The Feel of Cold, Hard Cash

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hand holding American dollar currency isolated on blurred blackground injured woman with broken hand and green cast on arm, insurance health concept.

Can you imagine what it feels like to cash $3.3 million in checks? Argyrios “Eric” Mavros, 57, knows what that feels like. And he knows what if feels like to plead guilty to tax fraud and workers compensation fraud. (That’s probably not a feeling that most would like to experience.)

Let’s just say that the owner of Mavros Construction, Inc., a defunct Peabody, Mass., construction company, was not very honest. (Fraudsters never are.) He defrauded the Internal Revenue Service (IRS) by not paying payroll taxes and he also defrauded his workers’ compensation insurance carrier by lying about the number of workers he employed. (This guy is definitely not winning the “Small Business Owner of the Year Award.”)

So, let’s go back to the feel of cashing $3.3 million in customer checks. Instead of using a bank to deposit payments from customers, Mavros used a Peabody check cashing business. He paid his employees cold, hard cash “under the table” and did not report the employees on his quarterly filings with the IRS. (That meant he did not have to pay payroll taxes, Social Security, or Medicare withholdings.)

As if that were not enough, he also under-reported the number of employees he hired to his workers’ compensation insurance carrier. (This reduced his premiums and gave him an unfair advantage over his competitors.) It is alleged that Mavros failed to pay and withhold federal taxes on more than $2.5 million in wages. This caused a tax loss of more than $1 million.

Mavros pleaded guilty to 10 counts of failure to collect or pay over taxes and one count of mail fraud. When sentenced, he could receive up to five years in prison, three years of supervised release and a fine of $10,000 for failing to collect and pay taxes. For the charge of mail fraud, he could get up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. (He’s likely to be headed to a cold, hard bunk bed in a 6 ft. x 8 ft. prison cell without any cash at all.) 

Today’s Fraud of the Day comes from a Department of Justice press release, “Peabody Construction Company Owner Pleads Guilty to Tax and Workers’ Compensation Fraud,” dated November 2, 2021.

BOSTON – The owner of a now-defunct Peabody construction company pleaded guilty yesterday in connection with a scheme to defraud the IRS of payroll taxes and to defraud his workers’ compensation insurance carrier by failing to disclose how many workers he employed.

Argyrios “Eric” Mavros, 57, pleaded guilty to 10 counts of failure to collect or pay over taxes and one count of mail fraud. U.S. Senior District Court Judge William G. Young scheduled sentencing for Feb. 17, 2022. Mavros was indicted in September 2020.

 

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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.