This week, it was announced that a Massachusetts temporary employment agency operator had pleaded guilty to an indictment charging him with conspiring to defraud the government, failing to pay over employment taxes and obstructing the internal revenue laws. Court documents show that Tien Chau ran an employment agency that provided temporary labor to businesses in New Hampshire and Massachusetts. The agency operated under at least four different names, including the following.
- Central Boston Staffing Services
- Metro Boston Staffing Services
- General Staffing Inc.
- Kim’s Staffing Inc.
The defendant and others used nominees to conceal their ownership of the business. From 2006 through 2011, the defendant and others conspired to conceal the agency’s total number of employees from the IRS. They did so to lower their tax liabilities. Chau paid most of his employees under the table and filed false employment tax returns, which underreported the number of employees and omitted wages paid in cash.
The defendant and others cashed more than $11 million in client checks and used the staffing agency’s site supervisors, office manager and drivers to pay the employees in cash. The conspirators also took steps to obstruct the investigation into their activities. At one point, an employee was directed to help shred the agency’s records. Chau was also accused of destroying and removing computers and equipment from the business offices.
Chau will be sentenced on May 17, 2018. At sentencing, he will face a statutory maximum of five years in prison for the conspiracy charge, five years for each employment tax count and three years for obstructing the internal revenue laws.
Additional details have been made available here.