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The owner of a now-defunct Peabody, Massachusetts, construction company pleaded guilty 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 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.

Mavros, who owned Mavros Construction Inc., cashed more than $3.3 million in customer checks at a Peabody check cashing business and used some of those funds to pay his employees in cash. Mavros failed to report these employees or their wages in quarterly corporate tax filings, in an effort to avoid paying Social Security and Medicare taxes on employee wages and withholding federal income taxes.

Overall, it is alleged that Mavros failed to pay and withhold federal taxes on more than $2.5 million in wages, resulting in a tax loss of more than $1 million. Additionally, Mavros failed to report these employees to his workers’ compensation insurance carrier, thereby defrauding his insurer of premiums.

The charge of failure to collect and pay over taxes provides for a sentence of up to five years in prison, three years of supervised release and a fine of $10,000. The charge of mail fraud provides for a sentence of 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. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Source: U.S. Attorney’s Office, District of Massachusetts

Topics Fraud Workers' Compensation Construction Massachusetts