Something’s Shifty

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High Angle View Of A Person With Fractured Hand Filling Health Insurance Form

Julio Lopez, of Los Angeles, Calif., and formerly of Worcester, Mass., pleaded guilty to workers compensation fraud for his role in a scheme to hide cash wages from the Internal Revenue Service (IRS). (Everyone knows that it’s not a good idea to hide anything from the IRS. This guy must have missed the memo.) 

Lopez, 43, worked for three Worcester-based employment agencies including Bay State, Prime Labor and UT Services. While employed by Bay State in 2016, Lopez provided false documents that had been fabricated by another Bay State employee to a client. These fake documents erroneously showed that payroll taxes had been deducted from Bay State’s employees’ paychecks. Another important fact: Bay State also intentionally misrepresented the number of employees and amount of wages earned at the company. (The company failed to report this info to the IRS.)

In November 2017, Bay State closed. Lopez assisted in shifting some Bay State clients to UT Services, an employment agency controlled by Tam Vuong. (He was shifting alright. He was shifty too.) Together, Lopez and Vuong tried out the same scam at UT Services, where once again, the number of employees who worked for UT Services and the wages earned were misrepresented.

UT Services paid most of the company’s employees in cash, but company officials failed to report the number of employees and the cash wages to the IRS and its workers compensation insurance carrier. (Here we go again.)

While Lopez was employed by UT Services, he knew that federal law enforcement was hot on his trail, investigating the company and other employment agencies and their cash payroll practices. Lopez intentionally used an email address with a fake name so he would not be connected to the company. (Well, he didn’t remain hidden for long.)

Lopez was charged in December 2020 and he pleaded guilty in federal court to federal tax and fraud charges surrounding the workers compensation scheme. When sentenced in April 2021, Lopez faces up to 20 years in prison, three years of supervised release and a fine of $250,000 for wire fraud. He’s looking at another five years in prison, three years of supervised release and another fine of $250,000 for the conspiracy charge.

Vuong was indicted on fraud and tax charges for his alleged illegal activities involving the oversight of UT Services and Prime Labor. Until he stands trial in September 2021, Vuong is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Today’s Fraud of the Day comes from an article, “MA: California Man Pleads Guilty to Wire Fraud and Conspiracy,” published by workerscompensation.com on January 28, 2021.

Boston, MA (WorkersCompensation.com) – A California man pleaded guilty in federal court in Worcester to federal tax and fraud charges arising from his role with various Worcester-based employment agencies.

Julio Lopez, 43, of Los Angeles, Calif., and formerly of Worcester, pleaded guilty to two counts of wire fraud and one count of conspiring to defraud the United States. Lopez was charged in December 2020. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for April 27, 2021.

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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.