RICHMOND, Va. - Edward R. Prestes, 48, of Glen Allen, pleaded guilty today to conspiracy to defraud the IRS of over $3 million in employment and income taxes.
According to court documents, the purpose of the conspiracy was to evade the payment of income and employment taxes to the IRS for laborers working for various construction companies by paying the laborers “under the table." From in or about 2011 through in or about 2013, Prestes was an agent for the following nominee corporations, incorporated in the Commonwealth of Virginia: Virginia American Contractors, LLC; Elson Contractors, LLC; Proactive Services, LLC; Positive Solutions, LLC; and Service Contractors, LLC, (“nominee corporations"). These nominee corporations all had the same address, a post office box in Glen Allen, but each nominee corporation had a separate bank account for which Prestes was an authorized signatory.
According to court documents, various construction companies made regular payments to the nominee corporations. Prestes then distributed the funds from the nominee corporations to the laborers. Prestes would make these payments to laborers by both cash and check. Prestes did not withhold any income or employment taxes, issue Forms W-2 or 1099 to the laborers, or file quarterly returns (Forms 941) or yearly income tax returns for the nominee corporations as required by law. At the end of each year, the construction companies issued IRS Forms 1099 to the nominee corporations and deducted the payments.
According to court documents, from in or about 2011 through in or about 2013, the construction companies paid over $9.2 million to the nominee corporations. Prestes then paid the laborers approximately $2.8 million in cash and $6.3 million in checks. Prestes kept as a commission approximately 2 1/2 to 3 1/2 percent of the funds he received from the construction companies. As a result of this conspiracy, the IRS lost over $3 million in employment and income taxes.
Prestes faces a maximum penalty of 5 years in prison when sentenced on December 12. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Kimberly Lappin, Special Agent in Charge of IRS-Criminal Investigations, made the announcement after U.S. District Judge John A. Gibney, Jr. accepted the plea. Assistant U.S. Attorney David T. Maguire is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-CR-114.
Source: U.S. Department of Justice, Office of the United States Attorneys
