COMMERCE CITY — The owner of a Commerce City-based transportation company pled guilty Friday, Jan. 3, after being accused of withholding more than $2 million in unpaid taxes.
Lucilious J. Ward, 63, of Denver, Colorado, entered the guilty guilty plea before U.S. District Court Judge Lewis T. Babcock on one count of failure to account for and pay over the employment taxes withheld from his employees’ paychecks and one count of making a false claim against the United States.
The plea was announced by U.S. Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd.
Ward, who is free on a bond, is scheduled for further sentencing proceedings before Judge Babcock on Feb. 3. He was indicted by a federal grand jury on Oct. 2, 2012.
On Sept. 8, 2011, Special Agents with IRS Criminal Investigation executed a search warrant on Ward’s business, Global Access, LLC, located at 5455 E. 52nd Ave.
According to the facts contained in the Indictment as well as the stipulated facts contained in the plea agreement, since at least 2004, Ward has owned and operated Global Access, which provided transportation services including hotel and airport shuttles, para transit services, and charter bus tours. Its largest client has been the Regional Transportation District, which contracted with Global Access to provide a portion of RTD’s Access-a-Ride bus services.
RTD paid Global Access more than $35 million from 2003 through 2012. During this time, the Internal Revenue Code required Global Access to withhold its employees’ shares of Federal Insurance Contribution Act taxes (“FICA,” or Social Security and Medicare taxes) and income taxes from the salaries or wages of its employees, and to account for and pay over the withheld amounts to the IRS.
From January 2005 through the second quarter in 2011, Ward withheld employment taxes from Global Access’ employees’ paychecks and failed to file with the IRS Forms 941 as required by law, as well as failed to pay the employment taxes that Ward had withheld from their paychecks. With the exception of the first quarter of 2008 — which was paid in part and filed automatically by a payroll company Ward hired — Ward also failed to pay the required employer’s matching portion of FICA. Rather than paying the IRS the employment taxes owed by Global Access, Ward kept that money in Global Access’ accounts and spent it on a variety of expenses.
At the end of 2008 Global Access’ office manager recommended to Ward that he let a payroll company take care of paying the employment taxes for Global Access; however, Ward declined. A CPA who performed various accounting functions for Global Access and Ward repeatedly advised Ward about Global Access’ growing tax liability and the potential consequences associated with not paying them.
Additionally, in 2010, Ward filed with the IRS an amended personal tax return for tax year 2007 which falsely claimed that $76,479.44 of federal income tax withholdings had been withheld from his paychecks by Global Access and paid to the IRS. At the time Ward filed, he knew that he and Global Access had not paid to the IRS the $76,479.44. Ward intentionally filed the false return so that he would be assessed a refund of $76,479 to which he was not legitimately entitled.
The government asserts that the employment tax due and owing for restitution purposes is approximately $5,955,866.
Failure to account for and pay over employment taxes and filing a false claim against the United States both carry a penalty of not more than 5 years in federal prison, and a fine of up to $250,000, per count.