The long-time owner of two sports card and gaming shops in the state of Washington has pleaded guilty to tax evansion charges.
U.S. Attorney Annette L. Hayes announced Friday that Donald A. Knutsen, 54, the owner Northwest Sportscards, which had locations in Tacoma and University Place, admitted that he withheld over $234,000 in income, Social Security and Medicare taxes from the paychecks of at least 51 different employees between 2008 and 2016 and that he didn’t accurately report or pay that amount to the IRS. Prosecutors say he also failed to pay an additional $122,350 in employer-owed taxes to the Internal Revenue Service.
“Because Knutsen was not filing tax forms or paying taxes to the IRS, the employees working at the shops failed to accrue individual Social Security benefits,” states a news release from the U.S. Attorney’s Office in the Western District of Washington.
According to records filed in the case, Knutsen has operated the two shops for more than 27 years. The investigation revealed that as early as 2002, he stopped paying employment taxes, including Social Security and Medicare taxes on his employees. Knutsen admits he withheld the money from the employee paychecks but never paid it to the IRS or filed the required forms accounting for the payments. Instead, prosecutors say he used the money to acquire inventory and promote his business.
Knutsen has agreed to pay the taxes and any interest imposed by the IRS. He could face up to five years in prison when sentenced by U.S. District Judge Robert J. Bryan on July 20.
The case is being investigated by the Internal Revenue Service Criminal Investigation and prosecuted by Assistant United States Attorney Steven Masada.