PaulMJD referred your question to me so that I may assist you.
You actually are in a good position regarding the taxes if the officer manager's conviction addressed the theft of employment and trust fund taxes.
Let's look at the VA statute you referred to:
§ 60.2-521. Collection by civil action; persons subject to civil actions; other remedies; compromise and adjustment.
If, after notice, any employer defaults in any payment of taxes or payment in lieu of taxes or interest or any penalty assessed pursuant to subsection C of § 60.2-501 and § 60.2-513, the amount due shall be collected by civil action in the name of the Commission. The employer adjudged in default shall pay the fees and costs of such action. Civil actions brought under this article to collect taxes or interest or any penalty from an employer shall be heard by the court at the earliest possible date. Such civil actions may be brought against any officer, employee, or agent of a corporation or partnership in his individual, personal capacity when that person willfully fails to cause the employer to pay the appropriate taxes and he had the authority to do so. No person shall be subject to this section unless it is proved (i) that such person had knowledge of the failure or attempt to make such payment and (ii) that such person had authority to prevent such failure or attempt. In addition to the foregoing remedies the Commission shall have such other remedies as are available to the State Tax Commissioner and county and city treasurers for the collection of taxes generally. The Commission is authorized to compromise, settle and adjust any tax or taxes, including interest, or any penalty assessed against any employer where in the judgment of the Commission the best interests of the Commonwealth will be promoted or served. The Commission may in such cases accept in full settlement of the tax assessed an amount less than that assessed.
(Code 1950, § 60-78; 1968, c. 738, § 60.1-94; 1974, c. 466; 1977, c. 445; 1979, c. 634; 1986, c. 480; 1990, c. 687.)
The portion of the statute that applies to your situation is:
No person shall be subject to this section unless it is proved (i) that such person had knowledge of the failure or attempt to make such payment and (ii) that such person had authority to prevent such failure or attempt.
Let's break down the paragraph above. Unless you were involved with the theft by your business manager, your knowledge was that the taxes were being collected and then deposited as required. Is that correct? If so, then the State should fail in meeting the first requirement that you had 'knowledge'. The second prong of the equation is that you had the authority to prevent such failure or attempt. The second prong fails as well because your authority was usurped without your knowledge or consent. If she hid her embezzlement, then she falsified documentation that you would have reasonably relied on to conduct your business and if she provided these doctored books to your accountant who relied on them as well, then you have evidence of a professional who relied on the falsified documents and you, as a lay person should not be held responsible if a professional could not detect her deception.
One aspect you have not mention is the IRS. If you are contacted regarding the Trust Fund monies, it is very important that you obtain representation by a knowledgeable Tax attorney who specializes in Trust Fund matters. I always tell business owners -- you can get away with playing with your income taxes, but if you touch Trust Fund monies, the IRS will hunt you down!!! It is very important any communication between the IRS and you be through an attorney as the agency has been rather aggressive on similar cases in the past few years.
I may not have addressed everything, but if you feel like I made any headway into the information you need, please, respond with a list of the items I may not have covered to your satisfaction. We at JA want to answer your questions !
Let me know what I may have missed! I will be going off line in a little while, but if you wish to continue to work with me, then send a list and I will research them and have an answer tomorrow. If you wish to have another expert assist you or go back to Paul (he is one of the best, XXXXX XXXXX way!), that is fine as well. We are here to get you the best answer possible and to make sure you are a satisfied customer!
I wish you the best and just let me know what direction you want to go from here.
Thank you again for trusting us with your problem. Good luck and Godspeed.
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Paul is right when he says that the government can come after you if they chose to. You will win, but that does not some bureaucrat from making life miserable for you for as long as they like! You and I both know that is true.