The U.S. Attorney's Office for the Middle District of Pennsylvania announced today that Vanny Son (33), Son Thach (55), and Hung Danh (54), all of Harrisburg, Pennsylvania, were indicted by the federal grand jury on charges they participated in a tax scheme that resulted in over $1 million in losses to the IRS. Vanny Son and Son Thach were arrested and brought before U.S. Chief Magistrate Judge Martin C. Carlson for an initial appearance and released on bail pending trial, which is scheduled for September 3, 2014. An arrest warrant is pending for Hung Danh, who remains a fugitive.
According to U.S. Attorney Peter Smith, Son and Thach allegedly operated five employee leasing businesses in Harrisburg between 2006 and 2012 and paid their employees over $7 million in cash without withholding income taxes or Federal Insurance Contribution Act (FICA) taxes resulting in a tax loss of over $1 million to the IRS. Danh helped operate one of the employee leasing businesses during that time, known as HD Staffing. The names of the employee leasing companies operated by the defendants and the years of operation are as follow:
Vanny and Son Services (V&S), (2006-2007)
Industrial Labor Services (ILS), (2007)
Advance Labor Services (ALS), (2008)
HD Staffing (HD), (2009-2010)
TD Staffing (TD), 2011-2012)
Employers are required to withhold income taxes from employee wages based on the number of allowances on the employees' W-4 Form. Employers are also required to withhold FICA taxes from their employees' wages at the FICA tax rate and remit those payments, along with the employee's matching FICA tax, when they file their Employer's Quarterly Federal Income Tax Return-Form 941. The 37-count Indictment charges the defendants with conspiring to evade these employment taxes, tax evasion, and causing multiple false Forms 941 and Forms 1120 to be filed with the IRS which failed to report any of the cash wages paid to their employees.
The defendants face up to five years' imprisonment and $250,000 in fines for the conspiracy count and tax evasion charges, and up to three years' imprisonment and $250,000 in fines for filing false tax returns, along with full restitution to the IRS.
The case was investigated by the Criminal Investigation Division of the IRS and is assigned to Senior Litigation Counsel Bruce Brandler for prosecution.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute is 5 years imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.