Skip to main content
Press Release

North Carolina Businessman Sentenced to 12 Years in Prison for Payroll Tax Fraud

For Immediate Release
Office of Public Affairs
Failed to Pay More Than $40 Million Involving His Temporary Staffing Companies

Bruce Gregory Harrison III of Greensboro, N.C., was sentenced today to 144 months in prison following his December 2011 conviction for payroll tax fraud and other crimes, announced Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; Ripley Rand, U.S. Attorney for the Middle District of North Carolina; and Richard Weber, Chief of Internal Revenue Service (IRS) - Criminal Investigation.


Harrison was convicted on a 63-count indictment alleging large-scale payroll tax fraud and failure to file individual income tax returns. The evidence at trial and at sentencing showed that Harrison failed to pay over more than $40 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.


“The integrity of our Social Security and Medicare system depends on payroll deductions from honest, hard-working taxpayers being properly paid over,” said Assistant Attorney General Keneally. “The sentence handed down today demonstrates that those who steal the taxes paid by their employees risk lengthy prison sentences, and in the end, will still owe the taxes together with civil penalties.”


“Greg Harrison used a foundation of fraud and deceit to build his reputation as a successful businessman and prominent local citizen,” commented U.S. Attorney Rand, “but appearances, no matter how polished, cannot overwhelm the truth. The substantial sentence handed down today shatters the Harrison myth and represents justice appropriate to his shameless thievery.”


“Mr. Harrison is being held accountable today because he defrauded his employees and attempted to conceal his fraud by lying to the IRS” said Chief Richard Weber, IRS - Criminal Investigation.  “He used employee taxes for personal gain which resulted in the significant loss of tax revenue to the United States government and the potential loss of future Social Security or Medicare benefits for the employees. IRS - Criminal Investigation is committed to vigorously pursuing those who violate employment tax laws.”


According to the trial evidence and other documents filed in the case, Harrison did business under various corporate names including U.S.A. Staffing and Compensation Management Inc. He owned or controlled temporary staffing companies operating in at least nine states. Harrison’s staffing companies were headquartered in Guilford County, N.C., and contracted with client businesses to provide temporary workers. Harrison’s companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees. Instead, Harrison failed to account for and pay over in excess of $40 million in federal payroll taxes for the employees of those companies. The evidence at trial showed that Harrison caused false bank statements to be presented to auditors to conceal the nonpayment of the payroll taxes.


Harrison was also convicted of corruptly endeavoring to obstruct the IRS by means of false statements to IRS revenue officers. Evidence established he had used company funds to purchase personal residences, to buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants. Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006.


U.S. District Court Chief Judge James A. Beaty, Jr., who presided over the trial and imposed the sentence, had ordered Harrison jailed as a flight risk after the jury rendered its verdict on Dec. 20, 2011. At sentencing, Chief Judge Beaty ordered Harrison to pay more than $43 million in restitution to the IRS.


Assistant Attorney General Keneally and U.S. Attorney Rand commended Assistant U.S. Attorneys Frank Chut and Terri-Lei O’Malley and Tax Division Trial Attorney Jeffrey McLellan, and the IRS Agents who assisted them, for their outstanding work in investigating and prosecuting the case.

Updated September 15, 2014

Press Release Number: 12-1079