April 11, 2003
Sean Caine, 410-576-6357
MAN PLEADS GUILTY TO FAILING TO PAY
SALES TAX MONIES
General J. Joseph Curran, Jr. and State Comptroller William Donald
Schaefer jointly announced today that Bernard Philip Herring,62,
the owner and operator of the Frederick Diner, located at 700 N.
Market Street, Frederick, plead guilty Thursday to Failure to Pay
Over Sales Tax and Misappropriation by a Fiduciary in connection
with monies that he collected from customers who patronized his
business. Between July 2001 and July 2002, Herring failed to remit
approximately $12,000 in sales tax that he acknowledged was due
in reports he filed with the Comptroller.
Arundel County Circuit Court Judge Philip A. Caroom sentenced Herring
on the charge of Failure to Remit Sales and Use Tax to six months
imprisonment in the Anne Arundel County Detention Center, before
suspending that sentence in favor of five years supervised
probation. Herring was sentenced to a consecutive six-month term
on the Misappropriation charge, which Judge Caroom also suspended.
He was further ordered to pay $11,969.30 in restitution to the Comptrollers
Office, which represents the actual amount of tax due, excluding
interest and penalties that may be assessed by the Comptroller.
criminal charges cover a period of time following a civil assessment
by the Comptrollers Office in March 2001, at which time the
Frederick Diner was assessed over $300,000 in sales and use tax,
withholding tax, and interest and penalties for the period of time
the Diner operated from late 1995 through March 2001. At the time
of the audit, Herring acknowledged owing a large sum of money to
the Comptrollers Office. Although he applied for and opened
a sales and use tax license in late 1995, when the Diner opened,
the account was automatically closed in 1996 because he had filed
zero returns and no remittance. The Comptrollers Office mandated
that the account be reopened at the time of the audit when it was
determined that the Diner had been in uninterrupted operation since
1995 and collecting sales tax on all of its sales to customers.
As sole owner and operator of the business, and upon request by
the auditor, Herring began filing sales tax returns, although he
failed to remit the monies he had collected on behalf of the Comptrollers
Office. It was only after the criminal charges were filed that he
began to remit the monies with the sales tax returns.
week, the Frederick County Circuit Court refused to grant the Diner
a stay on the Comptrollers recent revocation of its sales
and use license for a past assessment, thereby requiring the business
to close until it becomes current.
The case was referred by the Comptrollers Office, and investigated
and prosecuted by the Office of the Attorney General, Criminal Investigations