The former board chairman of Miami-Dade’s taxpayer-owned hospital system pleaded guilty to tax evasion this week, accepting responsibility for refusing to pay his personal income taxes for several years and then dodging the Internal Revenue Service’s collection efforts.
Darryl Sharpton, 61, faces a maximum of five years in prison at sentencing, which is scheduled for March 7. Sharpton also will be required to pay the U.S. government an undetermined amount of money in back taxes and fines.
Sharpton was appointed to the Public Health Trust that manages Jackson Health System in May 2011 as part of a financial recovery team charged with steering the hospital system out of near-bankruptcy. He served as chairman from 2013 to 2015 and stepped down in 2016 after completing his term.
Sharpton initially pleaded not guilty to charges of tax evasion, refusal to file taxes and failure to pay for and account for payroll taxes as alleged in a criminal indictment handed down by a Miami grand jury in April. He changed his plea to guilty on Thursday during a hearing in federal court in Miami before U.S. District Judge Cecilia Altonaga.
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David Garvin, a Miami attorney representing Sharpton, said his client was caught in a cycle where he was struggling to keep his financial management firm afloat while also trying to catch up with back taxes and payroll taxes owed to the IRS.
“He got on to a treadmill and he couldn’t figure out a way to get off,” Garvin said.
A certified public accountant, Sharpton founded a financial management firm, The Sharpton Group, formerly known as Sharpton, Brunson & Co., in 1984. The firm specializes in financial management, audits and tax and wealth planning, according to its website.
Garvin said Sharpton’s tax troubles arose from the strain of running his business: clients were not paying on time and Sharpton split with his business partner, who took clients and employees away from the firm, causing Sharpton to struggle for years to make ends meet.
“It seems like it’s just perpetual that you’re not catching up, and it just spreads.” Garvin said. “And the next year becomes the same as the last year, and you just feel like you’re treading water but you’re not actually making progress.”
The grand jury’s indictment and a statement of facts signed by Sharpton on Thursday paint a less sympathetic portrait of the man who led a campaign in 2013 that won approval from Miami-Dade voters to raise $830 million in public money for upgrades and new equipment and facilities for Jackson Health.
The court documents say Sharpton tried to evade personal income taxes that he owed for 2004 through 2008 and for 2010. Sharpton reported his income from The Sharpton Group for those years on a Form 1040 but failed to pay the reported taxes due, according to the statement of facts.
Sharpton’s failure to pay personal income taxes for those years led to an IRS audit, and additional taxes against him. The IRS also garnished Sharpton’s wages and imposed liens to collect the unpaid taxes, but Sharpton tried to dodge those debts by paying his personal expenses with The Sharpton Group’s corporate bank account, according to the indictment and the statement of facts.
For 2009, and 2011 through 2016, the records state that Sharpton failed to file a tax return with the IRS despite being required to do so.
As the principal of his firm, Sharpton also had the responsibility of withholding and paying the IRS payroll taxes for his employees. Sharpton admitted that he withheld payroll taxes from the firm’s workers for part of 2012 through 2013, and from part of 2014 through 2017 but didn’t give the full amount to the IRS.
In all, the grand jury indictment handed down in April charged Sharpton with failing to pay the IRS nearly $1 million in payroll taxes withheld for his employees. The indictment did not state how much Sharpton owed in personal income taxes.
The plea agreement that Sharpton signed on Thursday states that there’s a disagreement over the amount of the loss to the IRS. Sharpton has put the loss at more than $550,000 but less than $1.5 million while federal prosecutors believe the loss is more than $1.5 million but less than $3.5 million.
If Sharpton and federal prosecutors do not agree on the amount before March 7, then each side will present evidence to the judge at the sentencing hearing, according to the plea agreement.