Mom-daughter duo paid for personal maid and pet spa with NC workers’ taxes, feds say
.jpg "Rebecca Adams and her daughter Elizabeth Wood have been charged with conspiring to commit tax fraud and failing to pay taxes.")
Two women in North Carolina who run a staffing agency and quilting store took taxes out of their employees’ paychecks — but the government never saw it, federal prosecutors said.
Instead, the pair spent it on luxury services for themselves, court documents show.
“Rebecca Adams and her daughter Elizabeth Wood, who operated a temporary staffing business in Greensboro, conspired to defraud the government by withholding taxes from employees’ paychecks and failing to pay those taxes over to the Internal Revenue Service,” prosecutors said in a press release Tuesday.
The fraud occurred at various points between 2011 and 2016, sometimes two to three months apart, according to the indictment.
Court documents show Adams, 57, and Wood, 40, have been charged with conspiring to commit tax fraud and failing to pay taxes. Wood also faces a separate set of charges for tax evasion involving more than $400,000 in prior unpaid employment taxes and IRS penalties.
The pair changed the name of their staffing business twice while keeping its operations the same in an attempt to conceal the fraud, according to the indictment.
During that time, prosecutors said Adams and Wood continued withholding taxes from the staffing employees’ paychecks and issued W-2s for both the staffing and quilting businesses, but never actually filed the taxes.
The funds were diverted to pay for a “personal maid and landscaping services, vacations and pet spa and grooming services,” the indictment states.
Prosecutors said the pair also made it look like the quilting store didn’t have to pay employment taxes by “having the staffing business pay their wages and bill (the quilting store) for the amounts.”
Prior to the alleged fraud, Adams owed employment taxes on another iteration of the staffing company, according to the indictment.
The IRS reportedly issued penalties against her between December 2006 and September 2009 that totaled roughly $428,320, but prosecutors said Adams tried to duck the payments.
She also allegedly used business funds to pay for cable TV subscriptions and household furniture, then lied to IRS agents in 2015 when they asked her about the expenditures, the indictment states.
Court documents show Adams and Wood both have prior records.
Adams was convicted in 1995 of embezzlement and sentenced to probation. Woods served a four-month sentence in 2015 on felony embezzlement charges.
Warrants for their arrest were issued Tuesday.
The pair face a maximum of five years in prison for each charge as well as monetary penalties, prosecutors said.
This story was originally published October 30, 2019 at 5:04 PM.
