Michelle L. Bielaski, 48, of Bellevue, pleaded guilty Friday, Sept. 25 in U.S. District Court in Seattle to Failure to Pay Over Tax. Bielaski admitted that as secretary and treasurer of Falcon Construction, Inc. of Bellevue, she was responsible for failing to send to the Internal Revenue Service taxes that the company withheld from employee paychecks.

In a plea agreement, Bielaski admitted that the tax loss to the IRS from 1997 to 2007 based on her failure to forward withheld taxes was more than $2.4 million. She also admitted in the plea agreement that the construction company had the ability to pay withheld taxes over the years and in fact had paid salaries totaling approximately $3.9 million to Bielaski and her husband from 1998 to 2007.

The exact charge Bielaski pleaded guilty to concerned her failure to forward to the IRS withheld tax of $140,489.48 from the third quarter of 2004. At sentencing, however, the court will be able to consider the full tax loss of more than $2.4 million that Bielaski admitted in the plea agreement. Bielaski faces up to five years in prison when she is sentenced by U.S. District Judge Ricardo S. Martinez on December 18, 2009.

Bielaski remains free on her own recognizance until that time. She also has agreed to pay restitution of more than $2.4 million as part of a criminal sentence and the IRS remains free to collect any additional taxes and penalties due.

Employers generally are required to withhold income taxes, Social Security taxes and Medicare taxes from their employees’ wages. They also are required to periodically forward the withheld taxes to the IRS along with reports describing the wages paid and taxes withheld. Bielaski admitted that for some reporting periods she failed to file reports while for other periods she filed reports, but failed to forward the withheld taxes.

The case is being investigated by Internal Revenue Service Criminal Investigation (IRS CI) and is being prosecuted by Assistant United States Attorney Mark Parrent.