South Bay CEO sentenced for failing to pay employment taxes

SAN JOSE – A South Bay executive was sentenced Tuesday to one year and one day in prison for failing to pay more than $1 million in employment taxes to the IRS, federal prosecutors said.

As the CEO of Campbell-based metal-coating company Vivid Inc., John Comeau was responsible for withholding Social Security and federal income taxes from the wages of workers and then paying those funds to the IRS each quarter, according to the U.S. Attorney’s Office.

However, from the first quarter of 2010 to the fourth quarter of 2019, Comeau did not pay all the taxes owed to the IRS, prosecutors said. He also filed false quarterly employment tax returns, underreporting Vivid’s wages by more than $5 million.

Comeau concealed the scheme by issuing tax forms to employees that either underreported or over-reported wages paid to them by the company, according to prosecutors.

Prosecutors said Comeau used some of the withheld funds to maintain a “comfortable lifestyle” that included a $3 million home in Santa Clara and luxury cars.

Comeau caused a total tax loss to the IRS of about $1.15 million, according to prosecutors.

In addition to one year and one day in prison, a federal judge ordered Comeau to serve three years of supervised release and pay $1.15 million in restitution to the IRS.