BOSTON - A Dracut man was convicted today of defrauding the Internal Revenue Service of approximately $2 million by lying on corporate tax forms about how many workers he employed.
Tom Seng, 70, pleaded guilty before U.S. District Judge George A. O’Toole to 20 counts of making and subscribing a false tax return.
Beginning around 2006, S&T Industrial Service, Incorporated, (S&T) a company owned and operated by Seng, began providing temporary employees to several companies in the Boston area. Seng, however, failed to list these employees on S&T's quarterly and yearly corporate tax returns, in an effort to avoid paying Social Security and Medicare taxes on employee wages and withholding federal income taxes. Overall, Seng failed to pay and withhold federal taxes on approximately $12 million in wages, resulting in losses to the U.S. Treasury of approximately $2 million. Moreover, at least one company working with S&T placed its permanent workers on S&T's payroll, instead of keeping them on the company's books, to hide the fact that the workers were permanent employees of the company and therefore avoided paying taxes on the employees' wages.
Judge O’Toole scheduled sentencing for April 16, 2013. Seng faces up to three years in prison on each count, to be followed by up to three years of supervised release and a maximum fine of $250,000. Seng must also pay the costs of prosecution, and full restitution to the U.S. Treasury.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Andrew E. Lelling of Ortiz’s Economic Crimes Unit.