2½-year sentence given in tax case

Still owe $1.9M, judge tells Hot Springs Village man

HOT SPRINGS — A Hot Springs Village business owner was ordered to pay $3.8 million in restitution to the state and to the federal government, and sentenced to 2½ years in federal prison, for failing to pay employment taxes and to file a tax return, using the funds instead to support a “lavish lifestyle,” the U.S. attorney’s office for the Western District of Arkansas said in a news release.

Donald Lee Owen, 62, was also ordered to pay a combined total of $1,942,736.51 in restitution to the Internal Revenue Service and Arkansas Department of Finance and Administration, in addition to the $1,928,380.90 in back taxes he had already paid to the IRS, the news release said.

Chief U.S. District Judge Susan O. Hickey, who presided over the Oct. 6 sentencing hearing in U.S. District Court at Hot Springs, denied Owen’s request to be placed on probation, the news release said. He had entered guilty pleas to the two federal offenses in August 2021.

In pleading guilty last year, Owen agreed to pay all of his back taxes to the IRS and state of Arkansas, along with all penalties and interest due, it said. As of Oct. 6, Owen had paid $1,928,380.90 to the IRS, leaving another $1,627,419.69 due and owing to the IRS, and $315,316.82 due to the Arkansas Department of Finance and Administration — both of which he was ordered to pay. Owen’s total restitution obligation amounts to $3,871,117.41.

Citing court documents, the release said Owen owned and operated National Golf Classics, Inc., also known as All American Classics, located in Hot Springs Village. The company produced sports memorabilia for use in charity auctions and conducted charity auctions.

From 2010 through 2018, Owen’s company withheld employment taxes from wages paid to employees, including federal income tax, Social Security tax, and Medicare, and hired an accounting firm to calculate the taxes due and to prepare the IRS Forms 941, Employers Quarterly Federal Tax Return, for reporting those taxes to the IRS.

“However, Owen did not actually file those forms with the IRS, as he was required to do, nor did he pay over the employment taxes due to the IRS,” the news release said.

From 2010 through 2018, Owen “willfully failed” to file Forms 941 with the IRS, and to pay at least $818,158 in employment taxes to the IRS, “despite having ample funds to do so.”

The release said the court documents also showed that during the period when the employment taxes were due to be paid to the IRS, Owen “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.”

In addition, Owen failed to pay $430,000 of the employer portions of the employment taxes and Federal Unemployment Tax Act taxes. Owen also failed to pay $169,883 to the state of Arkansas that was withheld from his employees’ wages.

“This negatively impacted multiple employees who did not receive credit with the Social Security Administration for wages earned and taxes withheld,” the news release said.

At the same time, Owen used the additional funds to support a “lavish lifestyle,” including purchasing and improving a luxury home in Hot Springs Village, buying 32.6 acres in Newton County, a cabin on the Buffalo River, a 2017 GMC Yukon SUV for which he paid $64,206, and a 2016 39-foot Tiffin Allegro recreational vehicle with a list price of $188,099.

When audited by the Arkansas Department of Finance and Administration on two occasions, Sept. 19, 2013, and on July 19, 2018, Owen “falsely told the auditors he did not have regular employees, but instead used family and friends to help him during 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 release said.

Owen’s second charge related to his willful failure to file a personal federal income tax return for the year 2018. Owen acknowledged he knew he was required to file a tax return and that he willfully failed to do so. Owen also failed to file and pay $301,544 of his federal and $69,405 of his Arkansas state personal income taxes for the years 2008 through 2018, and also failed to file and his company’s federal corporate income taxes for the years 2014 through 2018.

U.S. Attorney David Clay Fowlkes of the Western District of Arkansas made the announcement on the case Oct. 7. The case was investigated by IRS’ Criminal Investigations and prosecuted by Assistant U.S. Attorney Steven Mohlhenrich.