Barrington Businessman Sentenced for Stealing Payroll Taxes from Seekonk Water District

A 67-year-old Barrington man and owner of Checkmaster Payroll Services will serve 24 months in federal prison and will pay $1.1 million in restitution for stealing payroll taxes from employees at seven businesses and the Seekonk, Mass., Water District, announced United States Attorney Peter F. Neronha and William P. Offord, Special Agent in Charge of IRS Criminal Investigation.

Warren Hebert, of Barrington, will also serve two years supervised release and 200 hours of community service upon his release from prison.

Hebert pleaded guilty to eight counts of wire fraud and one count of impeding the administration of the Internal Revenue Code in October of 2014. He was sentenced today before U.S. District Court Chief Judge William E. Smith.

Hebert admitted to the court that he diverted $1.2 million in funds due to the IRS from the seven companies that should have been used to pay their federal employment taxes. Instead, in some instances, he used the money to pay additional tax liabilities, interest and penalties of other clients whose tax returns he “had previously failed to accurately prepare, file and pay,” according to a U.S. Department of Justice release.

The crimes began in as early as 2009 and continued until at least Oct. 2011 and his victims included a nursery school, local gym, a family owned moving company as well as the municipal water agency.

“What makes the defendant’s conduct particularly appalling is that, at bottom, he stole money from several small businesses, as well as a municipality,” Neronha said. “Such entities, private and public, often operate near the margin, where every dollar counts. The defendant violated the trust placed in him and, out of greed, diverted money that these entities had worked so hard to generate and set aside to pay their fair share of taxes. A meaningful prison sentence is more than appropriate.”

“IRS Criminal Investigation takes employment tax violations very seriously,” said William P. Offord, Special Agent in Charge of the Boston field office of IRS Criminal Investigation. “Mr. Hebert’s tax fraud is particularly egregious because his clients entrusted his business, Checkmaster Payroll Services, to collect and timely remit their employees’ payroll taxes.” Instead, Mr. Hebert diverted over $1.2 million of these taxes for his personal benefit, which may result in the loss of future social security or Medicare benefits for the victims.”

The matter was investigated by IRS Criminal Investigation, with the assistance of the FBI, Rhode Island FDA Task Force, Barrington Police and Rhode Island State Police.