09/27/2011

News / President of Virginia-Based Connection Newspapers Sentenced to Six Months in Prison for Failing to Pay Employment Taxes

Owed the Internal Revenue Service More Than $940,000 in Employment Taxes

WASHINGTON – Peter Labovitz of Alexandria, Va., was sentenced to six months in prison for failing to pay employment taxes to the Internal Revenue Service (IRS), the Justice Department and IRS announced today. Labovitz pleaded guilty on July 19, 2011, to willfully failing to pay over to the IRS the federal income taxes and Federal Insurance Contributions Act (FICA) taxes due and owing to the United States for Connections Newspapers LLC for the quarters ending Sept. 30, 2007, and Dec. 31, 2007.



According to the plea agreement and statement of facts, Labovitz was the president of Connection Newspapers, a Northern Virginia newspaper publisher that currently publishes approximately 15 community newspapers throughout Northern Virginia and Maryland. Between 2002 and 2008, Labovitz ran Connection Newspapers’ day-to-day operations, directed employees, approved payments and made financial decisions on behalf of the company. Labovitz admitted that between 2002 and 2008, he caused to be deducted and collected from the total taxable wages of his employees’ federal income taxes and FICA taxes. However, Labovitz failed to timely pay over to the IRS more than $940,000 in federal income taxes and FICA taxes withheld and due and owing to the United States, despite the fact that he was required to do so by law.



In addition to the term of imprisonment, Magistrate Judge John F. Anderson sentenced Labovitz to serve one year of supervised release, six months of which will be served on home confinement.



The case was investigated by the IRS-Criminal Investigation Division and prosecuted by Assistant U.S. Attorney for Eastern District of Virginia Tim Belevetz and Justice Department‘s Tax Division Trial Attorney Caryn Finley.

http://www.justice.gov/opa/pr/2011/September/11-tax-1262.html

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