Maryland Payroll Company Owner Pleads Guilty to Employment Tax Crimes and Embezzling from Employees’ 401(k) Plans

A Maryland woman pleaded guilty today to failing to pay employment taxes to the IRS and embezzling from an employee benefit plan.

According to court documents and statements made in court, Michelle Leach-Bard, of Lutherville-Timonium, was the owner and sole corporate officer of iProcess Online Inc., a third-party accounting company that specialized in payroll, human resources and bookkeeping. From at least October 2016 through the end of 2021, she was, as iProcess's sole corporate officer, responsible for withholding Social Security, Medicare and income taxes from employees' wages and paying those wages to the IRS. Though the taxes were withheld from employees wages, Leach-Bard did not pay them to the IRS, as she was required to do.

In total, Leach-Bard caused a tax loss to the IRS of $2,663,264.12.

In addition, iProcess had a Section 401(k) Profit Sharing and Retirement Plan for the benefit of some of its employees. Contributions to the 401(k) Plan were deducted from participating employees' wages. Beginning in or around 2007, Leach-Bard did not pay those employee contributions to the 401(k) Plan. In total, Leach-Bard did not pay to the 401(k) plan approximately $207,180.41 in wages that had been withheld from employees' paychecks. Additionally, Leach-Bard did not make approximately $18,740.37 in employer matching contributions for certain employees.

Leach-Bard is scheduled to be sentenced on Aug. 20 and faces a maximum penalty of five years in prison for both the tax and embezzlement charges. She also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department's Tax Division made the announcement.

IRS Criminal Investigation and the Department of Labor's Employee Benefits Security Administration are investigating the case.

Trial Attorneys Catriona Coppler and Jeffrey McLellan of the Tax Division are prosecuting the case.