An Austin construction company owner has admitted in federal court that he spent years keeping payroll tax money away from the IRS. On Tuesday, David Stone pleaded guilty to obstructing IRS collection efforts tied to roughly $1.4 million in unpaid employment taxes, acknowledging that he routed and concealed payroll funds that should have gone to the government. Prosecutors say the conduct ran from 2013 through 2024.
According to the U.S. Attorney’s Office for the Western District of Texas, Stone owned and operated Engineered Metals Company, a roofing, siding, and sheet-metal business, and willfully failed to pay over employment taxes he collected from employees’ wages. Prosecutors say Stone stopped filing his own individual tax returns and used company accounts to cover personal obligations such as child support and alimony, moves that kept funds away from IRS collection efforts. Investigators estimate his actions caused a tax loss of about $1.4 million. IRS Criminal Investigation handled the probe, and Stone pleaded guilty to corruptly endeavoring to obstruct the due administration of the internal revenue laws.
Owner of Construction Company Pleads Guilty to Obstructing IRS Efforts to Collect $1.4 Million in Unpaid Taxes @DOJCrimDiv @IRS_CI https://t.co/R4WgAONj69
— U.S. Attorney WDTX (@USAO_WDTX) April 21, 2026
The U.S. Attorney’s Office also shared the announcement on X, where a post from U.S. Attorney WDTX links to the Justice Department release and court filing while highlighting Stone’s plea and the official statement.
How prosecutors say he hid payroll taxes
In court documents, prosecutors describe a long-running pattern in which Stone diverted payroll tax money instead of sending it to the IRS. According to the government, he used Engineered Metals Company’s accounts to cover personal expenses, including child support and alimony, and stopped filing individual tax returns altogether. Those choices, they allege, were designed to frustrate IRS collection efforts and keep his income and assets out of reach of revenue officers. The scheme, as outlined in the plea, stretched over more than a decade and produced the $1.4 million tax loss cited by investigators.
Legal implications
Stone pleaded guilty to a charge under 26 U.S.C. § 7212(a), often called the omnibus obstruction clause, which makes it a crime to corruptly attempt to impede the administration of the Internal Revenue Code. The statute carries a maximum sentence of three years in prison along with potential fines. A judge will weigh the U.S. Sentencing Guidelines and other statutory factors before deciding what sentence to impose. The full statutory language is available at 26 U.S.C. § 7212.
What's next
A federal judge will determine Stone’s sentence after reviewing the sentencing guidelines and a presentence report. The Justice Department release did not specify a sentencing date. IRS Criminal Investigation led the case, which is being prosecuted by attorneys in the Justice Department’s Tax Division.
