Former owner of Mellow Mushroom restaurant sentenced to prison after withholding payroll taxes

SAVANNAH, Ga. () – The former owner of a Savannah pizza franchise will spend a year and a half in prison after withholding employees’ taxes and keeping the money for herself.

Melissa Johnson, 48, of Statesboro, pleaded guilty to failure to account for and pay over employment taxes. In addition to her prison sentence, Johnson was ordered to pay restitution of $428,203.48 and must serve one year of supervised release once her prison term is complete.

Johnson was the sole owner of LHMS Inc., which operated a franchise of the Mellow Mushroom pizza restaurant in Savannah.

“For several years, Melissa Johnson withheld taxes from her employees’ paychecks and kept that money for her own enrichment rather than remit it to the IRS,” said Jill Steinberg, U.S. Attorney for the Southern District of Georgia, in a press release. “She’s now being held accountable for stealing from the U.S. Treasury at the expense of other law-abiding taxpayers.” 

Read Related Also: Saudi Arabia's golf case threatens to spill kingdom secrets

Johnson acknowledged in court that LHMS Inc. withheld payments for federal income taxes, Medicare, and Social Security from employees’ paychecks from 2015 through 2019, but then failed to pay all of those taxes to the IRS.

“Melissa Johnson’s employees were dedicated over the years, keeping her business running, and she repaid them by stealing their employment taxes,” said James Dorsey, Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office, in a press release. “Employers have a responsibility to their employees to pay over federal income taxes withheld from their payroll checks to the IRS.

“IRS Criminal Investigation will continue to investigate dishonest employers who evade their responsibilities and abuse their employees’ trust.”