Madeline Nieves, Tax Fraud, Pennsylvania 2020

SCRANTON- In a shocking revelation, Madeline Nieves, a 48-year-old resident of Plains, Pennsylvania, has been indicted by a federal grand jury on tax fraud and conspiracy offenses. The indictment alleges that Nieves conspired with other individuals to defraud the Internal Revenue Service (IRS) in connection with a temporary staffing company, Encore Staffing Solutions LLC (Encore), that she and her co-conspirators owned and operated.

Nieves’ alleged scheme involved leasing temporary employees to manufacturing businesses throughout Pennsylvania. According to the indictment, Nieves failed to report Encore employee wages to the IRS, resulting in approximately $67,000 in employment taxes owed, but never paid, by Encore to the IRS. She was also charged with three counts of tax evasion, for failing to report her own personal income from Encore. The tax fraud activities allegedly occurred between 2018 and 2020.

This is not Nieves’ first brush with the law. Two other individuals were previously convicted in this investigation and await sentencing. Mark Holmes, a 66-year-old resident of Hughes Springs, Texas, pleaded guilty to failing to remit approximately $135,000 in employment taxes to the IRS that were owed by Encore. Holmes also pleaded guilty to accepting, as the General Manager of a Pennsylvania food services company, approximately $400,000 in bribes and kickbacks from two temporary staffing companies, one of which was Penns Independent Staffing, in exchange for hiring their employees.

Nari Lam, a 29-year-old resident of Wilmington, Delaware, pleaded guilty to failing to remit employment taxes to the IRS. From 2016 through 2020, Lam, the owner of Pennsylvania-based temporary staffing company Penns Independent Staffing, failed to pay approximately $300,000 in employment taxes owed by Penns Independent Staffing to the IRS.

The case was investigated by the IRS Criminal Investigations Division. The case is being prosecuted by Assistant U.S. Attorney Phillip J. Caraballo. If convicted, Nieves faces up to five years of imprisonment, a term of supervised release following imprisonment, and a fine.

The maximum penalty under federal law for each offense is five years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court. We will continue to follow this case and provide updates as more information becomes available.

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