On Wednesday, January 3, 2017, it was announced that a man from Glen Allen, Virginia had been sentenced to 20 months in prison for tax fraud conspiracy that caused the IRS to lose more than $3 million. Court documents show that 48-year-old Edward R. Prestes was a bookkeeper. Prestes was accused of running a conspiracy to evade paying income and employment taxes to the Internal Revenue Service for laborers working for several construction companies.
To avoid taxes, the defendant paid these laborers more than $9.1 million under the table. Between 2011 to 2013, the defendant served as an agent for Virginia American Contractors LLC, Elson Contractors LLC, Proactive Services LLC, Positive Solutions LLC, and Service Contractors LLC. These nominee corporations all shared the same mailing address, which belonged to a post office box in Glen Allen.
However, each corporation had a separate bank account and Prestes was an authorized signatory. Court documents showed that construction companies made regular payments to the nominee corporations. Then, Prestes distributed the money to the laborers. The defendant made the payments via cash and check, without holding any income or employment taxes. He also did not issue W-2 or 1099 forms to the laborers.
The construction companies issued IRS Forms 1099 to the nominee corporations and deducted the payments at the end of each year. Court documents show that from 2011 through 2013, the construction companies paid more than $9.2 million to the nominee corporations. Prestes then paid the laborers roughly $2.8 million in cash and $6.3 million in checks. The defendant kept approximately two to three percent of the funds as a commission.
As a result of the conspiracy, the IRS lost more than $3 million in employment and income taxes. Again, 48-year-old Edward R. Prestes has been sentenced to 20 months in prison for his involvement in the tax fraud conspiracy. Additional details have been made available here.