Carter M. Stewart, United States Attorney for the Southern District of Ohio and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, announced the indictment that was returned on October 26.
IRS and Customs agents arrested Sacco at the Orlando International Airport on Monday evening as he returned to the United States from Costa Rica where he was vacationing. He will have an initial appearance in federal court in Orlando Tuesday.
Sacco, 59, now lives in Orlando and formerly lived in Huber Heights until 2007. He was the owner of Paysource, a Dayton-based professional employer organization.
Paysource provided services that enabled business owners to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation and other strategic services. It did this by hiring a client company’s employees and becoming their employer of record for tax and insurance purposes. This practice is known as co-employment.
The indictment alleges that between October 2007 and April 2009, Sacco and a co-conspirator withheld money from employees’ paychecks in order to pay federal taxes and conspired to avoid paying the taxes to the IRS. The conspiracy allegedly included filing fraudulent documents with the IRS claiming that the wages paid by the company and the resulting tax liabilities were significantly lower than the wages the company actually paid.
The indictment charges Sacco with one count of conspiracy to defraud the United States by impeding and impairing the Internal Revenue Service, punishable by up to five years in prison. He was also indicted on count of conspiracy to commit mail fraud, wire fraud and money laundering, which is punishable by up to 30 years in prison.
The indictment also charges Sacco with ten counts of wire fraud, each punishable by up to 30 years behind bars, 39 counts of money laundering, each punishable by up to ten years in prison and 16 counts of tax evasion, each punishable by up to five years.
The indictment seeks a money judgment of $26,729,098.79, representing the amount of proceeds obtained as a result of the offenses.
At its height, Paysource had more than 190 client companies located throughout the United States and achieved annual revenues of $120 million.
Paysource Chief Executive Officer Charles C. Painter pleaded guilty in February to one count of aiding the preparation of a false federal employment tax return. He is scheduled for sentencing on December 16 by U.S. District Judge Michael Barrett.