Operator of Temporary Employment Agency Sentenced for Tax Crimes and Insurance Fraud
BOSTON – A Providence woman was sentenced today in federal court in Boston in connection with a long-running, off-the-books payroll scheme through which her temporary employment agency evaded federal employment taxes and workers’ compensation insurance premiums.
Souleang Kane, 48, was sentenced by U.S. District Court Senior Judge Douglas P. Woodlock to two years in prison, three years of supervised release, and ordered to pay restitution. In October 2018, Kane pleaded guilty to 18 counts of willful failure to collect and pay over taxes to the Internal Revenue Service (IRS) and five counts of mail fraud.
From 2010 to 2015, Kane operated a series of temporary employment agencies under the name Expert Staffing, Affordable Staffing and M&K Temp Inc., providing labor for Massachusetts companies in agricultural industries. During that time, Kane failed to report to the IRS approximately $4.3 million that her agencies paid in employee wages. Although she withheld federal taxes from the wages of her employees, Kane failed to report the wages to the IRS. Kane thereby avoided collecting and paying to the IRS both the taxes required to be withheld from employee wages and the matching employer taxes she was required to pay. As a result, Kane evaded payment of more than $1.3 million in federal taxes. She also evaded more than $431,000 in Massachusetts state taxes.
In addition, Kane grossly understated her business’ payroll in dealings with her workers’ compensation insurance providers. As a result, her workers’ compensation insurance premiums were fraudulently reduced by approximately $165,000 between 2010 and 2015.
United States Attorney Andrew E. Lelling; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Massachusetts Insurance Fraud Bureau, made the announcement. Assistant U.S. Attorney Victor A. Wild of Lelling’s Economic Crimes Unit prosecuted the case.