Jury convicts one of the owners of former new york payroll company, total time solutions, llc of wire fraud
FOR IMMEDIATE RELEASE |
August 29, 2011 |
TRENTON, N.J. – One of the owners of former payroll services company, Total Time Solutions, LLC (“TTS”), was convicted by a jury of two counts of wire fraud in connection with a scheme to defraud clients out of millions of dollars in payroll taxes that were not paid to the IRS, U.S. Attorney Paul J. Fishman announced.
The jury returned a guilty verdict against Mark Holzwanger, 51, of Forest Hills, N.Y., after a three-week long trial before Judge Joel A. Pisano in Trenton federal court. The jury was deadlocked as to co-defendant, Andrew Muhlstock, 58, of Teaneck, N.J. Both defendants were charged with wire fraud by Indictment last October along with another TTS owner, Stephen Guthartz, 46, of New York, N.Y. and Russell Speranza, 55, of Bellmore, N.Y., an employee of the defendants’ Manhattan accounting firm, Muhlstock Holzwanger, LLP.
According to documents filed in this case and the evidence at trial:
TTS was a payroll company that handled payroll and tax withholding services for its clients, including numerous private entities located in New Jersey. In that capacity, TTS received money from those entities and was responsible for issuing payments to the IRS and to employees of those entities on behalf of its clients. Instead of using money withdrawn from TTS clients’ bank accounts for the payment of payroll taxes, TTS used the money to fund its own operating expenses. TTS caused false reports to be sent to clients stating that the taxes had been paid in order to conceal the fraud from the clients.
On June 30, 2011, Speranza pleaded guilty to one count of wire fraud. Speranza admitted that while an employee of Muhlstock Holzwanger, LLP, he participated in a scheme to defraud TTS clients out of millions of dollars in payroll taxes that were not paid to the IRS. Speranza’s sentencing is scheduled for October 3, 2011.
On July 27, 2011, Guthartz pleaded guilty to a Superseding Information charging a misprision of a felony stemming from his knowledge of a fraudulent scheme to defraud TTS clients and his failure to bring that scheme to the attention of law enforcement. Guthartz’s sentencing is scheduled for November 3, 2011.
The two counts on which Holzwanger was convicted each carry a maximum statutory sentence of 20 years in prison and a $250,000 fine as well as restitution. Sentencing is currently scheduled for October 27, 2011.
U.S. Attorney Fishman credited special agents with the Office of the Treasury Inspector General for Tax Administration, under the direction of Special Agent in Charge, Washington Field Division, Robert Geary; and IRS – Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, with the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys J Imbert of the U.S. Attorney’s Office Criminal Division in Newark and Sarah Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.
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Defense counsel:
Holzwanger: Julian Schreibman, Esq., New York, N.Y.
Muhlstock: Edward V. Sapone, Esq., New York, N.Y.
