A Massachusetts staffing firm owner was sentenced to a year in prison and ordered to pay nearly $4.0 million in restitution to the IRS and $155,870 in restitution to Traveler’s Insurance Co., the US Department of Justice announced on Sept. 15.
The owner, Dam Ngoc Luong, 70, of Dorchester, Massachusetts, had previously pleaded guilty to two counts of filing false corporate and individual tax returns, three counts of failure to collect and pay over employee taxes and one count of mail fraud, the department said.
Luong owned and operated Four Seasons Temp Inc. from at least 2015 through 2019, the department said. However, Luong cashed most checks rather than deposit the funds into her business account and then reported only the amounts in the business account to the IRS. As a result, she failed to pay federal taxes on more than $14 million of the company’s income.
Additionally, because Luong created Four Seasons as an S corporation, the net business income and expenses flowed through to her Form 1040 individual tax returns, according to the department. As a result, Luong failed to report more than $3 million in pass-through income and failed to pay $885,000 in personal income taxes.
Luong also paid more than $12 million of employee wages in cash and failed to withhold taxes from those wages — resulting in failure to pay more than $3 million in employment taxes, the department said.
By concealing cash wages, Luong also improperly paid lower workers’ compensation insurance premiums, according to the department.