Company Owner Sentenced For Tax Fraud

5:46 PM, Jan 4, 2013   |    comments
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Greensboro, NC -- A judge sentenced a Winston-Salem man Thursday, to more than 15 years in prison for employment tax fraud and other crimes.

According to a release from the U.S. Attorney's office, the judge also ordered Weiss to pay more than $7 million in restitution to numerous victims, including the IRS, the North Carolina Department of Revenue and former clients.

Weiss pleaded guilty to wire fraud, bank fraud, money laundering and tax obstruction charges October 5, 2012.

Case documents show Weiss operated professional employer organizations (PEOs), which provided payroll-related services to client companies. For his client companies, Weiss agreed to pay the employees, withhold and remit federal and state taxes, prepare and file the federal and state employment tax returns  and provide workers compensation insurance (WCI).

Weiss did pay the employees and withhold the employment taxes, but he failed to remit the employment taxes, keeping them for his personal use.

From 2004 to 2012, Weiss failed to file employment tax returns and failed to pay over to the IRS employment taxes in excess of $4 million.

In addition, Weiss collected WCI premiums from his clients but failed to obtain adequate WCI protection, and diverted WCI premiums for his personal use.  

According to court documents, Weiss used a portion of his fraud proceeds to purchase expensive jewelry and exotic cars, such as Ferraris, Lamborghinis, and Porsches.

During a trip to Europe, Weiss fraudulently reported four pieces of jewelry lost or stolen, and received $177,480 from his insurance company. The jewelry was later seized during a search at his former residence in Marion, NC.

Weiss also admitted to committing bank loan fraud. In order to receive four loans from a bank, Weiss provided numerous personal income tax returns to the bank. Each of the returns Weiss provided to the bank included significantly greater income than the returns actually filed with the IRS.

The case was investigated by IRS-Criminal Investigation, the FBI, the North Carolina Industrial Commission's Fraud Unit, the North Carolina Department of Insurance-Investigations, and the McDowell County Sheriff's Office. The case was prosecuted by Assistant U.S. Attorney Clifton Barrett and Trial Attorney Todd Ellinwood of the Tax Division.

United States Attorney Ripley Rand, Middle District of North Carolina

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