04-11-03 Court Orders Payroll Service Company Into Receivership; Prohibits Defendants From Operating Any New Payroll Service Company

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FOR IMMEDIATE RELEASE
FRIDAY, APRIL 11, 2003
WWW.USDOJ.GOV
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(202) 514-2007
TDD (202) 514-1888

COURT ORDERS PAYROLL SERVICE COMPANY INTO RECEIVERSHIP; PROHIBITS DEFENDANTS FROM OPERATING ANY NEW PAYROLL SERVICE COMPANY

WASHINGTON, D.C. - A federal court in Salt Lake City issued a preliminary injunction on Thursday appointing a receiver to shut down payroll service company Provident Management Group, Inc. (formerly known as Paysource, LLC and also operating under the name Provident Business Partners, Inc.) and preventing Provident and its part-owners and officers, Scott M. Boley of Heber City, Utah; Douglas C. Morby of American Fork, Utah; and Robert A. Langford of Mesa, Arizona from continuing to operate Provident or any new payroll service company.

The Court had earlier entered a temporary restraining order freezing the payroll service's bank accounts, and preventing defendants from transferring or otherwise disposing of assets in any of the company's business bank accounts, dissipating client funds or assets held outside those accounts, receiving further cash or other property from clients, and destroying or otherwise altering or disposing of any of their documents. In addition to extending those injunctions, Thursday's order requires defendants to transfer all Provident assets to the receiver and empowers the receiver to assume full control of Provident and to shut down the payroll service business. The order also establishes a claims adjudication process to resolve claims against Provident.

"Many businesses rely on payroll services to prepare their payroll and help them meet their tax obligations," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division in Washington. "There is no place in the payroll service industry for cheats and swindlers."

According to suit papers filed by the Justice Department, Provident customers turned their payroll funds over to the company in return for its agreement to prepare their payroll checks, make required employment tax deposits for them, prepare their employment tax returns, and pay other benefits for them, such as workers' compensation and health insurance premiums. Despite these agreements, Provident allegedly failed to file at least 282 federal employment tax returns for its customers and failed to make more than $2 million in required employment tax deposits on their behalf. Instead, Provident's officers allegedly diverted customer funds to their personal and business uses. According to Justice Department papers, a majority of Provident customers contacted by the IRS did not know that their taxes had not been paid.

Related Documents:

United States v.
Paysource LLC, etc.

Preliminary Injunction
(PDF document)

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Updated April 6, 2015