An Orange County businessman was sentenced to eight years in federal prison and ordered to pay more than $38 million in restitution after orchestrating a tax fraud scheme that spanned over two decades and cost the government nearly $30 million, the U.S. Attorney’s Office announced Thursday, May 22.
Luis E. Perez, 56, who operated multiple staffing companies, collected payroll taxes from employees without turning the money over to the IRS. Prosecutors said he misled federal investigators, disguised personal spending as business expenses, and continued committing tax-related crimes even after being criminally charged.
Instead of paying taxes, Perez spent the money on luxury cars, including a Ferrari and Rolls Royce, as well as a Duffy boat.
In court filings, prosecutors described Perez as a repeat offender who persistently violated tax laws and showed no remorse, calling him a “prolific employment tax cheat.”
Perez’s companies—including Checkmates Staffing Inc., Staffaide Inc., BaronHR, and Fortress Holding Group LLC—were required to withhold taxes from employee wages and remit those amounts to the IRS on a regular basis. Those taxes, referred to as “trust fund taxes,” include money that would’ve gone to fund Social Security and Medicare.
From May 2009 to January 2017, Perez’s companies failed to pay the IRS for tax years 2001 to 2003, 2006 to 2008, and 2010, including taxes required to be withheld from employee wages and paid to the IRS, a news release states.
Collection efforts began in 2007, but by 2017, the balance had grown to nearly $30 million with penalties and interest.
When interviewed by IRS revenue officers, Perez falsely claimed he earned only $1,000 a week and had no other access to company funds, prosecutors said.
Perez was charged before 2018 and released on pretrial bond, but continued committing fraud while awaiting trial, according to the U.S. Attorney’s Office. Between October 2018 and August 2019, he helped file false tax returns for BaronHR West that underreported wages by more than $130 million, resulting in $29.6 million in unpaid federal employment taxes, the release states.
From March 2021 to 2023 — still out on bond — Perez directed his companies to withhold more than $25 million in payroll taxes, including $13 million in trust fund taxes, which were never paid to the IRS, prosecutors said.
Perez’s bond was revoked in August 2024 due to the continued violations. He pleaded guilty the following month to one count of tax evasion and one count of aiding in the preparation of a false tax return.
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