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Justice News

Department of Justice
U.S. Attorney’s Office
District of New Hampshire

FOR IMMEDIATE RELEASE
Wednesday, September 9, 2015

Queen City Dry Waller Pleads Guilty To Employment Tax Scam

          CONCORD, N.H. – Acting United States Attorney Donald Feith announced that today Cruz E. Galvan pleaded guilty to one count of Federal Employment Tax Evasion in connection with his scheme to dodge federal employment taxes on wages he paid to employees of his Manchester, N.H., dry wall business, Four Star Drywall, LLC.  Galvan, age 39, resides in Manchester.

          During his plea hearing, Galvan admitted that from April 2010 until December 2012, he paid the employees of Four Star Drywall with vouchers instead of with checks.  He further admitted that he instructed those employees to present the vouchers to a local check cashing business to which he previously had provided funds and instructions to pay the vouchers upon presentment in cash.  Galvan acknowledged that he did not report to the Internal Revenue Service the wages he paid in that fashion, thereby evading federal income tax withholding and Social Security, Medicare and federal unemployment taxes.  The scheme resulted in a total tax loss of several hundred thousand dollars.

          The United States District Court scheduled Galvan’s sentencing hearing for December 23, 2015.  If the court accepts the parties’ joint sentencing recommendation, Galvan will be sentenced to a term of incarceration of eighteen months and required to pay restitution of approximately $670,000 to the Internal Revenue Service, including $100,000 before his sentencing.

          “Individuals engaged in business who attempt to avoid their tax obligations as employers cause great harm to their employees and obtain an unfair advantage over their competitors who are complying with their obligations,” stated Acting U.S. Attorney Donald Feith.  “We will continue to work with our federal law enforcement partners to identify, investigate and prosecute these individuals.”

          The investigation of Galvan was led by the Manchester, N.H., offices of the Internal Revenue Service, the Department of Homeland Security and the Department of Labor, Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorney Bill Morse.

Topic(s): 
Tax
Component(s): 
Updated February 4, 2016