An Andover man and his Woburn company were charged on Tuesday with paying employees in cash in order to avoid paying union benefits and employment taxes.
Ronald P. Mulcahey and Wing Environmental Inc. were indicted on theft from benefit plans subject to the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), and making false statements in documents submitted to benefit plans subject to ERISA. Mulcahey was also charged with tax evasion.
According to the indictment, Mulcahey was the owner and sole corporate officer of Wing Inc. Specialty Trades, EWT-Fireproofing Inc. and Wing Environmental Inc.
The indictment alleges that between January 2008 and June 2011, Mulcahey and Wing Environmental engaged in a scheme to defraud the union benefit funds by paying some of those employees in cash. By keeping the cash payments off-the-books, Mulcahey and Wing Environmental falsely underreported the union workers’ hours in order to avoid making the required hourly payments to the benefit funds. Union benefit funds are used to provide healthcare, pensions and other services to union members. As a union employer, Wing Environmental was required to report to the union benefit funds the number of hours worked by its union employees and to make the corresponding contributions to the funds.
Wing Specialty Trades and EWT-Fireproofing were non-union companies that provided asbestos abatement, demolition, and fireproofing services, according to the indictment. All of Mulcahey’s companies were required by federal tax law to accurately report their total payments to employees and to withhold and pay to the IRS the applicable employment and income taxes based on those payments. Between January 2008 and June 2011, the indictment alleges that Mulcahey was defrauding the IRS by paying certain employees of all three of his companies in cash. By keeping the cash payments off-the-books, Mulcahey falsely underreported his workers’ wages to the IRS and avoided paying employment taxes on the unreported wages.
Each charges of the charging statutes carries a possible sentence of no greater than five years in prison and three years of supervised release. The ERISA charges provide for a fine of no greater than $250,000 and the tax charges provide for a fine of no greater than $100,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
