BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Lawrence Davis, former owner of Digitel Solutions for Business, who was convicted of failing to account and pay payroll taxes and wrongful conversion of 401(k) contributions of Digitel employees, was sentenced to six months home detention and two years probation and ordered to pay a $4,000 fine by Chief U.S. District Court Judge William M. Skretny. Davis previously agreed to repay $17,838.36 to the Digitel employees for the wrongfully converted 401(k) funds and further agreed to repay the IRS $112,937.72 for the tax loss.
Michael Groh, former president of Digitel, who was also convicted of failing to account and pay payroll taxes of Digitel employees, was sentenced to five years probation and ordered to repay $46,527.23 to the IRS.
Assistant U.S. Attorney Robert G. Trusiak, who handled the case, stated that Davis failed to pay over $112,937.72 to the IRS in payroll taxes as owner of Digitel between 2002 and 2003. Davis also wrongfully converted $17,838.36 in Digitel employee 401(k) contributions. The total loss to the IRS and the 401(k) funds totaled $116,562.67. Groh meanwhile failed to pay $42,117.44 in payroll taxes to the IRS in 2003 and 2004.
The conviction is the culmination of an investigation on the part of the Internal Revenue Service, Criminal Investigation Division, under the direction of Charles R. Pine, Special Agent in Charge of the New York Field Office, and the Department of Labor.