Fraud Friday – Bookkeepers Embezzle Over $1 Million From Small Business Clients
February 19, 2021
Caity Roach
Editor
Fraud Friday – Bookkeepers Embezzle Over $1 Million From Small Business Clients
“People need to know who these people really are,” says George Lambos, the owner of a small business restaurant that was defrauded by Patricia Lindau and her husband, Kjell Lindau. “It’s sickening,” Lambos says of the situation. He paid over $130,000 in payroll taxes to the IRS through the Lindaus’ bookkeeping company only to later discover that the funds had been diverted into the Lindaus’ business account. Now, Lambos and nineteen other victimized small business owners may have to take out loans to pay past-due payroll taxes.
During court proceedings last month, Patricia admitted that she and her husband engaged in a scheme to defraud small businesses throughout New England by convincing them to allow their bookkeeping company to make direct withdrawals for the purpose of issuing payroll checks. The Lindaus then used their access to the small businesses’ accounts to transfer payroll tax funds into their bookkeeping firm’s checking account instead of making payments to the IRS. To hide the scheme, Particia and Kjell sent their clients a weekly report falsely indicating that the funds had been paid over to the IRS.
When their clients began receiving letters from the IRS indicating that payroll taxes had not been paid, the Lindaus lied to the small business owners and falsely told them that the IRS letters could be ignored because there was a lag between when the payments were sent out and when the IRS would process them. When the business owners received additional notices, the Lindaus again falsely reassured their clients that there was no balance on their accounts.
Particia and Kjell’s scheme was discovered when some of their clients began applying for Paycheck Protection Program loans in the first quarter of 2020 and found out that they owed hundreds of thousands of dollars in past-due payroll taxes. Shortly after the fraud was discovered, Paricia and her husband filed for bankruptcy. According to the bankruptcy proceedings, the bookkeeping company had failed to pay more than $2 million in payroll taxes on behalf of their clients, causing their customers a net loss of $1.1 million.
If Particia and her husband are found guilty, they could be charged with up to 25 years in federal prison and receive a fine of $1 million.