Long-Time Tax Scofflaw Sentenced Up to 10 Years

ANNAPOLIS, MD (April 29, 2009) – Comptroller Peter Franchot today announced that one of Maryland’s worst tax scofflaws, Lloyd Binion, was sentenced today up to 10 years in state prison after pleading guilty in February to two counts of failure to pay nearly $400,000 in sales and use and withholding taxes to the state. Binion received the maximum 5 year sentence with each count, which could be suspended after 18 months in jail. The guilty pleas were a result of a four-year-long investigation by Comptroller auditors into Binion’s restaurant business, which led to a 13-count indictment by the Harford County State’s Attorney Office. Mr. Binion is required to report to the State Department of Corrections on July 23.

“Today, we closed the books on the sad story of one of Maryland’s worst tax scofflaws,” said Comptroller Franchot. “This sentence proves that with persistence and hard-work, we can create a more level playing field for the vast majority of hard-working individuals who play by the rules and pay their taxes. While we are not interested in harassing any law-abiding businesses, today’s actions should send a message to any individual who wrongfully seeks to break Maryland’s tax laws that my office will be coming after you.”

The investigation into the business began after the Comptroller’s Office received a complaint in June 2005, which spurred a nearly year long audit into whether Binion and his wife Leah, owners of the Diane’s Restaurant in Havre de Grace, were remitting sales and use and withholding tax to the state. As a result of the audit, Binion was assessed $394,771.35, including penalty and interest, for the period January 1998 to March 2007. In August 2007, Mr. Binion was ordered to close his business after a Comptroller enforcement agent visited the business to make a purchase and found the business was collecting the sales tax but not remitting it to the state.

In 2008, Diane’s Restaurant appeared on the Comptroller’s “Caught in the Web” list, which is posted on the agency’s Web site, www.marylandtaxes.com. This infamous list identifies the worst tax scofflaws in Maryland — the 50 individuals and businesses who owe the largest amounts in delinquent taxes. "Caught in the Web" was originally created to send a message to those who have ignored all attempts by the state to collect overdue taxes. Names remain on the list until payment has been received or a payment plan has been set up. The list was recently updated with the 50 newest worst tax scofflaws which owe the state nearly $6 million in unpaid taxes.