Former drug treatment executive charged with embezzlement
By By Edward Ericson Jr.
Mar 03, 2015 at 12:40 PM
Federal prosecutors have filed a criminal information charging former Baltimore Behavioral Health CEO William Hathaway with theft from an employee benefit plan and failure to pay payroll taxes totaling nearly $2.5 million.
Beginning in March of 2009 and through 2011, Hathaway deducted payroll taxes, including FICA, from his employees' paychecks but did not forward that money to the IRS as required by law, the document, which is typically filed in lieu of an indictment when the defendant agrees to plead guilty to the charges, says.
The total amount of unpaid tax is $2,495,779, according to the information, which Hathaway used for "company expenses, including Hathaway's and other BBH officers' salaries."
Federal and state authorities opened an investigation into BBH's retirement plan soon after. The criminal information says Hathaway "knowingly and willfully failed to transfer" more than $53,000 deducted from employees' pay into their retirement fund.*
*UPDATE: Mr. Hathaway's attorney contacted City Paper after this story was published to stress that the charging document does not allege that his client personally pocketed the money that was intended for the pension fund, but rather that he directed it to "company expenses."