Brockton Enterprise Proprietor Sentenced for Tax Fraud and Staff’ Compensation Insurance coverage Fraud | USAO-MA

BOSTON – The owner of a construction company in Brockton and allied companies was convicted yesterday on charges of paying under-the-table wages to employees of more than $ 1.6 million in government, workers’ compensation and state unemployment benefits have cheated.

Richard McLaughlin, 61, of Quincy, was sentenced to three years custodial release by Douglas P. Woodlock, U.S. District Court Justice, and paid approximately $ 747,781 to the IRS, $ 207,572 to workers’ compensation funds, and $ 731,188 Dollars to the Massachusetts Department of Unemployment Assistance. McLaughlin was also ordered to forfeit $ 207,572 to the federal government. In December 2020, McLaughlin pleaded guilty to filing false tax returns in five cases and postal fraud in three cases.

During the 2005 through 2010 tax years, McLaughlin paid under the table wages totaling more than $ 2.9 million for which McLaughlin did not collect, settle, or pay income and FICA taxes to the IRS as required by law Has. Cash payments to employees were funded through off-book accounts created by McLaughlin and were used solely to pay under-the-table wages. By failing to pay the required taxes on the $ 2.9 million, McLaughlin evaded nearly $ 750,000 in federal taxes.

McLaughlin was also required by state law to take out workers’ compensation insurance. The insurance premiums were based on an audit of his payroll to determine the actual wages paid. Because McLaughlin did not disclose the wages paid under the table, he did not disclose the wages for which he owed more than $ 200,000 in insurance premiums.

In addition, McLaughlin directed employees to apply for unemployment benefits while they were working for him. When McLaughlin falsely confirmed that employees had been laid off and withheld the fact that he paid them wages, those employees received more than $ 725,000 in fraudulent unemployment benefits.

This was announced by acting US Attorney Nathaniel R. Mendell and Ramsey E. Covington, acting special agent for the criminal investigation of the Internal Revenue Service in Boston. U.S. Assistant Attorney Victor A. Wild of Mendell’s Securities, Financial & Cyber ​​Fraud Unit is pursuing the case.