Owners of Greensboro Temporary Staffing Firms Indicted for Employment Tax Fraud
Allegedly Paid for Pet Spa, Landscaping, and Maid Services Instead of Paying Withholdings to the IRS
A federal grand jury indicted two Greensboro, North Carolina, women yesterday with conspiring to defraud the United States and for failing to pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney for the Middle District of North Carolina Matthew G.T. Martin.
According to the indictment, Rebecca Adams and her daughter Elizabeth Wood, who operated a temporary staffing business in Greensboro, conspired to defraud the government by withholding taxes from employees’ paychecks and failing to pay those taxes over to the Internal Revenue Service (IRS). Adams and Wood also allegedly created Forms W-2 for the staffing business employees but failed to file these forms with the government as they were required to do. Instead of paying the taxes they withheld from employees, the indictment alleges that Adams and Wood used the funds to pay for personal expenses, such as a personal maid, personal landscaping services, and pet spa services. The staffing business allegedly changed names twice, even though it did not otherwise change its actual business operations. Adams was also charged with tax evasion based on her allegedly evading payment of more than $400,000 in previously assessed employment taxes and penalties to the IRS.
If convicted, Adams faces a statutory maximum sentence of five years in prison for each charge of conspiracy, employment tax fraud, and tax evasion. Wood faces a statutory maximum sentence of five years in prison for each charge of conspiracy and employment tax fraud. They also face a period of supervised release and monetary penalties.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Martin thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kevin Schneider of the Tax Division and Assistant United States Attorney Frank Chut, who are prosecuting the case.