New Richmond Woman Senenced to 30 Months in Prison for Mail Fraud & Tax Crime

Wednesday, August 8, 2018 | WisDOJ l Press Release |


MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Stephanie M. Johnson, 40, New Richmond, Wisconsin, was sentenced yesterday by U.S. District Judge William M. Conley to 30 months in federal prison for mail fraud and willful failure to pay payroll taxes.  Johnson, formerly the co-owner of Paradigm Service Inc. (PSI), which operated homes for disabled adults in western Wisconsin, pleaded guilty to these charges on May 15, 2018.

The defendant was responsible for all financial aspects of PSI, including payroll.  The defendant withheld payroll taxes and caused PSI to fail to properly file and pay taxes from the fourth quarter 2008 through the fourth quarter 2017, resulting in a tax loss of $822,054.46 in withheld employee taxes and $447,784.26 in employer tax contributions.  In addition, the defendant stole $300,601.12 in PSI funds for her personal benefit, including having merchandise shipped and delivered, meals, and entertainment using the embezzled money from PSI.

Judge Conley noted that the “unspeakable” crimes had been built on a “daunting tale of lies.”  He ordered the defendant to pay restitution in the amount of $300,601.12 to PSI’s other former co-owner and over $1.2 million to the IRS.

“Stealing from the government is stealing from American taxpayers, and this crime was made worse by placing our most vulnerable, individuals with disabilities, at risk of losing their homes,” said United States Attorney Blader.

“Employment tax evasion results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” stated Gabriel Grchan, Acting Special Agent in Charge of the St. Paul Field Office.  “Failure to pay over withheld taxes is a serious offense.  Corporate executives like Mrs. Johnson have a responsibility to withhold income taxes for their employees and then remit those taxes to the IRS.  The sentence received by Mrs. Johnson is reflective of the seriousness of this crime.  IRS Criminal Investigation will vigorously pursue anyone who collects these taxes and uses the funds for their own personal gain.”

The charges against Johnson were the result of an investigation conducted by IRS-Criminal Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Darren Halverson.


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