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SAN TAN VALLEY — A San Tan Valley man has been accused of nearly $700,000 in tax evasion.

According to U.S. District Court of Arizona records, Gary C. Mecham of San Tan Valley was indicted by a grand jury on four counts of evasion of tax payments on Oct. 6.

According to the indictment, the IRS believes that Mecham siphoned off about $687,968.80 in payroll taxes from clients over several years.

In 2013 and early 2014, Mecham ran a payroll services business called Icon. The company processed payrolls, employee benefits, workers compensation and state and federal tax payments for a variety of other companies.

In the indictment, the IRS claims that Mecham understated his clients’ employee wages and tricked the IRS into assessing a lower employment tax amount to his clients. Mecham also allegedly hid the correct information from the IRS by failing to file his clients’ employees’ W-2s with the Social Security Administration, although he did send W-2 forms to his clients’ employees.

The IRS explained in its complaint filed with the court against Mecham that the IRS matches information from an employee’s W-2 against a form filed by an employer about how much payroll tax was removed. The IRS gets an employee’s W-2 information from Social Security. Because Mecham did not file W-2s with Social Security, the IRS did not have the information to match against its employer records.

The IRS also pointed out in its indictment that if Social Security does not have correct W-2 information, an employee may not be given credit for those contributions into the Social Security system. The IRS believes that the last time Mecham may have filed W-2s for his clients with Social Security was in 2010.

Mecham then allegedly collected the payroll taxes withheld from the employees’ paychecks and spent the money on his mortgage, a salary for himself and his wife, paying operating expenses for an unrelated business and personal expenses and deposited some of the money into other family members’ bank accounts. IRS does not believe that Mecham’s wife or the other family members did any work for Icon.

The IRS also accused Mecham of trying to hide his actions by closing the business when an IRS revenue officer contacted him in 2014, 2015 and 2016 as part of an investigation into the business.

Mecham then allegedly had two of his own employees reopen the business in their names using several different business names including: Icon Employer Services, Icon HR of Hawaii, Icon HR of Arizona and Elevated HR. However, Mecham allegedly had access to and control of all of the businesses’ records and bank accounts, according to the IRS.

He allegedly told an IRS revenue officer that he had closed Icon HR and Icon HR of Hawaii and given the business to an employee in December 2014.

The IRS Criminal Investigation unit executed a search warrant on Mecham’s San Tan Valley home and office in May 2018.

IRS Special Agent and Public Information Officer Brian Watson said that any employee who may be concerned that their payroll taxes were incorrectly handled by an employer or by a payroll service business, like Mecham’s, can check their Social Security contributions online at ssa.gov. If they find a discrepancy, they should contact the Social Security Administration.

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Suzanne Adams-Ockrassa is a reporter covering the city of Casa Grande and the surrounding area, as well as Central Arizona College. She can be reached at sadams@pinalcentral.com.

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