Melrose Accounting Executive Pleads Guilty to Tax and Fraud Conspiracy
BOSTON – The former principal of a Boston-area accounting firm pleaded guilty today in federal court in Boston to conspiring with the former president of a Gloucester seafood processing company and other executives to defraud the company and its majority shareholder, and to avoid paying taxes on the proceeds.
Michael Bruno, 62, of Melrose, pleaded guilty to conspiring to defraud the Internal Revenue Service and to commit wire fraud. U.S. District Court Judge Denise J. Casper scheduled sentencing for March 8, 2018.
Between approximately 1999 and 2015, Bruno, who also served as a member of the seafood processor’s board of directors, conspired with three executives of the company - its president, head of operations and a senior sales executive - to divert money from the company and its majority shareholder to the three executives. As part of the scheme, the conspirators caused the seafood professor to retain a temporary labor company, Continental Labor Team, purportedly to provide temporary workers for the seafood processor’s facility in Gloucester. In fact, however, Continental was controlled by the seafood processor’s president, and it was employees of the seafood processor who recruited the temporary workers, handled their employment applications and otherwise dealt with issues relating to their employment. Continental’s profits from the seafood processor - its sole customer - were deposited into accounts controlled by the seafood processor’s president and distributed by him to the other two executives, or to corporate entities they controlled, which performed no services in exchange for those payments.
Bruno, whose accounting firm prepared tax returns for the seafood processor, its president, and the corporate entities controlled by the other executives, also acknowledged conspiring with the executives to understate their income on federal tax returns.
The charging statute provides for a sentence of no greater than five years in prison, three years of supervised release, a fine of up to $250,000, or twice the gross gain or loss caused by the offense, and mandatory restitution. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorneys Stephen E. Frank and Brian A. Pérez-Daple of Weinreb’s Criminal Division are prosecuting the case.