PRESS RELEASE

THREE QUINCY RESIDENTS PLEAD GUILTY TO TAX AND INSURANCE FRAUD

LARGEST UNDER-THE-TABLE PAYROLL SCHEME PROSECUTED IN MASSACHUSETTS

Boston, MA... Three Quincy residents pleaded guilty as trial was about to begin on a multi-count indictment alleging that they paid hundreds of temporary employees, who performed manual labor at factories and warehouses in the Boston area and Western and Southeastern Massachusetts, approximately $30 million in unreported cash payroll over a ten year period.

United States Attorney Michael J. Sullivan and Warren T. Bamford, Special Agent in Charge of the Federal Bureau of Investigation New England Field Division, Douglas A. Bricker, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation Division, Peter Zegarac, Inspector in Charge of the United States Postal Inspection Service and Daniel Skelly, Chief of Investigations, Insurance Fraud Bureau of Massachusetts, announced today that TINA LE, age 50, STEVEN NGUYEN, age 48, and MERCEDES ACAR, age 32, all of 301 Adams Street, Quincy, Massachusetts, pleaded guilty to an indictment charging them with conspiring to defraud the Internal Revenue Service and to commit mail fraud, and with filing false tax returns.

Under the terms of their plea agreements, which are subject to acceptance by the court, the defendants, all first time offenders, would receive the following sentences: TINA LE - 97 months incarceration, STEVEN NGUYEN - 87 months incarceration, and MERCEDES ACAR - 70 months. The defendants also have agreed to forfeit to the government their home in Quincy, an office building in Dorchester, a warehouse in Brockton, as well as bank accounts and luxury automobiles.

From December 1995 through the end of 2004, the defendants owned and operated a temporary employment agency that employed hundreds of workers. Under the terms of the agreements with these businesses, the defendants were responsible for filing taxes on behalf of the employees and paying for workers compensation insurance. The defendants would pay most of the employees in cash and not report the cash payments, as required by law, to the Internal Revenue Service. In so doing, the defendants failed to pay payroll, or “FICA” taxes, and to withhold taxes from their employees’ pay. Over the course of the conspiracy, the unreported cash payroll totaled approximately $30 million. The defendants obtained most of the cash from a Worcester check casher.

The defendants defrauded their workers compensation insurers. Like other employers, the defendants were legally required to pay for their employees’ workers’ compensation insurance. The insurance premiums were based in part on the size of the defendants’ payroll. The defendants fraudulently reduced their insurance premiums by concealing their cash payroll from the insurers.

The defendants concealed their activities through the use of shell corporations. Over the course of the conspiracy, the defendants would claim to have shut down the company in whose name they operated, and would re-incorporate under another name so as to avoid scrutiny by either the IRS or insurance auditors. The names of the shell corporations were First State Labor, Wonder Fast Labor Services, T. Nguyen Temporary, Mass Labor Services, Labor Staffing, and Star Labor Staffing. As a further way of concealing their activities, the defendants used “straw” corporate officers, individuals who held titles of responsibility in the business but who really were paid by the defendants only for the use of their names.

The defendants are scheduled to be sentenced on September 14, 2007.

The case was investigated by the FBI, IRS, Postal Inspection Service and the Insurance Fraud Bureau. It is being prosecuted by Assistant U.S. Attorneys Jonathan F. Mitchell of Sullivan’s Economic Crimes Unit and Kristina Barclay of Sullivan’s Asset Forfeiture Unit.

Press Contact: Christina DiIorio-Sterling, (617) 748-3356