Lowell business owner admits to hiding $6 million in payroll, avoiding taxes

May 31, 2026 - 01:46

BOSTON - The owner of a Lowell employment agency admitted in federal court to concealing over $6 million in payroll, a scheme that allowed him to dodge more than $1.5 million in federal employment taxes while securing cheap workers for clients.

Prosecutors said the man ran the agency for years, paying employees off the books to avoid reporting wages to the IRS. By hiding the true size of his workforce, he also undercut competitors who followed tax laws. The scheme involved paying workers in cash or through untraceable methods, then failing to file required tax returns or pay Social Security, Medicare, and unemployment taxes.

The plea came after a federal investigation that uncovered bank records, payroll ledgers, and testimony from former employees. The business owner now faces up to five years in prison, restitution, and substantial fines. Sentencing is scheduled for later this year.

Tax evasion cases like this one have drawn increased attention from federal authorities, who say such schemes hurt honest businesses and shift the tax burden onto law-abiding citizens. The case also highlights how small and mid-sized employers can fall into serious legal trouble by trying to cut corners on payroll reporting.