Thomas Armour II, former owner and operator of American Made Bags (asi/35556), pleaded guilty to not paying nearly $1.25 million in employment taxes. The U.S. Attorney’s Office for the Northern District of Ohio announced the plea earlier this month as part of an investigation by the IRS Criminal Investigation Division; the U.S. Department of Labor, Office of Inspector General; and the Social Security Administration Office of Inspector General.

Akron, OH-based American Made Bags, which brands itself as a union-made, Made-in-USA supplier of promotional totes, backpacks, messenger bags and custom-made products, was initially investigated more than a decade ago for Fair Labor Standards Act violations. That case settled in 2014.

In 2022, a federal judge ordered American Made Bags and Armour to pay nearly $190,000 in back wages and damages to 48 employees after two federal investigations uncovered illegal pay practices.

In the first investigation, the U.S. DOL’s Wage and Hour Division found that Armour and his company misclassified employees as independent contractors and failed to pay employees the required overtime rate of 1.5 times their regular hourly pay. American Made Bags also failed to maintain required wage records, the DOL found.

The company agreed to pay $47,457 in back wages to 38 employees but failed to complete all payments as agreed upon.

A second investigation found further overtime violations. Armour also initially misrepresented his pay practices to investigators, the DOL said in a March 2022 news release.

Investigators later determined that Armour didn’t file required quarterly forms and didn’t pay employment taxes from 2017 through 2020. His sentencing is set for Jan. 11, 2027, and he faces up to five years in prison.

“There are always those who try and cheat the system and think they are exempt from complying with tax laws,” U.S. Attorney David M. Toepfer for the Northern District of Ohio said in a statement. “Dishonest individuals who deceive and choose to engage in unlawful business practices will be held accountable.”

American Made Bags didn’t immediately respond to Counselor’s request for comment.

The case was included in the Justice Department’s first-ever national tax enforcement surge, which the National Fraud Enforcement Division’s Tax Section and U.S. Attorneys’ Offices across the country participated in from early Sept. through Oct. 14, 2026. According to the Justice Department, the investigations resulted in prosecutorial actions against defendants whose alleged and proven crimes intended an estimated loss of revenue to the federal government of more than $490 million.