Former president and head bookkeeper of moving company convicted of multimillion-dollar payroll tax fraud scheme

Date: April 15, 2024

Contact: [email protected]

Damian Williams, the United States Attorney for the Southern District of New York, announced today that a jury returned a guilty verdict against Joseph Eugene Lemay, a/k/a "Gene Lemay," and Joel Lingat for criminal tax conspiracy. Lemay is the former president of a company that provides moving and storage services ("Company-1"), and Lingat is Company-1's head bookkeeper. Lemay and Lingat conspired to perpetrate a long-running scheme to evade more than approximately $7.7 million in federal payroll taxes owed by Company-1 and affiliated companies to the Internal Revenue Service ("IRS"). The defendants were found guilty following a two-week trial before U.S. District Judge Mary Kay Vysckocil.

U.S. Attorney Damian Williams said: "Gene Lemay and Joel Lingat cheated the systems that are in place to protect hardworking Americans at the end of their careers. As a result, Social Security and Medicare were deprived of millions in payroll taxes. This Office will not stand by when employers violate the public trust by refusing to pay taxes meant to support their workers."

According to the allegations in the Indictment, the criminal Complaint previously filed against Lingat (where Lemay is identified as CC-1), and the evidence at trial:

From in or about 2010 through in or about December 2016, Lemay, Lingat, and other co-conspirators perpetrated a scheme to defraud the U.S. government of payroll and income taxes due and owing to the IRS by Company-1 and affiliated companies. As part of the criminal scheme, Lemay, Lingat, and their co-conspirators created front companies, nominally owned by close associates or family members of Lemay or others at Company-1; assigned (on paper only) foremen and movers working for Company-1 to the sham companies; and fraudulently made it appear that the sham companies were independent contractors, including by creating fake invoices by which the sham companies purportedly billed Company-1 for labor. Because the conspirators fraudulently made it appear that the labor was performed by independent contractors, Company-1 was able to deduct the cost of the labor as an expense on its tax returns, without withholding or paying over any payroll taxes to the IRS. Through the criminal scheme, Company-1 and affiliated companies evaded in excess of approximately $7.7 million in payroll taxes, including FICA and Medicare contributions, during the charged period.

Lemay of Delray Beach, Florida, and Lingat of Jersey City, New Jersey, were convicted of one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the IRS Criminal Investigation (CI).

This case is being handled by the Office's Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Timothy V. Capozzi, Jilan Kamal, and Steven Kochevar are in charge of the prosecution, with assistance from Paralegal Specialists Geoffrey Mearns and Julia Gutierrez.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.

Public link

Please use the above public link if you want to share this noodl on another website.