James L. Watts, president of Watts Trucking Service, has been charged by the federal government with owing more than $30 million in unpaid employment and unemployment taxes, according to a civil suit filed in U.S. District Court, Davenport, IA.

According to a report in the Quad City Times, Watts made it a regular business practice for more than two decades to transfer unpaid employment taxes to newly created companies. Watts and the other defendants repeatedly failed to deposit income taxes withheld from employees’ payroll wages and intentionally failed to pay them to the Internal Revenue Service, then transferred the funds to new companies to thwart IRS collection efforts, according to court documents.

The list of defendants on the complaint includes: James L. Watts, Watts Trucking Service Inc., A-1 Disposal Service Inc., Black Hawk Waste Disposal Co. Inc., Cedar Valley Recycling Inc., County Waste Systems Inc., Hawkeye Waste Systems Inc., L&M Waste Systems Inc., Metro Waste Systems LLC, City Waste Systems LLC and Tri-Star Waste Systems Inc.

Over the past 20 years, the government charges, Watts has formed and controlled 23 different entities, including all of the named defendants and most have accrued delinquent tax liabilities.

On at least two occasions, Watts has transferred the assets of an entity that he owns in order to begin pyramiding employment taxes through the new entity, according to the complaint.

The government said a court injunction is necessary because “traditional collection methods have not and will not convince” Watts to stop pyramiding federal tax liabilities. According to the complaint, Watts and other defendants in the case owe so much “the United States will likely never recover the lost revenue caused by their pyramiding of employment taxes.”