Ohio woman jailed for 18 months after diverting $494K in employee taxes to fund luxury spending

An Ohio woman who used hundreds of thousands of dollars in employee tax payments to fund a luxury lifestyle has been sentenced to 18 months in federal prison. Tammy Butdorf, 51, was sentenced in federal court in Akron after being found guilty of failing to pay employment taxes withheld from workers at her husband's electrical contracting business. This was confirmed in an official statement released by the U.S. Attorney's Office for the Northern District of Ohio. Butdorf worked as the accountant and office manager for the family business. Her duties included collecting federal income tax, Social Security, and Medicare payments from employees' wages and sending the money to the government. However, an investigation by the Cleveland office of the Internal Revenue Service Criminal Investigation (IRS-CI) found that she had been moving the money into private accounts over a period of six years. Between 2015 and 2021, Butdorf failed to send more than $494,000 (£380,000) in required quarterly employment taxes to the federal government.Misdirected funds spent on property and private clubsCourt records show that instead of sending the withheld payroll taxes to the Internal Revenue Service, Butdorf made payments directly to herself and her husband. Federal prosecutors said the money was used to pay for personal and family expenses.