Bookkeeper charged with fraud and tax evasion

 

Date: January 25, 2021

Contact: newsroom@ci.irs.gov

Boston — Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service's Criminal Investigation announced, the owner of a firm that provided payroll and payroll tax services to small businesses in New England was charged and agreed to plead guilty to a scheme to defraud her clients by diverting the funds set aside by her clients for payroll taxes.

Patricia Lindau of Newburg, Maine, was charged and has agreed to plead guilty to one count of wire fraud and one count of tax evasion. According to the plea agreement filed today, the government will recommend a sentence of incarceration at the low end of the Guidelines sentencing range, one year of supervised release and restitution of $1,393,430. A plea hearing has not yet been scheduled.

As alleged in the charging document, between 2017 and the spring of 2020, Lindau engaged in a scheme to defraud many of her clients by failing to pay over to the Internal Revenue Service and Massachusetts Department of Revenue (DOR) the payroll taxes that she withdrew from her clients' bank accounts. Lindau used her access to her clients' accounts to transfer funds that were to be used to satisfy her clients' payroll tax liabilities into her firm's business checking account. Lindau then sent each client a weekly report falsely indicating that the funds had been paid over to the IRS and Massachusetts DOR.

When Lindau's clients received letters from the IRS and Massachusetts DOR indicating that their payroll taxes had not been paid, Lindau lied to the clients and falsely told them that the IRS or Massachusetts DOR letters were a mistake and that she would take care of it. In some instances, she then paid the taxes late.

Lindau's scheme continued into the first quarter of 2020 when most of her clients closed due to COVID-19 and then discovered that their employees' payroll taxes had not been and were not being paid.

Over the course of the scheme, Lindau failed to pay over when due more than $2 million and caused a net loss to her clients of over $1.1 million.

The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of the greater of $250,000 or twice the gross gain or loss. The charge of tax evasion provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Assistant U.S. Attorney Sara Miron Bloom of Lelling's Securities, Financial & Cyber Fraud Unit is prosecuting the case.