SEATTLE, Washington — The owner of a Capitol Hill restaurant in Seattle has been sentenced to 13 months in federal prison for keeping more than $1.4 million in payroll taxes that were withheld from his own employees' paychecks and were supposed to go to the Internal Revenue Service, the U.S. Department of Justice said.
Source: U.S. Department of Justice, Western District of Washington
Ruadhri McCormick, 44, of Seattle, owns and operates the Single Shot restaurant in the city's Capitol Hill neighbourhood. He was sentenced on Monday, October 26, 2026, in U.S. District Court in Seattle to 13 months in prison, followed by three years of supervised release, for willfully failing to pay over unemployment, Social Security and Medicare taxes, Acting U.S. Attorney Charles Neil Floyd announced.
13 months in federal prison, three years of supervised release and $1,446,341 in restitution. The judge called the case a significant breach of public trust. The money included $1,027,362 withheld from employees' own paychecks.
What happened, quarter after quarter
Between 2014 and 2024, McCormick employed as many as 87 people as servers, bartenders and cooks, according to prosecutors. While McCormick withheld payroll taxes from employee paychecks, he kept the money and failed to pay it over to the IRS, the Justice Department said.
For at least 36 quarters between 2014 and 2024, he failed to pay $1,027,362 in payroll taxes withheld from employees, prosecutors said. He also failed to pay the employer portions of Social Security taxes, Medicare taxes and federal unemployment taxes — more than $400,000 more — bringing the total tax loss to $1,446,341. In her sentencing memo, Assistant U.S. Attorney Lauren Watts Staniar wrote that quarterly taxes came due 39 times and 39 times he made the conscious decision not to pay them, and that the crime did not reflect a momentary lapse in judgment.
McCormick also admitted in his plea agreement that he did not file his personal income taxes for any tax year from 2015 through 2024, the Justice Department said. He pleaded guilty in July 2026, in a plea first announced by the U.S. Attorney's Office and the IRS Criminal Investigation division.
Source: Internal Revenue Service, Criminal Investigation
Where the money went, according to the investigation
The investigation found that McCormick spent nearly $400,000 buying and remodeling a home on Vashon Island, nearly $125,000 on casino expenses, and more than $38,000 on travel, prosecutors said. At sentencing, U.S. District Judge Kimberly K. Evanson said, according to the Justice Department: 'This offense involves a significant breach of public trust… During the period when taxes were not being paid, he was spending on a home remodel, casino expenses, and travel.'
Acting U.S. Attorney Floyd said: 'This defendant chose to use money that should have gone to pay for the employee's future benefits, to pay to remodel a home on Vashon Island. Unfortunately, the employee's Social Security work records now show gaps where they don't have credit for the years they put in at McCormick's restaurant.' Prosecutors had asked for a 15-month prison sentence; the court imposed 13 months.
Why this matters for workers — and for small-business owners
Payroll taxes withheld from a worker's paycheck are not the employer's money to spend. An employer holds those withholdings in trust and must remit them so the worker is credited for Social Security and Medicare and for unemployment protection. When that money is not paid over, a worker can reach retirement and find missing years in the Social Security record, which can lower future benefits — exactly the harm prosecutors described for Single Shot's servers, bartenders and cooks.
That warning lands directly for many readers in Washington state and across the diaspora who work in restaurants, dhabas, trucking and other small businesses, and for owners who employ others: a cash-flow problem does not make withheld taxes a business loan. IRS Criminal Investigation investigated this case. Its Seattle field office chief, Special Agent in Charge Carrie Nordyke, said at the guilty-plea stage that employees trusted McCormick with their withholdings and that he kept over $1 million of those funds for himself.
What happens next
McCormick must serve the 13-month federal term and then complete three years of supervised release, and he was ordered to pay $1,446,341 in restitution, the Justice Department said. The department did not announce a surrender date or a further hearing in its release. For the former employees, the restitution order is the court's mechanism to make the tax loss good, but prosecutors have already warned that gaps in Social Security work history are the lasting consequence workers will need to check in their own records.