Chesterfield County, Va. – A local business owner was sentenced to two years in prison on Tuesday, February 25, for withholding and failing to remit nearly half a million dollars in federal taxes. David Neel, 63, of Chesterfield, Virginia, who operated several sleep disorder centers in Central Virginia, was convicted for diverting tax funds meant for the IRS for personal use.
Neel, the owner of Siesta Health LLC, Healthy Sleep LLC, and Health Sleep Partners LLC, withheld federal trust fund taxes from employees’ wages between 2015 and 2020. However, he did not report or send these withholdings to the IRS. Court documents reveal that Neel did not file any Employer’s Quarterly Federal Tax Returns (IRS Form 941) on behalf of his businesses during that time frame, nor did he make the required trust fund tax payments to the IRS.
From the first quarter of 2015 through the last quarter of 2020, Neel withheld a total of $311,985 in trust fund taxes from his employees, but failed to remit these funds to the federal government. In addition, he neglected to pay the employer’s portion of Medicare and Social Security contributions for the same period, amounting to $148,558. The total sum Neel failed to pay to the IRS during this time exceeded $460,000.
While failing to fulfill his tax obligations, Neel used the funds he withheld from employees to finance a lavish personal lifestyle. Investigators revealed that he spent more than $220,000 on rent for a 215-acre home and horse farm, which cost him $5,000 per month. Neel also allocated up to $30,000 for home improvements, spent close to $40,000 on life insurance premiums, and paid tuition fees for his significant other’s daughter. Additionally, he purchased a new Ford F600 truck.
The U.S. Department of Justice (DOJ) highlighted that despite his businesses generating revenue, Neel took no steps to ensure his employees’ tax withholdings were sent to the IRS, using the funds to support his personal expenses instead.
“This case is a reminder of the serious consequences of misusing tax funds and the importance of fulfilling financial obligations to the federal government,” said a DOJ spokesperson. “By taking these funds for personal gain, Mr. Neel not only betrayed the trust of his employees, but he also broke the law, leading to his conviction and sentencing.”
David Neel’s sentencing serves as a warning to others in positions of financial responsibility that failing to meet tax obligations can lead to significant legal penalties.
