The owner of a Canton company that manufactures American flags has been indicted for failing to pay $162,000 in payroll taxes.

Authorities say 51-year-old Richard Spencer was indicted in federal court on 15 counts of failure to account for, collect, and pay over employment taxes.

According to the indictment, Spencer controls RS Sewing, which manufactures American flags. He oversaw production, source materials, paperwork and the company's financial operations.

U.S. Attorney Justin Herdman says, "This defendant benefitted from being able to say that his flags were made in America, but he failed to meet his obligations to his employees and the American taxpayer."

Ryan Korner, Special Agent in Charge, IRS Criminal Investigation says Spencer did this in an attempt to avoid his employment tax responsibilities as the owner of RS Sewing.

Korner says Spencer misclassified a portion of his employees as independent contractors. He also withheld employment taxes from his appropriately classified employees but never paid them to the IRS.

The indictment says after an audit in 2011, Spencer was informed he improperly classified the workers as independent contractors, and a penalty was assessed against Spencer. He continued to misclassify some employees and failed to pay employment taxes.

The indictment states Spencer failed to withhold taxes from workers he knowingly and willfully misclassified as independent contractors from 2012 to 2015.

Authorities say for workers classified as W-2 employees, Spencer withheld federal income, Social Security and Medicare taxes from employees but never paid the money to the IRS.

Overall, he failed to collect, account for and pay over approximately $162,728 of federal employment taxes, according to the indictment.

The case has been investigated by the Internal Revenue Service- Criminal Investigations.