Former Worcester temp agency manager will pay $3.5M, report to prison
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U.S. District Court in Worcester
A former Worcester temp agency manager will report to federal prison at the end of February and pay $3.48 million in restitution to the U.S. Internal Revenue Service and Travelers Insurance after pleading guilty to wire fraud and failure to pay over taxes, according to court documents filed Thursday.
Tam Vuong, who managed Prime Labor Services and U.T. Services Inc. of Worcester, was accused of paying the majority of his employees with cash and failing to report cash wages from both companies, thus causing Travelers Insurance to under-calculate the premium Vuong’s companies owed for workers’ compensation policies, according to indictment documents.
The Prime Labor Services insurance scheme allegedly ran from 2012 to 2017, during which more than $30 million in client company checks were cashed at a check-cashing business in the city, per the Massachusetts U.S. Attorney’s Office.
When federal agents executed search warrants at addresses associated with the company, Vuong stopped providing temp workers to Prime’s clients, according to court documents. He directed a portion of them to obtain services from U.T. Services, instead, where the insurance scheme continued until April 2019.
With U.T. Services, specifically, Vuong told the company’s insurance carrier the agency had only one employee and an annual payroll of $50,000, according to a press release from the Massachusetts U.S. Attorney’s Office. In reality, U.T. employed dozens of employees and a much higher payroll. Separately U.T. allegedly provided forged certificates of insurance when its workers compensation policy was cancelled.
At the same time, Vuong failed to report cash wages from both Prime and U.T. to its payroll company, resulting in significant underpayment in taxes to the IRS between 2012 and 2018, according to court documents.
Vuong pleaded guilty to 14 counts of wire fraud and four counts of failure to pay over tax, respectively. He will be required to pay $3.1 million in restitution to the IRS, and $345,000 to Travelers Insurance.
When his sentence is complete, he will be subjected to three years of supervised release and submit to DNA collection. He will be prohibited from doing any job that would require him to manage temporary employees, using any unauthorized lines of credit, and will have to pay restitution.
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