U.S. Department of Justice
Peter F. Neronha
United States Attorney
District of Rhode Island
October 7, 2010
R.I. EMPLOYMENT AGENCY OWNER SENTENCED FOR
FAILING TO PAY MILLIONS IN FEDERAL WITHOLDING TAXES
PROVIDENCE, R.I. – The owner of a Providence, R.I., temporary employment agency was sentenced Thursday in U.S. District Court in Providence to 24 months in federal prison for under reporting substantial amounts of wages and failing to pay millions of dollars in federal withholding, social security and Medicare taxes. Cheang Chea, owner of S&P Temporary Help Service, Inc., pleaded guilty in June to tax evasion, theft from a health care benefit program and mail fraud.
The sentence, which was imposed by U.S. District Court Chief Judge Mary M. Lisi, was announced by U.S. Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of Internal Revenue Service, Criminal Investigation. Judge Lisi also ordered Chea to pay the government $14 million in workers’ taxes that he failed to submit.
At the time of Chea’s guilty plea, Assistant U.S. Attorney Dulce Donovan told the Court that since 2003, Chea has run S&P Temporary Help Service, a Providence based company which has supplied hundreds of workers to approximately 30 Rhode Island companies. Chea’s workforce is made up of primarily East Asian, non-English speaking immigrants.
In supplying temporary employees to their client companies, S & P Temporary Help Service agreed to be responsible for all payroll and employment tax withholdings and carry workers compensation insurance coverage for its employees. Donovan told the Court that Chea under reported substantial amounts of wages and failed to pay millions in federal withholding, social security and Medicare taxes.
U.S. Attorney Peter F. Neronha commented, “Employers and employees alike put their trust in employment agencies like S&P expecting that honest services will be provided and that workers, often times unskilled, will be treated fairly and not be taken advantage of. When that trust is abused and the law is broken those who are responsible will be held accountable for their actions.”
William P. Offord, Special Agent in Charge of IRS Criminal Investigation stated, “Employers who steal withheld employment taxes from their employees are not only greedy, but also create financial problems for their employees. The employees are hurt the most by this crime because they may not qualify for social security or Medicare benefits in the future. "
The matter was investigated by the Internal Revenue Service, Criminal Division; U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; and the U.S. Department of Labor, Office of Labor Racketeering & Fraud Investigations.
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