The feds are not buying William R. Grogg’s story that he can’t produce tax records from his publishing companies because the people who had them died.
U.S. Attorney Geoffrey S. Berman filed an indictment against Grogg on Jan. 15 in federal court in White Plains accusing him of willfully failing to turn over payroll taxes and corruptly endeavoring to obstruct and impede the Internal Revenue Service.
“I don’t know anything about it,” Grogg, of Millbrook, responded in a brief telephone interview. “I haven’t gotten a copy of it. I haven’t been notified. I haven’t heard from the IRS for years. … I assumed it had all been taken care of.”
Grogg has owned, managed or controlled printing companies in and around Poughkeepsie since 1987, according to the indictment.
In 1994, the IRS assessed a $368,640 civil penalty against him for failing to collect, account for and pay employee payroll taxes at Hamilton Reproductions, where he was president. By 2014, the penalty had grown to more than $1 million.
In 2014, the IRS small business division opened an examination of Netpublications Inc. and MCA-Netpub Inc. In 2016, the case was referred to the criminal investigation office.
Grogg had hired a payroll company to calculate employees’ wages and taxes, including income taxes and Social Security and Medicare contributions.
The taxes were withheld from the paychecks, the government claims, but they were not payed to the IRS. Grogg, as the person responsible for paying the taxes, also did not file quarterly tax returns.
“Instead, Grogg spent the withheld payroll taxes … on personal and business expenses.”
The government claims he failed to turn over $843,984 in payroll taxes.
The IRS demanded corporate records for its investigation, but Grogg, according to the indictment, made several false statements in correspondence and in interviews.
He allegedly stated that records did not exist because his company had been in bankruptcy and that there were no payroll records for the years requested.
He purportedly told investigators that Netpublications and MCA were originally owned by a Canadian businessman, for whom he worked, and that he took over in 2014 or 2017. Business records that had been stored by an associate of the Canadian had been destroyed in a flood.
Grogg had claimed that the Canadian businessman died in 2017, according to the indictment, and the associate died “at an unspecified point in time.”
The Canadian and the associate were solely responsible for filing and paying MCA’s payroll taxes, in the government’s telling of Grogg’s story, and after the associate’s death no one has been responsible.
Grogg has also struggled with his personal finances, filing seven bankruptcy petitions from 2011 to 2019. The most recent is a Chapter 7 liquidation case filed last September, in which he declared $908,046 in assets and more than $3.9 million in liabilities.
The assets consist mostly of his home. The liabilities include nearly $1.4 million in taxes to the IRS and New York state.
Assistant prosecutor Benjamin A. Gianforti is in charge of the government’s criminal case.