Acting Mass. U.S. Attorney: Peabody Construction Company Owner Pleads Guilty to Tax and Workers' Compensation Fraud

BOSTON, Massachusetts, Nov. 3 -- The Acting U.S. Attorney for the District of Massachusetts, Nathaniel R. Mendell, issued the following news release on Nov. 2, 2021:

The owner of a now-defunct Peabody construction company pleaded guilty yesterday in connection with a scheme to defraud the IRS of payroll taxes and to defraud his workers' compensation insurance carrier by failing to disclose how many workers he employed.

Argyrios "Eric" Mavros, 57, pleaded guilty to 10 counts of failure to collect or pay over taxes and one count of mail fraud. U.S. Senior District Court Judge William G. Young scheduled sentencing for Feb. 17, 2022. Mavros was indicted in September 2020.

Mavros, who owned Mavros Construction, Inc., cashed more than $3.3 million in customer checks at a Peabody check cashing business and used some of those funds to pay his employees in cash. Mavros failed to report these employees or their wages in quarterly corporate tax filings, in an effort to avoid paying Social Security and Medicare taxes on employee wages and withholding federal income taxes. Overall, it is alleged that Mavros failed to pay and withhold federal taxes on more than $2.5 million in wages, resulting in a tax loss of over $1 million. Additionally, Mavros failed to report these employees to his workers' compensation insurance carrier, thereby defrauding his insurer of premiums.

The charge of failure to collect and pay over taxes provides for a sentence of up to five years in prison, three years of supervised release and a fine of $10,000. The charge of mail fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney Nathaniel R. Mendell and Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service's Criminal Investigation in Boston made the announcement. Valuable assistance was provided by the Insurance Fraud Bureau of Massachusetts. Assistant U.S. Attorney Kristen A. Kearney of Mendell's Securities, Financial & Cyber Fraud Unit is prosecuting the case.