On Monday, September 11, 2017, a Glen Allen, Virginia man pleaded guilty to conspiracy to defraud the IRS of $3 million in employment and income taxes. 48-year-old Edward R. Prestes pleaded guilty to the charges. Court documents show that the purpose of the conspiracy was to avoid paying income and employment taxes to the Internal Revenue Service. Prestes did this by paying laborers for various construction companies “under the table.”
From at least 2011 to 2013, Prestes served as an agent for several companies, including Virginia American Contractors LLC, Elson Contractors LLC, Positive Solutions LLC, Service Contractors LLC, and Proactive Services LLC. The nominee corporations had the same address, which was a post office box in Glen Allen. However, each corporation had its own separate bank account and Prestes was an authorized signatory for each.
Court documents show that various construction companies made frequent payments to the nominee corporations. Prestes was then responsible for distributing the funds from the nominee corporations to the laborers. The payments were made by cash and check. Prestes did not withhold any employment or income taxes. He also failed to file quarterly forms and yearly income tax returns as required by law.
At the end of each year, the companies issued IRS Forms 1099 to the corporations and deducted the payments. Court documents conclude that the construction companies paid more than $9.2 million to the nominee corporations between 2011 and 2013. Prestes paid the laborers roughly $2.8 million in cash and $6.3 million in checks. Prestes kept approximately a 2 ½ to 3 ½ percent commission for himself.
The conspiracy resulted in the IRS losing more than $3 million in employment and income taxes. Prestes is scheduled to be sentenced on December 12 of this year. The defendant faces a maximum penalty of five years in prison at the time of his sentencing.