Three people, including a Norwood man, were sentenced in Worcester federal district court for conspiracies to defraud the U.S. using several tax fraud schemes. Released wearing electronic monitoring devices, they are awaiting sentencing in June. All three were found guilty of participating in an “under the table” payroll scam and the use of “underground warehouse banking.” Both charges are defined by conspiracy and fraud and were used to hide income and assets from the Internal Revenue Service. The Norwood man was also convicted of tax evasion.
Evidence presented described tax crimes including a plan to pay participating employees without following proper accounting or tax withholding procedures. Under their scheme, they helped nearly 150 people avoid paying employer and individual payroll taxes to the tune of more than $2.5 million in unreported compensation and wages. Additional evidence described the scheme that they ran and promoted allowing people to conceal assets and income from the IRS. They were able to do so by maintaining several accounts at different banking locations where they would comingle receipts from the participants to hide the true ownership of the funds. Both schemes were funded by participants who subscribed to their services under at least six different business names.
The three defendants were indicted back in 2009 with four others who already pleaded guilty and are also awaiting sentencing. Each faces up to five years for each count of conspiracy and fraud followed by supervised released for three years. Their fines may be as high as $250,000 or twice whatever they gained or denied the IRS.
Source: Norwood Patch, “Norwood Man Convicted of Conspiracy to Defraud the IRS,” April 3, 2012