December 15, 2017

MA Temp Agency Operator Pleads Guilty to Tax Crimes and Workers’ Comp Fraud

Boston, MA – A Swansea resident recently pleaded guilty in federal court in Boston in connection with a long-running, off-the-books payroll scheme through which her temporary employment agency evaded federal employment taxes and workers’ compensation insurance premiums.

Souleang Kane, 48, pleaded guilty to 18 counts of willful failure to collect and pay over taxes to the Internal Revenue Service (IRS) and five counts of mail fraud in connection with her evasion of workers’ compensation insurance premiums. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Jan. 9, 2018.

From 2010 to 2015, Kane operated a series of temporary employment agencies under the names Expert Staffing, Affordable Staffing and M&K Temp Inc., which provided labor for Massachusetts companies in agricultural industries. Kane failed to report to the IRS approximately $4.3 million that her agencies paid in employee wages. She thereby avoided collecting and paying both the taxes required to be withheld from employee wages and the matching taxes required to be paid by the employer. As a result, Kane evaded payment of more than $1.3 million in federal taxes.

Kane also grossly understated her business’ payroll in dealings with her workers’ compensation insurance providers. As a result, her workers’ compensation insurance premiums were fraudulently reduced by more than $100,000 between 2010 and 2015.

Each count of failure to collect and pay over federal taxes provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Each count of mail fraud provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $250,000. Sentences are imposed by the federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney William D. Weinreb; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Massachusetts Insurance Fraud Bureau, made the announcement. Assistant U.S. Attorney Victor A. Wild of Weinreb’s Economic Crimes Unit prosecuted the case.

Source: US Attorney’s Office

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