Seattle restaurant owner sentenced to prison for failing to pay employment taxes for dozens of employees over ten years

Seattle - The owner of a restaurant in Seattle's Capitol Hill neighborhood was sentenced Monday in U.S. District Court in Seattle to 13 months in prison and three years of supervised release for willfully failing to pay over more than $1.4 million in unemployment, Social Security, and Medicare taxes - some of which were withheld from employee paychecks, announced Acting U.S. Attorney Charles Neil Floyd.

Ruadhri McCormick, 44, of Seattle, owns and operates Single Shot restaurant. Between 2014 and 2024 he employed as many as 87 people as servers, bartenders, and cooks. While McCormick withheld payroll taxes from employee paychecks, he kept the money and failed to pay it over to the Internal Revenue Service. At the sentencing hearing U.S. District Judge Kimberly K. Evanson said, "This offense involves a significant breach of public trust… During the period when taxes were not being paid, he was spending on a home remodel, casino expenses, and travel."

"This defendant chose to use money that should have gone to pay for the employee's future benefits, to pay to remodel a home on Vashon Island," said Acting U.S. Attorney Neil Floyd. "Unfortunately, the employee's Social Security work records now show gaps where they don't have credit for the years they put in at McCormick's restaurant."

McCormick was ordered to pay $1,446,341 in restitution.

For at least thirty-six quarters between 2014 and 2024, McCormick failed to pay $1,027,362 in payroll taxes that had been withheld from employee paychecks. McCormick also failed to pay the employer portions of the Social Security taxes, Medicare taxes, and federal unemployment taxes - more than $400,000 - bringing the total tax loss to $1,446,341.

McCormick also admitted in his plea agreement that he did not file his personal income taxes from any tax year 2015 through 2024.

The investigation found that McCormick spent nearly $400,000 buying and remodeling a home on Vashon Island, nearly $125,000 on casinos expenses, and more than $38,000 on travel.

In asking for a 15-month prison sentence, Assistant United States Attorney Lauren Staniar noted that several employees' Social Security work history appears incomplete for years they worked at Single Shot, meaning their benefits at retirement could be lower. In her sentencing memo AUSA Staniar wrote, "McCormick failed to pay employment taxes for about a decade-from 2014 through 2024. This crime does not reflect a momentary lapse in judgment. Thirty-nine times McCormick's quarterly taxes came due, and thirty-nine times he made the conscious decision not to pay them. McCormick also deprived his employees of money they earned as servers, bartenders, and cooks. McCormick withheld taxes from his employees' paychecks, meaning he reduced their take-home pay by an amount he represented he would remit to the IRS on their behalf. In some sense, that money belonged to the employees'-McCormick was supposed to hold it in trust on their behalf and send it to the IRS for their benefits. But, instead of remitting the withheld amounts as promised, the money sat in Single Shot's bank account, where McCormick spent it on himself."

The case was investigated by the Internal Revenue Service - Criminal Investigations (IRS-CI). The case is being prosecuted by Assistant United States Attorney Lauren Watts Staniar.