Not-guilty plea for tax evasion
A not-guilty plea was entered Thursday for a south Nevada County business owner accused of filing false tax reports for five years with the intent of evading taxes.
Although William E. Mann wasn’t in Nevada County Superior Court, his lawyer, Michael Casterton of Gold River, entered the plea on his behalf on 10 felony counts. A felony conference was set for April 16.
An investigation into Mann’s Streeter Road corporation, Educational Marketing Group Inc., was launched in 2000 by the state Employment Development Department.
The department alleges Mann, 59, of Lake of the Pines, paid some employees cash without making payroll deductions, and others were paid by check with deductions not reported to EDD from 1996 through 2000. The California Unemployment Insurance Code requires accurate reports of employees’ earnings.
EDD is seeking $106,084 in restitution. The amount includes $42,262 for allegedly unpaid taxes through 2000, with the balance from penalties, interest and investigation costs.
Casterton said he couldn’t comment on the case without seeing all the evidence. Mann wasn’t present because he was on vacation and had court permission to be absent, the lawyer said.
Deputy District Attorney Jim Phillips said EDD usually forwards a few cases each year to his office for prosecution, but rarely for the kind of restitution sought in Mann’s case.
Phillips said Mann’s corporation provides software training to businesses, and the case will likely center on the status of Mann’s employees – were they employees or contractors?
An EDD investigator talked with a man who said he started working for Mann in 1995 at $1,100 a week as a contractor, but came to be treated as an employee, claiming Mann prohibited him from accepting outside work, the investigator’s report says.
The same worker said he paid his own taxes and each year received a 1099 tax form from Mann. But in 1999, Mann refused to give him a form, saying his business is a Nevada corporation and didn’t have to pay taxes, the EDD report says.
Another former worker said she worked a year at the business until May 1999, then quit because of sexual harassment, according to the EDD report.
The woman filed an unemployment claim, but was told Educational Marketing Group didn’t submit her wages, according to the report. It also alleges Mann deducted 20 percent of her pay and gave her a W-2 form at year’s end.
Phillips said EDD is still investigating the woman’s case.
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