Co-owner of Puyallup steel fabrication business pleads guilty to tax fraud of more than $1 million

The co-owner of a Puyallup steel fabrication business pleaded guilty Friday in the U.S. District Court in Tacoma to nine counts of failing to pay over employment taxes that added up to more than $1 million, U.S. District Attorney Nick Brown announced.

Donna Powell, 56, is the co-owner and financial manager of Pinnacle Steel Fabricators in Puyallup.

The indictment against Powell alleges that between 2010 and 2018, the company withheld $1,167,891 in payroll taxes from employees’ paychecks and failed to pay those funds to the Internal Revenue System.

According to case records, the company employs 15-20 people. Between 2010 and 2018, Powell withheld the employees’ share of employment taxes from their paychecks and failed to pay the funds to the government as required by law.

Each quarter, Powell was supposed to file Forms 941 with the IRS disclosing how much the company withheld in payroll taxes.

Powell failed to file any Forms 941 between 2010 and the first quarter of 2018. Instead of paying the taxes, she and her husband spent the funds on travel ($32,000+), gambling ($41,000+), online gaming ($33,000+), and spa and pool-related purchases ($7,400).

“Like in the movies, illegal pool parties are all fun and games until they are not,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation, Seattle Field Office. “Ms. Powell had ill-intentions for her employees’ payroll withholdings and stole these amounts to pay for her own globe-trotting vacations, to fund her gambling, and to help pay for a pool. While paying federal income taxes along with paying into Medicare and Social Security is not as fun as going on vacation or putting in a pool, honest people understand the need for these payroll withholdings and pay their fair share.”

Purposely failing to pay employment taxes is punishable by up to five years in prison.

Powell is scheduled to be sentenced on November 7.

The case is being investigated by IRS:CI and is being prosecuted by Assistant U.S. Attorney Seth Wilkinson.