SAN DIEGO (CNS) — A Del Mar-based CEO was sentenced Thursday to 18 months in prison for failing to pay millions in employment taxes to the IRS.
Michael Todd Lucas, who controlled TradeMotion, Inc. -- which sold software to automotive dealerships -- and other business entities like i3 Brands, Inc. and Intelligentz Automotive Corporation, pleaded guilty last year to collecting more than $2.1 million in withholdings from TradeMotion's employees, but only paying around $760,000 of that money to the IRS.
Prosecutors say Lucas also did not pay IRS employment taxes for the employees of other companies he controlled, causing an additional tax loss of more than $3.5 million.
In a defense sentencing memorandum, Lucas' attorney states that he fell behind on paying employment taxes during a turbulent time in the automotive industry, with the company "under the constant threat of bankruptcy."
The memorandum states, "Michael failed to pay over payroll taxes because he was trying to keep his company alive, a company that employed at least 40 individuals."
In addition to the prison term, Lucas was ordered to serve three years of supervised release and pay nearly $5 million in restitution.