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Massachusetts temp agency owners plead guilty in $25 million scheme

August 29, 2014

Four family members from Lowell, Mass., who operated a temporary employment agency pleaded guilty Thursday in a scheme to hide $25 million in employees’ wages from the U.S. Internal Revenue Service, according to the U.S. Attorney’s Office.

The defendants ran a temporary employment agency providing unskilled labor to companies in the Lowell area, including those in the packaging and food services industries, according to the U.S. Attorney’s Office. Between 2004 and 2009, the agency operated under the name International Temp Agency and JP Company.

Family members involved included Margaret Mathes, 67; Boseba Prum, 47; Sam Pich, 63; and Thaworn Promket, 52, according to the U.S. Attorney’s Office. They pleaded guilty to conspiracy to defraud the IRS, mail fraud and to violating laws against structuring monetary transactions to avoid report requirements.

Defendants reported between 2004 and 2009 that their temporary employees made about $2.2 million in wages, when the real figure was nearly $30 million, according to the U.S. Attorney’s Office. Defendants withdrew cash from about 20 bank accounts and paid their temporary workers “off the books.” The defendants structured these bank transactions — more than 4,300 in all — so they could withdraw the cash needed to pay the workers without triggering federal reporting requirements.

The defendants also defrauded the agency’s workers compensation insurer, Granite State Insurance Co., by hiding the true number of temporary workers the defendants employed, thus avoiding about $880,000 in insurance premiums, according to the U.S. Attorney’s Office.

Sentencing is scheduled for Nov. 24.