavoring to obstruct the administration of internal revenue laws, and failing to timely file his 2013 through 2015 individual income tax returns. According to court documents and the evidence presented at trial, after the IRS attempted to collect unpaid payroll taxes, Cheff sent an $80,000 false financial instrument to the IRS and falsely claimed to a revenue officer that he had paid the taxes due.

Sentencing is set for Sept. 3. Cheff faces a statutory maximum sentence of five years in prison for each payroll tax fraud count, three years in prison for the corrupt endeavor to obstruct count, and one year in prison for each of the failure to file counts. Cheff will also face a term of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Schneider commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey A. McLellan and Carl F. Brooker, IV of the Tax Division, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division's website.