United States v. Randy Bragg

FACTS

In 1999, Bragg formed Consolidated Human Resources Az., Inc. (CHRAZ), an Arizona corporation providing payroll and other services to clients, taking on the clients’ employees as its own and leasing them back to the clients. Bragg became the owner and president of CHRAZ.

During 2000, CHRAZ had responsibility for the employ- ment taxes of thousands of employees. The clients of CHRAZ paid the company the employers’ share of employment taxes and the amounts that the clients withheld to cover the employ- ees’ share. These sums, amounting to $2,000,000, were to be paid by CHRAZ to the Internal Revenue Service.

For the four quarters of 2000, Bragg, acting on behalf of CHRAZ, filed federal employment tax returns showing zero wages paid. For the same period, he filed state returns for CHRAZ showing over $8,000,000 in wages paid. The federal returns were false.

In April 2004, agents of the Internal Revenue Service dis- covered that there was a discrepancy between the federal returns and the state returns and that CHRAZ had not filed a federal corporate income tax return for 2000. On November 6, 2007, Bragg entered into a plea agreement, pleading guilty UNITED STATES v. BRAGG …