Employer liable for unpaid taxes despite payroll firm's embezzlement

CCH INCORPORATED, a leading provider of healthcare law information services, software and workflow tools, in the Payroll section of its website, recently noted a decision in which a corporation was liable for unpaid payroll taxes despite the fact that the funds were paid to a payroll agent who embezzled the funds. See the full case summary here.

The case is reported at: Pediatric Affiliates, P.A., v. United States of America, DC-NJ, 2006 U.S. Dist. LEXIS 9181.

Tenth Circuit Affirms Embezzlement Conviction over Booker Challenge

The defendant Verel Tracy Westover was convicted by a jury of violating 18 U.S.C. sec. 1001, by making false statements regarding matters within the jurisdiction of a federal agency, and 18 U.S.C. sec. 641, by embezzling government funds in conjunction with his receipt of public housing assistance and food stamps. Subsequent to the conviction, the United States Supreme Court decided Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004), and then United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), which extended the Sixth Amendment holding of Blakely to the United States Sentencing Guidelines ("U.S.S.G.").   In Booker, the Supreme Court held that  "[a]ny fact (other than a prior conviction) which is necessary to support a sentence exceeding the maximum authorized by the facts established by a plea of guilty or a jury verdict must be admitted by the defendant or proved to a jury beyond a reasonable doubt."  Booker, 125 S.Ct. at 756.

In this case, while the Tenth Circuit agreed that the district judge had imposed a sentence which exceeded that supported by the facts found by the jury or admitted by the defendant, it nevertheless held that under the circumstances of this case and on plain error review, the defendant's sentence should be affirmed.

See the full text of the decision on Findlaw here.

Ninth Circuit Affirms Denial of Motion to Suppress Evidence Related to Conviction for Embezzlement

In U.S. v. Weaver, the Ninth Circuit affirmed the District Court's denial of defendant's motion to suppress evidence related to her conviction for embezzlement of mail matter by a postal employee. The Ninth Circuit held that the warrantless search of defendant's vehicle was a contemporaneous incident of the custodial arrest of one of defendant's two passengers, and therefore valid under New York v. Belton 453 U.S. 454, 460 (1981).  See the full text of the decision here (PDF on FindLaw).

Businessman Wins Bid to Sue State Agency That Referred an Embezzler as Employee

The New York Law Journal has reported that the Appellate Division, Second Department of the Supreme Court of the State of New York has ruled in a 3-2 decision that a business owner who lost $75,000 that was embezzled by a crooked bookkeeper can sue the New York State Department of Labor for failing to properly screen the employee as it had promised to do under a special program. The appellate court's ruling reversed a decision by the Court of Claims that had dismissed the claim.

You can read the full decision here.