Temporary Employment Agency Owner Indicted for Tax and Insurance Fraud
On March 10, federal prosecutors announced that a grand jury had indicted Lilian Giang, age 53, on four counts of tax and insurance premium fraud. After appearing before U.S. District Court Magistrate Judge Donald L. Cabell in Boston on March 10, Ms. Giang was released on conditions.
The charges against her stem from allegations that between 2015 and 2019, she owned and operated Able Temp Agency, a temporary employment agency located in Quincy, Massachusetts, that served client companies in the state.
Ms. Giang’s Workers’ Compensation Fraud Scheme
Between 2015 and 2019, Lilian Giang and Able Temp Agency obtained workers’ compensation insurance policies from an unidentified insurance company. The policy premiums were based on the total wages of employees, and Able Temp Agency was required to provide estimates of its anticipated payroll during the policy term.
After the policy term, the insurance carrier typically conducted an “audit” of the employer’s actual payroll by mail. Acting for Able Temp Agency, Ms. Giang provided false information, including false IRS Forms 941, which substantially underreported the payroll of its temporary employees. This allowed the company to obtain the required insurance at a reduced cost.
When billed based on its fraudulent payroll records, the company received premium adjustment notices that reflected lower insurance premiums than what they actually owed. By underreporting payroll by approximately $3,222,857, Ms. Giang and Able Temp Agency evaded payment of approximately $30,582 in workers’ compensation insurance premiums. This scheme defrauded the workers’ compensation insurance carrier that was responsible for compensating employees who suffered work-related injuries.
The Tax Fraud Scheme
The tax fraud charges allege that between 2015 and 2019, Ms. Giang deposited payments received from client companies into bank accounts in the name of Able Temp Agency, which she controlled. She then allegedly paid temporary employees through a combination of checks and cash, hiding over $3.2 million in payroll and avoiding paying more than $815,000 in required payroll taxes.
Ms. Giang then allegedly used false payroll numbers to obtain workers’ compensation insurance at lower premium rates.
Possible Sentences for Ms. Giang if Convicted
The charge of mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, restitution, and forfeiture. The charge of failure to collect or pay over taxes provides for a sentence of up to five years in prison, three years of supervised release, a fine of $10,000, and restitution. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes that govern the determination of a sentence in a criminal case.
Prosecution Team
United States Attorney Rachael S. Rollins and Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement of Ms. Giang’s indictment. Assistant U.S. Attorney Christopher J. Markham of Rollins’ Securities, Financial & Cyber Fraud Unit is prosecuting the case.
