LOWELL COUPLE CHARGED IN UNDER-THE-TABLE PAYROLL SCHEME
BOSTON, Mass. - A Lowell couple was charged today in federal court with defrauding the Internal Revenue Service (IRS) and their workers compensation insurers by concealing millions of dollars of wages they paid to employees of their temporary employment agency.
United States Attorney Carmen M. Ortiz and Susan M. Dukes, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation - Boston Field Office, announced today that JENNIFER MILESKI, 36, and her common law husband, KINH DINH DO, 34, of Lowell, were charged in a three-count criminal information with conspiracy, mail fraud and assisting in the preparation of false tax returns.
The information alleges that from 2003 to 2008, MILESKI and DO operated a temporary employment agency in Lowell named C&A Associates that supplied workers to a graphics company to perform manual labor. According to the information, the couple charged their customer by the hour for each employee, and were responsible for paying payroll taxes and workers compensation insurance for the employees. MILESKI was in charge of the business and kept its finances, while DO was responsible for recruiting workers, nearly all of whom were recent immigrants, and for distributing the payroll. At any given time, the couple had between 10 and 60 employees on the payroll.
It alleged that the defendants concealed the true size of their payroll from the IRS and from their workers compensation insurer, in order to reduce their employer payroll taxes (FICA) and their workers compensation insurance payments. They did this by allegedly paying their employees in cash each week and hiding any record of the payments. It is alleged that, although they retained a payroll service, they routinely told the service that C&A had no work and therefore no employees. Relying on this repeated misrepresentation, the payroll service filed over twenty quarterly payroll tax returns on behalf of C&A that reported no payroll. It is further alleged that they similarly told the auditors for their workers compensation insurance carrier at the end of every policy period that C&A had no employees, and concealed any record of the cash payroll, knowing that the fewer employees they appeared to have, the lower their insurance premiums would be. Over the course of their alleged six year scheme, the defendants paid out over $3.4 million in cash wages. It is alleged that, in so doing, they fraudulently deprived the IRS of approximately $656,414 in tax payments, and their insurance carrier of approximately $77,811 in premium payments.
If convicted on these charges, MILESKI and DO each face up to 28 years imprisonment, to be followed by three years of supervised release and a $750,000 fine.
The case was investigated by the Internal Revenue Service - Criminal Investigation. It is being prosecuted by Assistant U.S. Attorneys Jonathan Mitchell and Sarah Walters of Ortiz’s Economic Crimes Unit.
The details contained in the information are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.