January 15, 2025 | JacobiJournal.com — The construction firm owner fraud case in Massachusetts resulted in an 18-month prison sentence for a Hopkinton man, who was convicted in federal court of defrauding the IRS and Travelers Insurance Co. over employee wages at his companies.
The case highlights how payroll manipulation and insurance misrepresentation can carry severe criminal consequences. Prosecutors emphasized that schemes like this not only defraud government agencies and insurers but also place honest businesses at a competitive disadvantage. The sentencing sends a strong message that federal authorities are prioritizing accountability in the construction sector, where wage reporting and workers’ compensation compliance are closely monitored.
Sentencing and Restitution Orders
In the construction firm owner fraud case, U.S. Attorney Joshua S. Levy announced that Dariusz Pietron was sentenced to 18 months in prison, followed by three years of supervised release. As part of the judgment, he must pay $1,107,000 in restitution to the IRS and $244,000 to Travelers Insurance Co.
The restitution reflects both unpaid employment taxes and underreported workers’ compensation premiums, underscoring the financial scale of the scheme. Federal prosecutors noted that restitution orders are intended not only to recover losses but also to deter other business owners from similar misconduct. By pairing prison time with financial penalties, the court aimed to reinforce accountability in cases where fraudulent practices impact both government revenue and private insurers.
Guilty Plea and Fraud Details
In May 2024, Pietron pleaded guilty to charges of failing to pay employment taxes to the IRS and committing mail fraud by underreporting workers’ compensation insurance premiums. Construction Firm Owner Sentenced
Between 2012 and October 2018, Pietron owned and operated TJM Construction, Inc. (TJM) and Point Construction, Inc. He failed to report employee wages to the IRS, did not withhold required income taxes, and neglected to pay necessary employment taxes. Additionally, he misrepresented the wages paid to his employees to Travelers, resulting in lower workers’ compensation insurance premiums than owed.
Scheme Involving Shell Companies
Prosecutors revealed that, in the fraud case, Pietron paid two employees to create three shell companies, making it appear that TJM and Point’s workers were subcontractors. This arrangement allowed him to avoid employment tax and workers’ compensation obligations, ultimately evading more than $1.1 million in taxes and defrauding Travelers of approximately $244,000.
Federal investigators emphasized that the use of shell companies is a common tactic in employment and insurance fraud, designed to disguise payroll obligations and conceal true business costs. In this case, the scheme not only deprived the IRS and Travelers Insurance of significant revenue but also gave Pietron an unfair advantage over competitors who complied with tax and labor laws. Authorities highlighted the prosecution as a warning that such fraudulent arrangements will be closely scrutinized and aggressively prosecuted.
For further details, refer to the original article from Business Insurance.
FAQs: Construction Firm Owner Fraud Case
What was the construction firm owner fraud case about?
The case involved a Massachusetts construction company owner who defrauded the IRS and Travelers Insurance by underreporting wages and avoiding taxes.
What sentence did the construction firm owner receive in the fraud case?
The owner was sentenced to 18 months in prison, followed by supervised release, and ordered to pay over $1.3 million in restitution.
How did the construction firm owner commit fraud?
He failed to report employee wages, withheld employment taxes, and misrepresented payroll to reduce workers’ compensation insurance premiums.
What role did shell companies play in the construction firm owner fraud case?
The owner used shell companies to disguise employees as subcontractors, allowing him to evade taxes and reduce insurance costs illegally.
Stay informed on fraud cases and corporate crime enforcement. Subscribe to JacobiJournal.com for trusted reporting on financial fraud, insurance scams, and federal prosecutions.