Jefferson County Businessman Sentenced for Failing to Pay Employment Taxes

Jefferson Co., Mo. (KFMO) - A Jefferson County businessman has been sentenced to 18 months in federal prison for failing to pay employment taxes totaling more than $774,000 over a 10-year period.

U.S. District Judge Zachary M. Bluestone sentenced 54-year-old Danny L. Nickelson Jr. on Tuesday. In addition to the prison sentence, Nickelson was ordered to pay $774,081 in restitution to the Internal Revenue Service and a fine of $18,684.

According to federal prosecutors, Nickelson owned General Physiotherapy, a company that manufactures and distributes massage and percussion devices used in medicine and physical therapy. Court records state that from 2013 through 2022, Nickelson withheld Social Security taxes, Medicare taxes and federal income taxes from employees’ paychecks but failed to turn those funds over to the IRS.

Authorities say Nickelson also failed to pay the employer’s matching share of those taxes as required by law.

Prosecutors said Nickelson committed similar violations involving Tomichi Industries, a small plastic distributor and supplier for General Physiotherapy, during tax years 2013 through 2015. Nickelson was listed as the sole shareholder of Tomichi Industries.

According to court documents, Nickelson used the unpaid tax money for operating expenses and personal purchases, including food, travel, retail purchases and credit card payments.

Federal prosecutors stated in a sentencing memorandum that Nickelson’s actions put employees’ tax liabilities and future federal benefits at risk while depriving the federal government of funds collected through payroll taxes.

Nickelson pleaded guilty in February to two counts of failure to pay over trust fund taxes.