Mass. man arrested, accused of hiding more than $6M in payroll, feds say

BOSTON — A Lowell man has been arrested in connection with payroll tax avoidance and workers’ compensation insurance fraud, the U.S. Attorney said this week.

Henry Lam, 67, was arrested Monday. A federal grand jury indicted Lam on June 25 on charges of failure to collect and pay over taxes and mail fraud, U.S. Attorney Leah Foley said in a statement.

According to court records, between 2016 and 2023, Lam owned and operated HL Temporary Services – a temporary employment agency in Lowell that served client companies in Massachusetts.

The client companies paid HL Temporary Services for the temporary employees’ work on an hourly basis.

Lam allegedly cashed these client’s checks at check cashing businesses in Massachusetts and paid the temporary employees primarily in cash, prosecutors allege.

By using cash payments, Lam allegedly hid over $6.1 million in payroll and avoided paying more than $2.4 million in required payroll taxes, prosecutors allege.

Prosecutors also allege that Lam used HL Temporary Services’ false payroll numbers to obtain worker’s compensation insurance at lower premium rates.

If convicted of the charge of failure to collect or pay over taxes, Lam faces a sentence of up to five years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution.

If convicted of the charge of mail fraud, Lam faces a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, whichever is greater, restitution, and forfeiture.

This is a developing story. Check back for updates as more information becomes available.

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