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North Carolina payroll company fleeces clients

On Behalf of | Nov 28, 2014 | Federal Crimes |

A Taylorsville manufacturer is under the gun due to thousands of dollars in unpaid payroll taxes owed to the North Carolina Department of Revenue and the Internal Revenue Service.

Federal and state authorities informed Piedmont Fiberglass that the 35-employee firm owed $15,000 in back taxes, interest and penalties, said their office manager. “It was just a complete shock. We’d never had any issues,” she said.

According to the office manager, a payroll firm, Employee Services Net in Cornelius, was tasked with collecting and paying state and federal taxes.

Federal prosecutors allege that instead, the owners of the company were scamming their business clientele in order to pay for lavish lifestyles. Just last month, the 72-year-old ex-con owner and his 43-year-old son, respectively from Huntersville and Iron Station, were accused of theft of over $11 million from no fewer than 113 clients of their decade-old firm.

The indictment alleges the two used client payroll and tax payments to purchase a Mercedes, a lavish home with cascading waterfall and a pool with three tiers. The younger man also burned through money at local strip clubs.

Piedmont Fiberglass operators were clueless about the prison term the older man served in 2008 after a federal bank fraud conviction. He stayed involved in the day to day operations of the payroll company unbeknownst to his clients.

This case is the latest in approximately two dozen others involving payroll companies over the last few years. Critics say that the industry needs more regulations to weed out the bad seeds.

Payroll taxes have become more complex, causing more small businesses to farm out the jobs. A recent report from the National Small Business Association stated that a third of smaller companies spend over $6,000 annually on these type of payroll services.

With this uptick in cases, prosecutors will be gunning for companies with irregularities. Those facing such charges may wish to seek the counsel of a North Carolina criminal defense attorney.

Source: The Charlotte Observer, “Firms in a bind after payroll operators charged with fraud” Deon Roberts, Nov. 18, 2014


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