Fri, Feb 28, 2014

http://www.bizjournals.com/stlouis/news/2014/02/27/owner-of-payroll-services-company.html

The owner of a local payroll services company has been indicted for mail fraud and money laundering, after prosecutors allege he deducted money from his client’s accounts for taxes, but failed to remit the funds for payment.

Bradley Ferguson, 48, owner of Fenton-based Paymaster Business Solutions Inc., was indicted by a grand jury late Wednesday, according to prosecutors.

Prosecutors said between January 2005 and January 2014, Ferguson drafted more than $2.7 million from Paymaster business clients’ bank accounts to pay clients’ federal, state and local tax bills, as well as FICA (Federal Insurance Contributions Act) obligations. But at his direction, Paymaster allegedly failed to forward the payments to the tax authorities, prosecutors said.

When he was contacted by the IRS and questioned about the clients’ failure to pay federal taxes, he allegedly did not tell clients, prosecutors said. If clients learned that Paymaster hadn’t forwarded their funds to tax authorities, Ferguson allegedly lied to them and said the company made payments on their behalf, prosecutors said.

In December 2013, Ferguson allegedly hired a commercial shredding company to shred client records, according to prosecutors.

Ferguson was indicted on one felony count of mail fraud and one felony count of money laundering. If convicted, the mail fraud carries a maximum penalty of 20 years in prison and or fines of up to $250,000. The money laundering charge carries a maximum of five years.