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A pair of California executives have pleaded
guilty to failing to pay millions in employment
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taxes to the IRS.
Instead, They bought season tickets to the
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NHL’s San Jose Sharks and country club
memberships.
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According to the Department of Justice, Lalo
Valdez and Matthew Olsson operate a San
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Jose-based product development and health
informatics company that offers clinical care
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and technology services to clients in
healthcare and academia.
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From Q1 2017 through the second quarter of 2021,
Valdez and Olson allegedly.
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Withheld taxes from employee wages but didn’t
pay the IRS or report them on quarterly tax
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forms.
During that time, according to LinkedIn,
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both worked for Stella Technology, which is
based in Milpitas,
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a San Jose suburb.
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Stella specializes in healthcare technology
services, primarily custom software development.
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According to their LinkedIn profiles, both
Valdez and Olsen still work for Stella from
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2017 to.
In 2021, both were responsible for Stella’s
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operations, including managing the books,
signing checks,
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and hiring and firing employees.
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Both were responsible for withholding Social
Security, Medicare,
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and federal income taxes from employee wages
and paying those funds to the government each
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quarter.
In a press release, the Justice Department
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stressed that the timely payment of quarterly
employment taxes is critical to the US
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government functioning.
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They are the primary source of funding.
During the same period referenced,
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Olson also owned a day spa in Saratoga and from
Q2 2017 through the fourth quarter of
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2020, he collected but failed to pay or report
employee taxes.
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Olson caused a tax loss exceeding 2%.
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$1 million and Valdez caused a tax loss to the
IRS of some $1.5 million.
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Valdez and Olsen are scheduled to be sentenced
on October 20th.
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Both face a max penalty of 5 years in prison,
as well as supervised release,
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restitution, and other monetary penalties.
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We reached out to Stella Technology, but the
company didn’t immediately respond to our
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request for comment.
I’m David Manti.
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This is manufacturing now.