Parkersburg man pleads guilty to tax evasion

(Court Reports - Photo Illustration/MetroCreativeConnection)

CHARLESTON — A Parkersburg man pleaded guilty Thursday in U.S. District Court for the Southern District of West Virginia.

Brian E. Drake, 56, admitted to evading payroll and corporate income taxes while the owner and operator of River City Chem Dry, according to a release from United States Attorney Will Thompson.

According to court documents and statements made in court, from at least 2008 and continuing through 2021, Drake owned and operated River City Chem Dry, which provided general building and specialty contracting services throughout West Virginia.

Drake admitted that as an employer, he had a legal responsibility to collect and pay over to the IRS payroll taxes withheld from his employees’ wages and complete and file IRS Form 941, the release said Drake further admitted he knew that after he reorganized River City Chem Dry as a C corporation in 2012, he was required to pay corporate income taxes on earned income and complete and file IRS Form 1120 on behalf of the company every year, the release said.

Beginning no later than 2005, Drake amassed a significant tax debt due to unpaid personal income taxes. Drake admitted that while his tax problems began as personal in nature, they later extended to River City Chem Dry. Drake’s tax delinquencies grew exponentially from 2005 through 2016, despite IRS attempts to collect his outstanding balances and work with him to help him attain compliance, the release said.

Drake admitted he willfully evaded payment of $299,765 in payroll taxes, including federal taxes and the employer-due portion of Social Security and Medicare, for reported wages paid to River City Chem Dry employees from at least 2016 through 2019, the release said. Drake further admitted that he evaded the assessment of $347,054.87 in payroll taxes by routinely paying River City Chem Dry employees substantially in cash from at least 2017 and continuing through 2021. Employees would receive paychecks reflecting a portion of their hourly wages and withheld taxes each payday along with envelopes containing cash for the hours they worked for which no federal taxes were withheld or paid over to the IRS, the release said.

Drake also admitted that he failed to report money earned by River City Chem Dry for tax year 2016 and continuing through tax year 2021 and did not file corporate income tax returns for RCCD for tax years 2019, 2020, and 2021 to evade payment of corporate income taxes, the release said.

Drake is scheduled to be sentenced on May 2 and faces a maximum penalty of five years in prison, three years of supervised release and a $250,000 fine. Drake also owes restitution, the release said.

The tax loss from Drake’s conduct exceeds $646,819.87, the release said.

Thompson commended the investigative work of the Internal Revenue Service.

United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Erik S. Goes is prosecuting the case.

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