Four Family Members Plead Guilty To Defrauding IRS Of Over $5 Million
BOSTON – Four family members who operated a temporary employment agency pleaded guilty yesterday to charges relating to a scheme to hide $25 million in employees’ wages from the U.S. Internal Revenue Service.
Margaret Mathes,67, Boseba Prum, 47, Sam Pich, 63, and Thaworn Promket, 52, all of Lowell, pleaded guilty to conspiracy to defraud the Internal Revenue Service, mail fraud, and to violating laws against structuring monetary transactions to avoid reporting requirements. Prum also pleaded guilty to 10 counts of filing false employment tax returns, six counts of mail fraud, and two counts of structuring monetary transactions. Pich also pleaded guilty to 17 counts of assisting the filing of false employment tax return, six counts of mail fraud and two counts of structuring monetary transactions. Promket also pleaded guilty to seven counts of filing false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions. The defendants were indicted in September 2013, and on Nov. 24, 2014 they are scheduled to be sentenced by U.S. Senior District Judge Mark L. Wolf.
The defendants ran a temporary employment agency providing both short-term and long-term unskilled labor to companies in and around Lowell, including those in the packaging and food services industries. Between 2004 and 2009, the agency operated under the name International Temp Agency (INT) and JP Company.
Between 2004 and 2009, the defendants reported to the IRS that their temporary employees made about $2.2 million in wages, when the real figure was nearly $30 million. The defendants also defrauded the agency’s workers compensation insurer, Granite State Insurance Co., by hiding the true number of temporary workers the defendants employed, thus avoiding about $880,000 in insurance premiums. As part of the conspiracy to help cover up the unreported worker wages, the defendants withdrew cash from about 20 bank accounts and paid their temporary workers “off the books.” To further ensure that they would not be caught, the defendants structured these bank transactions – over 4300 in all – so they could withdraw the cash needed to pay the workers without triggering federal reporting requirements.
Each of the statutes provide a maximum penalty of between five and 20 years in prison. The statutes also provide for substantial fines and up to three years of supervised release. Note that actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Anthony DiPaolo, Chief of Investigations of the Massachusetts Insurance Fraud Bureau, made the announcement today. The investigation was undertaken jointly by the IRS, the FBI, and the Massachusetts Insurance Fraud Bureau. The case is being prosecuted by Andrew E. Lelling of Ortiz’s Economic Crimes Unit.