Delco Accountant Ran Ponzi Scheme Using Clients' Taxes: Feds

NEWTOWN SQUARE, PA — A Delaware County accountant has been hit with federal tax crimes after allegedly running a Ponzi scheme using clients' tax money, according to federal authorities.

United States Attorney William M. McSwain said Myles Hannigan, 48, of Newtown Square, was charged by Information with one count of obstructing the due administration of the Internal Revenue Service (IRS), and seventeen counts of preparing materially false income tax returns.

Hannigan owned and operated Payroll Professionals, Incorporated (PPI), which operated out of Media. PPI is a third-party payroll processor that assists its clients by issuing payroll checks and forwarding tax payments to federal, state, and local authorities. PPI’s clients were small to medium-sized businesses, and the clients relied on Hannigan to prepare and file Form 941 with the IRS. Form 941 details employee wages that were paid by a company and income tax withheld and paid to the IRS based on those wages.

Authorities allege that from January 2012 to December 2016, Hannigan prepared and submitted Form 941s that falsely reported information to the IRS.

Specifically, Hannigan reported depositing more money to pay tax debt than he actually had sent to the IRS, causing 35 of PPI’s client companies (who are considered victims in this case) to collectively underpay the IRS $3,270,566.89 for those tax years, federal authorities allege.

These victims/companies gave Hannigan access to all necessary funds to pay the full tax debt, but Hannigan allegedly failed to do so, according to authorities.

Hannigan hid his behavior from these victims/companies by presenting bogus documents that purported to be confirmation of payments of taxes he had made to the IRS on their behalf, and by re-directing IRS correspondence to his business address.

In essence, authorities said Hannigan operated a "Ponzi scheme" of borrowing from one client’s money to pay the debts of another, which collapsed when the interest and penalties owed to the IRS (which he was hiding from clients) became too big to hide.

If convicted, Hannigan faces a maximum possible sentence of up to 54 years in prison, one year of supervised release, a fine of up to $1,805,000, and a special assessment of $1,800.