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Former Owner of a Temporary Employment Agency Facing Federal Charges for Allegedly Defrauding Lenders and for Failing to Pay to the IRS the Employment Taxes Withheld from Employees’ Wages

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 Baltimore, Maryland – A federal criminal information has been filed charging Crystal Jones, a/k/a Crystal Powell-Jones, age 53, of Laurel, Maryland, for the federal charges of wire fraud and failure to pay to the IRS employment taxes withheld from employees’ wages.  The criminal information was filed on April 26, 2021.

The criminal information was announced by Acting United States Attorney for the District of Maryland Jonathan F. Lenzner and Acting Special Agent in Charge Darrell Waldon of the Internal Revenue Service – Criminal Investigation (IRS-CI), Washington, D.C. Field Office.

According to the criminal information, Jones was the owner and managing partner of JAG Professional Resources, a temporary employment agency doing business in Howard County, Maryland and elsewhere from 2012 through August 2107.  As JAG’s managing partner, Jones exercised control over all aspects of JAG’s business, including its finances.  A relative of Jones was a silent minority partner in JAG.

As detailed in the criminal information, from at least February 2013 through October 2016, Jones obtained factoring services from Victim Lender 1 for JAG.  Factoring is a means by which cash intensive businesses, like JAG, could obtain cash quickly and reliably by leveraging accounts receivable.  JAG was a cash intensive business because JAG had to pay its temporary employees weekly or biweekly, but typically did not receive payment from JAG’s clients until at least 30 days after services had been rendered, which meant that JAG could be short of the cash flow needed to pay its employees each week, but its business model was theoretically profitable if all outstanding invoices had been paid.  Specifically, JAG sold its account receivables to Victim Lender 1 and, in return, JAG received cash advances from Victim Lender 1 totaling approximately 90% of JAG’s accounts receivables.  Upon receiving payments from JAG’s clients on the outstanding invoices, Victim Lender 1 sent JAG the remaining 10% of the invoice that had been purchased, less fees Victim Lender 1 charged for its factoring services.

The criminal information alleges that from March 2016 to about May 2016, Jones caused JAG to sell Victim Lender 1 fraudulent invoices totaling more than $350,000 for services that JAG had purportedly provided to a City in Ohio.  The City in Ohio had contracted with JAG for temporary employment services beginning in February 2013, but JAG’s relationship with the City in Ohio ended in about February 2016.

To execute the scheme, Jones allegedly created false paystubs purportedly issued by JAG and fraudulent invoices that purported to represent services that JAG had provided, so Jones could obtain loans for her own benefit and the benefits of others.  Jones allegedly sent emails to representatives of Victim Lender 1 falsely stating that payments on the false and fraudulent invoices were coming, to lull Victim Lender 1 into a false sense of security about the outstanding collections.  Further, Jones allegedly appropriated the names, signatures, and personal identifying information of her silent partner and others for Jones’s own benefit.

In addition, the criminal information alleges that from January 2014 to October 2016 Jones withheld payroll taxes from the wages paid to JAG employees, but neglected to pay the taxes withheld over to the Internal Revenue Service, resulting in a tax loss to the United States of at least $523,244.38.

If convicted, Jones faces a maximum sentence of 20 years in federal prison for wire fraud; and a maximum of five in federal prison for failure to pay over employment taxes.  Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.  Jones is expected to have an initial appearance and arraignment in U.S. District Court in Baltimore before U.S. District Judge George L. Russell III, although no date has been scheduled.

A criminal information is not a finding of guilt.  An individual charged by criminal information is presumed innocent unless and until proven guilty at some later criminal proceedings. 

Acting United States Attorney Jonathan F. Lenzner commended the IRS-CI for their work in the investigation.  Mr. Lenzner thanked Assistant U.S. Attorneys Dana J. Brusca and Harry M. Gruber, who are prosecuting this case.



Source: http://criminal-justice-online.blogspot.com/2021/04/former-owner-of-temporary-employment.html


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