By: Richard L. Smith
A Sicklerville, New Jersey, man has admitted to participating in a scheme to defraud the Internal Revenue Service (IRS) by working with others to conceal cash wages paid to employees, according to a statement released by the U.S. Department of Justice.
Chung “Alex” Lam, 46, pleaded guilty before U.S. District Judge Edward S. Kiel to one count of conspiring to defraud the United States.
His plea comes as part of an ongoing investigation into fraudulent payroll tax practices involving temporary staffing companies.
Court records and statements made in court reveal that Lam had previously pleaded guilty in 2018 to failing to pay payroll taxes to the IRS.
He was sentenced to 18 months in federal prison, serving portions of his sentence in 2019 and 2020.
However, even before serving his time and after his release, Lam conspired with the owners of multiple temporary staffing firms to evade payroll tax obligations.
These staffing companies were responsible for collecting and remitting payroll taxes for wages paid to temporary workers. Instead, Lam played a key role in diverting payments meant for payroll taxes.
Between the first quarter of 2018 and the second quarter of 2023, he used a commercial check-cashing service to negotiate over $4 million in payments intended for these staffing companies.
Lam retained a portion of the funds for personal use while funneling the remaining cash to co-conspirators, who used it to pay workers off the books—ensuring that payroll taxes were never reported or paid.
Additionally, Lam admitted to filing false individual income tax returns that failed to disclose his earnings from the scheme.
The conspiracy resulted in an estimated tax loss of approximately $628,351 to the U.S. government.
The conspiracy charge to defraud the United States carries a maximum sentence of five years in prison and a fine of up to $250,000. Lam is scheduled to be sentenced on June 16, 2025.
