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Massachusetts Tax Fraud Promoter Sentenced to Prison
William Scott Dion, a tax fraud promoter from Massachusetts, was sentenced to 84 months in prison for conspiring to defraud the United States and obstructing the Internal Revenue Service (IRS).
U.S. District Judge F. Dennis Saylor also ordered Dion to pay restitution in the amount of $3 million.
A federal jury convicted Dion and Catherine Floyd, both of Sanbornville, N.H., and Charles Adams, of Norwood, Mass., for conspiracies to defraud the United States through the promotion and use of multiple tax fraud schemes.
The jury convicted all three of conspiracy to defraud the IRS by promoting an ‘under the table’ payroll scheme. Dion and Floyd were also convicted for conspiracy to defraud the IRS through the use of an ‘underground warehouse banking’ scheme designed to conceal customer income and assets from the IRS.
Floyd and Dion were also convicted separately for corruptly endeavoring to obstruct the IRS’s ability to determine their own income. Adams was separately convicted of tax evasion.
According to the evidence presented at trial, Dion, Floyd, and Adams ran a payroll tax scheme in order to pay employees ‘under the table’ without properly accounting for, withholding, and paying over to the IRS the payroll taxes required by law.
The three promoted the payroll scheme to employers and individuals who wanted to avoid payment of employer payroll taxes and individual payroll taxes. The three ran the payroll scheme under three different names: Contract America, Talent Management, and New Way Enterprises.
Approximately 150 individuals subscribed to the payroll scheme and in excess of $2.5 million in unreported wages and compensation were paid through the system.
The evidence at trial also established that Dion and Floyd conspired to defraud the United States by promoting and operating an ‘underground warehouse banking’ scheme which helped subscribers conceal income and assets from the IRS.
According to the evidence, the warehouse scheme operated under three different names: Your Virtual Office, Office Services, and Calico Management.
As part of the warehouse banking scheme, the defendants maintained accounts at several banks and used the accounts to deposit and commingle business receipts and other funds received from subscribers in order to mask the true ownership of the funds.
According to evidence presented at trial, more than $28 million in deposits were made into the various bank accounts used in the scheme.
The case was investigated by special agents of IRS – Criminal Investigation and prosecuted by Tax Division Assistant Chief John N. Kane, former Tax Division Trial Attorney Jeffrey L. Shih, and Assistant U.S. Attorney Victor A. Wild.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts, commended the efforts of the special agents and prosecutors involved in the case.
RELATED: Mass Tax Fraud Promoter Sentenced to 5 Years in Prison
Key Facts
- State: Federal
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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