Business Agent Sentenced for $3 Million Tax Fraud
For Immediate Release
U.S. Attorney's Office, Eastern District of Virginia
RICHMOND, Va. – A Glen Allen man was sentenced today to 20 months in prison for a tax fraud conspiracy that caused a loss to the IRS of over $3 million.
According to court documents, Edward R. Prestes, 48, was a bookkeeper who operated a conspiracy to evade paying income and employment taxes to the IRS for laborers working for various construction companies by paying such laborers more than $9.1 million “under the table.” From 2011 through 2013, Prestes was an agent for Virginia American Contractors, LLC; Elson Contractors, LLC; Proactive Services, LLC; Positive Solutions, LLC; and Service Contractors, LLC. These nominee corporations all used the same mailing address: a post office box in Glen Allen. However, each nominee corporation had a separate bank account in which Prestes was an authorized signatory.
According to the court documents, after various construction companies made regular payments to the nominee corporations, Prestes would then distribute the funds from the nominee corporations to the laborers. Prestes would make these payments to laborers by both cash and check, and would not withhold any income or employment taxes, issue Forms W-2 or 1099 to the laborers, or file quarterly returns or yearly income tax returns for the nominee corporations, as required by law. At the end of each year, the construction companies issued IRS Forms 1099 to the nominee corporations and deducted the payments.
According to the court documents, from 2011 through 2013, the construction companies paid over $9.2 million to the nominee corporations. Prestes then paid the laborers approximately $2.8 million in cash and $6.3 million in checks. Prestes kept as a commission approximately two to three percent of the funds he received from the construction companies. As a result of this conspiracy, the IRS lost over $3 million in employment and income taxes.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Kimberly Lappin, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after sentencing by U.S. District Judge John A. Gibney. Assistant U.S. Attorney David T. Maguire prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-cr-114.
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Updated January 3, 2018