(Source: By The News Herald, Morganton, N.C. (MCT) – Former McDowell resident Arthur S. Weiss has been indicted by a grand jury for tax fraud, wire fraud, mail fraud, bank loan fraud, money laundering and bankruptcy fraud.
In June, Weiss’s indictment was returned in Middle District of North Carolina.
According to the indictment, Weiss operated professional employer organizations (PEOs), which provided payroll-related services to client companies.
For his client companies, Weiss agreed to pay the employees, withhold and remit federal and state taxes, prepare and file the federal and state employment tax returns, and provide workers compensation insurance (WCI).
Weiss did pay the employees and withhold the employment taxes, but he failed to remit the employment taxes, keeping them for his personal use, the indictment alleges.
From 2004 to 2011, Weiss failed to file employment tax returns and failed to pay over to the IRS employment taxes of over $4 million, investigators said.
In addition, Weiss allegedly collected WCI premiums from his clients but failed to obtain adequate WCI protection, and diverted WCI premiums for his personal use.
While running his professional employment organizations, Weiss falsely sold himself to clients as a CPA (Certified Public Accountant), his business email was email@example.com.
During a deposition in March of 2011, Weiss stated that the letters CPA in his email address stood for “can’t prove anything,” not certified public accountant. He also stated that he had never been a certified accountant.
The indictment also states that Weiss used profits from his employment tax scheme to purchase expensive jewelry for his wife.
Records then indicate that Weiss fraudulently reported those same four pieces of jewelry as lost or stolen, and received $177,480 from his insurance company.
Weiss then used the money he collected from his insurance company to pay off a loan on his 2007 Ferrari Spider and deposited the rest of the funds in his personal bank account, the indictment states.
All of the reportedly stolen jewelry was later found during a raid by the IRS, with assistance from local law enforcement at his home the Black Forest Community in Marion.
According to the indictment, Weiss also committed bank loan fraud. In order to receive four loans from a bank, Weiss provided numerous personal income tax returns to the bank.
Each of the returns Weiss provided to the bank included significantly greater income than the returns actually filed with the IRS, according to investigators.
The indictment also alleges that Weiss filed two false personal income tax returns, and lied under oath in his bankruptcy proceeding.
Each of the 13 wire fraud, 10 mail fraud and four bank loan fraud counts against Weiss carries a maximum of 30 years in prison upon conviction.
Weiss faces a maximum potential prison sentence of 10 years upon conviction for each of the two money-laundering counts.
The bankruptcy fraud count carries a maximum sentence of five years. As to the tax charges, the count of corrupt interference with the Internal Revenue laws and each count of filing a false tax return carry a maximum of three years imprisonment upon conviction. Each of the 33 charges alleged in the indictment also carries a maximum $250,000 fine upon conviction.
The case was investigated by IRS-Criminal Investigation, the FBI and the North Carolina Industrial Commission’s Fraud Unit. The case is being prosecuted by Assistant U.S. Attorney Clifton Barrett and Trial Attorney Todd Ellinwood of the Justice Department’s Tax Division.
The McDowell News could not locate a current address for Weiss.
©2012 The News Herald (Morganton, N.C.)
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