Arthur S. Weiss was indicted by a grand jury for tax fraud, wire fraud, mail fraud, bank loan fraud, money laundering and bankruptcy fraud, the Justice Department and Internal Revenue Service (IRS) announced today. The indictment was returned yesterday in the Middle District of North Carolina.
According to the indictment, 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 2011, Weiss failed to file employment tax returns and failed to
pay over to the IRS employment taxes of over $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.
The indictment also alleges that Weiss used a portion of his fraud proceeds
to purchase expensive jewelry. 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, N.C.
According to the indictment, Weiss also committed 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 indictment also alleges that Weiss filed two false personal income tax returns, and lied under oath in his
Each of the 13 wire fraud, 10 mail fraud and four bank loan fraud counts
against Weiss carries a maximum of 30 years in prison upon conviction. Weiss
faces a maximum potential prison sentence of 10 years upon conviction for each
of the two money-laundering counts. The bankruptcy fraud count carries a maximum
sentence of five years. As to the tax charges, the count of corrupt interference
with the Internal Revenue laws and each count of filing a false tax return carry
a maximum of three years’ imprisonment upon conviction. Each of the 33 charges
alleged in the indictment also carries a maximum $250,000 fine upon
The case was investigated by IRS-Criminal Investigation, the FBI and the North Carolina Industrial Commission’s Fraud Unit. The case is being
prosecuted by Assistant U.S. Attorney Clifton Barrett and Trial Attorney Todd
Ellinwood of the Justice Department’s Tax Division.
An indictment is a formal accusation of criminal conduct, not evidence. A
defendant is presumed innocent unless convicted through due process of law.
As an American, I have witnessed many events in our nation's history. Some of them great like placing a man on the moon. Some of them were dark and shameful events. No matter what happened, it is the people that make this nation great. Each looking to the future with optimism and looking to improve this nation for all. The United States is a great and wonderful nation and her people are her best asset. As Americans, we need to stand together and let our voices be heard.
Thursday, June 28, 2012
Operator of Payroll Companies Charged in North Carolina with Federal Fraud and Money Laundering Crimes
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