BOSTON (AP) — The owner of a company that provided payroll and payroll tax services to many small businesses in New England has agreed to plead guilty to embezzling more than $1 million from her clients, many of them already struggling because of the coronavirus pandemic, federal prosecutors said Monday.
Patricia Lindau, 65, of Newburgh, Maine, will plead guilty at a date to be determined to wire fraud and tax evasion, according to a statement from the U.S. attorney’s office in Massachusetts.
A voicemail seeking comment was left with her attorney.
Lindau, owner of Northeast Abacus Inc., from 2017 and the spring of 2020 failed to pay payroll taxes that she withdrew from her clients’ bank accounts to the Internal Revenue Service and the Massachusetts Department of Revenue, prosecutors said.
She instead transferred those funds into her company’s checking account for her personal use.
Lindau then sent her clients a weekly report falsely indicating that the funds had been paid, authorities said.
When her clients received letters indicating that their payroll taxes had not been paid, she lied and told the businesses that the IRS and Department of Revenue were mistaken and she would take care of it, prosecutors said.
In some instances, she paid the taxes late, but over the course of the scheme, Lindau failed to pay when due more than $2 million and caused a net loss to her clients of more than $1 million, according to prosecutors.
She had faced up to 25 years in prison, but under a plea agreement the government will recommend a sentence at the low end of sentencing guidelines. She must also pay nearly $1.4 million in restitution.
(Copyright (c) 2020 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)