LAVALE BUSINESSMAN CONVICTED OF FAILING TO REMIT WITHHOLDING TAXES

Attorney General J. Joseph Curran, Jr. and State Comptroller William Donald Schaefer announced today the conviction and sentencing of Douglas G. Reineke, 54, of 13010 Gramlich Road, Lavale, for failure to remit withholding taxes. Reineke is the secretary and treasurer of CQ Services, Inc., a contracting business in western Maryland. Reineke had entered an "Alford" plea in which he acknowledged the State had sufficient evidence with which to convict him beyond a reasonable doubt, and which has been held by the Supreme Court to be the equivalent of a guilty plea. The Honorable Joseph P. Manck of the Circuit Court for Anne Arundel County imposed a sentence of two years, suspended, and 12 months supervised probation. The judge also ordered Reineke to pay $10,501.80 restitution and a $200 fine.

Between January 2000 and May 2001, Reineke failed to remit $10,501.80 in withholding tax due to the State. In April 1990, Reineke applied on behalf of CQ Services for a combined registration business license to withhold taxes from employee wages and the payment of unemployment tax. As secretary and treasurer of the corporation, he was responsible for reporting and remitting withholding taxes to the Comptroller. The money Reineke did not remit to the Comptroller was money he reported was withheld from the wages of CQ Services employees.

Beginning in 2000, the Comptroller's website has published a list of the State's top delinquent taxpayers who have the largest unresolved tax liabilities for sales and use, withholding, unemployment and income taxes. CQ Services, Inc. was featured on the list in 2000 as the result of a civil judgment and lien for unpaid withholding taxes totaling $151,784.92, including interest and penalties. CQ Services, Inc. failed to take advantage of the Comptroller's Amnesty Program in August-October 2001.

In another case being prosecuted by Curran's office, Franklin C. Showell, the president of Nutter Funeral Homes, Inc., located in Baltimore City, was charged on August 7 in the Circuit Court for Anne Arundel County with 14 counts of failure to remit withholding taxes, in connection with the operation of his business. It is alleged that between February 2000 and March 2001, Showell failed to remit $32,537.38 in withholding tax that was due to the State. He is scheduled to be arraigned on September 22. All individuals are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, he could be sentenced on each count to a maximum of 5 years incarceration and a fine of up to $5,000.

"These cases are part of an ongoing partnership with the Comptroller's Office to hold delinquent taxpayers with the largest unresolved tax liabilities criminally responsible when all efforts at collection have failed," Curran said. "In addition, it should be noted that the State funds taxpayer refunds from withholding taxes, so when such money is not remitted, there is no money on account to fund the refund requests of the employees."

Both cases were referred by the Compliance Division of the Comptroller's Office, investigated by the Maryland State Police and prosecuted by the Criminal Investigations Division of the Attorney General's Office.

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