MIAMI, Fla.— A Palm Beach Gardens business owner pleaded guilty in federal court to employment tax and income tax charges, causing over $10 million in tax losses to the IRS, the U.S. Department of Justice (DOJ) has announced.
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Paul Walczak, who controlled a network of healthcare companies under names such as Palm Health Partners and Palm Health Partners Employment Services (PHPES), reportedly failed to pay employment taxes between 2016 and 2019.
At its peak, PHPES employed more than 600 individuals, with an annual payroll exceeding $24 million.
According to court documents, Mr. Walczak withheld $7.5 million in taxes from employees’ paychecks but did not remit those funds to the IRS. Despite previous IRS penalties in 2014 for similar violations, Walczak also failed to pay $3.48 million of the business’s portion of Social Security and Medicare taxes.
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While reportedly evading taxes, Mr. Walczak is said to have used over $1 million from business accounts to purchase a yacht, transferred hundreds of thousands of dollars to personal accounts, and spent extensively at luxury retailers such as Bergdorf Goodman, Cartier, and Saks Fifth Avenue.
Additionally, the DOJ said he did not file personal income tax returns for 2019 and 2020 as required.
In total, Walczak’s actions caused a tax loss to the IRS of $10,912,334.80.
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Mr. Walczak is scheduled for sentencing on Feb. 28, 2025. He faces a maximum of five years in prison for the employment tax charge and an additional year for failing to file income tax returns. He may also be subject to supervised release, restitution, and monetary penalties.
The announcement was made by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. The case is being investigated by IRS Criminal Investigation and prosecuted by Trial Attorneys Andrew Ascencio, Brian Flanagan, and Ashley Stein of the Justice Department’s Tax Division.
