Former Hennepin County Chief Public Defender Kassius Benson has been indicted on 17 counts of federal tax evasion for failing to pay taxes withheld for employees at the private law firm he ran before taking his public job.
Benson resigned in October amid news of the federal investigation into his Minneapolis-based criminal defense firm, Kassius Benson Law, which he ran before starting the Hennepin County job in January 2021. His resignation came two days after he was cited for drunken driving in Wayzata in the early morning hours of Oct. 15.
The U.S. grand jury indictment filed Thursday charges him with 14 counts of failing to account for and pay the employment taxes due and owed to the IRS on behalf of his employees between 2016 and 2020, for a total nearing $125,000.
Benson is also charged with three counts of aiding and assisting in the preparation and presentation of false and fraudulent tax returns, statements and other documents. The false income tax withheld for those charges is nearly $50,000, according to the indictment.
As the sole shareholder at his firm, Benson was responsible for the collection and payment of employment taxes and filing the appropriate quarterly IRS forms, according to the federal search warrant affidavit.
He employed at least five people in 2013 and again from 2015-2019, and failed to file proper quarterly forms and turn over $159,262 in taxes he withheld during that stretch, the affidavit said.
Benson didn't respond to requests for comment. State Chief Public Defender William Ward, who oversees Benson's office, did not respond to calls, texts and emails seeking comment.
Ward previously said he was unaware of the IRS investigation before Benson was hired for the Hennepin County job. He received an annual salary of $145,288 and oversaw 120 attorneys and more than 70 support staff.
Benson faced questions earlier this year about whether he was improperly continuing to take private clients in his new job. He said he wasn't.
One former employee of Benson's private firm, who spoke on condition of anonymity, told the Star Tribune that they testified in July under subpoena before a federal grand jury investigating Benson. They said the paychecks and documents reflected that federal taxes and Social Security were withheld from their pay.
The federal probe started in July 2020 — six months before Benson was hired by the state — when, according to the affidavit, a revenue agent began an audit relating to forms 940 and 941 that Benson was to have filed in 2017. The agent expanded the investigation to 2013 and 2015-2019 upon finding that Benson had failed to pay employment taxes, unemployment taxes and to file the forms.
He withheld $159,262 in total employment taxes from his employees but failed to turn over the money to the government, the affidavit said.
When the agent interviewed Benson, he confirmed that he was responsible for his firm's payroll and that he used a third-party service called paycheckmanager.com.
But by January 2021, Benson stopped speaking to the agent, the court documents said. He paid all taxes and filed the appropriate forms for 2020, but he did not file the forms or pay the taxes for 2013 and 2015-2019, the affidavit said.
Ward told the Star Tribune in an email earlier this week that a replacement for Benson has not been named four months after his resignation. The position opened Oct. 28 and Ward anticipates the selection process to begin soon.
Lisa Lopez, who was hired by Benson as the first assistant, is handling daily operations of the office. She did not respond to requests for comment.
Public defenders' union steward Bob Kolstad said in a phone interview Friday that there doesn't seem to be much progress on hiring a new chief. He said staffers are feeling left out of the process and have been in the past.
"I think it's unfortunate that our office had to suffer the consequences of what turned out to be a poor choice of someone to lead the office," he said.
"Hopefully they will make better choices next time."
Star Tribune staff writers Stephen Montemayor and Paul Walsh contributed to this report.