Former owner of a temporary help agency facing federal charges for allegedly defrauding lenders and failing to pay IRS employment taxes withheld from employee wages | USAO-MD

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Baltimore, Maryland – Federal criminal information has been filed accusing Crystal Jones, aka Crystal Powell-Jones, 53, of Laurel, Md., On federal charges of wire fraud and IRS non-payment of employment taxes deducted from employee salaries. The criminal information was filed on April 26, 2021.

The criminal intelligence was announced by Acting U.S. Attorney General for the District of Maryland Jonathan F. Lenzner and Acting Special Agent in Charge Darrell Waldon of the Internal Revenue Service – Criminal Investigation (IRS-CI), Washington, DC Field Office.

According to criminal reports, Jones was the owner and managing partner of JAG Professional Resources, a temporary employment agency doing business in Howard County, Maryland and elsewhere from 2012 to August 2107. As a managing partner of JAG Jones exercised control over all aspects of JAG’s business, including its finances. A relative of Jones was a silent minority partner of the JAG.

As detailed in the criminal information, from February 2013 to at least October 2016, Jones secured factoring services from Victim Lender 1 for JAG. Factoring is a means by which cash-intensive companies, like JAG, could obtain liquidity quickly and reliably by taking advantage of accounts receivable. JAG was a cash intensive business because JAG had to pay its temporary employees weekly or bi-weekly, but generally did not receive payment from JAG clients until at least 30 days after the services were provided, which meant that JAG may have run out of necessary cash. paying its employees every week, but its business model was theoretically profitable if all unpaid bills had been paid. Specifically, JAG sold its accounts receivable to victim lender 1 and, in return, JAG received cash advances from victim lender 1 totaling approximately 90% of JAG’s accounts receivable. After receiving payments from JAG customers on unpaid invoices, Victim Lender 1 sent JAG the remaining 10% of the invoice that had been purchased, less the fees charged by Victim Lender 1 for its factoring services.

Criminal reports allege that from March 2016 to about May 2016, Jones tricked JAG into selling fraudulent invoices to Victim Lender 1 totaling over $ 350,000 for services JAG allegedly provided to a town in Ohio. The City of Ohio had contracted with JAG for temporary employment services as of February 2013, but JAG’s relationship with the City of Ohio ended around February 2016.

To carry out the scheme, Jones allegedly created fake pay slips purportedly issued by JAG and fraudulent invoices purported to represent services that JAG had provided, so that Jones could obtain loans for his own benefit and the benefit of others. Jones reportedly sent emails to representatives of Victim Lender 1 falsely indicating that payments on bogus and fraudulent invoices were coming, to lull Victim Lender 1 into a false sense of security over overdue collections. Additionally, Jones allegedly appropriated the names, signatures and personally identifiable information of his silent partner and others for his own benefit.

Further, criminal reports allege that from January 2014 to October 2016, Jones withheld payroll taxes from salaries paid to JAG employees, but neglected to pay withheld taxes to the Internal Revenue Service, resulting in a US tax loss of at least $ 523,244.38.

If convicted, Jones faces a maximum sentence of 20 years in federal prison for wire fraud; and a maximum of five in federal prison for non-payment of employment taxes. The actual sentences for federal crimes are generally less than the maximum sentences. A federal district court judge will determine any sentence after taking into account U.S. sentencing guidelines and other statutory factors. Jones is expected to have an initial appearance and arraignment in U.S. District Court in Baltimore before U.S. District Judge George L. Russell III, although no date has been set.

A criminal information is not a guilty verdict. A person charged with criminal information is presumed innocent unless and until his guilt has been proven in subsequent criminal proceedings.

Acting United States Attorney Jonathan F. Lenzner praised the IRS-CI for its work in the investigation. Mr Lenzner thanked Deputy US Prosecutors Dana J. Brusca and Harry M. Gruber, who are pursuing this case.

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