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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Virginia

Tuesday, May 24, 2016

Williamsburg Man Sentenced on Employment Tax Fraud Charge

Vladimir Maglnik Caused More Than $3 Million in Tax Losses to IRS

ROANOKE, VIRGINIA – A Williamsburg man, who was convicted in October 2015 of conspiring to defraud the United States of more than $3 million of employment taxes, was sentenced last week in the United States District court for the Western District of Virginia in Roanoke, United States Attorney John P. Fishwick Jr. announced.

Vladimir Maglnik, 52, of Williamsburg, Virginia, was found guilty in October 2015 of one count of conspiring to defraud the United States and conspiracy to harbor illegal aliens for commercial advantage or private financial gain. Last Week in District Court, Maglnik was sentenced to 20 months in federal prison and ordered to pay a fine of $7,500.

“This defendant used the hard work of migrant workers to line his own pockets with millions of dollars in ill-gotten riches,” United States Attorney John P. Fishwick Jr. said today. “Many of his victims were forced to live in squalor and pay rent, afraid to contact law enforcement, while Maglnik defraud the United States government. We are glad his strong of deceit has been exposed and justice has been served.”

According to evidence presented at previous hearings by Assistant United States Attorney C. Patrick Hogeboom, from at least 2002 continuing through 2007, Maglnik and Makera Galustyants owned North American Management (NAM), a company that contracted labor service contracts with hotels, primarily in Florida, Virginia and Louisiana. NAM agreed to provide temporary employees to perform housekeeping services, would be responsible for hiring and paying all temporary workers as well as complying with all federal regulations, including the deduction and payment of employment taxes from the temporary workers’ wages. The hotels were also assured that the temporary workers held legitimate work permits and were eligible to work in the United States.

However, according to evidence presented in court, NAM routinely violated the terms of the contract and failed to pay employment taxes to the United States Treasury on any of the temporary works employed by NAM. All told, the conspirators pocketed $3,082,097 in unpaid employment taxes.

The investigation of the case was conducted by U.S. Immigration and Custom Enforcement’s Homeland Security Investigations, the Internal Revenue Service, Criminal Investigations, the Department of Labor and the Federal Bureau of Investigation.  Assistant United States Attorney C. Patrick Hogeboom III prosecuted the case for the United States.

Updated May 24, 2016