Palm Beach Gardens, Florida (CBS12) – The healthcare company owner has been sentenced to 18 months in prison and more than $4 million in reparations for a 10-year tax fraud that was used to fund his luxurious lifestyle.
According to the U.S. Department of Justice (DOJ), Paul Walczak manages a network of interconnected healthcare companies under a variety of names, including Palm Health Partners, based in Palm Beach Gardens.
The DOJ says Walczak has failed to pay more than $10 million in taxes for over a decade.
Palm Health Partners employs more than 600 people, and is worth more than $24 million a year in payroll costs, according to a DOJ news release.
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So, authorities say Walczak will withhold Social Security, Medicare and federal income taxes from employee pay and will pay quarterly fees to the IRS for some of the Social Security and Medicare taxes.
Rather than obligate the necessary payments, the DOJ says Walczak used the funds to enrich itself.
The IRS reported that they attempted a collection effort in 2012, and Walczak then paid the valuation in October 2014.
By the end of the following year, DOJ says Walczak has returned to his old ways.
Between 2016 and 2019, Walczak reportedly withheld $7.4 million in taxes from employee salaries but did not pay those taxes to the IRS.
According to the DOJ, he used $1 million of these funds to transfer money to his account, buy yachts and shopped at high-end stores such as Bergdorf Goodman, Cartier and Saks. During this time he failed to pay another $3.4 million for a portion of his Social Security and Medicare tax businesses.
In 2019, Walczak created his new business, Nextera, using his family as the nominal owner despite controlling finances and operations.
Through Nextera, Walczak has paid more than $200,000 in the family's name, more than $250,000 in the bank account in his wife's name, and directly paid to third parties for Walczak's personal expenses, including clothing stores, department stores and fishery retailers.
In total, Walczak caused more than $190,000 for tax purposes.
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