Worcester, MA (WorkersCompensation.com) – According to the US Attorney for Massachusetts, a man who oversaw two employment agencies failed to report more than $30 million in wages paid to his employees on his taxes and in insurance audits.
Tam Vuong, 44, was indicted August 29, according to a statement from Andrew Lelling, U.S. Attorney for Massachusetts. Vuong was charged with 14 counts of wire fraud and four counts of failure to pay taxes. Vuong had been arrested in April.
According to Lelling, Vuong ran Prime Labor LLC and UT Services Inc.; employment agencies located in Worcester. Employees for the companies were paid in cash, for which Vuong failed to report or pay any taxes.
“Vuong allegedly concealed millions of dollars in cash wages that were paid to Prime Labor workers and additional cash wages paid by UT Services,” Lelling said in a statement. “Between 2012 and 2017, more than $30 million in Prime client company checks were cashed at a check-cashing business in Worcester; Prime allegedly paid millions of these dollars in cash wages and then failed to report these wages to the IRS or to its insurer.”
Vuong, Lelling alleges, also misreported to his insurance carrier that UT Services only had one employee and an annual payroll of $50,000. In actuality, the statement said, UT Services had dozens of employees. The federal attorney also said Vuong failed to notify his client that the company’s workers’ compensation policy was cancelled.
Vuong further tried to hide his crimes, Lelling said.
“It is further alleged that Vuong shifted operations from Prime Labor Services to UT Services after federal search warrants were executed in November 2017. Vuong allegedly took steps to hide his role with both Prime and UT Services,” Lelling said in the statement.
Lelling estimated the amount paid in cash was nearly $30 million.
It’s not the first time Vuong has been indicted for fraud. In 2010, he was brought before Worcester Superior Court for similar charges. Vuong was alleged to have cheated the state and insurance companies out of more than $1.3 million by paying his employees in cash and not reporting their wages.
At that time, Superior Court Judge Janet Kenton-Walker gave Vuong five years of probation and ordered him to pay $500,000 in restitution, saying it would have been impossible for the state or the insurance company to collect $1.3 million.
In the current case, Vuong faces up to 20 years in prison for each wire fraud charge and up to five years in prison for each tax fraud charge. In addition, he faces up to three years of supervised release and a fine of up to $250,000 for each wire fraud charge, for a total fine of up to $3.5 million. Each tax count also includes a fine of up to $10,000.
No arraignment date for Vuong had been set yet.