A businessman from Texas has admitted to running a large employment tax fraud scheme that cost the U.S. government around $8.8 million in unpaid taxes.
According to the U.S. Department of Justice (DOJ), 51-year-old Martin R. Musalek from Dallas pleaded guilty to one count of employment tax fraud. The charges relate to his actions while running several staffing companies that provided temporary workers to clients in industries like logistics, manufacturing, and warehousing.
How the Fraud Happened
Between 2014 and 2022, Musalek owned and operated a group of staffing firms under different names, including “Constructure Technologies LLC,” “Workforce Solutions Group LLC,” and “People Ready Staffing Services.” Instead of paying employment taxes to the IRS as required, Musalek withheld payroll taxes from his employees but failed to deposit those funds. He also didn’t file the necessary tax forms.
The IRS requires employers to withhold income tax and the employee’s share of Social Security and Medicare taxes from paychecks. Employers are then supposed to deposit these taxes and file quarterly reports. Musalek did not follow these rules for years.
What the DOJ Found
The DOJ said that Musalek used shell companies and bank accounts in other people’s names to hide his activities. He would close one staffing company once it drew IRS attention and then reopen under a new name. This allowed him to keep the scam going while making it harder for the government to track the fraud.
Despite being repeatedly notified by the IRS about unpaid taxes, Musalek ignored these notices and continued the scheme. His actions led to a total tax loss of approximately $8.8 million.
Legal Consequences
Now that Musalek has pleaded guilty, he faces a maximum sentence of 5 years in federal prison. He will also be required to pay restitution for the full amount of tax loss. The sentencing is scheduled for September 9, 2025, in front of U.S. District Judge Ada Brown.
The DOJ, IRS Criminal Investigation (IRS-CI), and other federal agencies are continuing to crack down on employment tax fraud schemes across the country.
Government’s Warning
Acting Deputy Assistant Attorney General Stuart M. Goldberg warned employers that stealing employment taxes is a serious crime. He stated, “This case shows that trying to cheat the IRS by ignoring your tax duties won’t go unnoticed. Employers who commit payroll fraud will be held accountable.”
IRS-CI Special Agent Christopher J. Altemus Jr. added that the IRS takes employment tax fraud seriously because it directly affects employees, the Social Security system, and honest taxpayers.