Federal Court Orders Cleveland Business Owner to Pay Restitution, Serve 24 Months in Prison for Fraud and Theft of Employee Benefit Plan
CLEVELAND, OH – As a result of a joint investigation by the U.S. Department of Labor and the Internal Revenue Service (IRS), the U.S. District Court for the Northern District of Ohio has sentenced business executive C. David Snyder of Cleveland, Ohio, to serve 24 months of imprisonment, followed by an additional three years of supervised release, and to make more than $781,000 in restitution, following a federal investigation and prosecution leading to conviction on charges of embezzlement and tax fraud.
The sentencing comes after a jury convicted Snyder on June 12, 2018, of one count of embezzling more than $126,000 from an employee retirement plan – a violation of the Employee Retirement Income Security Act – and five counts related to collecting nearly $860,000 from his employees but not forwarding that money to the IRS as required.
An earlier joint investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the Department’s Office of the Inspector General (OIG), and the IRS alleged Snyder committed the embezzlement and tax fraud while acting as chairman, president, and chief executive officer of Attevo Inc., a technology consulting company headquartered in Cleveland. He also served as chairman and primary shareholder at Ruralogic Inc., headquartered in Bryan, Ohio.
The investigation determined Snyder failed to pay the IRS approximately $328,355 in 2010 and approximately $530,778 in 2012 that he withheld from employees for payroll tax. Additionally, between 2011 and 2012, Snyder failed to remit approximately $126,000 in contributions and loan repayments withheld from Attevo and Ruralogic employee wages, into the Attevo 401(k) Retirement Plan.
“Fraudulent transactions like these have a severe impact on companies and individuals,” said Employee Benefits Security Administration Regional Director Joe Rivers, in Cincinnati. “The actions can cause irreparable damage to the retirement savings of individuals and their future financial security.”
Trial testimony and court documents revealed that Snyder used the money for personal expenses, including his residences, vehicles, and travel, instead of paying Attevo’s employment taxes. Snyder earned income from Attevo totaling approximately $1.6 million between 2009 and 2012, according to the court documents and trial testimony.
Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private-sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.