Frederick Payroll Processing Owner Sentenced to 4 Years in Prison for Defrauding Victims of $1.6+ Million

Full restitution and forfeiture of the victim’s full loss was also ordered.

Frederick, MD – A Frederick man was sentenced on Thursday to 4 years in federal prison for defrauding victims of over $1.6 million from 2012-2014.

David Richison, 64, owned and operated a payroll processing business called Period Payroll that provided payroll and tax services to businesses in Maryland and Virginia.

Richison’s clients authorized Period Payroll to place their funds into an escrow account to pay their federal and state taxes, but Richison proceeded to pay for his personal expenses using the funds instead of sending payments to the IRS.

Judge George L. Russell, III sentenced Richison to 48 months in federal prison for wire fraud and aiding in the filing of a false tax reform, and also ordered restitution and forfeiture in the amount of the victims full loss, which will be determined after a restitution hearing.

“They placed a great deal of trust in Mr. Richison and he betrayed that trust,” United States Attorney for the District of Maryland Robert K. Hur said. “He basically did nothing more than steal that money and appropriate it for his own personal expenses.”

Hur said Richison moved almost $600,000 in client funds between escrow accounts to conceal the fraud, garnering suspicion from both his clients and the IRS.

Richison ran out of funds in the escrow accounts in 2014 and closed Period Payroll, totaling in at least $1,622,481,56 in missing IRS payments on behalf of his clients.

“What remains is trying to get restitution for the victims,” Hur said. “That’s always the goal of ours in cases like this.”


By Timothy Young