Peabody Tax Preparer Sentenced to Prison for Fraud

BOSTON – A Peabody tax preparer was sentenced yesterday to federal prison for defrauding small-business clients out of nearly $900,000 that his clients had given him to pay their federal payroll taxes.

Barry Ginsberg, 63, was sentenced by U.S. District Court Judge Leo T. Sorokin to 21 months in prison, six months of home confinement following release from prison, and ordered to pay restitution.  In June 2015, Ginsberg pleaded guilty to multiple counts of mail and wire fraud, preparing false tax returns, and obstructing the IRS.

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 for years—became significantly indebted to 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.

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 was prosecuted by Assistant U.S. Attorneys Eric P. Christofferson and Vassili Thomadakis of Ortiz’s Economic Crimes Unit.