Employer gets three years for payroll tax fraud

SNOHOMISH — A Snohomish businesswoman is going to prison for nearly three years for stealing from the federal government and her employees.

Lynda J. Mead, 50, was sentenced Friday in U.S. District Court in Seattle. She was ordered to pay $537,000 for willful failure to pay over tax.

For 25 years Mead and her husband owned a Snoho­mish company, operated as CM Flooring Inc. and Carl Mead Flooring Design. Between 1998 and 2006, Mead withheld $357,000 from employee pay but never handed the money over to the IRS.

Instead, Mead used the money to feed her gambling addiction and to pay for a lavish lifestyle that included shopping sprees, expensive vehicles and trips to Hawaii, the Bahamas and Disneyland, according to prosecutors.

Mead was responsible for collecting, accounting for and paying trust-fund portions of taxes her employees paid to the IRS. She collected the money from their paychecks but kept it for herself, according to court documents.

Now some of her employees are left to prove they paid employment taxes meant for Social Security and Medicare even if the money was never turned over to the government.

One employee even had his driver’s license suspended after Mead pocketed the money being garnished from his paychecks for child support, Assistant U.S. Attorney Tessa Gorman wrote in court documents.