Former Massachusetts Contractor Pleads Guilty to "Off-the-Books" Payroll Scheme

Ryan Whisner Headshot
Mauricio Baiense, former owner of Contract Framing Builders Inc., is facing more than 40 years in federal prison.
Mauricio Baiense, former owner of Contract Framing Builders Inc., is facing more than 40 years in federal prison.
Getty Images

The former owner of a Massachusetts construction company pleaded guilty to a tax scheme and making false statements at an Occupational Safety and Health Administration hearing.

Mauricio Baiense is scheduled to be sentenced July 25 and faces a maximum of more than 45 years in federal prison. He was facing seven counts of willful failure to collect or pay over employment taxes, and individual counts of conspiring to defraud the United States, aiding and assisting in the preparation of a false tax return, and making a false statement at an OSHA hearing.

As owner of Contract Framing Builders Inc. in Medford, Baiense was responsible for paying the IRS the payroll taxes withheld from employees' wages and for filing the quarterly employment tax returns.

According to court documents, from about April 2013 through December 2017, he operated an “off-the-books” cash payroll for the company. To generate cash for the payroll, Baiense wrote checks drawn on Contract Framing Builders Inc.’s bank account to purported subcontractors, which were, in fact, nominee entities that Baiense controlled. He then cashed or directed others to cash about $11 million in such checks at a check-cashing business.

Baiense and another man then used some of the cash to pay Contract Framing Builders employees’ wages. 

Court documents indicate that Baiense did not report the cash wages to the IRS and did not pay the required employment taxes on them. In addition, he also helped prepare at least one false employment tax return that underreported the actual wages paid to Contract Framing Builders' employees.

In total, Baiense caused a tax loss to the IRS of $2,824,577.45.

When questioned at an OSHA hearing regarding a workplace accident, Baiense made a false statement. According to court documents, OSHA was investigating the workplace death of a Contract Framing Builders worker.

Testifying under oath, Baiense falsely claimed that the deceased employee did not work for Contract Framing Builders at the time of the accident.