Houston CPA Sentenced to Prison Over $1.6M Payroll Tax Failure

It starts the way a lot of tax problems do, quietly, almost invisibly. A missed filing here, a delayed payment there. Then one day, it’s not a paperwork issue anymore, it’s a federal case. In Houston, that slow burn turned into a hard stop for a former CPA who went from running a cybersecurity firm to facing 18 months in federal prison. The reason? Failing to hand over more than $1.6 million in payroll taxes that were never his to keep.

How Did This Spiral Get So Out of Hand?

Harry Lamar Curtis III was not just any business owner. He was a certified public accountant running Information Advisory Group LLC, a cybersecurity and IT firm. He knew the rules, which is exactly what makes this case hit differently. According to court filings and IRS findings, Curtis stopped filing business tax returns as far back as 2016. On the personal side, things were even more off track, he had not filed individual returns since 2008. That is not a short-term slip. That is a long-term breakdown in compliance.

And here is where things really went sideways. Curtis withheld payroll taxes from employee paychecks, including federal income taxes and FICA, but never sent that money to the IRS. Over time, that added up to $1,647,142. That money was never operating capital. It was trust fund money. Once withheld, it belongs to the government.

Payroll Taxes Are Not Your Piggy Bank

Let’s call it what it is. Payroll tax violations are one of the fastest ways to land on the IRS Criminal Investigation radar. This was not about miscalculations or messy books. This was about taking money from employees’ wages and failing to remit it. That crosses a line quickly. The IRS treats these as “trust fund taxes,” and enforcement tends to be aggressive. In fact, IRS Criminal Investigation maintains one of the highest conviction rates in federal law enforcement, often cited around 90%. Once a pattern forms, especially over multiple years, the case shifts from civil penalties to criminal exposure. That is exactly what happened here.

From Missed Filings to Federal Court

Curtis pleaded guilty on November 6, 2025. The court, led by U.S. District Judge Sim Lake, later sentenced him to 18 months in federal prison, followed by three years of supervised release. He was allowed to remain on bond until surrendering to a Bureau of Prisons facility. The investigation was handled by IRS Criminal Investigation, with Assistant U.S. Attorney Brad Gray prosecuting the case. The Department of Justice has also emphasized its broader push through the National Fraud Enforcement Division to crack down on misuse of taxpayer funds. Translation? The government is not playing around when it comes to payroll tax enforcement.

A CPA on the Wrong Side of Compliance

This is the part that makes professionals stop and take a second look. Curtis was trained in accounting. He understood payroll obligations, filing requirements, and trust fund rules. That knowledge likely made the case more severe from an enforcement perspective. Courts and regulators tend to hold professionals to a higher standard. When someone with that background ignores compliance for years, it signals intent, not confusion. And in white-collar cases, intent is everything.

What Professionals Should Be Watching Like a Hawk

This is where the story shifts from headline to real-world application.

For accountants, advisors, and firm owners, the warning signs in this case were not hidden. They were sitting in plain sight:

• Repeated failure to file payroll and business returns
• Gaps between business compliance and personal filings
• Use of withheld taxes to manage cash flow
• Long timelines of unresolved liabilities

Payroll tax issues do not fix themselves. They compound. The moment a client starts missing deposits or delaying filings, the risk clock starts ticking. Waiting only raises the stakes. The takeaway is simple: trust fund taxes are non-negotiable. Treat them like a liability that cannot be deferred, because legally, they cannot.

A Costly Lesson That Sticks

An 18-month prison sentence is only part of the story. Add in supervised release, financial penalties, reputational damage, and a permanent record, and the real cost becomes much bigger. This case shows how a pattern of inaction can snowball into something irreversible.

Missed filings are rarely just missed filings. Sometimes, they are the first step toward federal prosecution. If there is one takeaway here, it is this: when payroll taxes start slipping, it is already time to act. Stay ahead of compliance issues, because once enforcement steps in, the conversation changes fast.