Former Cup owner Ron Devine was indicted Wednesday of four counts of failure to pay payroll taxes, according to a release from the U.S. Attorney’s Office for the Western District of North Carolina.
The 67-year-old Devine was the primary owner of BK Racing, which fielded a Cup entry from 2012-18. He filed for Chapter 11 bankruptcy for the team 72 hours before the 2018 Daytona 500, shortly before a bank was to begin court proceedings to request it operate BK Racing and seek a preliminary injunction to prevent him from selling or leasing the team’s charter. The bank claimed that the team owed more than $8 million in outstanding loans.
Later that year, the bankruptcy court sold his team’s charter and assets for $2.08 million. Front Row Motorsports purchased the charter and assets.
According to the allegations in Wednesday’s indictment, Devine oversaw BK Racing’s financial affairs as the owner and president of BK Racing, LLC. The indictment alleges that starting in 2012, Devine caused BK Racing to fail to account for and pay payroll taxes.
The indictment notes that in 2017, Devine allegedly failed to pay more than $390,000 in payroll taxes due to the IRS. The indictment alleges that between 2012-17, instead of using funds held in trust to pay for payroll taxes due, Devine transferred more than $2 million to other businesses and entities that he owned and controlled and used some of the funds to pay for BK Racing’s expenses, such as rent, utilities and vendor bills.
Payroll taxes are withheld from employees’ gross pay and used to fund Social Security and Medicare, and also include the income taxes withheld from the employees’ paychecks. Employers are required to make contributions to trust fund taxes matching the amounts from their employees’ pay and to file quarterly forms indicating payment of the relevant taxes.
Devine will have his initial appearance in federal court in Charlotte. The charge of failure to truthfully account for and pay over trust fund taxes carries a maximum penalty of five years in prison and a $250,000 fine for each of the four counts in the indictment.