News Release
U.S. Department of Justice
United States Attorney
District of Rhode Island
January 26, 2009
Florida man is sentenced for looting RI trucking firms
A federal judge today sentenced Patrick Crowe, most recently of Florida, to four years in federal prison for stealing nearly $350,000 in payroll deductions for health insurance premiums and payroll taxes from two trucking firms that he owned for brief periods in 2004.
United States Attorney Robert Clark Corrente announced the sentence, which U.S. District Court Judge William E. Smith imposed today in U.S. District Court, Providence. Judge Smith also ordered Crowe to pay a total of $220,000 restitution to Blue Cross Blue Shield of Rhode Island and United Health Care, plus $46,000 to Drew Oil Company and $10,000 to CSC, a payroll company. Crowe must also pay the Internal Revenue Service about $127,000 in payroll taxes that his companies withheld but failed to pay over to the IRS.
Because of Crowe’s prior record and his post guilty-plea conduct, the government recommended, and Judge Smith imposed, a longer sentence than guidelines called for.
In May, Crowe pleaded guilty to two counts of violating the Employee Retirement Income Security Act (ERISA) by stealing worker’s payroll deductions and two counts of failing to pay over to the IRS deducted payroll taxes. At the plea hearing, Assistant U.S. Attorney Adi Goldstein said the government could prove that, in 2004, after Crowe purchased Dean Transportation Services, an East Providence trucking company, he quickly defaulted on the company’s financial obligations.
From February through April 2004, numerous deductions were taken from employees’ paychecks towards payment of health care premiums and payroll taxes. However, Crowe never forwarded the health care premiums to Blue Cross, which cancelled the company’s health insurance plan at the end of April 2004. Similarly, approximately $97,000 in payroll and FICA taxes were withheld but not paid over.
Crowe subsequently bought another trucking company, C-Line Trucking, on Jefferson Boulevard in Warwick, where he continued his practice of not paying over health care premiums and federal taxes, and defaulting on other financial obligations.
Between the two trucking companies, Crowe failed to pay Blue Cross Blue Shield of Rhode Island a total of $124,860 in premiums, United Health Care $94,891 in premiums, and the Internal Revenue Service $127,380 in payroll taxes, all of which the companies had withheld from employees’ payroll checks.
Crowe, 57, who has prior addresses in Fort Lauderdale and Palm Beach, has several prior convictions in federal court in New York for offenses including wire fraud and bankruptcy fraud. After he pleaded guilty in Providence in May, he was released on bond pending sentencing. However, he was subsequently charged in Port St. Lucie, Florida with passing forged checks and in Connecticut with issuing a bad check. Crowe was brought back to federal court in Rhode Island in September, Magistrate Judge David L. Martin revoked his bond, and he has since been detained.
The U.S. Department of Labor, Employee Benefits Security Administration, and the Internal Revenue Service, Criminal Investigation investigated the case.