Andrew Park, the former CEO and co-founder of CarNow Inc., has pleaded guilty to failing to pay over $14 million in federal, state, and local payroll taxes. Park, 49, admitted to withholding taxes from his employees’ paychecks between 2014 and 2021 but never sending the money to the government. He also failed to file personal income tax returns for several years, according to the U.S. Department of Justice (DOJ).
Park entered his guilty plea on July 22, 2024, in a U.S. District Court in New Hampshire. He faces serious consequences, including up to five years in prison for failing to pay payroll taxes, one year for failing to file a tax return, and three years of supervised release after serving his sentence.
He could also be fined up to $250,000 for the payroll tax violation and $100,000 for failing to file his personal taxes. In addition, Park is required to pay restitution to the IRS and other state and local taxing authorities.
The DOJ explained that as CEO of CarNow, Park was responsible for all financial matters of the company, including filing quarterly employment tax returns and ensuring the payment of Social Security, Medicare, and income taxes withheld from employees’ wages. He was also responsible for paying the company’s share of payroll taxes.
“Park was regularly notified by a payroll service company that taxes were due, but he ignored the warnings,” the DOJ stated.
In addition, one employee even alerted Park that her Social Security deductions on her W-2 form did not match what the Social Security Administration had reported.
The DOJ revealed that the amount owed by Park totals $14,333,946 in federal payroll taxes, with an additional $434,665 in unpaid personal income taxes. Before sentencing, the full amount of any state and local tax losses will also be determined.
In a plea agreement reached on June 3, 2024, Park agreed to plead guilty in exchange for prosecutors recommending a lower sentence. However, the final decision on sentencing will be made by the court based on the facts of the case.
CarNow, a company known for its role in automotive retail, confirmed that Park was no longer associated with the company as of April 2023. A spokesperson for CarNow stated, “The company discovered the failure to remit payroll taxes in late 2021 and took immediate steps to address the problem, paying the withholdings before the government investigation began. All monies owed have been paid to the government, and employees are not at risk.”
CarNow, which serves over 5,000 dealerships nationwide, has since appointed Kayne Grau as its new CEO. The company continues its mission of creating “simple, real-time experiences that streamline dealership operations and facilitate transactions between dealers and their clients.”
Park is scheduled to be sentenced on November 14, 2024, where the court will determine the full scope of his punishment, including fines and restitution.