A Lowell resident was arrested on charges related to payroll tax avoidance and workers’ compensation insurance fraud, federal authorities announced. Henry Lam, 67, faces accusations of failing to collect and pay over taxes as well as mail fraud. He is scheduled to appear in federal court in Boston.
According to information from the U.S. Attorney’s Office, between 2016 and 2023, Lam operated HL Temporary Services, a staffing agency based in Lowell that provided temporary employees to client companies across Massachusetts. Authorities allege that Lam cashed checks from his clients at check cashing businesses and paid his employees mainly in cash. This method allegedly allowed him to conceal more than $6.1 million in payroll and avoid paying over $2.4 million in required payroll taxes.
It is also alleged that Lam reported false payroll numbers for HL Temporary Services when obtaining workers’ compensation insurance, which resulted in lower premium rates.
If convicted of failure to collect or pay over taxes, Lam could face up to five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss—whichever is greater—and restitution. The mail fraud charge carries a potential sentence of up to 20 years in prison with similar fines and restitution requirements. Sentencing decisions are made by a federal district court judge according to U.S. Sentencing Guidelines and relevant statutes.
“United States Attorney Leah B. Foley and Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement. Valuable assistance was provided by the Insurance Fraud Bureau of Massachusetts.” “Assistant U.S. Attorney Kristen A. Kearney of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.”
“The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.”
