Four Family Members Sentenced to Prison for Defrauding IRS of Over $5 Million
BOSTON – Four family members who operated a temporary employment agency in Lowell were sentenced yesterday on charges relating to a scheme to hide over $25 million in employee wages from the Internal Revenue Service.
Margaret Mathes, 67, was sentenced by U.S. District Court Judge Sr. Mark L. Wolf to 80 months in prison and three years of supervised release. Her daughter, Bosea Prum, 47, was sentenced to two years in prison and three years of supervised release. Prum’s brother-in-law, Sam Pich, 63, was given the same sentence. Prum’s husband, Thaworn Promket, 52, was sentenced to one year and a day in prison and three years of supervised release. All defendants were ordered to pay, jointly and severally, over $6 million in back taxes and workers compensation premiums. The Court further required Mathes and Prum to pay, jointly and severally, $100,000 within the next 45 days, and Prum and Promket to pay over $500,000 in additional back taxes for amounts underreported on their personal tax returns.
In August 2014, all four defendants pleaded guilty to conspiracy to defraud the IRS, mail fraud, and to violating laws against structuring monetary transactions to avoid reporting requirements. Prum also pleaded guilty to 10 counts of filing false employment tax returns, six counts of mail fraud, and two counts of structuring monetary transactions. Pich also pleaded guilty to 17 counts of assisting the filing of false employment tax returns, six counts of mail fraud, and two counts of structuring monetary transactions. Promket also pleaded guilty to seven counts of filing false employment tax returns, six counts of mail fraud, and two counts of structuring monetary transactions.
The charges arose from a temporary employment agency in Lowell that the defendants operated that provided unskilled labor to local companies, including those in the packaging and food services industries. Between 2004 and 2009, the defendants reported to the IRS that their temporary employees made about $2.2 million in wages, when the real figure was nearly $30 million. The defendants also defrauded the agency’s workers compensation insurer, Granite State Insurance Co., by hiding the true number of temporary workers the defendants employed, thus avoiding about $880,000 in insurance premiums. As part of the conspiracy to help cover up the unreported worker wages, the defendants withdrew cash from about 20 bank accounts and paid their temporary workers “off the books.” To further ensure that they would not be caught, the defendants structured these bank transactions – over 4300 in all – so they could withdraw the cash needed to pay the workers without triggering federal reporting requirements.
In the weeks leading up to the sentencing hearing, the government also developed evidence that defendant Mathes, with the help of her daughter, tried to mislead the Court about Mathes’s medical condition. Mathes had recently been diagnosed with possible Alzheimer’s Disease, after which she greatly exaggerated her symptoms in an effort to win a shorter sentence. At sentencing, the Court imposed an obstruction enhancement on both Mathes and her daughter, Prum.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Anthony DiPaolo, Chief of Investigations of the Massachusetts Insurance Fraud Bureau, made the announcement. The case was prosecuted by Assistant U.S. Attorney Andrew E. Lelling of Ortiz’s Economic Crimes Unit.