New York Accounting Firm Employee Admits Defrauding Clients Of Payroll Services Company Of Over $3 Million In Tax Money
TRENTON, N.J. – Russell Speranza admitted today that while an employee of a New York accounting firm, he defrauded clients of former payroll services company Total Time Solutions, LLC, out of millions in payroll taxes that were not paid to the IRS, U.S. Attorney Paul J. Fishman announced.
Speranza, 55, of Bellmore, N.Y., pleaded guilty to one count of wire fraud – Count Two of the Indictment against him. He entered his guilty plea before U.S. District Judge Joel A. Pisano in Trenton federal court.
According to documents filed in this case and statements made in court:
At the time of the offense, Speranza was an employee of Manhattan accounting firm Muhlstock Holzwanger, LLP, and was involved in the operations of Total Time Solutions, LLC (TTS), which shared office space with the firm. TTS was a payroll company that handled payroll and tax withholding services for its clients, including numerous private entities located in New Jersey. In that capacity, TTS received money from those entities and was responsible for issuing payments to the IRS and to the employees of those entities on behalf of their clients.
Speranza admitted to participating in a scheme to defraud TTS clients from January 2002 through November 2005. Instead of using money withdrawn from TTS clients’ bank accounts for the payment of payroll taxes, TTS used the money to fund its own operating expenses. Speranza admitted that to conceal this fact from the clients, TTS caused false reports to be sent to clients stating that the taxes had been paid. By November 2005, TTS had failed to turn over more than $3 million to the IRS.
Speranza was indicted in October 2010 along with three former owners of TTS: accountant Mark Holzwanger, of Forest Hills, N.Y.; accountant Andrew Muhlstock, of Teaneck, N.J.; and Stephen Guthartz of New York. Trial for Speranza’s co-defendants is currently scheduled for August 1, 2011, before Judge Pisano.
The count to which Speranza pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is currently scheduled for Oct. 3, 2011.
U.S. Attorney Fishman credited the Office of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge, Washington Field Division, Robert Geary; and IRS – Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys J Imbert, Senior Litigation Counsel, of the U.S. Attorney’s Office Criminal Division in Newark; and Sarah Wolfe of the Office’s Criminal Division in Trenton.
As for the remaining defendants, the charges and allegations contained in the Indictment are merely accusations, and they are considered innocent unless and until proven guilty.
Defense counsel: Lawrence Carra Esq., Mineola, N.Y.