Jefferson County Businessman Pleads Guilty to Failing to Pay $774,081 in Employment Taxes

Jefferson Co., Mo. (KFMO) - A Jefferson County businessman has admitted to failing to pay more than $774,000 in employment taxes over a ten-year period.

54-year-old Danny L. Nickelson Jr. pleaded guilty Wednesday to two counts of failure to pay over trust fund taxes. According to court documents, employers are required to withhold Social Security, Medicare and federal income taxes from employees’ paychecks. These “trust fund taxes” must be held in trust and paid to the United States on a quarterly basis. Employers are also required to match Social Security and Medicare contributions and remit those payments to the IRS.

Nickelson owned General Physiotherapy, a manufacturer and distributor of massage and percussion devices used in medical and physical therapy settings. From 2013 through 2022, Nickelson withheld required taxes from employees’ paychecks but failed to pay those funds to the IRS. He also did not pay the employer’s share of Social Security and Medicare taxes. Instead, prosecutors say Nickelson used the money to cover business operational expenses as well as personal expenditures, including food, travel, retail purchases and credit card bills.

Authorities say Nickelson engaged in similar conduct from 2013 through 2015 involving Tomichi Industries, a small plastic distributor and supplier for General Physiotherapy. Nickelson was the sole shareholder of Tomichi Industries. In total, Nickelson admitted to failing to pay 40 quarterly employment tax payments, resulting in a tax loss of $774,081.

As part of his plea agreement, he has agreed to repay the full amount to the IRS. Nickelson is scheduled to be sentenced on May 12.

The charges carry a potential penalty of up to five years in prison, a fine of up to $250,000, or both.