Temp agency owner gets 3 year prison sentence for tax fraud

The owner of a Houston temp agency withheld about $12 million in payroll taxes from his employees from 2008 to 20012 but spent the money on travels and upgrades to his ranch rather than give it to the IRS, federal prosecutors said.

Richard Floyd Tatum, 57, was sentenced Thursday to three years in prison for failure to pay employment taxes. He pleaded guilty in March.

According to prosecutors, Tatum employed about 1,000 people at his business, Associated Marine & Industrial Staffing, Inc. The company provided workers for businesses in Texas and other states.

Tatum exercised "significant control" over the company's finances, said officials with the U.S. Department of Justice. He signed checks, including the payroll, and decided which creditors to pay. Tatum also signed and filed the company's employment taxes returns.

In addition to the $12 million in payroll taxes that weren't handed over to the federal government, Tatum also withheld $6 million owed by the company for Social Security and Medicare taxes, officials said.

In addition to the 36 month prison term, Tatum also will pay more than $18 million in restitution to the IRS.