Ralph Caruso, Tax and Workers' Compensation Insurance Fraud, Massachusetts 2021

BOSTON – In a shocking case of corporate greed, Ralph Caruso, 72, of Wenham, has been sentenced for his involvement in an under-the-table payroll fraud scheme that defrauded the government of more than $500,000 and insurance carriers of approximately $93,000.

The scheme, which lasted from 2008 to 2016, saw Caruso, the owner of a Revere construction company, pay wages to his employees via payroll and under-the-table. The employee wages paid through payroll accounts were reported to the IRS and taxes were properly withheld and paid in returns. However, the under-table wages totaled more than $2.2 million, which Caruso did not collect, account for, or pay to the IRS in required withholding and FICA taxes.

By failing to pay the required taxes on $2.2 million in wages, Caruso evaded more than $546,000 in federal taxes. Additionally, he was required by state law to carry workers' compensation insurance, but by underreporting the wages for which he owed insurance premiums, he avoided paying more than $93,000 in premiums.

Caruso was sentenced by U.S. Senior District Court Judge George A. O'Toole to three years of probation with the first year to be served in home confinement. He was also ordered to pay restitution of $546,320 to the IRS and $93,430 to workers' compensation insurance carriers and forfeiture of $93,000.

The government recommended a sentence of one year and one day in prison, but it seems Caruso's luck ran out. For tax years 2008 through 2016, Caruso's scheme not only cheated the government but also put his employees at risk, as they were not paid the wages they deserved.

Acting United States Attorney Nathaniel R. Mendell and other officials announced the sentence, bringing relief to those affected by Caruso's actions. Assistant U.S. Attorney Victor A. Wild of Mendell's Securities, Financial & Cyber Fraud Unit prosecuted the case.

Ralph Caruso's case serves as a reminder of the importance of compliance with tax laws and regulations. His actions not only harmed the government but also his employees and the community at large.

Source: https://www.justice.gov/usao-ma/pr/owner-construction-company-sentenced-tax-and-workers-compensation-insurance-fraud