The president and chief financial officer of a Charlotte payroll services company were sentenced on Tuesday for stealing more than $2 million from client companies.
Jerry Wayne Overcash, 67, president of CenterCede Services Inc., was sentenced to nearly four years in federal prison, according to a news release from the U.S. Attorney’s Office for the western district of North Carolina. CFO John Bernard Thigpen was sentenced to nearly two years. They were also ordered to pay $1.3 million in restitution to their former clients, although that number could rise if additional victims come forward.
The company’s co-founder and the chairman of the board, Frank Alton Moody II, 56, was indicted in March for his alleged role. He’s charged with conspiracy and wire fraud.
CenterCede was started in 2010 to assume business operations of another payroll services company Overcash and Moody ran. That company, The Resource Solutions Group, was shut down by the IRS for failing to pay more than $9 million in federal payroll taxes collected from clients.
CenterCede ran the same scheme, according to the news release. The company prepared tax returns for client companies, but “did not pay the clients’ federal taxes in appropriate amounts and by the applicable deadlines,” the release said. Instead, the men diverted the money to pay for their own exorbitant salaries and to cover the tax liabilities of other clients, paying minimum taxes to keep the scheme afloat.
In the second and third quarters of 2011, Thigpen and Overcash defrauded clients of more than $2 million, according to the news release.