Massachusetts Construction Company Owner Pleads Guilty to Tax Crimes and Making a False Statement

Defendant Operated an “Off-the-Books” Payroll and Caused Over $2M Loss to IRS 

A Massachusetts man pleaded guilty to an employment tax scheme and making a false statement at an Occupational Safety and Health Administration (OSHA) hearing.

According to court documents and statements made in court, Mauricio Baiense, formerly of Quincy, owned and operated Contract Framing Builders Inc. (CFB), a Medford, Massachusetts, construction business. Baiense was responsible for paying to the IRS the payroll taxes withheld from CFB employees’ wages and for filing the quarterly employment tax returns.

From approximately April 2013 through December 2017, Baiense operated an “off-the-books” cash payroll for CFB. To generate cash for the payroll, Baiense wrote checks drawn on CFB’s bank account to purported subcontractors, which were in fact nominee entities that Baiense controlled. Baiense then cashed or directed others to cash approximately $11 million in such checks at a check cashing business.

Baiense and another man then used a portion of the cash to pay some of CFB’s employees’ wages. Baiense did not report the cash wages to the IRS and did not pay the required employment taxes on them. Baiense also helped prepare at least one false employment tax return that underreported the actual wages paid to CFB’s employees.

In total, Baiense caused a tax loss to the IRS of approximately $2,824,577.45.

Finally, when questioned at an OSHA hearing regarding a workplace accident, Baiense made a false statement. OSHA was investigating the workplace death of an individual working for CFB. During the hearing and while testifying under oath, Baiense falsely claimed that the deceased employee did not work for CFB at the time of the accident.

Baiense is scheduled to be sentenced on July 25. He faces a maximum penalty of five years in prison for each of the seven counts of willful failure to collect or pay over employment taxes, five years in prison for conspiring to defraud the United States and three years in prison for aiding and assisting in the preparation of a false tax return. He also faces up to five years in prison for the false statement. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, Acting U.S. Attorney Joshua S. Levy for the District of Massachusetts, OSHA Region 1 Administrator Galen Blanton, Special Agent in Charge Harry Chavis Jr. of IRS-Criminal Investigation’s (IRS-CI) Boston Field Office and Special Agent in Charge Jonathan Mellone of the Department of Labor’s Office of Inspector General in Boston made the announcement.

IRS-CI, OSHA and the Department of Homeland Security’s Homeland Security Investigations investigated the case with assistance from the Department of Labor’s Office of Inspector General