Operators Of Lowell Temp Agency Charged With Tax And Insurance Fraud
For Immediate Release
U.S. Attorney's Office, District of Massachusetts
BOSTON – Four Lowell residents who operated a temporary employment agency have been charged with running an off-the-books payroll scheme, paying employees millions of dollars, evading employment taxes and workers compensation premiums.
Margaret Mathes, 67, Boseba Prum, 47, Sam Pich, 63, and Thaworn Promket, 52, have each been charged with conspiracy to defraud the Internal Revenue Service and to commit mail fraud and to violating laws against structuring monetary transactions to avoid reporting requirements. Mathes is also charged with two counts of structuring monetary transactions. Prum is also charged with 10 counts of filing false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions. Pich is also charged with 17 counts of assisting the filing of false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions. Promket is also charged with seven counts of filing false employment tax returns, six counts of mail fraud and two counts of structuring monetary transactions.
According to the indictment, the defendants are family members who together ran a temporary employment agency providing both short-term and long-term labor for client companies in the packaging and food services industries. Between 2004 and October 2008 the agency operated under the name International Temp Agency; from October 2008 through 2009 it operated under the name JP Company. Between 2004 and 2009, the defendants reported approximately $2.2 million in wages to the IRS. The indictment charges, however, that the defendants= total payroll was approximately $28 million during that period. According to the indictment, the defendants failed to withhold and pay employment taxes and worker=s compensation insurance premiums on these unreported wages.
In order to meet their outsized cash payroll without triggering the filing of currency transaction reports the defendants maintained multiple bank accounts at various institutions and cashed approximately 4,383 checks in amounts less than $10,000. The indictment also charges that defendants grossly understated their payroll in response to inquiries from their workers' compensation insurance provider, under reporting the number of clients and employees on applications for insurance and during audits conducted by the insurer. As a result, their workers compensation insurance premiums were fraudulently reduced by approximately $850,000 between 2004 through 2010.
If convicted, the maximum prison sentences that could be imposed for each count of the indictment are as follows: five years in prison for conspiracy; three years in prison for filing or procuring false tax returns; 20 years in prison for mail fraud; and 10 years in prison for structuring of financial transactions.
U.S. Attorney Carmen M. Ortiz; John G. Collins, Acting 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 Insurance Fraud Bureau of Massachusetts, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Andrew Lelling of Ortiz=s Economic Crimes Unit.The details in the Indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Updated December 15, 2014