A sentencing hearing for local entrepreneur George Taylor Jr. for a case involving unpaid employment taxes is scheduled to be held Wednesday in a Wilmington courtroom, according to court documents.

The U.S. Attorney's Office announced in August that Taylor had pleaded guilty to not paying more than $2 million in employment taxes and not filing employment tax returns for high-performance speed shop National Speed, which has a location in Wilmington. At the time, his sentencing had been tentatively scheduled for Tuesday.

U.S. Attorney Michael Easley said in a news release in August that “for years, this businessman took millions from employees’ paychecks, supposedly for taxes, and spent it to pad his business and personal expenses.” 

In a district court sentencing memorandum filed Nov. 8 by Easley and two other attorneys, they said, "These serious crimes deserve serious punishment," recommending a sentence of 27 months in prison, a three-year term of supervised release, a mandatory special assessment of $100 and restitution payable to the IRS in the amount of nearly $2.3 million, plus interest.

According to the memorandum, when Taylor's employees notified him that the taxes were due, "he told them he would 'take care' of it and falsified his company’s books to make it look as though the taxes had been paid. He engaged in this criminal scheme for years and caused a tax harm to the United States of $2,272,072. These deliberate, repeated offenses reflect the careful calculations of a criminal who believes the law does not apply to him. Taking into account his history, in order to reflect the seriousness of the offense, and to deter this defendant and other tax cheats from similar conduct, the Government requests a within-Guidelines sentence of 27 months imprisonment." 

While he had no comment ahead of the sentencing hearing, Taylor's attorney explained his client's position in a statement Aug. 22.

"It should be noted that Mr. Taylor never received any personal financial benefit from the company’s employment tax arrearage," wrote Doug Kingsbery, of Raleigh-based Tharrington Smith LLP, in an email. "Also, after accepting responsibility for the situation, he personally paid the company’s entire employment tax arrearage. No former employee of the business has been harmed, and the IRS has now received all the employment taxes that were due."

In the sentencing memorandum, the U.S. attorneys wrote, "Taylor’s restitution payment and plea of guilty is indeed the first step towards rehabilitation, but it is not extraordinary in any way and does not merit a departure from the Guidelines calculation."

Taylor, who owned and operated National Speed, had gained attention in recent years for starting a brewery to address gang violence, but that brewery, TRU Colors, failed in 2022. His guilty plea in August, however, dealt solely with National Speed, an automotive services business with a location in Wilmington.

According to the sentencing memorandum, "From 2014 to 2021, Taylor employed between 10 and 47 employees a year at National Speed. Taylor paid those employees and withheld trust fund taxes from their paychecks."

The document goes on to state, "Without a doubt, Taylor knew how to properly prepare and file IRS Forms 941 for National Speed when it was to his benefit. In 2020, he applied for and received a Paycheck Protection Program ('PPP') loan for National Speed. As part of that application process, he attached Forms 941 for National Speed for the second quarter of 2019 through the first quarter of 2020. Those forms purported that National Speed was making timely tax deposits of approximately $100,000 a quarter, when in fact National Speed was not making any deposits or paying any of their employment taxes."

The U.S. attorneys explain in a footnote, "By referencing this PPP application, the Government is not implying that Taylor committed fraud in that application. Rather, the application itself is evidence that Taylor knew how to properly prepare Forms 941 accounting for the taxes he withheld from its employees and reporting National Speed’s tax obligations to the IRS, he simply chose not to."

The memorandum also describes Taylor's personal background as a reason the U.S. attorneys feel the 27-month sentence is a fair recommendation.

"During the conduct at issue, Taylor enjoyed a comfortable salary as the CEO of two different for-profit companies, National Speed and Tru Colors. Moreover, as evidenced from his accounting history, he had access to millions of dollars in funds from his prior business ventures. With that salary and those funds, he had more advantages than most defendants who appear before this Court, and that should be considered by the Court as part of his history and characteristics in determining the appropriate sentence," the memorandum states. 

Taylor's sentencing in the case is expected to occur at 2 p.m. Wednesday in Courtroom 1 in the courthouse on Princess Street before Chief Judge Richard E. Myers II, according to the U.S. District Court docket of the Eastern District of North Carolina.