A Lowell man pleaded guilty on May 28 in federal court in Boston to charges related to payroll tax avoidance and workers’ compensation insurance fraud. Henry Lam, 68, admitted guilt to failure to collect and pay over taxes and mail fraud. U.S. District Court Chief Judge Denise J. Casper scheduled sentencing for Aug. 27.
According to the U.S. Attorney’s Office, Lam owned and operated HL Temporary Services, a temporary employment agency serving client companies in Massachusetts between 2016 and 2023. The client companies paid HL Temporary Services for employees’ work on an hourly basis, after which Lam cashed these checks at check cashing businesses across Massachusetts and paid the temporary employees primarily in cash.
Prosecutors said that by paying employees in cash, Lam concealed more than $6.1 million in payroll from authorities and avoided paying over $1.5 million in required payroll taxes during this period. The government further alleged that Lam used false payroll numbers from HL Temporary Services to obtain workers’ compensation insurance at lower premium rates.
The charge of failure to collect or pay over taxes carries a maximum sentence of five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss (whichever is greater), as well as restitution requirements. The mail fraud charge provides for up to twenty years imprisonment with similar fines, restitution obligations, and forfeiture provisions; sentences are imposed by a federal district court judge based upon the United States Sentencing Guidelines.
United States Attorney Leah B. Foley announced the plea along with Thomas Demeo, Special Agent in Charge of Internal Revenue Service Criminal Investigations in Boston; assistance was provided by the Insurance Fraud Bureau of Massachusetts. Assistant U.S. Attorney Kristen A. Kearney is prosecuting the case.
The U.S. Attorney for the District of Massachusetts enforces federal laws throughout the state—including prosecutions involving national security threats and civil rights violations—and employs more than 200 attorneys and staff while advancing community initiatives on civil rights issues across its offices statewide, according to the official website.
