A Sea Isle City man was sentenced to 5½ years in prison and ordered to pay $9.5 million in restitution Tuesday for his role in a multimillion dollar tax-fraud scheme through his former payroll company.
John Scholtz, 68, previously pleaded guilty to one count of wire fraud and one count of transacting in criminal proceeds after stealing people’s tax dollars and using it for house payments, car payments, boats, credit cards and more, said William Fitzpatrick, acting U.S. Attorney in New Jersey.
Authorities said Scholtz owned and operated Innovative Payroll Services LLC, a company that provided payroll services to municipalities, schools and small companies in New Jersey and elsewhere.
Each payroll period, Innovative Payroll Services gave its clients a summary telling them how much they owed in payroll taxes that period. The clients then gave IPS the money owed in taxes, which the company was supposed to submit to the government.
Scholtz admitted he stole or told others to steal from the tax accounts between 2012 and 2016 and used the money for cars, houses, boats and more.
This caused several of the clients to be delinquent on their taxes with the IRS and local taxing authorities.
At least 103 IPS clients lost more than $8.4 million worth of federal, state and local tax dollars, and racked up $578,000 in penalties because they were delinquent on their taxes. Trenton was an IPS client from July 2009 to January 2016 and is one of is the IPS clients whose tax deposit funds were misappropriated by Scholtz, according to the U.S. Attorney.