MASS. MAN SENTENCED FOR PAYROLL SCHEME
usdoj.gov | 11/21/08 | $17 million | suspect: Xieu Van Son | victim: IRS/Workers Comp.
The U.S. Attorney, FBI, and IRS announced that XIEU VAN SON of Lowell, Massachusetts, was sentenced to two years probation because of his role as a "straw owner" of a temporary employment agency operated by Aimee King McElroy and Daniel W. McElroy.
It was revealed at trial that from the early 1990's to June 2001, the McElroys operated a temporary employment agency that did business under the names the Dan Agency, the Daily Agency, Daily A. King Labor, Inc., Pro Temp Company, PTC and Precission Temp Corp. To avoid paying employment taxes, such as Social Security and Medicare, and to fraudulently reduce the businesses' insurance premiums, the McElroys arranged to pay more than $43 million of their payroll in cash. The McElroys also recruited VAN SON to act as the nominal president of one of the entities to disguise their true ownership and control over the business. The hidden payroll resulted in a loss of approximately $10 million to the IRS and approximately $7 million to workers compensation insurance companies.
The McElroys' accountant, Charles Wallace, previously was sentenced to 40 months imprisonment for his role in assisting the McElroys with filing false tax returns and fabricating payroll documents provided to the insurance companies. The other straw owner, Dich Trieu, also received a probationary sentence.