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Owner of Bruce's Roofing in Enumclaw Sentenced to Two Years in Prison for Willful Tax Evasion

Bruce H. Sprague reportedly failed to pay more than $1 million in employment taxes and income tax withholding.

The owner of Bruce’s Roofing in Enumclaw, Washington, was sentenced today in U.S. District Court in Seattle to two years in prison and three years of supervised release for willfully failing to collect and pay over tax, announced U.S. Attorney Jenny A. Durkan. 

Bruce H. Sprague, 52, admitted with a guilty plea in July 2012, that he paid his employees a portion of their wages in cash from 2005-2008, and that he did not collect employment taxes including Social Security, Medicare and income tax withholding from the cash wages.  In his plea agreement, Sprague agrees to pay restitution in the amount of $1,179,761 to the IRS.  At sentencing U.S. District Judge Thomas S. Zilly said, “You were able to live the good life because you stole over a million dollars from the government…. Others need to know that you cannot steal from the government and not spend a significant time in jail.”

According to the plea agreement, Sprague, the sole owner of Bruce’s Roofing LLC, informed his employees in early 2005 that they would receive a portion of their wages in cash. The cash payroll was about fifty percent of each employee’s pay. No payroll taxes were collected on the cash portion of the employees’ pay. By paying in cash and not reporting the wages, Sprague avoided more than a million dollars in payroll taxes.  In 2006, Sprague failed to collect and pay over to the IRS $391,548 in employment taxes. In 2007, he failed to collect and pay over to the IRS $448,642 and in 2008, he failed to collect and pay over to the IRS $339,571. Even as he was failing to collect and pay over the employment taxes, Sprague was taking substantial wages and profits from the business – more than $929,000 in 2005, more than $1 million in 2006, more than $1.3 million in 2007, and more than $685,000 in 2008.  In his plea agreement, Sprague agrees to cooperate with the IRS to determine all taxes due and owing from him and his company.

“Trying to cheat on your payroll taxes by paying your employees in cash is a losing proposition,” said Kenneth J. Hines, Special Agent in Charge of the IRS in the Pacific Northwest.  “When you try to avoid payroll taxes by paying your employees in cash, you place yourself at risk of prosecution, penalties, and prison. Today's sentencing highlights the commitment of IRS Criminal Investigation to the vigorous pursuit of those who try to cheat on their payroll tax obligations.”

In asking that Sprague serve a prison term, prosecutors noted the sentence should send a warning to others.  This sentence “should signify to others who may be currently engaged in similar conduct, or those who may be tempted to engage in such conduct, that paying employees “under the table” is a serious crime that is not worth the price,” prosecutors wrote in their sentencing memo. 

The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI).  The case is being prosecuted by Assistant United States Attorney Susan Loitz.

Information provided by the U.S. District Attorney's Office in Seattle.

John Doe January 01, 2013 at 08:36 PM
I've seen Bruce's Roofing. It employed all illegal Mexicans, who many refused to work unless paid cash. It interfered with the illegals collecting from DSHS, free medical and food and Federal housing assistance. Why the government needs to collect from Bruce’s Roofing, is to pay for all of the illegal alien invaders and legal immigrants. The IRS lies, and makes it sound like it depriving a US citizen of the money. Hog wash. I would suggest you go down to your local DSHS office and see for yourself who is in there and who is sucking our state and country dry. You guessed it, Mexicans. US citizens are a minority in a DSHS office.
Proud Mexican AMERICAN&LEGAL January 23, 2013 at 05:05 PM
John Doe it shows how much yhu know about ”mexicans” . This isnt about race this is totally about something different so for you to pull the race card is ridiculous ! Maybe YOU should go to the DSHS and take a good look around & tell me if you see a bunch of ”mexicans” in there getting benefits ! No ! The majority of people getting benefits and mostly the people i see in a DSHS office are asians, ethiopians, russians, and americans ! I have hardly EVER seen hispanic people in there . They cant even get benefits from DSHS because they are illegal . DSHS is kind of messed up because if a american citizen is with a hispanic thar is illegal and have kids with them they can recieve benefits for theirself and their children but not for the hispanic that is illegal but they will count their income and lower your benefits or even deny you benefits if the ”illegal” makes too much . Its bs ! And bruces roofing did have a bunch of employees that were hispanic but did you see any americans or other races working on a roof in the hot or freezing weather tryin to make ends meat ?? No . So stop with all the racism because they can pull the race card also ! This country is so full of racism its ridiculous !
einer olsen January 31, 2013 at 05:44 PM
What most have not commented on is that While this practice was going on, Bruces Roofing had a significant competitive advantage over it's Legal competitors. How many jobs did he steal from honest businesses, who were paying their legal share? As for the hispanic argument, there isnt one. Racism is BS. If employers used E-Verify to determine status of prospect employees, we would not have any cause to argue.
US Citizen February 02, 2013 at 07:53 PM
Well put einer olsen!!!
Julie Handysides March 23, 2013 at 06:26 AM
He may have failed to pay the government, but he is in no way shape or form a greedy man. He is one of the biggest philanthropists I have ever met. He is generous, kind hearted, loving and has worked hard his whole life. Prison is no place for him. He has helped so many people and if you would put it into numbers it would far exceed the amount he “owes” the government.

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