H&R Block operator pleads guilty to embezzlement, tax fraud

A Marshfield women pleaded guilty to failing to pay withheld employment taxes and to filing a false federal income tax return as the operator of a Rogersville H&R Block office.

Katherine Hastings, 58, pleaded guilty in federal court April 10 before U.S. Magistrate Judge David Rush.

According to an April 15 news release from the office of Tammy Dickinson, U.S. attorney for the Western District of Missouri, Hastings filed a false personal income tax return for the 2012 tax year and willfully failed to pay over collected employment taxes. She failed to report more than $138,838 in embezzled income and to pay $246,334 in employee payroll taxes.
 
According to the plea agreement, in 2004, Hastings was hired by Mark Edwards to manage two businesses, Edherg & Hearstein Inc./Green Square Inc., operating as H&R Block, and Mason Dixon Inc. In January 2013, Edwards received notification of delinquent taxes from the IRS. Initially, Hastings told Edwards the delinquency notice was a mistake; however, Edwards subsequently received an email from Hastings admitting she didn’t file the missing reports or pay the taxes. Hastings also admitted she had taken money from him.  

Edwards fired Hastings and reported the embezzlement to local authorities, who referred the case to IRS-Criminal Investigation.

Hastings admitted she willfully did not pay the taxes even though she withheld them from employees. Instead of paying the taxes, Hastings converted the funds for personal use. Hastings did not report additional income of $24,597, $56,008 and $58,233 on her individual income tax returns for the years 2010, 2011 and 2012, respectively. The total tax loss due to the unreported income is $28,787.  

As a result, the total tax harm caused by Hastings amounted to $275,121, according to the release.
 
Hastings is subject to a sentence of up to five years in federal prison without parole, plus a fine of up to $10,000 and an order of restitution. The charge of filing a false tax return is punishable by a sentence of up to three years in prison without parole, plus a fine of up to $100,000 and an order of restitution.  

A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.[[In-content Ad]]