Raleigh Car Dealership Owner Pleads Guilty in Tax Fraud Scheme Publisher: U.S. Attorney's Office, Eastern District of North Carolina Dateline: Raleigh, North Carolina Date: 16 April 2024 Subjects: American Government , Crime, Dealership Operations Topics: Carol Jean Darrow, The Auto Finders

RALEIGH, N.C. – Carol Jean Darrow, 60, pled guilty today pursuant to a criminal information to failure to pay $346,775 in withheld employee payroll taxes. Darrow is the co-owner and operator of The Auto Finders, Inc. (TAF), a corporation headquartered in Durham, North Carolina. TAF is an automobile dealership. The defendant, a resident of Raleigh, North Carolina, managed the financial affairs of TAF, including approving payments to creditors and payroll taxes due.

“For five years, this auto dealer took money from their employees’ paychecks, supposedly for taxes, and then pocketed it for themselves,” said U.S. Attorney Michael Easley. Blatant fraud like this undermines faith in our system, and we won’t allow it in North Carolina.”

TAF was required to pay over the withheld payroll taxes to the Internal Revenue Service (IRS) through periodic deposits. In addition, TAF was required to file, at the end of each calendar quarter, an Employer’s Quarterly Federal Income Tax Return (Form 941) setting forth the total amount of wages and other compensation subject to withholding, the total amount of income tax withheld, the total amount of FICA taxes due, and the total tax deposits.

In her position at TAF, the defendant was responsible for collecting, truthfully accounting for, and paying over the payroll taxes due and owing from TAF to the IRS. Between 2016 and 2021, TAF continuously failed to meet its payroll tax obligations to the IRS, resulting in a substantial underpayment of tax. She faces up to 5 years in prison.  

Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after United States Magistrate Judge Robert B. Jones, Jr. accepted the plea. Sentencing will occur before United States District Judge Louise W. Flanagan later this year. The IRS-CI is leading the investigation, and Assistant U.S. Attorney Ethan Ontjes is prosecuting the case.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:23-CR-363-FL.

Updated April 16, 2024