Two men have been sentenced to federal prison for their roles in what is believed to be the largest real dollar loss fraud and tax related case ever prosecuted in the Western District of Texas, according to U.S. attorneys.
Authorities said Larry Kimes, the manager of AccounTex Financial Services, was sentenced to 12 years in federal prison followed by three years of supervised release, and ordered to pay $132 million restitution.
The sentencing follows after Kimes pleaded guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge last month, officials said.
Charles Pircher, manager of a series of Professional Employer Organizations based in San Antonio, including Service Professionals, was sentenced to 11 years in federal prison followed by three years of supervised release and ordered to pay $132 million restitution, after pleading guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge in November 2013, U.S. attorneys said.
"The sentencing of so-called 'white collar' defendants to significant terms of imprisonment such as the judge imposed in this case today should send a strong message to those who concoct fraudulent schemes -- schemes that result in real losses to real people," said U.S. attorney Robert Pitman.
In February, authorities said three other people who also entered guilty pleas in connection with this fraudulent scheme were sentenced to federal prison.
U.S. attorneys said John Bean, owner of Synergy Personnel, as well as an agent, representative, officer, license holder and accountant of several San Antonio and Austin-based PEOs, including Service Professionals; Pat Mire, owner and manager of several San Antonio-based PEOs, including Service Professionals; and Mike Solis, an executive assistant at several San Antonio based PEOs, including Service Professionals, were sentenced to six years, three years and three years in federal prison, respectively.
By pleading guilty, authorities said the defendants admitted that between 2002 and 2008 they participated in a scheme in which they stole more than $130 million from the clients of a series of PEOs operated by the defendants.
The PEOs entered into staff leasing agreements with various client companies to manage the companies' payroll and insurance programs. Officials said Kimes, Pircher and the other co-conspirators diverted to their own use and benefit clients' monies that should have been paid for payroll taxes and insurance premiums.
"The defendants involved in this -- the largest ever single criminal tax case in San Antonio's history -- knowingly violated our country's tax laws," said IRS-criminal investigation special agent in charge Steve McCollough. "They chose to ignore their responsibilities and live a lavish lifestyle on money belonging to their employees and to the U.S. government. IRS special agents will continue to aggressively pursue these types of very serious tax crimes."
"Motivated by greed, the defendants perpetrated an extensive fraud scheme, designed to steal money from their clients and taxpayers over a number of years," said FBI acting special agent in charge Aaron C. Rouse. "The FBI will continue to work with our partners to identify, investigate and prosecute others, like the defendants, who seek unjust enrichment by victimizing others."