Peabody Tax Preparer Convicted of Fraud

BOSTON – A Peabody tax preparer pleaded guilty today to defrauding small-business clients out of nearly $900,000 that his clients had given him to pay their federal payroll taxes.

Barry Ginsberg, 63, pleaded guilty to multiple counts of mail and wire fraud, preparing false tax returns, and obstructing the IRS, after being indicted in May 2013.  U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Sept. 28, 2015.

Ginsberg owned and operated a payroll tax business that had a number of so-called “escrow” clients.  Ginsberg not only prepared their payroll tax returns, but these clients also sent him money on a regular basis for the purpose of paying their payroll taxes to the IRS.  Instead of doing so, however, Ginsberg took the money and used it for other business or personal reasons.  As a result, the defendant’s clients—some of whom had trusted him years—racked up significant arrearages with the IRS over time.

To cover up his scheme, Ginsberg falsified his clients’ tax returns, which he was hired to prepare, indicating that the clients’ payroll taxes had been paid in full, when they had not.  When asked by clients about their mysterious IRS debts, Ginsberg gave them a litany of false excuses, including blaming the IRS and his own staff.

The mail and wire fraud charges provide for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the total gain or loss, whichever is greater.  The maximum penalties for the tax-related crimes are three years in prison, one year of supervised release, and a fine of $100,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  The case is being prosecuted by Assistant U.S. Attorneys Eric P. Christofferson and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.