The owner of Lane Tool & Manufacturing Co. in South Elgin was sentenced to 9 months in federal prison and ordered to pay $3.33 million in restitution after pleading guilty to payroll tax fraud.
Edward T. Arnieri, 71, of St. Charles, admitted to withholding about $3.9 million in employee payroll taxes and failing to pay it to the Internal Revenue Service, according to a news release from the U.S. Attorney’s Office in Chicago.
Payroll taxes are made up of money paid by the employer and employee for Social Security and Medicare, which are collected and remitted on a quarterly basis, and Federal Unemployment Taxes, which are to be paid by the employer annually, officials said.
Arnieri also failed to withhold federal income tax from employees’ wages, which he was required to send to the U.S. Treasury on a quarterly basis, the release said.
“For approximately eight years, Arnieri caused his company to issue Forms W-2 and paychecks to its employees which falsely reflected that the company had withheld income and payroll taxes from their wages,” the release said. “Arnieri’s conduct also resulted in the filing of inaccurate individual tax returns for himself, resulting in additional tax loss of approximately $450,000.”
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The restitution he owes is to be paid to the U.S. Treasury and the Illinois Department of Revenue.
The sentence was imposed by U.S. District Court Judge Jorge L. Alonso.