Springfield Business and its Owner Arraigned for Failing to Pay into the Unemployment Trust Fund
Business Failed to Pay More Than $373,000 in Tax Contributions
BOSTON – A Springfield auto repair business and its owner have been arraigned in connection with failing to pay more than $373,000 into the Commonwealth’s unemployment trust fund, Attorney General Martha Coakley announced today.
Moshe Ronen, 63, of Longmeadow and his company Brake King Automotive, Inc. d.b.a. Autoservice, Inc. have each been arraigned on the charge of Non-Payment of Employer Contributions (24 counts).
The case is the result of an investigation referred to the Attorney General’s Office by the Executive Office of Labor and Workforce Development’s Department of Unemployment Assistance (EOLWD\DUA).
The Department of Unemployment Assistance (DUA) administers the Unemployment Insurance program, providing temporary assistance to unemployed workers. Funding for these benefits comes from Massachusetts employers. Employers either pay quarterly contributions into the trust fund or non-profit or governmental employers have the option to self-insure, reimbursing the state dollar-for-dollar for benefits paid.
According to authorities Ronen was the president and treasurer of Brake King, Inc. (Brake King) since its incorporation in 1993 until its dissolution in 2011. Brake King confirmed in 1993 that it was obligated to pay unemployment contributions to DUA. Authorities allege that from 2007 through its dissolution in 2011, Brake King continued to pay its employees and file its tax reports, but failed to pay the required unemployment tax to DUA resulting in delinquent payments of more than $189,000.
In 2010, Ronen incorporated Autoservice Inc., a business listing the same address as Brake King. Investigators determined that Autoservice performed the same work and employed the same employees and notified the business of its obligation to pay the same contribution rate as the former business. Authorities allege that through May 2013 Autoservice had failed to file any forms and never made unemployment tax payments resulting in delinquent payments of more than $183,000.
Authorities allege that as a result of their failure to pay the required unemployment tax obligations the defendants collectively failed to pay more than $373,000.
A Suffolk County Grand Jury returned indictments against Ronen and Autoservice on July 25. The defendants were arraigned Tuesday in Suffolk Superior Court where each pleaded not guilty and were released on personal recognizance. The defendants are scheduled for a pretrial conference on November 25.
DUA’s Revenue Audit and Enforcement Department focuses on the prevention, detection and the investigation of those who defraud or attempt to defraud the unemployment insurance program. Once fraud is detected, the Revenue Audit and Enforcement works aggressively with the Attorney General’s office and other agencies to recover money owed to the UI Trust Fund.
AG Coakley’s Insurance and Unemployment Fraud Division works to protect consumers and the integrity of the insurance system by investigating and prosecuting those who commit fraud against all types of insurers, including the Commonwealth’s unemployment insurance and workers’ compensation systems. The prosecution of insurance fraud helps prevent the increase in premiums and taxes that are the result of fraudulent insurance claims. In 2012, the IUFD obtained more than $1,647,000 in restitution orders in 32 matters.
To report unemployment fraud call the EOLWD\DUA’s Fraud Hotline at (800) 354-9927 or visit: www.mass.gov/lwd/ui-fraud anytime, 24 hours a day. Callers may remain anonymous.
This case is being handled by Assistant Attorney General Joshua Pakstis of AG Coakley’s Insurance and Unemployment Fraud Division with assistance from investigator Philip Mantyla of the Attorney General’s Office and Richard Carney, Director of Revenue/Tax, from EOLWD\DUA.