2:58 PM Tuesday, November 2, 2010

http://www.daytondailynews.com/news/crime/paysource-owner-accused-of-defrauding-government-of-26-7-million-992817.html

DAYTON — The owner and chairman of Paysource has been indicted on 67 federal counts, including charges that he defrauded the Internal Revenue Service of $26.7 million.

Robert R. Sacco, 59, formerly lived in Huber Heights and now lives in Orlando. IRS and customs agents arrested him Monday, Nov. 1, at Orlando International Airport as he returned from a vacation in Costa Rica. His initial appearance, in the U.S. District Court in Orlando, could be later Tuesday.

A federal grand jury indicted Sacco on Oct. 26, but the indictment remained under seal until this week. Sacco is charged with: — one count of conspiracy to defraud the United States by impeding the IRS — one count of conspiracy to commit mail fraud, wire fraud and money laundering — ten counts of wire fraud — 39 counts of money laundering — 16 counts of tax evasion

According to the indictment, Sacco defrauded the government by by withholding money to pay federal employment taxes from employees’ paychecks, then keeping the money.

Dayton-based Paysource, which had offices on Poe Avenue, was a co-employment company - meaning that it hires a client company’s employees, thus becoming their employer of record for tax and insurance purposes. At one point, the company had more than 190 client companies nationwide and had annual revenues of $120 million.

The company’s CEO, Charles C. Painter, pleaded guilty in February to one count of aiding the preparation of a false federal employment tax return. He is to be sentenced Dec. 16 and faces a maximum of three years in prison. Federal authorities said he avoided paying $7 million in taxes during the second half of 2007.

Painter is identified as an “unindicted co-conspirator” in Sacco’s indictment as is “T.G., a person whose identity is known to the Grand Jury,” and who “previously served as Paysource’s Chief Financial Officer.”

The object of the conspiracy was to avoid paying federal employment taxes owned by Paysource from 2007 through 2009, the indictment states. Sacco directed his co-conspirators to prepare false IRS documents, which incorrectly stated the company’s tax liabilities, according to the indictment.