Seattle restaurant owner sentenced to 13 months for $1.4 million tax fraud

The owner and operator of Single Shot restaurant in Seattle’s Capitol Hill neighborhood was sentenced Monday in U.S. District Court to 13 months in prison and three years of supervised release for failing to pay over $1.4 million in employment and payroll taxes, said the Department of Justice (DOJ).

The sentence follows an investigation by the Internal Revenue Service – Criminal Investigations. They say between 2014 and 2024, Ruadhri McCormick, 44, employed as many as 87 people as servers, bartenders and cooks. While he withheld payroll taxes from employee paychecks, he kept the funds for personal expenses—including a home renovation, gambling and travel—and failed to pay employer tax obligations.

Court records show McCormick was ordered to pay $1,446,341 in restitution. The total tax loss includes $1,027,362 in payroll taxes withheld from employee paychecks across at least 36 quarters, alongside more than $400,000 in unpaid employer portions of Social Security, Medicare and federal unemployment taxes.

At the sentencing, U.S. District Judge Kimberly K. Evanson said, “This offense involves a significant breach of public trust… During the period when taxes were not being paid, he was spending on a home remodel, casino expenses, and travel.”

Investigators found that McCormick spent nearly $400,000 buying and remodeling a home on Vashon Island, nearly $125,000 on casino expenses, and more than $38,000 on travel.

Acting U.S. Attorney Charles Neil Floyd emphasized how these actions directly hurt workers. “This defendant chose to use money that should have gone to pay for the employee’s future benefits, to pay to remodel a home on Vashon Island,” Floyd said. “Unfortunately, the employee’s Social Security work records now show gaps where they don’t have credit for the years they put in at McCormick’s restaurant.”

In addition to failing to pay employment taxes, McCormick admitted in his plea agreement that he did not file personal income tax returns for any tax year from 2015 through 2024.

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Assistant U.S. Attorney Lauren Watts Staniar prosecuted the case and requested a 15-month prison sentence, detailing the persistent pattern of theft in a sentencing memorandum.

“McCormick failed to pay employment taxes for about a decade—from 2014 through 2024,” Staniar wrote. “This crime does not reflect a momentary lapse in judgment. Thirty-nine times McCormick’s quarterly taxes came due, and thirty-nine times he made the conscious decision not to pay them. McCormick also deprived his employees of money they earned as servers, bartenders, and cooks. McCormick withheld taxes from his employees’ paychecks, meaning he reduced their take-home pay by an amount he represented he would remit to the IRS on their behalf. In some sense, that money belonged to the employees’—McCormick was supposed to hold it in trust on their behalf and send it to the IRS for their benefits. But, instead of remitting the withheld amounts as promised, the money sat in Single Shot’s bank account, where McCormick spent it on himself.”