JUSTICE DEPARTMENT SUES TO SHUT DOWN PAYROLL SERVICE COMPANY

WASHINGTON, D.C. -- A federal court in Salt Lake City issued a temporary restraining order, which was unsealed today, against Scott M. Boley of Heber City, Utah; Douglas C. Morby of American Fork, Utah; Robert A. Langford of Mesa, Ariz.; and Provident Management Group, Inc. (PMG), the payroll service company which Boley, Morby, and Langford partly own and for which they work as officers. The order, which was issued on Monday but unsealed today, stops the defendants from transferring or otherwise disposing of assets in any of the company’s business bank accounts, dissipating client funds or assets held outside those accounts, receiving further cash or other property from clients, and destroying or otherwise altering or disposing of any of their documents. The order also freezes all of the payroll service company’s bank accounts and appoints a temporary receiver for the company; PMG was formerly known as Paysource, LLC and also operates under the name Provident Business Partners, Inc.

According to suit papers filed by the Justice Department, Provident customers turned their payroll funds over to the company in return for its agreement to prepare their payroll checks, make required employment tax deposits for them, prepare their employment tax returns, and pay other benefits for them, such as workers’ compensation and health insurance premiums. Despite these agreements, Provident allegedly failed to file at least 282 federal employment tax returns for its customers and failed to make more than $2 million in required employment tax deposits on their behalf. Instead, Provident’s officers allegedly diverted customer funds to their personal and business uses. According to Justice Department papers, a majority of Provident customers contacted by the IRS did not know that their taxes had not been paid.

“Businesses that swindle their customers and cheat the Treasury can and will be shut down,” said Eileen J. O’Connor, Assistant Attorney General in charge of the Justice Department’s Tax Division.

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