New Haven Man Sentenced to More Than Three Years in Federal Prison for Bankruptcy and Tax Fraud Schemes
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JASON SHEEHAN, 41, of New Haven, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 37 months of imprisonment, followed by three years of supervised release, for engaging in an extensive bankruptcy and tax fraud scheme. In addition, Judge Thompson sentenced SHEEHAN’s wife, GLORVINA CONSTANT, 36, to one year of probation for participating in a related mortgage fraud scheme.
According to court documents and statements made in court, SHEEHAN was the sole member of a limited liability company known as Infinistaff, LLC, which provided temporary workers to employers. In September 2010, Infinistaff filed a voluntary chapter 11 bankruptcy petition with the Connecticut Bankruptcy Court. As part of the bankruptcy case, SHEEHAN filed operating reports that falsely claimed that another company was being paid to process Infinistaff’s payroll checks and to prepare and file its payroll tax returns and tax payments. During this time, SHEEHAN also falsely represented to the Internal Revenue Service that this other company was making tax deposits under its taxpayer identification number. Although Infinistaff had such an arrangement with the other company for a period of time, the arrangement was terminated at the time SHEEHAN made these representations. After the arrangement with the other company was terminated, SHEEHAN continued to file operating reports with the bankruptcy court indicating that the arrangement was still in place, and that this other company was being paid monthly “administration fees.” SHEEHAN filed these reports in order to conceal his embezzlement of more than $1 million from Infinistaff’s bankruptcy estate.
In addition, between 2011 and 2013, Infinistaff failed to account for and pay to the IRS more than $2.5 million in employment taxes the company had withheld from employee paychecks, and also failed to pay approximately $1.4 million in employer payroll taxes.
The investigation further revealed that CONSTANT received Infinistaff payroll checks totaling $354,000 during the bankruptcy proceedings even though she performed no work for the company.
SHEEHAN and CONSTANT used the stolen money to support a lavish lifestyle, including foreign travel and the purchase of a $650,000 home in CONSTANT’s name.
In 2013, CONSTANT purchased a home using proceeds from a $390,000 mortgage loan she obtained from a local bank, as well as approximately $260,000 embezzled by SHEEHAN from the Infinistaff bankruptcy estate. The mortgage loan application falsely stated that CONSTANT worked for Infinistaff and earned approximately $16,000 per month, when in fact, she did not work for Infinistaff at all. After a bankruptcy trustee was appointed in the Infinistaff bankruptcy case and the company was no longer operating, CONSTANT applied for a second mortgage loan of $131,000 from the bank. CONSTANT again misrepresented on the loan application that she was employed by Infinistaff and earning a substantial salary.
On October 8, 2014, SHEEHAN pleaded guilty to one count of willful failure to collect, account for and pay tax, one count of embezzlement from a bankruptcy estate and one count of making a false declaration statement under penalty of perjury in a bankruptcy case.
On October 7, 2014, CONSTANT pleaded guilty to one count of conspiracy to commit bank fraud.
Judge Thompson will hold a subsequent hearing to determine restitution.
This matter was investigated by the Internal Revenue Service—Criminal Investigation Division and the Federal Bureau of Investigation, with the assistance of the U.S. Trustee Program.
The U.S. Trustee Program is the Department of Justice component that promotes and protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the civil bankruptcy laws. Members of the public can report suspected bankruptcy fraud via e-mail to USTP.Bankruptcy.Fraud@usdoj.gov.
In the District of Connecticut, the U.S. Attorney’s Office coordinates a Bankruptcy Fraud Working Group that includes representatives from the U.S. Attorney’s Office, the Office of the U.S. Trustee, the Internal Revenue Service—Criminal Investigation Division, the Federal Bureau of Investigation, the U.S. Secret Service, and the Social Security Administration Office of the Inspector General. This case was prosecuted by Assistant U.S. Attorney Heather Cherry and Senior Litigation Counsel Richard J. Schechter.