Office of the Attorney General: Nixon announces drywall contractor is bound over for trial on tax charges involving undocumented workers

FROM THE OFFICE OF THE ATTORNEY GENERAL

June 27, 2008

St. Charles, Mo. - A drywall contractor working on the Southernside Apartment building project in O’Fallon was bound over for trial on Thursday (June 26) on eight criminal counts brought by Attorney General Jay Nixon and St. Charles County Prosecuting Attorney Jack Banas. H&H Drywall Specialties, of Tulsa, Okla., was charged last December with failing to withhold payroll taxes from its construction workers and remit those payroll taxes to the State of Missouri.

Nixon’s office began a joint investigation with the St. Charles County Prosecutor after learning of an individual who admitted to an O’Fallon police officer after a traffic stop that he was in the United States illegally and was working at an O’Fallon construction project. The O’Fallon Police Department assisted in the investigation.

The charges allege that H&H Drywall misclassified workers as independent contractors in an attempt to avoid payroll withholding and reporting requirements. H&H Drywall faces two felony counts of failing to deduct Missouri employer withholding tax, two felony counts of filing a false tax return, two felony counts of failing to remit employer withholding tax, and two misdemeanor counts of making false statements in employment security wage reports.

The probable cause statement filed with employees, as well as the numbers in the company’s payroll records, either were registered to someone other than the employee, matched deceased individuals, or were not registered to a known individual. The I-9 form and payroll records for the individual questioned by O’Fallon police contained a Social Se the charges alleges that most of the Social Security numbers contained in the I-9 forms for H&H Drywall curity number registered to someone who was deceased.

Each count of failure to withhold, report or remit tax is punishable upon conviction by a fine of up to $10,000. Each count of making false statements in an employment security wage report is punishable upon conviction by a fine of up to $1,000. As in all criminal cases, the charges against the defendant are merely allegations, and the defendant is presumed innocent until or unless proven guilty in a court of lawSt. Charles, Mo. - A drywall contractor working on the Southernside Apartment building project in O'Fallon was bound over for trial on Thursday (June 26) on eight criminal counts brought by Attorney General Jay Nixon and St. Charles County Prosecuting Attorney Jack Banas. H&H Drywall Specialties, of Tulsa, Okla., was charged last December with failing to withhold payroll taxes from its construction workers and remit those payroll taxes to the State of Missouri.

Nixon's office began a joint investigation with the St. Charles County Prosecutor after learning of an individual who admitted to an O'Fallon police officer after a traffic stop that he was in the United States illegally and was working at an O'Fallon construction project. The O'Fallon Police Department assisted in the investigation.

The charges allege that H&H Drywall misclassified workers as independent contractors in an attempt to avoid payroll withholding and reporting requirements. H&H Drywall faces two felony counts of failing to deduct Missouri employer withholding tax, two felony counts of filing a false tax return, two felony counts of failing to remit employer withholding tax, and two misdemeanor counts of making false statements in employment security wage reports.

The probable cause statement filed with employees, as well as the numbers in the company's payroll records, either were registered to someone other than the employee, matched deceased individuals, or were not registered to a known individual. The I-9 form and payroll records for the individual questioned by O'Fallon police contained a Social Se the charges alleges that most of the Social Security numbers contained in the I-9 forms for H&H Drywall curity number registered to someone who was deceased.

Each count of failure to withhold, report or remit tax is punishable upon conviction by a fine of up to $10,000. Each count of making false statements in an employment security wage report is punishable upon conviction by a fine of up to $1,000. As in all criminal cases, the charges against the defendant are merely allegations, and the defendant is presumed innocent until or unless proven guilty in a court of law.