Beverly Farms Man Pleads Guilty To Federal Tax Fraud In Construction Business

BEVERLY, MA — A Beverly Farms man pleaded guilty on Wednesday to federal mail and tax fraud charges as part of what the U.S. Attorney's Office said was a $3 million scheme that involved underreporting overtime and failing to collect and pay payroll taxes from union employees at his Wilmington business.

The U.S. Attorney's Office said Frank Loconte, 62, committed the crimes as president of NER Construction Management Corporation, a Wilmington-based construction company that employed union workers. Loconte was also the president of the company's employment management company, NER Management LLC.

From approximately January 2014 and May 2022, the U.S. Attorney's Office said Loconte engaged in a scheme to defraud the union benefit funds and the IRS by paying some of its union workers for overtime hours worked without reporting these hours to the union benefit funds and without making the required payroll tax withholdings and payments.

Some NER employees were paid entirely in cash for overtime hours worked and, at other times, the employees were paid by check without the required withholdings, according to court documents. The U.S. Attorney's Office said Loconte also caused NER to file false and fraudulent remittance reports with the benefit funds and the unions, which underreported the overtime hours worked by these employees, shortchanging the union benefits funds of those workers.

Loconte also caused NER to file false and fraudulent IRS payroll taxes that underreported the amount of wages paid, court documents said.

The U.S. Attorney's Office said Loconte's actions defrauded union workers of more than $1 million dollars for overtime work covered by the collective bargaining agreements and defrauded the IRS of more than $3 million by not making the required payroll tax and union dues withholdings and payments.

Instead of paying employment taxes, the U.S. Attorney's Office said Loconte used NER business
accounts to pay for personal expenses, including vehicles, personal property taxes, household improvements, and golf memberships, also failing to report these benefits to the IRS.

Loconte was indicted by a federal grand jury in October 2022. U.S. District Court Judge Denise Casper scheduled sentencing for Nov. 29.

The charge of mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of willful failure to collect and pay over taxes provides for a sentence of up to five years in prison, two years of supervised release and a fine of up to $250,000.