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Hampden County Business Owner Accused Of Defrauding State Of Sales Tax

A Hampden County business owner has pleaded not guilty to an alleged scheme in which he sold software that allowed restaurants to delete cash sales and keep meal taxes paid by customers.
A Hampden County business owner has pleaded not guilty to an alleged scheme in which he sold software that allowed restaurants to delete cash sales and keep meal taxes paid by customers. Photo Credit: Pixabay/QuinceCreative

A Western Massachusetts business owner has been indicted in an alleged scheme in which he sold software that allowed restaurants to delete cash sales from cash registers and keep meal taxes paid by customers.

Hampden County resident Paul K. Backholm, age 53, of Westfield, was charged and arraigned on Friday, April 9, said Massachusetts Attorney General Maura Healey.

The AG’s Office alleges from 2010 to 2015, Backholm, who owns a company that sells cash registers, sold sales suppression software to restaurants for cash that enabled the restaurants to delete cash sales, keep the meals tax that had been paid by the customer, and renumber the remaining transactions to cover-up the deletions.

“We allege this defendant orchestrated an illegal scheme that falsified restaurant sales records and deprived the state and municipalities of much-needed tax revenue,” said Healey. 

Backholm is the president of Forbes Snyder Tri-State Cash Register Company, Inc., an Easthampton-based firm that sells software and technical support for point-of-sale cash register systems. 

Restaurants use the systems to enter a customer’s order, communicate that order to kitchen staff, generate the check and then record how the check was paid – whether by cash or credit card. 

He was charged with:

  • Five counts of conspiracy
  • Five counts of aiding false meals tax returns 
  • Five counts of aiding failure to account for and pay over meal taxes

Backholm pleaded not guilty and was released on his own recognizance. 

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