Former owner of Mellow Mushroom charged with withholding $400,000 in payroll taxes
OK, trivia question:
Which beloved Savannah pizza franchise closed in 2020, not because of the COVID-19 pandemic but because of tax evasion?
Answer: Mellow Mushroom.
The funky pizza parlor's former owner, Melissa Metts Johnson, 48, of Statesboro was charged in federal court for withholding more than $400,000 in payroll taxes — money that was deducted from employees paychecks and should have been paid to the federal government.
Cause for Celebration: Mellow Mushroom blooms again on Liberty Street with new owners and design
In court filings, Johnson was identified as the owner of LHMS Inc., which operated the Savannah Mellow Mushroom franchise. Between 2015 and 2019, the company allegedly spent thousands of dollars for Johnson’s benefit — even as the company failed to turn over to the Internal Revenue Service the payroll taxes withheld from the company’s employees.
Johnson entered a plea agreement on Nov. 9 with the U.S. Dept. of Justice, which has been provided to the court for consideration. Bond was set for $20,000.
If convicted, Johnson faces a felony charge that carries a statutory penalty of up to five years in prison and substantial financial penalties, followed by up to three years of supervised release. There is no parole within the federal court system.
The case is being investigated by IRS-Criminal Investigation and prosecuted for the United States by the U.S. Attorney’s Office for the Southern District of Georgia.
Drew Favakeh is the public safety reporter for Savannah Morning News. You can reach him at AFavakeh@savannahnow.com.
This article originally appeared on Savannah Morning News: Former Savannah Mellow Mushroom owner faces prison for tax fraud
