(Washington, DC) Robert J. Spagnoletti, the Attorney General for the District of Columbia, announces the conviction of Leland Schwartz, President of States News Services, Inc., for willful failure to pay withholding taxes and willful failure to pay corporation franchise taxes.

States News Service is a news wire service that distributes news pertaining to the District of Columbia nationwide.  Mr. Schwartz has operated States News Service, Inc., since 1993, and had been delinquent in various taxes including corporation franchise taxes since 1999, withholding taxes since 1994, sales and use taxes since 1999, personal property taxes since 1999, and individual income tax since 2000.  For the 1999 and 1998 corporation franchise tax years, States News Service reported gross receipts of $1,997,887 and $2,674,802, respectively.

As President of States News Service, Inc., Mr. Schwartz is required to file and pay corporation franchise taxes yearly to the Office of Tax and Revenue.  Likewise, withholding taxes for employees residing in the District of Columbia are required to be filed and paid on or before the 20th day of each month to the Office of Tax and Revenue.  Mr. Schwartz failed to comply with both requirements and pled guilty in his individual capacity to three counts of willful failure to pay corporation franchise taxes and three counts of willful failure to pay withholding taxes.

Under a plea agreement reached with the Office of the Attorney General on November 29, 2004, Mr. Schwartz paid the full outstanding taxes, interest and penalties owed in the amount of $278,106.18 to the Office of Tax and Revenue, and paid a voluntary criminal fine of $10,000 to the Antifraud Fund.  Additionally, Mr. Schwartz was sentenced to 60 days in prison on each count to run concurrently, with all but 10 days jail time suspended and to be served on five weekends, commencing December 3, 2004, and ending the weekend of January 7, 2004.  Mr. Schwartz will also be confined to his home for a period of 80 days and will perform 300 hours of community service in the District of Columbia.  Mr. Schwartz will remain on unsupervised probation until all conditions of the plea agreement have been met for a period not to exceed five years.