BOSTON – The owner of a firm that provided payroll and payroll tax services to small businesses in New England was sentenced on Thursday, July 22, 2021 for defrauding clients by diverting the funds her clients set aside for payroll taxes.
Patricia Lindau, 65, of Newburg, Maine, was sentenced by U.S. District Court Judge Denise J. Casper to three years in prison and two years of supervised release. Lindau was also ordered to pay restitution of $1,422,122 and forfeiture of $1,121,292. On Feb. 24, 2021, Lindau pleaded guilty to one count of wire fraud and one count of tax evasion.
Between 2017 and the spring of 2020, Lindau engaged in a scheme to defraud many of her clients by failing to pay over to the Internal Revenue Service (IRS) and Massachusetts Department of Revenue (DOR) the payroll taxes that she withdrew from her clients’ bank accounts. Lindau used her access to her clients’ accounts to transfer funds that her clients intended to use to satisfy their payroll tax liabilities into her firm’s business checking account. Lindau then sent each client a weekly report falsely indicating that she had paid the funds over to the IRS and DOR.
When Lindau’s clients received letters from the IRS and DOR indicating that their payroll taxes had not been paid, Lindau lied to the clients and falsely told them that the letters were a mistake and that she would take care of it. In some instances, she then paid the taxes late.
Lindau’s scheme continued into the first quarter of 2020 when most of her clients closed due to COVID-19 and then discovered that their employees’ payroll taxes had not been and were not being paid.
Over the course of the scheme, Lindau failed to pay over when due more than $2 million and caused a net loss to her clients of over $1.1 million.
Acting United States Attorney Nathaniel R. Mendell; Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation; and John Hayes, Director of the Criminal Investigations Bureau, Massachusetts Department of Revenue made the announcement today. Assistant U.S. Attorneys Sara Miron Bloom and Mackenzie Queenin of Mendell’s Securities, Financial & Cyber Fraud Unit prosecuted the case.
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