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Defendant Pleads Guilty to Tax Evasion and Bankruptcy Fraud
Steven Allard, age 47, a resident of Scituate, Rhode Island, pleaded guilty today to Tax Evasion and Bankruptcy Fraud. Allard admitted that between March, 2005, and July, 2006, he failed to pay employment taxes to the IRS for two of his companies, Builders Resources Delaware, and Quad, in the amount of $2,139,739. He also admitted that in October and November, 2005, he made false statements in a personal bankruptcy petition and during the bankruptcy creditor’s hearing, in that he failed to disclose his ownership of real property in Warwick, Rhode Island.
Acting United States Attorney Luis. M. Matos announced the guilty plea, which Allard entered today before Chief Judge Mary M. Lisi in U.S. District Court, Providence.
At the plea hearing, Assistant U.S. Attorney Andrew J. Reich said the government could prove that Allard operated a number of related companies, including Builders Resources, Inc.- Delaware; Quad Company, Inc.; Builders Resources, Inc.- Massachusetts; and Eaglewood Realty, LLC.
BRI-MA was in the business of constructing steel commercial buildings. At the direction of the defendant, income generated from BRI-MA was transferred to other companies controlled by Allard, including BRI-DE, Quad and Eaglewood. The payroll for construction jobs was paid by BRI-DE and Quad.
BRI-DE and Quad were required to pay over employment taxes to the IRS on the amount of wages that they paid to their employees. In addition, these companies were required to report employment taxes on an Employer's Quarterly Federal Tax Return, also known as a Form 941.
At the direction of defendant, Form 941s were filed on behalf of BRI-DE reflecting $806,149 in employment taxes due and owing to the IRS for the last quarter of 2005 and the first two quarters of 2006. In addition, at the direction of defendant, Form 941s were filed on behalf of Quad reflecting $1,333,590 in employment taxes due and owing to the IRS for the four quarters of 2005.
At the direction of the defendant, the employment taxes due and owing from BRI-DE and Quad, were not paid over to the IRS. Instead of paying these employment taxes, the defendant used funds from BRI-MA for the benefit of creditors of BRI-MA other than the IRS, and for the benefit of himself and his family by, among other means, diverting funds from BRI-MA to the benefit of himself and his wife, and by diverting funds from BRI-MA to Eaglewood Realty for the purchase of luxury automobiles.
With respect to the bankruptcy fraud charge, on October 14, 2005, the defendant filed for personal bankruptcy. He received a discharge in bankruptcy in January 2006. In both his bankruptcy petition, and during the creditor’s hearing, the defendant failed to disclose his ownership of real property located at 91 Haven St., Warwick, Rhode Island.
The defendant was released on an unsecured bond in the amount of $50,000. He is scheduled to be sentenced on October 22, 2009. The statutory maximum prison sentence and fine for Tax Evasion is five years' imprisonment and a fine of $100,000. The statutory maximum prison sentence and fine for Bankruptcy Fraud is five years' imprisonment and a fine of $250,000.
The Internal Revenue Service and the Federal Bureau of Investigation conducted the investigation.
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