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Worcester resident Tam Vuong, age 46, pleaded guilty this week to 14 counts of wire fraud and four counts of failing to pay taxes on Massachusetts businesses he oversaw for several years.
US Attorney Nathaniel Mendell said that Vuong oversaw Prime Labor LLC and UT Services, Inc., which were employment agencies based in Worcester.
Each agency paid a few employees by check but paid most in cash. Each agency failed to report or pay taxes on the wages paid in cash, which Vuong fraudulently concealed in connection with tax filings and insurance audits.
Vuong concealed millions of dollars in cash wages that were paid to Prime Labor workers and additional cash wages paid by UT Services, Mendell said.
Between 2012 and 2017, more than $30 million in Prime Labor client company checks were cashed at a check-cashing business in Worcester; Prime Labor paid millions of these dollars in cash wages and then failed to report these wages to the IRS or to its insurer.
Additionally, while overseeing and controlling UT Services, Vuong admitted to falsely telling insurance carriers that the company only had one employee and an annual payroll of just $50,000, when in fact there were dozens of employees and a significantly higher payroll than was submitted.
Mendell said that Vuong shifted operations from Prime Labor to UT Services after federal search warrants were executed in November 2017. Vuong took steps to hide his role with both Prime Labor and UT Services.
The charges of wire fraud each provide for a sentence of up to 20 years in prison, up to three years of supervised release, and a fine of up to $250,000. The charges of failing to pay taxes each provide for a sentence of up to five years in prison, up to three years of supervised release, and a fine of up to $10,000.
No sentencing date has been announced.
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