Pay Now or Pay Later

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Paying workers “under the table” to avoid paying the IRS is not unusual, but it is illegal. In fact, it is considered to be tax fraud, which is a felony.

A Montana man recently found out how high the stakes are for getting caught for committing tax fraud. The man, who operated a construction company in Helena, pleaded guilty to defrauding both the Social Security Administration and the Montana State Fund for workers’ compensation.

The man was ordered to pay over $10,000 in restitution and received a three-year deferred sentence – meaning, if he doesn’t pay, he will go to jail. (Now, he’s out of more money than if he had paid the taxes in the first place).

The fraud dates back to the 2014-2015 tax years, which may have made the perpetrator think he was in the clear. (But you can never really get ahead of the tax man.)

As the Montana deputy attorney general explained, “A lot of people don’t know that we have work-comp prosecutors here in our office that prosecute employer and employee workers compensation fraud.” The office acted on a tip about the construction company and opened an investigation.

To learn more about employer tax responsibility, go to IRS.gov.

Today’s Fraud of the Day is based on a report by Newstalk KGVO, “Helena Man Pleads Guilty to Felony Employer Misconduct,” on Oct. 3, 2019.

On September 10, Darren Booth entered guilty pleas in Lewis and Clark District Court to charges of employer misconduct for paying his employees under the table.

Montana Deputy Attorney General Jon Bennion describes the charges.

“This employer was paying his employees under the table,” said Bennion. “He wasn’t paying workers compensation premiums or Social Security taxes. A tip was provided and we have investigators who go after workers compensation fraud, so we conducted an investigation. This dates back to 2014 and 2015, and we were able to bring the investigation to a successful conclusion.”

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.