SAN JOSE — Two men pleaded guilty Monday to not paying employment taxes of a combined $3.6 million to the Internal Revenue Service, instead using that money to pay for country club memberships and hockey tickets, federal authorities said.

Lalo Valdez and Matthew Olson, who are both residents of Northern California, cost the IRS about $1.5 million and $2.1 million, respectively, by withholding employees’ income tax and not giving it to the government for two separate businesses, according to a news release from the Department of Justice’s Northern District of California.

Valdez and Olson operated a health informatics company based in San Jose and were responsible for withholding and paying to the government their employees’ federal income taxes each quarter, prosecutors said. After collecting the money, the pair instead withheld the money and used it for personal purchases.

Valdez and Olson managed the company’s operations and finances as its chief executive officer and chief financial officer, respectively, prosecutors said.

From the first quarter of 2017 to the second quarter of 2021, the pair withheld employees’ taxes but did not report them on tax forms or pay them to the government, prosecutors said. They instead purchased season tickets to the San Jose Sharks and country club memberships, prosecutors said.

Olson also did the same at a second business he partially owned, a day spa in Saratoga, prosecutors said. He was responsible for collecting his employees’ income taxes and paying them to the government on a quarterly basis. From the second quarter of 2017 to the fourth quarter of 2020, Olson collected the money but did not pay it to the government or report it on tax forms.

Olson and Valdez are scheduled to be sentenced Oct. 20, prosecutors said. The men face a maximum sentence of five years in prison followed by supervised release. The men will also have to pay restitution and monetary penalties.