U.S. Attorney's Office Northern District of New York

NEWS RELEASE

Glenn T. Suddaby, United States Attorney for the Northern District of New York, and Anne Marie Coons, Special Agent in Charge of the Buffalo District Office of the Internal Revenue Service, Criminal Investigation Division, announced today a guilty plea in a payroll tax and bank fraud case. ROBERT BULLOCK, age 57, a former resident of New Hartford, New York, pled guilty before United States District Judge David N. Hurd to two felony charges–willful failure to pay federal payroll taxes and making a false loan application to a federally insured financial institution. As a result of his guilty plea BULLOCK faces up to 35 years in prison and fines up to $1,250,000 when he is sentenced before Judge Hurd in Utica on July 8, 2005 at 2:00 p.m.

Under Federal law, every employer must deduct income withholding taxes and Social Security taxes from the wages of its employees. A Form 941 tax return reflecting the withholding of such taxes must be filed every calendar quarter. Further, every employer and its responsible officers have an obligation periodically to deposit the taxes withheld from employees in a separate tax account and to pay said taxes over to the Internal Revenue Service at least quarterly.

Between and including 1998 and 2000, ROBERT BULLOCK was the majority owner and President of Staff Source, Inc. and Staff Link, LLC of Utica, New York and had significant control over the financial decision-making process within those entities. As such, BULLOCK was in a decision-making role and had the authority and duty to assure that withholding taxes and social security taxes of that entity were withheld, collected, and paid over to the Internal Revenue Service.

Starting in the quarter ending June 30, 1999, through and including the quarter ending September 30, 2000, ROBERT BULLOCK and employees of Staff Source, Inc. and Staff Link, LLC under his control deducted and collected, from the total taxable wages of employees, federal income taxes and Federal Insurance Contributions Act taxes in a sum totaling more than $1.4 million. In entering his guilty plea, ROBERT BULLOCK admitted that he and his related entities failed to pay over to the Internal Revenue Service some or all of said withholding taxes and social security taxes due and owing to the United States of America.

ROBERT BULLOCK further admitted that, starting in the Spring of 1999, he was notified by employees that Staff Source, Inc. was failing to make required deposits and payments of withholding taxes and social security taxes. Nonetheless, BULLOCK continued to direct his employees to use available corporate revenues to pay other obligations of Staff Source, Inc. and other business entities he controlled instead of paying said taxes. Among the other expenses that ROBERT BULLOCK directed employees of Staff Source, Inc. to pay before paying delinquent withholding taxes and social security taxes were the bills for advertising services provided by his spouse, the corporate American Express bill, expenses relating to an airplane owned by another entity, and costs relating to the renovation of a building on French Road in Utica that was owned by another entity.

On March 28, 2001, ROBERT BULLOCK executed a Uniform Residential Loan Application for a mortgage loan on a second residence in North Naples, Florida. In entering his guilty plea, BULLOCK admitted that, in response to a question which asked the applicant to list "all outstanding debts," he failed to disclose a $350,000 mortgage on the same property in Florida which was filed in the official records of Collier County on or about December 11, 2000. A $750,000 mortgage loan on the North Naples property was ultimately granted to BULLOCK and his spouse by Emigrant Mortgage Company, Inc., a wholly- owned subsidiary of Emigrant Savings Bank, the deposits of which were then insured by the Federal Deposit Insurance Corporation.

The guilty pleas in this case resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation Division and the Federal Bureau of Investigation. United States Attorney Suddaby noted that this prosecution reflects the determination of the Department of Justice and the Internal Revenue Service to crack down on business owners who willfully fail to account properly for the federal taxes they withhold from their employees. The prosecution was handled by Assistant U.S. Attorney Andrew T. Baxter, who may be reached at (315) 448-0672 for further information.