On Friday, it was announced that a federal jury in Memphis had convicted a Tennessee temporary staffing company officer of conspiring to defraud the United States, filing fraudulent employment tax returns, failing to pay over employment taxes, theft of government funds, and aggravated identity theft. Between 2005 and 2015, Mark Stinson and his wife, Jayton, operated a temporary staffing company in Memphis. The company provided services to businesses in Tennessee and elsewhere.
According to the company’s standard contract with its customers, it was responsible for withholding employment tax from its employees’ wages and paying the amounts withheld to the Internal Revenue Service. In total, the Stinsons failed to pay more than $2.8 million in withholdings and other employment taxes. They also failed to timely file employment tax returns and filed false employment tax returns.
In hopes of avoiding payments to the IRS, the Stinsons changed the name and structure of their company multiple times after accumulating tax liabilities. The company operated as Jayton Stinson Connex Staffing & Janitorial Services, Connexx Staffing Services LLC, Complete Employment Agency, and Connexx Staffing Services Inc. The defendants also conspired to impede the IRS’s efforts to collect on employment tax liabilities owed by the companies.
The defendants made false representations to the IRS about the control of the company and their knowledge of their responsibility to truthfully account for and pay employment taxes. The Stinsons ultimately used the withheld funds to pay for personal expenses, including making mortgage payments and paying for private school tuition for their children. Additional details can be found here.