A Lowell man, Henry Lam, was arrested for allegedly orchestrating a payroll tax avoidance and workers’ compensation insurance fraud scheme through his business, HL Temporary Services. According to federal prosecutors, between 2016 and 2023, Lam concealed over $6.1 million in payroll by paying employees in cash and failed to pay more than $2.4 million in required payroll taxes. He’s also accused of submitting false payroll figures to obtain lower workers’ compensation insurance premiums.
These allegations are serious. Lam has been indicted on charges of failure to collect and pay over taxes, as well as mail fraud. If convicted, he faces up to five years in prison for the tax offense and up to 20 years for mail fraud. Both charges also carry potential fines of $250,000 or twice the gross gain or loss from the offense, whichever is greater, along with restitution and forfeiture.
Payroll tax avoidance is not simply a matter of accounting negligence—it’s a federal crime. Employers are legally obligated to withhold and remit taxes on behalf of their workers. Evading this responsibility can result in criminal charges, especially if there’s evidence of deliberate deception. Additionally, misrepresenting payroll figures to insurance companies undermines the workers’ compensation system and puts both employees and legitimate businesses at risk.
Workers’ compensation insurance fraud affects more than just the insurer. It increases costs across the board and can leave injured workers without the benefits they are entitled to. Law enforcement agencies take these violations seriously, and those found guilty can face lengthy prison terms, steep fines, and the loss of business licenses and assets.
For business owners, this case serves as a cautionary tale. Maintaining accurate payroll records, properly reporting income, and complying with insurance requirements are not just best practices—they are legal obligations. If you’re facing allegations related to tax or insurance fraud, consulting a skilled criminal defense attorney is essential to protect your rights and navigate the legal process.
At Dhar Law, LLP, our firm has extensive experience defending individuals charged in federal related offenses. We understand the stakes, and we know how to build a strategic defense in even the most complex cases.
Contact us today at 617-880-6155 to schedule a confidential consultation and learn how we can help you navigate federal charges and fight for your rights and your future.
