PALM BEACH GARDENS, Fla. – A Florida man who owned healthcare companies pleaded guilty to withholding nearly $7.5 million in taxes from his employees’ paychecks and not paying those taxes to the IRS as required by law.
Prosecutors said he misappropriated the funds to purchase a yacht and went on a personal spending spree at luxury retailers like Cartier and Bergdorf Goodman, resulting in a loss of over $10 million to the IRS.
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Paul Walczak, from Palm Beach Gardens, faces a maximum sentence of five years in prison for the employment tax charge and one year for failing to file his personal income taxes. Additionally, he may face a period of supervised release, restitution, and monetary penalties.
According to the IRS Criminal Investigation, Walczak managed a network of interconnected healthcare companies operating under various names, including Palm Health Partners and Palm Health Partners Employment Services (PHPES). At one point, he employed over 600 people and paid over $24 million annually in payroll.
Between 2016 and 2019, Walczak withheld taxes from his employees' paychecks, according to the plea.
In 2014, the IRS had already penalized him for not paying employees' taxes, neglecting to pay $3,480,111 of the business’s portion of employee Social Security and Medicare taxes.
Walczak used over $1 million from his business bank accounts to buy a yacht and transferred hundreds of thousands of dollars to his personal bank accounts, spending lavishly at prestigious stores with the withheld taxes from his employees' wages.
His sentencing is scheduled for Feb. 28, 2025.