Construction company owner hid income while withholding employee taxes for years.
The owner of a Texas construction company has been sentenced to 30 months in federal prison after spending more than a decade taking steps to prevent the Internal Revenue Service from collecting approximately $1.4 million in unpaid employment taxes. The case involved money withheld from employees’ paychecks that was never turned over to the federal government, along with efforts to hide personal income and keep assets beyond the reach of tax authorities. David Stone, who owned and operated Engineered Metals Company, a roofing, siding, and sheet metal business, received the prison sentence on October 29, 2026. In addition to serving time behind bars, the Texas contractor must complete one year of supervised release and repay the United States approximately $1,384,766.
According to federal court records, the Texas contractor failed to send the government employment taxes that had been collected from the company’s employees. Employers are required to withhold certain taxes from employee paychecks and forward those funds to the IRS. The money does not belong to the company or its owner, even when the business is facing financial difficulties. Federal authorities said Stone knowingly kept the funds instead of making the required payments. These taxes help fund federal programs and other government services, making employers legally responsible for handling the withheld money properly. Failing to turn over these funds can lead to serious financial penalties and criminal charges.
After the IRS began taking steps to collect the unpaid taxes, Stone took additional actions to keep his money and income out of reach. Prosecutors said he stopped filing his personal income tax returns, making it harder for the agency to determine his financial situation and identify available funds. Stone also used company bank accounts to cover personal expenses rather than paying those costs through his own accounts. Among the expenses paid with company funds were child support and alimony payments. By routing personal payments through the business between 2023 and 2024, he attempted to keep money from appearing to be under his direct control, ultimately resulting in a total loss of approximately $1.4 million to the federal government.
With his guilty plea, the Texas contractor allowed the case to move toward sentencing without a trial, and the court later ordered Stone to serve 30 months in prison and repay $1,384,766 to the U.S. government. The announcement was made by Assistant Attorney General Colin McDonald of the Department of Justice’s National Fraud Enforcement Division and U.S. Attorney Justin Simmons for the Western District of Texas. IRS Criminal Investigation handled the investigation, while Caroline Pearson, a trial attorney with the Justice Department’s Fraud Division Tax Section, prosecuted the case.
Stone’s sentence serves as a reminder that business owners can face prison time when they knowingly keep employment taxes collected from employees and take steps to prevent the IRS from recovering the money. Federal authorities maintain that employers are responsible for sending withheld taxes to the government, regardless of the financial condition of their companies. The case also demonstrates that using company accounts to hide personal income does not shield individuals from federal scrutiny. Even years after the original violations, investigators can trace financial activity, pursue unpaid obligations, and hold those responsible accountable through criminal prosecution and court-ordered repayment.
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