Roofing company owner faces prison for $2.5M IRS fraud

The owner and manager of Nastar Roofing, a Cape Coral roofing company, face five years in federal prison after pleading guilty to committing tax fraud for not paying at least $2.48 million in money owed to the IRS. 

William Skaggs Jr., the company’s owner, and Billie Adkison, its manager, both admitted to using cash to pay employees in order to avoid paying federal withholding taxes, the U.S. Department of Justice says.

In addition to the possibility of jail time, they will have to pay back the employment taxes, including an upfront partial restitution payment of $1 million before they are sentenced.

According to the Justice Department and the plea agreements, here is what happened:

Between 2013 and 2023 the pair along, with other employees, would make cash withdrawals on Thursdays and Fridays. They would then use the cash to cover payroll, paying employees for their work and expenses.

Adkinson and Skaggs knowingly did not withdraw required taxes from the employees’ pay nor did it pay the company’s share.

Other times, though, Nasatar would use a payroll company to issue nominal paychecks with taxes withheld. But it was not told of the cash payments. 

The payroll company filed the required reports with the IRS, but those reports were false because the cash payments were not included.

In all, Nastar withdrew $21 million in cash and avoided paying $2.48 million in payroll taxes, according to the plea agreement.

(It is not immediately clear what repercussions, if any, employees face.)

This case was investigated by the Internal Revenue Service’s Criminal Investigation Division and is being prosecuted by Assistant United States Attorney Michael V. Leeman and Justice Department Tax Division trial attorney Kevin Schneider.

A sentencing date has not been set.