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Area man pleads guilty to tax charges
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MADISON - A Monroe businessman pleaded guilty Tuesday in federal court to withholding employee income, Social Security and Medicare taxes but not paying them to the IRS.

Donald Penniston, 47, of Brodhead, president of Canton Promotions, LTD., faces maximum statutory penalties of 10 years in prison, $260,000 in fines, three years supervised release and restitution at his June 14 sentencing before District Judge Barbara Crabb.

Penniston's actual punishment will be determined from advisory sentencing guidelines which factor in the amount of money involved, any or lack of prior convictions, and his guilty plea.

In pleading guilty to two of the 11 counts in the indictment, Penniston told Crabb that he withheld employees' taxes without paying them to the IRS in July 2006. He also admitted that he withheld employee contributions to a 401(K) plan without forwarding them to American Funds, the pension plan's administrator.

Assistant U.S. Attorney Meredith Duchemin said that instead of forwarding $12,000 in employee IRA contributions to the pension administrator Penniston retained them in company bank accounts and used them for "personal living expenses."

Penniston was responsible for withholding and paying employee taxes, maintaining the company's books and tax forms, said Duchemin.

Neither Penniston nor his attorney, Erika Bierma, of the federal defenders office, disputed Duchemin's statements.

Duchemin didn't know how many workers Canton employs or were involved in the tax case including quarterly taxes between October 2004 and January 2007.

Canton's embezzling employee IRA contributions began in August 2006 until Dec. 28, 2008, according to the indictment.

Penniston remains the president of Canton Promotions, according to a person who answered the phone at the company Tuesday afternoon, but declined to give her name. Canton offers a "complete line of promotional items and services including signs, screen printing, brochures and banners, according to Canton's website.

In pleading guilty, Penniston agreed to make restitution and cooperate with the IRS' civil division.

Duchemin said the amount of restitution Penniston owes would be determined at sentencing.