Bay Area execs admit to not paying employment taxes, using money for golf, hockey tickets
Two executives of a San Francisco Bay Area company face federal prison after pleading guilty to not paying millions of dollars in employment taxes to the IRS, spending the money on themselves.
According to the U.S. Attorney's office for the Northern District of California, Lalo Valdez and Matthew Olson pled guilty to the charges on Monday.
Valdez was the CEO and Olson was the CFO of a San Jose-based health informatics and product development company. The company provided clinical care and technology services to clients in healthcare and academia.
Prosecutors said between 2017 and the second quarter of 2021, Valdez and Olson withheld Social Security, Medicare and federal income taxes from employees' wages, but did not pay them to the IRS or report them on quarterly tax forms.
"Instead of paying over the taxes, Valdez and Olson used the company's money to pay for country club memberships and season tickets to the San Jose Sharks of the National Hockey League," said a statement from the U.S. Attorney's Office.
Olson was one of the owners of a day spa in Saratoga. Prosecutors said he withheld the taxes of day spa employees but did not pay the IRS between the second quarter of 2017 and the fourth quarter of 2020.
Prosecutors said Olson was responsible for more than $2.1 million in losses to the IRS, while Valdez was responsible for nearly $1.5 million in losses.
Olson and Valdez face a maximum sentence of five years in prison along with supervised release, restitution and monetary penalties.
The pair are scheduled to be sentenced on Oct. 20.
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