Jump to Navigation
Over 30 Years of Experience handling tax controversies & tax disputes

Boston IRS Nabs Contractor in Tax Evasion Case

A Rhode Island general contractor pled guilty to two counts of tax evasion and eight counts of wire fraud earlier this week, following an investigation by agents from the FBI Boston Field Office and the Boston office of the IRS's criminal investigation division.

The contractor is facing up to five years in prison and a $100,000 fine for each count of tax evasion. In addition, he could receive up to 20 years in prison and a $250,000 fine for each count of wire fraud.

Charges Stemmed from Investment Scam

The contractor was allegedly involved in investment scam that took more than $4.2 million from investors.

According to the FBI and IRS investigators, the contractor hired a recruiter to help draw investors to the company. He then gave the recruiter false information regarding the company's business prospects. For example, he told the recruiter that the company was involved in the construction of a YMCA on Martha's Vineyard and a casino resort in Mashantucket, Connecticut. The recruiter used this false information to induce inducements.

The contractor admitted to making false claims to investors regarding potential rates of return and to hiring an attorney draft promissory notes that promised returns of 12 to 14 percent. He further admitted to telling customers that their cash was needed to pull the company back from the brink of collapse, which was, in fact, not true.

The contractor says he did not spend the investor's money on his company, but instead used it to pay personal expenses and fund a gambling habit.

Boston business owners should take heed from the contractor's example and must understand that using investors' money to fund personal expenses can have serious consequences.

Source: LoanSafe.org, "RI Steelworks Contractor Pleads Guilty in $4.2M Scam," Evan Bedard, Jan. 31, 2012.

No Comments

Leave a comment
Comment Information
Have a Question? Ask an Attorney:

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Visit Our
Tax Law Website
Contact Information

Levins Tax Law, LLC
1671 Worcester Road, Suite 304
Framingham, MA 01701

Framingham Law Office Map

Levins Tax Law, LLC
38 Newbury Street, 6th Floor
Boston, MA 02116

Boston Law Office Map
By Appointment Only

Phone: 508-435-0118
Toll-Free: 888-333-9501
Fax: 888-333-0291