UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

UNITED STATES OF AMERICA

Cr No. 07-08-02-SM

v.

Violation: Conspiracy to

JEFFREY MEALEY Defraud United States

(18 U.S.C. §371)

SECOND SUPERSEDING INDICTMENT

The Grand Jury charges:

INTRODUCTION

1. From in and around January 2000, through in and around

December 2004, the defendant, JEFFREY MEALEY, and MICHAEL MONAHAN

operated and managed three temporary employment agencies (“the

agencies”), Merrimack Temps, Inc. (“Merrimack”), Practical Business

Solutions, Inc. (“PBS”), and Industrial Business Services, Inc.

(“IBS”). MEALEY and MONAHAN conducted the agencies’ business from

locations in Massachusetts and New Hampshire. They also used

other people to act as the agencies’ nominee owners and officers.

2. MEALEY and MONAHAN caused checks they received from the

agencies' customers to be deposited to separate bank accounts they

maintained for the agencies.

3. MEALEY and MONAHAN obtained money for themselves and the

cash they needed to pay hourly wages to laborers who worked for the

agencies (“laborers”) by causing checks made payable to "Cash" that

were drawn on the agencies’ bank accounts to be negotiated.

4. Each agency was required to pay to the Internal Revenue

Service (“IRS”) federal income, social security and medicare taxes

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on behalf of the laborers, plus additional social security and

medicare taxes the agency owed, as an employer, to the IRS. (The

total amount of federal income, social security and medicare taxes

that were owed by each agency to the IRS is referred to hereinafter

as “federal employment taxes”).

5. Each agency was also required to submit an IRS Form W-2

for each laborer to the IRS. On each IRS Form W-2 the agency was

required to state, among other things, the laborer’s true name and

social security number, the amount of money the agency paid to the

laborer during the relevant calendar year, and the amount of

federal employment tax the agency paid for the laborer to the IRS

that year.

6. Each agency was also required to file Quarterly Federal

Tax returns (“Quarterly Returns”) with the IRS, and to accurately

state on each Quarterly Return the total wages (“taxable wages”)

that had been paid to the laborers and the agencies’ other

employees during the period covered by the return, and the amount

of federal employment tax that was due and owing thereon.

7. The agencies were not required to pay federal employment

taxes to the IRS for laborers who were considered to be independent

contractors for federal employment tax purposes. Instead, each

agency was required to submit an IRS Form 1099 to the IRS for each

independent contractor. On each IRS 1099 Form, the agency was

required to accurately state, among other things, the independent

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contractor’s true name and social security number, and the amount

of income the agency paid to the independent contractor that year.

CONSPIRACY TO DEFRAUD THE UNITED STATES

18 U.S.C. §371

8. From in and around January 2000, through in around and

December 2004, in the District of New Hampshire and elsewhere, the

defendant,

JEFFREY MEALEY,

and MICHAEL MONAHAN knowingly and willfully conspired and agreed

with each other and other people to defraud the United States for

the purpose of impeding, impairing, obstructing, and defeating the

lawful government functions of the Internal Revenue Service in the

ascertainment, computation, assessment, and collection of revenue:

to wit, federal employment taxes, in violation of Title 18, United

States Code, Section 371.

Purpose of the Conspiracy

9. The purposes of the conspiracy were to conceal information

and mislead the IRS regarding the amount of the agencies’

liabilities for federal employment taxes and to evade the payment

of those taxes.

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Manner and Means of the Conspiracy

10. The manner and means by which MEALEY and MONAHAN sought

to accomplish the object of the conspiracy included, among others,

(a) causing Quarterly Returns to be submitted to the IRS that

falsely and fraudulently reported (i) the amount of taxable wages

the agencies paid to laborers and other employees during the

periods covered by the returns, and (ii) the amount of federal

employment tax that was due and owing thereon; and (b) causing IRS

Form 1099s to be submitted to the IRS that used false social

security numbers to identify laborers.

Overt Acts

11. In furtherance of the conspiracy, MONAHAN and MEALEY

committed and caused the following overt acts to be committed in

the District of New Hampshire, and elsewhere:

a. they established a mailing address for IBS in

Nashua, New Hampshire;

b. they paid another person to act as the nominee

owner of IBS;

c. they caused Quarterly Returns to be submitted to

the IRS that falsely and fraudulent stated (i) the amount

of taxable wages the agencies paid to laborers and other

employees during the periods covered by the returns, and

(ii) the amount of employment tax that was due and owing

thereon; and

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 d. they caused the agencies to submit IRS Form 1099s

to the IRS that used false social security numbers to

identify laborers. 

All in violation of Title 18, United States Code, Section 371.

Dated: July 23, 2008

A TRUE BILL

/s/ Foreperson

Foreperson of the Grand Jury

Thomas Colantuono

United States Attorney

By: /s/ Robert M. Kinsella

 Robert M. Kinsella

 Assistant United States Attorney

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