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November 21, 2011


Money laundering plea deal saves executive from 27 charges

A San Antonio executive who was accused with others of illegally collecting payroll taxes and worker’s compensation fees agreed to a plea deal earlier this month.

The 49-year-old has pleaded guilty to mail fraud and money laundering conspiracy charges; and in exchange, 27 counts of a 29-count indictment will be dropped.

The Internal Revenue Service and the FBI charged that the man was involved in illegal business ventures for 12 years, until 2007. However, the signed guilty plea involves conduct over only a five-year period.

Authorities claim the fraud took place while the man and unnamed co-conspirators operated a number of professional employer organizations that collected payroll taxes from companies. He is accused of keeping the payroll taxes in addition to collecting fees for workers compensation insurance that was not actually provided. While the total losses have been estimated at about $66 million, the court will determine the actual amount of restitution required and the man’s clients will not be responsible for any tax losses.

However, the plea of guilty is not the end of the matter. Assuming the plea deal is accepted by the court, a judge will set a date for sentencing and give both the prosecution and defense an opportunity to suggest an appropriate sentence within the guidelines provided by federal law. He reportedly may face up to 20 years in prison.

Any individual who is aware of the fact that he or she may be the target of a criminal investigation would do well to seek advice from a professional who is fully versed in the defense of tax fraud and money laundering allegations. It is of utmost importance to present a meaningful defense in order to achieve optimal results.

Source: San Antonio Express-News, “S.A. exec to plead guilty in $66 million fraud,” Guillermo Contreras, Nov. 1, 2011

Tax Crimes