Former Temporary Help Agency Owner Pleads Guilty to Wire Fraud and Failure to Pay IRS Employment Taxes | USAO-MD

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Baltimore, Md. – Crystal Powell-Jones, 54, of Laurel, Md., Pleaded guilty today to non-payment to the IRS of employment taxes withheld from employee wages and cable fraud in connection of a scheme to defraud at least four victim lenders.

The guilty plea was announced by the Acting United States Attorney General for the District of Maryland, Jonathan F. Lenzner; Acting Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service – Criminal Investigation (IRS-CI), Washington, DC Field Office; and Chief Melissa R. Hyatt of the Baltimore County Police Department.

According to his guilty plea, from August 2012 to October 2017, Jones operated and was the managing partner of JAG Professional Resources (“JAG”), a temporary help agency that provided hourly labor to administrations. and municipal agencies. As a managing partner of JAG, Jones exercised control over all of JAG’s business affairs, including JAG’s finances and bank account. Individual 1 was a silent minority partner of the JAG.

Between at least October 2012 and August 2017, Jones devised a scheme to defraud Victim Lender 1, a factoring company; Victim Lender 2, an automobile financing service; Victim Lender 3, a mortgage banking company; and Victim Lender 4, a personal finance company.

As detailed in the plea agreement, Jones secured factoring services from Victim Lender 1 for JAG from February 2013 to October 2016. Factoring is one way that 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 its customers until at least 30 days after the services were rendered. 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.

From March 2016 to approximately 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. Ohio City had contracted with JAG for temporary employment services as of February 2013, but JAG’s relationship with Ohio City ended around February 2016. In total, the victimized lender 1 paid at least $ 347,993.13 to JAG as a result of fraudulent invoices Jones JAG sold Victim Lender 1.

In October 2012, Jones and her co-borrower financed the purchase of a 2012 Ford Fusion. To obtain financing, Jones falsely stated that she had been employed as a JAG accountant for four years on a credit statement from the applicant. Jones also submitted a fraudulent bank statement for funding that listed Jones and one other person when in fact the bank statement only belonged to Person 1.

Subsequently, Victim Lender 2 granted Jones and Individual 1 $ 19,657.50 in financing for the purchase of Jones’ car. Victim Lender 2 suffered a loss of $ 5,422.60 after Jones declared bankruptcy and failed to pay his debt.

The plea further details that in November 2015, Jones submitted a uniform home loan application to Victim Lender 3 for the purpose of financing a residence in Laurel, Maryland. Jones provided false and misleading information, including that she had worked for the JAG for two years as an accountant, was not self-employed, and had entered a bank account with a balance of 44,435 , $ 26. In fact, Jones’ bank account had a balance of $ 4,425.26 at the time. Based on the false documents provided by Jones, Victim Lender 3 provided $ 417,302 in financing for the purchase of Jones’ residence.

Additionally, Jones admitted that in October 2016, she submitted a loan application on behalf of person 2 to victim lender 4. The contact details were an email address and phone number controlled by Jones. The loan application incorrectly stated that Person 2 was a JAG employee earning an annual salary of $ 75,000. As part of the program, Jones completed an employment verification form in which Jones stated that Individual 2 had been employed for two years with salaries of $ 75,000 and $ 68,000, respectively. Jones also provided a fraudulent pay stub indicating that the JAG paid Individual 2 a salary in September 2016. In fact, Individual 2 did not receive any salary from the JAG in 2016. Victim 4’s lender approved the loan application and transferred $ 66,708 to a bank account in Jones’ name. In 2017, Jones carried out a similar scheme to defraud Individual 3 and received at least $ 29,000 in loan proceeds.

Finally, from January 2014 to October 2016, JAG Professional Resources paid salaries totaling approximately $ 3,851,994.00. During this time, Jones willfully failed to pay employment taxes to the IRS and failed to pay unemployment and workers’ compensation rights on a timely basis. These failures resulted in additional tax losses for the state in which JAG operated and prevented JAG employees from receiving unemployment and workers compensation benefits to which they might otherwise have been entitled.

Jones admitted that she did not keep reliable or accurate business records, including payroll and withholding tax records. JAG employees often received incorrect payment for labor and were not paid for all hours worked, including overtime. When the JAG issued wages, correct or incorrect, it did so while allegedly withholding employment taxes on behalf of employees. In addition, under Jones’ leadership, the JAG annually issued IRS W-2 forms to its employees indicating that employment taxes, including FICA, Social Security, and Medicare, were withheld on wages paid to the employee. In fact, Jones did not file a single quarterly federal employer’s income tax return for the 2014 tax year, an IRS Form 941. Due to non-payment of IRS employment taxes. From January 2014 to October 2016, Jones caused an IRS of at least $ 523,244.38.

As a result of Jones’ criminal activities, the United States and victim lenders suffered a total loss of at least $ 1,196,085.35 ($ 225,516.28 to victim lenders and the remainder to the United States) .

Jones faces a maximum sentence of 20 years in prison for wire fraud and a maximum of five years in prison for non-payment to the IRS of employment taxes withheld from employee wages. U.S. District Judge George L. Russell, III sentenced July 30, 2021 at 11:30 a.m.

Acting US Attorney Jonathan F. Lenzner commended the IRS-CI and the Baltimore County Police Department for their 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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