Kenyan-American Business Owner Sentenced to Over 4 Years in Prison for $1.5 Million Employment Tax Fraud

KANSAS CITY, Mo. — A Kenyan-American business owner in the Kansas City area has been sentenced to more than four years in federal prison for employment tax crimes.

Ephantus Mwangi, 48, was sentenced Monday to 51 months in prison for willfully failing to pay over employment taxes to the IRS for companies he owned and operated, according to court documents. He was also ordered to serve three years of probation, pay $1.5 million in restitution to the United States, and pay a fine of $150,000.

Mwangi owned and operated True Payment Solutions, a Kansas-based business that sold credit-card processing services and card readers to merchants, along with True POS Solutions, Inc., a separate business offering similar services.

Prosecutors said Mwangi withheld $331,404.33 in taxes from his employees' wages that he did not pay over to the IRS, and also willfully failed to pay over employment taxes due from True Payment Solutions.

Instead, from 2016 to 2019, Mwangi transferred more than $1.5 million from the corporate bank accounts of True Payment Solutions and True POS Solutions Inc. to his personal bank accounts, according to court documents.

He spent more than $200,000 on loan payments for luxury vehicles, including a Hummer H2, a Cadillac Escalade, two Range Rovers, two Mercedes and a Lexus. He also used the funds to rent an 11,000 sq. ft. mansion as a second home in San Antonio, Texas, for $13,000 per month, and to pay for private school tuition for his children.

Between 2016 and 2019, Mwangi also transferred a total of $763,000 to "TRUE PAYMENT SOLUTIONS, EA LTD" in Kenya.

In total, he caused a tax loss to the U.S. government exceeding $1.5 million.

Mwangi was originally scheduled to be sentenced on April 27 but failed to appear in court. He was arrested six weeks later during a traffic stop, where he gave officers a fake name and birth date.