BUSINESSMAN CONVICTED FOR FAILING TO PAY OVER $15 MILLION IN PAYROL TAXES

The following excerpt is from the Department of Justice website:

December 21, 2011
“WASHINGTON - Bruce Gregory Harrison III was convicted yesterday following a jury trial in federal court in Winston-Salem, N.C., announced the Department of Justice.   Harrison had been charged in a 63-count indictment with large-scale payroll tax fraud and failure to file individual income tax returns.   The evidence at trial proved that Harrison failed to pay over more than $15 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.

“Mr. Harrison not only defrauded his own employees, but he defrauded the American people as well,” said Ripley Rand, U.S. Attorney for the Middle District of North Carolina. “This sort of conduct is intolerable, especially during these difficult economic times, and we will do everything we can to make sure it is punished accordingly.”

“Honest, hard-working taxpayers count on their payroll deductions for Social Security and Medicare being paid over to fund their retirement and health care needs,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division.  “They should rest assured that those who would steal those funds will be prosecuted to the fullest extent of the law.”

“The IRS-Criminal Investigation Division takes these violations of law very seriously.   Payroll tax fraud results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” said Victor S.O. Song, Chief of the Internal Revenue Service (IRS) – Criminal Investigation.

According to the trial evidence and other documents filed in the case, Harrison, a resident of Greensboro, N.C., did business under various corporate names including U.S.A. Staffing and Compensation Management Inc.   He owned or controlled temporary staffing companies operating in at least nine states.   Harrison’s staffing companies were headquartered in Guilford County, N.C., and contracted with client businesses to provide temporary workers.   Harrison’s companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees.   Instead, Harrison failed to account for and pay over in excess of $15 million in federal payroll taxes for the employees of those companies.   The evidence at trial showed that Harrison caused false bank statements to be presented to auditors to conceal the nonpayment of the payroll taxes.

Harrison was also convicted of corruptly endeavoring to obstruct the IRS by means of false statements to IRS revenue officers.   Evidence established he had used company funds to purchase personal residences, to buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants.   Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006.   Following the jury verdict, Chief Judge James A. Beaty Jr. ordered Harrison detained.   Sentencing is scheduled for April 6, 2012, at 9:30 a.m. in Winston-Salem.

U.S. Attorney Rand and Principal Deputy Assistant Attorney General DiCicco commended Assistant U.S. Attorneys Frank Chut and Terri-Lei O’Malley and Tax Division Trial Attorney Jeffrey McLellan, and the IRS Agents who assisted them, in successfully prosecuting the case.”