Newtown Square Man Gets Prison In Tax Fraud Case

NEWTOWN SQUARE, PA — A Newtown Square man was hit a 52-month prison sentence and ordered to pay back more than $3.25 million for filing false taxes, authorities said.

United States Attorney William M. McSwain said Myles Hannigan, 48, of Newtown Square sentenced to 52 months in prison, one year of supervised release, and was ordered to pay $3,270,566 in restitution.

Hannigan in July 2019 pleaded guilty to obstructing the due administration of the IRS and 17 counts of preparing materially false income tax returns, in connection with owning and operating Payroll Professionals, Incorporated (“PPI”) in Media.

PPI is a third-party payroll processor, which helps 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 tax Form 941, among others, with the IRS. Form 941 details employee wages that were paid by a company, and payroll tax withheld and paid to the IRS based on those wages.

From January 2012 to December 2016, Hannigan prepared and submitted Forms 941 that falsely reported information to the IRS.

Hannigan reported depositing more money to pay tax debt than he had actually 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.

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

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