News and Press Releases
DAYTON PAYROLL COMPANY OWNER SENTENCED TO 78 MONTHS IN PRISON FOR CONSPIRACY IN $26.7 MILLION DOLLAR TAX SCHEME

 

FOR IMMEDIATE RELEASE
FRIDAY, JUNE 21, 2013
http://www.justice.gov/usao/ohs
CONTACT: Fred Alverson
Public Affairs Officer
(614) 469-5715

CINCINNATI –Robert R. Sacco, 62, the owner and chairman of the board of Dayton-based Paysource, was sentenced to 78 months in prison in a conspiracy and financial crimes scheme involving withholding money to pay federal employment taxes from employees’ paychecks and keeping the money instead of paying it to the IRS.  In addition, Sacco must pay a $26,729,098.79 money judgment.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS) announced the sentence handed down today by U.S. District Judge Michael R. Barrett.

Sacco previously pleaded guilty on October 26, 2012 to one count each of conspiracy to defraud the United States by impeding the Internal Revenue Service, money laundering, and tax evasion.

According to court documents, Sacco and others conspired to avoid the payment of federal employment taxes owed by Paysource for 2007 through 2009 and concealed from the IRS the legitimate tax liabilities the company owed. Sacco directed co-conspirators to prepare fraudulent IRS forms claiming that the wages paid by the company and the resulting tax liabilities were significantly lower than the wages the company actually paid.

Sacco, lived in Huber Heights prior to moving to Orlando in 2010.

Paysource was a Dayton-based professional employer organization. Paysource provided services that enabled business owners to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation and other strategic services. It did this by hiring a client company’s employees, thus becoming their employer of record for tax and insurance purposes.  This practice is known as co-employment.

After serving his prison term, Sacco must serve three years of supervised release.  He was also ordered to pay $26,729,098.79 in restitution, jointly and severally with Charles Painter who was also charged in the scheme, to the Internal Revenue Service.

Stewart commended the investigation by IRS Criminal Investigation agents, and Assistant U.S. Attorney Dwight Keller, who is prosecuting the case.

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