The former state’s attorney for Bennett County has been charged in U.S. District Court with evading business taxes and is set to plead guilty on Friday.
Kenneth Orrock, 48, of Rapid City, is charged with willful failure to collect and pay over tax in 2015 as owner of the Black Hills Patrol security agency. The crime is punishable by up to five years in prison and/or a $250,000 fine.
According to court documents, Orrock did not pay $17,352.23 in employees’ taxes during the last quarter of 2015, even after collecting taxes from his employees, including federal income tax and Social Security.
He prevented the IRS from discovering this partly by not filing the Employer’s Quarterly Federal Tax Return, said a statement Orrock signed Friday.
“Instead of paying over the taxes, Orrock used at least a portion of the withholdings for his own personal use, including payments for private school tuition,” it said.
In Orrock’s plea deal, signed the same day, he agreed to pay the IRS a restitution of $280,257.72.
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The amount includes other Black Hills Patrol taxes he failed to pay: $100,703.67, the employer’s portion of taxes from 2011 to 2015, as well as $162,201.82 that he taxed employees from the first quarter of 2011 through the third quarter of 2015.
Orrock’s statement said he used a portion of the money for personal expenses, including vacations and cruises.
"Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the IRS," Shea Jones, special agent in charge of IRS criminal investigations, said in a statement. "IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes."
Orrock was state’s attorney for Bennett County from 2013 until last year, when he lost the Republican primary to the incumbent state’s attorney, Sarah Harris. As a defense attorney, his recent clients included Jody Kreycik, who was convicted of killing a Rapid City woman in a drunken boating accident at Pactola Reservoir in 2015.
It is not clear if Orrock still owns and operates Black Hills Patrol. A call to his lawyer was not immediately returned.