Zealcon software firm owner sentenced for tax fraud

Cash was withheld from staff wages but did not end up in IRS coffers.
Written by Charlie Osborne, Contributing Writer

The owner of Zealcon Corporation has been sentenced to jail time for employment tax fraud conducted over two years. 

On Tuesday, the US Department of Justice (DoJ) said that Earenest Grayson Jr., the owner and operator of Tulsa-based Zealcon, garnished the wages of employees for tax purposes but failed to hand over payroll taxes to the US Internal Revenue Service (IRS). 

Zealcon markets itself as a SAP and Intrexx specialist with experience in web portals, CRM, mobile technology, e-commerce, and online media including branding and marketing. 

CNET: Huawei ban: Full timeline as Mate X foldable phone launches in China

According to prosecutors, from January 2014 through to June of 2016, Grayson withheld taxes from staff wages but failed to pay up taxes imposed by the IRS on his employees' behalf. 

Over the course of two years, the DoJ says that the IRS caused a tax loss of approximately $1 million by withholding IRS income tax and social security taxes, as well as the portion that employers are meant to contribute. 

See also: Vengeful IT admin thrown behind bars for destroying Army systems on exit

The software firm owner has been ordered to serve 24 months in prison, followed by three years of supervised release. In addition, Grayson must pay the IRS a total of $904,091.

The investigation was conducted by the Criminal Investigation arm of the IRS. 

TechRepublic: Hackers finding ways to exploit automotive software to overtake cars

The DoJ has wrapped up a number of criminal investigations and prosecutions of late. In July, the agency charged a 64-year-old engineer for allegedly attempting to smuggle military-grade semiconductor chips to China, followed by the sentencing of a former US National Security Agency (NSA) contractor to nine years behind bars for stealing roughly 50GB of data belonging to the intelligence outfit. 

In October, an IT administrator tasked with maintaining US Army Chaplain Corps networks sabotaged systems, changed WHOIS records, and both stole and shared data in revenge for what he believed to be his impending termination. The IT admin was sentenced to two years in prison.

How to discover and destroy spyware on your smartphone (in pictures)

Previous and related coverage

Have a tip? Get in touch securely via WhatsApp | Signal at +447713 025 499, or over at Keybase: charlie0

Editorial standards