Florida Healthcare Executive Sentenced to Prison for $10M Employment Tax Fraud Scheme
Paul Walczak, the owner of several Florida-based healthcare companies, has been sentenced to 18 months in federal prison for orchestrating a large-scale employment tax fraud that caused over $10 million in losses to the IRS. In addition to prison time, he received two years of supervised release and was ordered to pay $4.38 million in restitution to the United States government.
Employer Withheld Taxes But Never Paid the IRS
From 2016 to 2019, Walczak controlled a complex network of healthcare companies, including Palm Health Partners and Palm Health Partners Employment Services (PHPES). These companies employed more than 600 individuals and managed an annual payroll exceeding $24 million. As an employer, Walczak was legally obligated to withhold Social Security, Medicare, and federal income taxes from employee paychecks and remit those funds, along with employer tax contributions, to the Internal Revenue Service (IRS).
Instead, Walczak willfully failed to pay over $7.4 million in withheld taxes and an additional $3.4 million in employer payroll taxes, resulting in a total tax loss of $10,912,334.80.
Lavish Lifestyle Funded by Tax Fraud
Rather than fulfilling his tax obligations, Walczak diverted large sums of money from his businesses to support a luxury lifestyle. He used more than $1 million to purchase a yacht, transferred hundreds of thousands to personal bank accounts, and spent lavishly at high-end retailers such as Cartier, Saks Fifth Avenue, and Bergdorf Goodman.
Despite multiple warnings and efforts by the IRS to bring him into compliance, including face-to-face meetings and personal tax assessments, Walczak repeatedly ignored his responsibilities. He briefly settled some of his debts in 2014, only to return to fraudulent practices the following year.
Continued Fraud Through a New Business
In 2019, Walczak ceased filing personal tax returns altogether, despite earning a $360,000 salary and receiving over $450,000 in transfers from business accounts. That same year, he launched a new business called NextEra, which he deceptively listed under a family member’s name to obscure his ownership.
Through this new entity, Walczak funneled nearly $1.3 million into accounts held by relatives or used directly for personal expenses such as luxury shopping and recreational activities.
Federal Authorities Crack Down on Employment Tax Evasion
The case was investigated by the IRS Criminal Investigation (IRS-CI) Miami Field Office and prosecuted by the U.S. Department of Justice Tax Division. Acting Deputy Assistant Attorney General Karen E. Kelly and IRS-CI Special Agent in Charge Emmanuel Gomez emphasized that business owners who misuse employee withholdings will be held accountable.
“Failing to pay employment taxes is not just a paperwork issue — it’s a serious federal crime,” said Gomez. “This case is a reminder that the IRS will aggressively pursue those who cheat the system for personal gain.”
Why This Case Matters
This case highlights the growing federal scrutiny on employment tax compliance, especially in high-liability industries like healthcare. Business owners and financial officers are urged to ensure that payroll taxes are withheld and paid correctly to avoid civil and criminal penalties.
Source = Office of Public Affairs, United States Department of Justice
