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U.S. Attorney Geoffrey Berman said Dutchess County resident William Grogg, of Millbrook, has worked in the printing and publishing industry in and around Poughkeepsie since the 1980s, owning and managing the financial affairs of multiple companies.
During his three decades working in the industry, it is alleged that Grogg failed to pay taxes for years.
Among the companies Grogg had financial control over his three decades in the business include Hamilton Reproductions, Hamco - later called the Netpub Corporation - Netpublications Inc. and MCA-Netpub.
Berman noted that in 1994, the IRS assessed a civil penalty of approximately $368,639.93 against Grogg for willfully failing to collect, account for, and pay the IRS payroll taxes owed by Hamilton Reproductions.
Between 2013 and 2017, it is alleged that Grogg was the sole owner of Netpublications and MCA, which had dozens of employees. During that time, he employed a third-party payroll service which prepared the companies’ payroll tax returns, which were provided to Grogg.
According to Berman, although Netpublications and MCA withheld payroll taxes from employees’ paychecks as directed by the payroll service, Grogg failed to pay over the withheld payroll taxes, as well as Netpublications’ and MCA’s matching Social Security and Medicare contributions, to the IRS.
Instead, Grogg spent the withheld payroll taxes for personal gain, money which he was required to hold in a trust for the United States Government, on personal and business expenses.
Later, when contacted by the IRS about payroll tax compliance, Grogg made a series of false statements to investigators in writing and during interviews. The statements included claims that Netpublications and MCA were originally owned by a dead Canadian businessman, and that a deceased associate of the Canadian businessman kept certain of Netpublications’ records in a garage until they were destroyed in a flood.
Berman said that those and other false statements that Grogg made were intended to obstruct and impede the IRS.
“As alleged, William R. Grogg failed to pay over payroll taxes for his company for years, and then lied to the IRS about it,” Berman said. “This cost the government hundreds of thousands of dollars in tax revenue. Grogg now faces 18 counts of criminal tax charges, and the possibility of time behind bars.”
Grogg, 69, has been charged with 17 counts of willfully failing to pay over Netpublications’ and MCA’s payroll taxes and one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws. He faces up to five years in prison on each of the top counts.
IRS-CI Special Agent in Charge Jonathan Larsen stated, “as the indictment against Mr. Grogg demonstrates, using employment taxes for personal and business expenses is illegal, and therefore subject to criminal enforcement. Employment tax enforcement is among the IRS’s highest priorities and our Special Agents will continue to vigorously investigate these criminal allegations.”
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