Father and son accused of embezzling $11 million

A Lincoln County man has pleaded guilty in federal court to embezzling more than $11 million from clients of a payroll company he operated with his father and using the stolen money to pay for trips to strip clubs, a luxury vehicle and a mansion.

James Staz, 44, of Iron Station, pleaded guilty on Thursday to wire fraud, transactional money laundering and tax evasion, prosecutors said. His father, William James Staz, 72, of Huntersville, pleaded guilty in January to wire fraud and tax evasion charges.

The duo processed payroll, collected employment taxes and filed employment tax forms for more than 500 clients through their company “Employee Services.Net, Inc. But court documents say the men, who had access to their clients’ bank accounts, illegally took millions to pay for a lavish lifestyle between 2008 and 2014.

To conceal the fraud, James Staz made false entries in ESN’s accounting system to make it appear as if the funds were used for legitimate client expenses, prosecutors said.

Instead, court document say, James Staz used the money to pay for alcohol, strip club entertainment, jewelry, a Mercedes Benz and a luxury mansion. William Staz drew a $200,000 salary from ESN at the same time he was serving a nine-month federal prison sentence.

James Staz has been in jail since his arrest. William Staz is out on bail pending sentencing.

They each face a maximum of 20 years in prison and a $250,000 fine for the wire fraud charge and five years in prison and a $100,000 fine for the tax evasion charge.

James Staz also faces a maximum of 20 years in prison and fines for the money laundering charge. Both men have agreed to pay restitution.

This story was originally published March 5, 2015 at 5:39 PM with the headline "Father and son accused of embezzling $11 million."