Second Payroll Services Company Official Pleads Guilty in $20 Million Fraud
Scheme Defrauded Sacramento County and Others
|U.S. Attorney’s Office November 19, 2010|
SACRAMENTO, CA—United States Attorney Benjamin B. Wagner announced today that Kerry Seaman, 35, of Lake Ronkoukoma, N.Y., pleaded guilty today in connection with a scheme to divert more than $20 million from Sacramento County as well as two other businesses: SanDisk Corporation (SanDisk) and The Stanley Works and Stanley Solutions Inc. (Stanley). She entered her guilty plea before United States District Judge Garland E. Burrell Jr. Co-defendant and CEO Albert Cipoletti entered a guilty plea to the fraud on October 29, 2010.
This case is the product of an extensive investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. The County of Sacramento reported the offense to federal law enforcement and has assisted with the investigation. Assistant United States Attorney S. Robert Tice-Raskin is prosecuting the case.
According to court documents, Seaman was the comptroller of Ingentra HR Services Inc. (Ingentra), a payroll services corporation in Hauppauge, N.Y. Ingentra, then known as Humanic Solutions Inc., was hired by Sacramento County in late 2004 to process the payrolls for Sacramento County’s Special Districts (including the Sacramento Metropolitan Fire District, the cemetery district, the parks and recreation district, independent contractors, and various elected officials). As part of the payroll services, Ingentra calculated the tax payments for the clients and the clients’ employees and then transmitted the payments to the state and federal tax authorities. Ingentra was responsible for paying the income tax withholdings to the IRS and to file the Employer’s Quarterly Federal Tax Form (Form 941) with the IRS on behalf of the clients. (Form 941 includes totals for number of employees, total pay for the period being reported, and amounts withheld from the pay of the employees.)
As stated in the plea agreement, from 2005 until April 2010, Seaman and co-defendant Cipoletti, Chief Executive Officer for Ingentra, devised a scheme to defraud the County of Sacramento - Special Districts, SanDisk, and Stanley of the tax withholdings intended to be payed to the IRS by collecting the correct amount from the clients but underreporting to the IRS the amount owed and diverting the difference to Ingentra’s operating account for its own use.
According to the plea agreement, Seaman and Cipoletti sent funding letters to the clients that correctly calculated payroll and federal tax withholdings for the clients’ employees, and these clients wire transferred funds to Ingentra for the purposes of paying both the payroll and taxes. Seaman and Cipoletti then filed false 941s to the IRS, understating the true employee tax withholdings for these clients. Seaman and Cipoletti then wrongfully diverted in excess of $20 million in tax withholdings from clients Stanley, SanDisk, and Sacramento County that should have been remitted to the IRS on behalf of these clients and these clients’ employees.
Seaman is scheduled to be sentenced by Judge Burrell on March 25, 2011, at 9:00 a.m. Cipoletti is scheduled to be sentenced by Judge Burrell on January 21, 2011, at 9:00 a.m.
The maximum statutory penalty for this wire fraud violation is 20 years in prison and a fine of up to approximately $35 million (two times the pecuniary loss). The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.