The Justice Department has had a busy week in its enforcement actions against real estate-related companies.
First, the CFO of a Mississippi construction company admitted to willfully failing to file and pay employment taxes, According to a press release from the U.S. Department of Justice.
Julian Russ, chief financial officer of Mississippi-based Community Construction Company, admitted not filing quarterly employment tax returns as required or paying the IRS withholding taxes from employee wages. The tax evasion period lasted from 2012 to October 2018, resulting in more than $6 million in lost tax revenue.
According to court documents and statements, Russ knew but willfully ignored his tax obligations. He faces up to five years in prison, as well as supervised release, restitution and a fine. No date was listed for his sentencing before a federal district judge.
In a separate lawsuit, property management company FPI Management Inc. agreed to pay nearly $75,000 to settle allegations of violations of the Military Civil Relief Act.Ministry of Justice announced the resolution in a statementalleging that the FPI illegally accused nine service members of invoking their right to terminate their apartment leases after receiving orders from the military to relocate.
The SCRA is designed to protect active duty military members by granting them various rights and guarantees while serving in the military. A provision allows service members to terminate residential leases without penalty when faced with military orders to permanently relocate, deploy or retire. Landlords are prohibited from charging servicers an early termination fee for exercising this right.
The investigation into FPI’s practices was launched after the Coast Guard Legal Aid Division filed two cases in which FPI demanded repayment from service members whose leases were terminated early under SCRA.
Under the proposed consent order, subject to court approval, FPI would pay $51,500 to affected service members and pay a $22,500 civil penalty to the United States. Additionally, FPIs will be required to correct service members’ tenant database entries, implement SCRA-compliant policies and procedures, and provide SCRA training to their staff.
The settlement reflects DOJ’s ongoing enforcement efforts to uphold SCRA, including seeking more than $481 million in monetary relief for more than 146,000 service members since 2011.
