IRS, Labor Department Crack Down on Maryland Payroll Company for Multi-Year Tax Evasion and Employee 401(k) Embezzlement Scheme

Maryland Payroll Company Fraud Unveiled

Federal authorities have taken decisive action against a Maryland payroll firm after uncovering a prolonged tax and 401(k) fraud campaign. Michelle Leach-Bard, leading iProcess Online Inc., has admitted guilt to crimes of employment tax evasion exceeding $2.6 million and swindling employees' retirement savings.

Operating from Lutherville-Timonium, Leach-Bard's role at iProcess involved withholding necessary taxes from employee wages and ensuring their delivery to the IRS. However, from October 2016 to the end of 2021, she neglected these responsibilities, causing significant financial loss to the government and her employees.

The Broken Promise of Retirement Security

401(k) plans serve as a cornerstone for American retirement planning, allowing employees to contribute a segment of their earnings into a tax-deferred account, often matched by their employer. These funds are intended to grow over time, providing a nest egg for retirement. Unfortunately for iProcess employees, contributions made between 2007 and the case's conclusion have yet to reach their intended destination. Instead of securing future financial stability, approximately $207,180.41 in employee contributions and an additional $18,740.37 in employer matching were diverted elsewhere.

ALSO READ: Biden-Nominated US Attorney Rachael Rollins Violated Spending Rules on Taxpayers' Dime for Personal Luxury Expenditures

Legal Repercussions and Enforcement

Scheduled for sentencing on August 20, Leach-Bard could face up to ten years in prison-five for each count of tax and embezzlement crimes. Alongside a potential prison sentence, the court will mandate a period of supervised release, restitution to the victims, and possible monetary penalties. This judgment underscores a firm commitment by federal agencies to prosecute financial misconduct aggressively. The IRS Criminal Investigation and the Department of Labor's Employee Benefits Security Administration have worked jointly to expose these malpractices, emphasizing the importance of compliance and integrity among employers.

With these bodies leading the investigation, trial attorneys Catriona Coppler and Jeffrey McLellan have charged forward with the prosecution, highlighting the government's dedication to safeguarding employee benefits and ensuring employer accountability.

Impacts on Employees and the Path Forward

The actions of Leach-Bard have not only resulted in a considerable tax deficit but have also jeopardized the financial futures of numerous employees. These workers, entrusting a portion of their earnings to their employer's care for future benefits, are deprived of their rightful savings. The case serves as a stark reminder of employers' fiduciary duty towards their employees' contributions and the severe consequences of breaching this trust.

As the legal process unfolds and restitution plans begin to take shape, impacted employees and industry observers will likely seek reforms and more robust safeguards to prevent such breaches of trust. The severity of the penalties awaiting Leach-Bard will underscore the government's stance on employment tax evasion and 401(k) embezzlement as a deterrent to similar schemes.

By spotlighting these illicit activities, authorities aim to reinforce the pillars of trust and security that underpin employee-employer relations, particularly concerning retirement planning and tax obligations.

RELATED TOPIC: DOJ Successfully Recovers Over $1.4 Billion from COVID-19 Pandemic Aid Fraud, Charges 3,500 Individuals

Tags

IRS, Labor Department, Maryland Payroll Company, Tax Evasion, Employee 401(k) Embezzlement Scheme

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.