Massachusetts business owner pleads guilty to million dollar tax fraud scheme

Date: Oct. 9, 2024

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BOSTON - A Hanson man pleaded guilty on Oct. 4, 2024, to a tax fraud scheme in which he willfully failed to pay employment taxes for his two businesses.

Kenneth Marston pleaded guilty to one count of failure to collect and pay over employment taxes. U.S. District Judge Indira Talwani scheduled sentencing for Jan. 3, 2025.

From 2015 through 2018, Marston owned and operated two businesses: Bowmar Steel Industries, Inc., which engaged in steel fabrication and Teleconstructors, Inc., which provided installation services on cellular phone towers. During that time, Marston falsely treated his employees as if they were independent contractors and, in turn, failed to withhold employment taxes on over $3.8 million in combined wages. As a result, Marston avoided reporting and paying $1 million in employment taxes owed to the Internal Revenue Service.

The charge of failure to pay over taxes provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

Acting United States Attorney Joshua S. Levy and Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service Criminal Investigation (IRS-CI) in Boston made the announcement. Assistant U.S. Attorney James R. Drabick of the Securities, Financial & Cyber Fraud Unit and Trial Attorney Mark McDonald of the Justice Department's Tax Division are prosecuting the case.

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.