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Staffing firm owner to pay $500,000

August 23, 2010

A Massachusetts court last week ordered a staffing firm owner to pay $500,000 in restitution and serve five years probation, the Massachusetts Attorney General's Office reported Friday.

Tam Vuong and his company, Labor Solutions, pleaded guilty to 65 counts of violating state wage and hour laws and committing insurance and tax fraud, according to the office.

Labor Solutions operated mainly on a cash basis from 2004 through 2008 and collected more than $24 million from staffing buyers and paid out approximately $15 million in cash wages, according to the Massachusetts Attorney General's Office. The company did not disclose the $15 million cash payroll to its workers' comp provider or to the Massachusetts Department of Revenue, according to the office. The company also never filed a corporate tax return between 2002 and 2007.

The Massachusetts Attorney General's Office also reported that many of Labor Solutions' workers between September 2007 and September 2009 were paid below minimum wage and didn't receive overtime payments. A number of employees were also illegally charged $2 to $3 per day for transportation and did not receive paystubs, according to the office.

Labor Solutions provided workers to various manufacturing facilities around Worcester County, according to the office.

The probation and restitution ordered last week by the court was less than the three- to five-year jail sentence and $1.3 million in restitution that was sought by the prosecution, according to the Massachusetts Attorney General's Office.