Owner of Dorchester temp agency agrees to a year in prison for shorting the IRS by more than $2 million in taxes

The owner of a Dorchester temp agency was formally charged yesterday with hiding enough payroll transactions from the feds over three years to reduce his taxes by more than $2 million.

Along with an "information" detailing the case against Det Tran, 63, the US Attorney's office also filed a plea agreement in which Tran admitted his guilt for two counts of failure to collect and pay over taxes - and agreed to spend a year in prison and pay the IRS the money.

According to the document, filed in US District Court in Boston, Tran under-reported how much he was paying his employees for temp assignments and so the payroll taxes he owed on those amounts:

TRAN accepted payments from HTP's clients by check for services that HTP provided. TRAN deposited some of these checks into a business bank account at TD Bank. However, TRAN cashed most of the checks from HTP's clients at a check casher in Worcester, Massachusetts.

TRAN used the bulk of the cash proceeds to pay cash wages to employees "off the books." Some HTP employees were paid by check "on the books," some by cash "off the books," and some by a combination of both. ...

TRAN's accountant prepared HTP's weekly payroll and its quarterly Forms 941. To prepare the weekly payroll, the accountant required that TRAN provide the identifying information of HTP employees who worked each week, and the total wages HTP paid each employee. Based on that information, the accountant provided payroll checks to HTP, and TRAN distributed the checks to employees weekly.

Between in or about 2018 and in or about 2021, TRAN deliberately failed to disclose to his accountant more than $8 million in cash wages he paid to HTP employees "off the books", thereby causing his accountant to prepare weekly paychecks that did not reflect the true wages paid to HTP's employees.

TRAN's concealment of more than $8 million in "off the books" cash wages also caused his accountant to prepare false quarterly Forms 941 for reporting HTP's employee wages and tax withholdings to the IRS between 2018 and 2021.

The plea deal acts as a recommendation to the judge in the case, who could reject the proposed punishment - which also calls for three years of probation. The maximum penalty for the offenses is five years in prison.

Complete "information" (194k PDF).
Plea agreement (3M PDF).