A Findlay businessman accused of failing to pay more than $3.2 million in federal payroll taxes for employees of his cable company entered into a plea agreement yesterday in U.S. District Court in Toledo.
Tony M. Tate, 44, pleaded guilty to a bill of information charging him with withholding payroll taxes from employees but failing to pay the money to the Internal Revenue Service from the last quarter of 1998 through 2001.
Magistrate Vernelis Armstrong accepted the plea and found Tate guilty of the crime.
Tate faces up to a five-year prison sentence and $250,000 fine, but sentencing guidelines could reduce the punishment to 27 to 33 months.
The sentence will be imposed by Judge James Carr during a hearing that will be scheduled later.
As vice president and co-owner of American Digital Technologies Corp., Tate did not pay $3,213,753 in payroll taxes, including $2,350,603 that was taken from the salaries of employees. He also did not pay $863,150 in matching payroll taxes that the firm was required to submit to the IRS.
In admitting to the crime, Tate told Magistrate Armstrong that as an owner he was involved in its operations, but that he was not chief financial officer. He said that in an attempt to keep the business afloat, decisions were made to pay creditors instead of the payroll taxes.
American Digital, which offers design and cable-installation services for cable and telephone companies, filed for bankruptcy protection in 2002, estimating that it owed between $1 million and $10 million to 16 to 49 parties.