Former CLE Job Corps Director indicted on tax charges - Hawaii News Now - KGMB and KHNL

Former CLE Job Corps Director indicted on tax charges

A three-count indictment was filed Wednesday charging the former director of the Cleveland Job Corps Center with withholding more than $872,000 in federal taxes from employees but never paying the money over to the Internal Revenue Service.

Clark Hayes, 53, of Richfield, Ohio, was the owner of Applied Technology Systems, Inc. or ATSI, in Cleveland.

The U.S. Department of Labor contracted with ATSI to operate the Cleveland and Jacksonville Job Corps Centers, according to the indictment.
"This defendant was hired to make sure struggling workers learned new job skills, but instead used it as an opportunity defraud his workers and the government," said United States Attorney for the Northern District of Ohio Steven M. Dettelbach.
"Business owners have an inescapable obligation to withhold income taxes for employees and remit those taxes to the IRS,"  said Kathy Enstrom, Special Agent in Charge, IRS-Criminal Investigation.

"The failure to pay over withheld taxes is a serious offense. IRS Criminal Investigation vigorously pursues those who violate employment tax laws," said Enstrom.
Under the terms of the agreement, ATSI staffed and maintained the centers, subject to reimbursement by the Department of Labor for their costs based on a budget.

The reimbursable costs included the wages ATSI paid to the centers' employees, including amounts to be withheld and paid over to the IRS, according to the indictment.
The Labor Department paid ATSI more than $15.5 million between from on or about July 1, 2010, through August 16, 2011, according to the indictment.
For the quarter ending Sept. 30, 2010, Hayes withheld but did not pay over $138,208. For the quarter ending Dec. 31, 2010, Hayes withheld but did not pay over $483,495. For the quarter ending March 31, 2011, Hayes withheld but did not pay over $250,307, according to the indictment. 
Three years ago, Clark Hayes was exposed by our Investigator, Carl Monday, for over billing the government for millions of dollars in consultant fees, gourmet food, and luxury cars.  The Job Corps trains workers to learn new job skills.  Hayes is no longer involved with the program.
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