Massachusetts Temp Agency Operator Pleads Guilty to Employment Tax Fraud
A Massachusetts temporary employment agency operator pleaded guilty today in Boston federal district court to willfully failing to collect and pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to information presented in open court and filed documents, Huong Le, also known as Lynn Le, assisted Tien Chau in the operation of an employment agency that provided temporary labor to businesses in Massachusetts and New Hampshire. The agency operated under at least four different names between 2006 and 2011: Central Boston Staffing Services, Metro Boston Staffing Services, General Staffing Inc. and Kim’s Staffing Inc. Le and Chau used family members and other individuals as nominees to conceal their ownership of the business.
From April 2010 through September 2011, Le was required to collect and pay over to the IRS employment taxes relating to the agency’s workers. Le and others underreported to the agency’s payroll company the total number of employees and wages paid, which caused the payroll company to prepare and file false forms with the IRS on behalf of the employment agency.
As part of her scheme, Le attempted to hide the size of the employment agency’s workforce by paying employees cash under the table. Le also personally cashed over $6 million in checks payable to the employment agency at a check casher, caused others to cash over $4.9 million at the check casher, and caused others to incorporate the employment agency under nominee names and open bank accounts in those names. Chau previously pled guilty to conspiring to defraud the government, failing to pay over employment taxes and obstructing the internal revenue laws and is awaiting sentencing.
U.S. District Judge George A. O’Toole, Jr., scheduled sentencing for June 19. Le faces a statutory maximum sentence of five years in prison. She also faces a period of supervised release, restitution in the amount of $256,627, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Brittney Campbell and Shawn Noud, who are prosecuting the case. Principal Deputy Assistant Attorney General Zuckerman also thanked Deputy Chief of Investigations Anthony DiPaolo of the Insurance Fraud Bureau of Massachusetts for his agency’s assistance with the investigation.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.