Kenneth Edward Jackson, 47, previously of Decatur but now residing in California, has been sentenced to federal prison for tax fraud in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.
Jackson pleaded guilty to false statements on income tax return and was sentenced to 36 months in federal prison by U.S. District Judge Robert W. Schroeder, III on May 1, 2024. Additionally, Jackson was ordered to pay restitution totaling $484,187.57 to the IRS and several of his small-business clients.
According to court records, Jackson was the president and owner of Employer Tools and Solutions (ETS), a payroll service provider operating in Denton County, Texas. ETS handled payroll and payroll tax payments for its clients, including filing necessary forms and remitting employment taxes to the IRS.
However, between 2017 and 2019, Jackson embezzled hundreds of thousands of dollars from his small-business clients. He diverted funds meant for employment taxes, using them for personal expenses such as home payments and luxury items, including a European vacation. Jackson also failed to report the embezzled funds as income on his U.S. Individual Income Tax return.
U.S. Attorney Damien M. Diggs commented on the case, stating, “As a payroll service provider, Jackson’s clients trusted him to honestly handle their finances. But Jackson allowed his greed to overtake his fiduciary duties. In addition to defrauding the United States, he also preyed upon his own clients to support his opulent lifestyle. We are grateful for our partners at the IRS, who not only protect our nation’s treasury, but also victims of financial fraud.”
Christopher J. Altemus Jr., special agent in charge of the IRS Criminal Investigation’s Dallas Field Office, emphasized the detrimental effects of failing to pay employment taxes, stating, “The failure to pay employment tax has a pernicious effect on the American public. It results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees. Instead of paying over the employment taxes received from his clients as part of his payroll business, Mr. Jackson embezzled those funds. He has been held accountable for his actions and sentenced to 36 months in prison and ordered to pay $484,187.57 in restitution.”
The investigation was conducted by the Internal Revenue Service – Criminal Investigations and the Frisco Police Department, with prosecution led by Assistant U.S. Attorney Sean J. Taylor.
