A 62-year-old Hot Springs Village business owner was sentenced Thursday to 30 months in federal prison and ordered to pay $3.8 million for not paying employment taxes and filing a tax return.
Donald Lee Owen, who owned and operated National Golf Classics Inc., also known as All American Classics, used the money earmarked for taxes to support a lavish lifestyle, according to a news release from U.S. Attorney David Clay Fowlkes of the Western District of Arkansas.
Owen was ordered to pay a combined total of $1.9 million in restitution to the IRS and the Arkansas Department of Finance & Administration. The restitution amount is in addition to the $1.9 million in back taxes Owen had already paid to the IRS.
All American Classics made sports memorabilia for charity auctions. It also ran charity auctions.
Between 2010-18, Owen’s firm withheld employment taxes from its workers’ wages. But he didn’t file tax forms with the IRS, nor did he pay the employment taxes owed to the IRS, the news release said.
From 2010 through 2018, Owen willfully failed to file Forms 941 with the IRS and pay at least $818,158 in employment taxes to the agency, “despite having ample funds to do so,” the news release.
Instead, he “chose to pay millions of dollars to his company’s creditors, $800 per month for a tract of real estate having nothing to do with the company and transferred $1,000 per month to a family member to pay his share on a cabin they were buying on the Buffalo River,” according to the release.
Owen also didn’t pay $430,000 of the employer portions of the employment taxes and Federal Unemployment Tax Act taxes.
And he failed to pay $169,883 to the state of Arkansas that were withheld from his employees’ wages, the news release said.
His action hurt several of his employees who didn’t receive credit with the Social Security Administration for wages earned and taxes withheld.
Owen used the extra money to support a “lavish lifestyle,” including buying and improving a luxury home in Hot Springs Village, buying 32.6 acres in Newton County, a cabin on the Buffalo River, and a 2016 39-foot Tiffin Allegro recreational vehicle with a list price of $188,099, the news release said.
When audited by the Arkansas Department of Finance & Administration on two occasions — in 2013 and 2018 — Owen falsely told the auditors he didn’t have regular employees, but instead used family and friends to help him during the busy season.
“However, when approached by employees who had not received credit with the Social Security Administration for wages earned and employment taxes withheld, Owen admitted he had not reported or paid over the employment taxes to the IRS,” the news release said.
Owen’s second charge related to his willful failure to file a personal federal income tax return for the year 2018. Owen failed to file and pay $301,544 of his federal and $69,405 of his Arkansas state personal income taxes between 2008 through 2018. Finally, Owen failed to file his company’s federal corporate income taxes between 2014 through 2018.
Owen pleaded guilty in August 2021, agreed to pay all his back taxes to the IRS and state of Arkansas, along with penalties and interest due. Owen’s total restitution was $3.87 million.
Chief U.S. District Judge Susan O. Hickey denied Owen’s request to be placed on probation.