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Ex-Owners of Temp Firm Accused of Paying $24 Million Under the Table

March 18, 2010
Related Topics: Contingent Staffing, Financial Impact, Ethics, Latest News
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Two former owners of a temporary employment agency in Stoughton, Massachusetts, were charged Wednesday, March 17, on suspicion of paying more than $24 million in cash to workers in an effort to avoid paying more than $7 million in taxes and hundreds of thousands of dollars in workers’ compensation insurance premiums, the FBI has announced.

Michael Powers, 45, of Westport, Massachusetts, and John Mahan, 46, of Stoughton, were each charged with one count of conspiracy to defraud the IRS and their workers’ comp carrier, one count of mail fraud and two counts of false tax returns, according to the FBI.

Powers and Mahan owned Commonwealth Temporary Services Inc. from 2000 to 2004, which supplied temporary workers to businesses throughout eastern Massachusetts, according to the FBI. They each face a maximum of five years in prison and a $250,000 fine on the conspiracy charge, a maximum of 20 years in prison and a $250,000 fine on the mail fraud charge and, three years in prison and a $250,000 fine on the tax fraud charges. 

Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.

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