Justice Department Secures $9 Million Agreement with Washington Trust Company to Resolve Redlining Claims in Rhode Island
PROVIDENCE, R.I. – A federal grand jury in Providence today returned a nine-count indictment alleging that Warren Hebert, 66, of Barrington, R.I., owner of Checkmaster Payroll Service, a payroll company which provided payroll services to private companies and at least one municipal agency, devised a scheme to defraud at least nine businesses and the Seekonk, Mass., Water District of federal payroll taxes that were to have been paid to the IRS, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of IRS Criminal Investigation.
The indictment alleges that Hebert withdrew funds from client accounts that were to have been used to pay the clients’ federal employment taxes and diverted the funds for other purposes. It is alleged that Hebert provided clients with “client copy” tax returns indicating that the taxes had been paid to the IRS, when they had not. It is also alleged that Hebert falsely represented to his clients that tax delinquency notices they received from the IRS were the result of administrative errors by the IRS.
According to the indictment, beginning in at least April 2009, and continuing through at least October 2011, Hebert allegedly diverted money from at least nine businesses operating in Rhode Island and Massachusetts, including, among others, a moving and storage company, nursery school, jewelry packaging company, and a marketing and communications company, and from the Seekonk Water District, a municipal water agency located in Seekonk, Mass.
The indictment charges Hebert with eight counts of wire fraud and one count of impeding the administration of the Internal Revenue Code. An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Wire fraud is punishable by a statutory penalty of up to 20 years in federal prison and a fine of up to $250,000. Impeding the administration of the Internal Revenue Code is punishable by a statutory penalty of up to 3 years in federal prison and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
The matter was investigated by IRS Criminal Investigation, with the assistance of the FBI, Rhode Island FDA Task Force, Rhode Island State Police and Barrington Police.
To assist the media and the public, a glossary of federal judicial terms and procedures is available at http://www.justice.gov/usao/justice101/