PEABODY — A Peabody accountant has been charged in federal court with tax fraud after prosecutors allege he convinced business owners to entrust him with funds intended for payroll taxes but instead used them for his own expenses.
Barry N. Ginsberg, 61, who has operated his firm under a series of names, including Ginsberg and Lombardi, Ginsberg and Associates, Debits Payroll and Patriot Bookkeeping, is facing 18 counts, including wire and mail fraud, aiding in the filing of a false return, and obstruction of the Internal Revenue Service.
Ginsberg was arrested Friday by IRS agents, two days after a federal grand jury handed up the indictments against him. He was released on personal recognizance after an initial appearance in U.S. District Court in Boston.
According to the indictments Ginsberg’s business was hired by at least five different businesses, including a doctor, to handle payroll tax processing. Under the arrangement, prosecutors allege, his clients would give Ginsberg access to their bank accounts in order to withdraw “escrow” money to make the payments.
Instead of using the money to pay the taxes, Ginsberg allegedly used it for his own expenses, then filed false quarterly employment tax returns with the IRS, claiming the taxes had been paid.
The alleged scheme may have dated back nearly a decade, according to the indictment; as early as 2004, some of Ginsberg’s clients were found to be in arrears on their tax payments.
Over the next seven years, prosecutors allege, Ginsberg continued diverting money from his clients to his own business and personal expenses and leaving their tax bills unpaid.
Prosecutors allege that Ginsberg withdrew more than $330,000 from the clients’ accounts, but paid just $35,604 in payroll taxes on their behalf.
Reached at his office yesterday, Ginsberg declined to comment. He also declined to identify his attorney. According to court records, he was appointed a lawyer to represent him, but warned by a magistrate that he may have to contribute toward the cost of the lawyer’s representation.
A status hearing is scheduled for June 14.
Courts reporter Julie Manganis can be reached at 978-338-2521, via email at email@example.com or on Twitter @SNJulieManganis.