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October 13, 2005
Operators of Temp Agency Accused of Avoiding Payroll Taxes

Three individuals in Quincy, Massachusetts have been indicted on charges that they participated in an under-the-table payroll scheme that paid hundreds of temporary employees a total of approximately $30 million in cash without reporting it to the Internal Revenue Service.

U.S. Attorney Michael J. Sullivan says Tina Le, age 47, Steven Nguyen, age 47, and Mercedes Tang, age 30, were charged by a federal grand jury in a twenty-five-count indictment.

Specifically, each of the defendants is charged with of count of conspiring to defraud the IRS, 1 count of conspiring to commit money laundering, and six counts of mail fraud. Additionally, Le and Nguyen are charged with 13 counts and 4 counts respectively of procuring false tax returns.

The indictment alleges that from December 1995 through the end of 2004, the defendants owned and operated a temporary employment agency that employed hundreds of workers. Prosecutors allege that the defendants would pay most of the employees in cash and fail to report the cash payments to the IRS. The defendants failed to pay payroll, or "FICA" taxes, and to withhold taxes from their employees' pay, according to the indictment.

According to the indictment, over the course of the ten year conspiracy, the unreported cash payroll totaled approximately $30 million.

The indictment also alleges that the defendants defrauded their workers' compensation insurers. Like other employers, the defendants were legally required to pay for their employees' workers' compensation insurance. The insurance premiums were based in part on the size of the defendants' payroll. Prosecutors allege that the defendants fraudulently reduced their insurance premiums by concealing their cash payroll from their insurers.

If convicted, the defendants face up to years 5 years' imprisonment on the conspiracy to defraud the IRS charge, 5 years' imprisonment on each of the procuring false tax return charges, 20 years' imprisonment on each of the mail fraud charges, and 20 years' imprisonment on the charge of conspiracy to commit money laundering, accoridng to Sullivan.