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Sicklerville Man Pleads Guilty to Tax Fraud Conspiracy—Second Federal Conviction for Payroll Tax Evasion
Defendant admits helping temporary staffing companies pay workers in cash, skirting more than $600,000 in taxes.
NEW JERSEY – A 46-year-old resident of Sicklerville, New Jersey, has pleaded guilty to conspiring to defraud the IRS by helping businesses conceal cash wages from federal tax authorities. Acting U.S. Attorney Vikas Khanna announced that Chung “Alex” Lam admitted to the charges before U.S. District Judge Edward S. Kiel, acknowledging that he and his co-conspirators caused a $628,351 tax loss to the federal government.
Second Federal Conviction for Payroll Tax Evasion
Lam is no stranger to payroll tax crimes. In 2018, he pleaded guilty in a separate federal proceeding for failing to pay over payroll taxes, a crime that led to an 18-month prison sentence served partially in 2019 and 2020. Court records now show that Lam returned to orchestrating fraudulent schemes almost immediately after being released from custody on that prior conviction.
According to documents and statements made in court:
- Partnerships with Temporary Staffing Owners: Lam partnered with individuals operating staffing companies. These companies supply temporary labor to other businesses, and, under normal circumstances, are responsible for collecting and paying payroll taxes owed on those wages.
- Concealed Cash Payroll: Lam accepted checks from these client businesses, nominally paying for the staffing services. He then cashed more than $4 million worth of these checks at a commercial check-cashing facility between the first quarter of 2018 and second quarter of 2023.
- Skimmed Wages: He kept a portion of the cash for himself and delivered the remainder to co-conspirators, who paid the temporary workers in unreported cash. This arrangement allowed both the companies and the workers to avoid payroll tax obligations.
- False Returns: Lam also filed fraudulent individual income tax returns, failing to declare the income he earned from the conspiracy.
Financial Toll and Legal Consequences
The government estimates that Lam’s conspiracy resulted in a $628,351 shortfall to the IRS. Prosecutors emphasize that this figure covers unpaid payroll taxes owed by the staffing companies, as well as Lam’s personal tax evasion.
Charge and Penalties:
- Conspiracy to Defraud the United States: Maximum penalty of five years in prison and a fine up to $250,000.
- Sentencing is scheduled for June 16, 2025, when the court will consider restitution and other penalties.
Acting U.S. Attorney Khanna praised the IRS-Criminal Investigation special agents, led by Special Agent in Charge Jenifer L. Piovesan in Newark, for revealing Lam’s scheme and gathering evidence that culminated in his guilty plea. Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden is overseeing the prosecution.
With this plea, Lam faces a potential second prison sentence for payroll tax fraud, underscoring a pattern of illegal business practices designed to circumvent federal tax laws. Authorities warn that fraudulent tactics like paying employees under the table not only cheat the government of owed revenue but also undermine workers’ benefits and rights.
