A Michigan staffing company owner has pleaded guilty to participating in a conspiracy that resulted in approximately $1.7 million in unpaid federal employment taxes over more than a decade. Federal prosecutors say the business owner repeatedly changed company names and locations while using business proceeds for personal expenses, including jewelry, travel, and housing.
According to an October 20 announcement from the U.S. Department of Justice, Roxanne L. Huneycutt of Fenton, Michigan, pleaded guilty to one count of conspiracy to defraud the United States.
The case highlights the serious financial and legal consequences business owners can face when they fail to meet federal payroll tax obligations.
Staffing Companies Failed to Pay $1.7 Million in Taxes
According to court documents and statements made in court, Huneycutt owned and operated a series of full-service staffing companies beginning in 2012.
The businesses recruited temporary employees for manual labor, office administration, and other positions on behalf of clients. They were also responsible for handling payroll and the associated employment taxes.
Between 2012 and 2024, the staffing companies failed to remit approximately $1.7 million in employment taxes to the Internal Revenue Service.
Prosecutors said the IRS assessed penalties against Huneycutt in 2015 for willfully failing to pay certain employment taxes. However, she did not pay those penalties or bring the businesses into compliance with federal tax requirements.
Business Names and Locations Were Changed to Conceal the Scheme
Federal prosecutors said Huneycutt took additional steps to conceal the conspiracy and avoid detection.
According to the DOJ, she changed the names and physical locations of her staffing companies and filed documents with the State of Michigan falsely indicating that she did not own the businesses.
Court documents also indicated that Huneycutt used proceeds from the staffing companies to cover personal expenses, including clothing, jewelry, travel, housing, and home decorations.
Huneycutt pleaded guilty to one count of conspiracy to defraud the United States and faces a maximum sentence of five years in federal prison.
Her sentencing is scheduled for February 18, 2027. A federal district court judge will determine the sentence after considering the U.S. Sentencing Guidelines and other applicable factors.
A co-conspirator previously pleaded guilty to the same charge and is also awaiting sentencing.
What Business Owners Should Know About Payroll Tax Obligations
The case serves as a reminder that employers have legal responsibilities involving taxes associated with employee wages.
Businesses generally must withhold applicable federal income taxes and employees’ Social Security and Medicare taxes, deposit those amounts with the IRS, and pay their own required employment tax contributions.
Failing to meet these obligations can result in substantial penalties, interest, and, in cases involving willful misconduct, criminal prosecution.
Business owners who use staffing agencies or third-party payroll services should also understand which entity is responsible for payroll tax compliance under their specific arrangements.
Maintaining accurate payroll records, reviewing tax deposits, and addressing IRS notices promptly can help businesses identify potential problems before they become more expensive.
Federal Authorities Continue Pursuing Employment Tax Fraud
IRS Criminal Investigation investigated the case, while prosecutors from the Justice Department’s Fraud Division are handling the prosecution.
The DOJ said the enforcement action is part of its broader effort to combat financial fraud and violations of federal tax laws.
For small business owners, the financial lesson is straightforward: money owed in employment taxes cannot simply be treated as available business revenue or used for personal spending.
Employers concerned about unpaid payroll taxes should review their records and consult the IRS or a qualified tax professional to understand their obligations and available options for addressing outstanding liabilities.
The Michigan case demonstrates how years of unpaid employment taxes can ultimately lead to criminal charges, even when businesses change names or operating locations.
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Amanda Blankenship is the Chief Editor for District Media. With a BA in journalism from Wingate University, she frequently writes for a handful of websites and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, son, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.