2 arrested on federal charges

Allegedly involved in employment tax, mail fraud scheme

BOSTON » A Clinton man and Fitchburg man were arrested Thursday and charged in connection with their involvement in an employment tax and mail fraud scheme, according to U.S. Attorney Andrew Lelling’s office.

Juliano Fernandes, 39, of Clinton, was charged with 11 counts of failure to pay over employment taxes and two counts of

mail fraud. Anderson Dos Santos, 36, of Fitchburg, was charged with one count of mail fraud, according to Lelling’s office.

According to the charging documents, Fernandes exercised management and control over Force Corp. and AB Construction, both Massachusetts-based construction companies.

Between 2015 and 2017, Fernandes failed to account for and pay over employment taxes for Force Corp. and AB Construction to the IRS. In addition, from approximately April 2013 through January 2017, Fernandes allegedly engaged in a scheme to defraud worker’s compensation insurance carriers for Force by misrepresenting the number of employees and amount of wages paid to Force employees.

Similarly, from December 2013 to April 2016, Fernandes and Dos Santos engaged in a scheme to defraud worker’s compensation insurance carriers for AB Construction by misrepresenting the number of employees and amount of wages paid to AB Construction employees.

In July, the U.S. Department of Labor found Fernandes and dos Santos in civil contempt by U.S. District Court for the District of Massachusetts for failing to fulfill certain terms of an August 2016 consent judgment.

That judgment ordered Force Corp. and AB Construction Group Inc., and Fernandes and dos Santos to pay $2,359,685 in back wages and liquidated damages to 478 employees under the Fair Labor Standards Act, according to a press release from the U.S. Department of Labor

The court’s order on contempt granted a petition the U.S. Department of Labor filed to enforce the back wage provisions of the 2016 consent judgment, which restrained Force Corp., AB Construction Group Inc., Juliano Fernandes and Anderson dos Santos from withholding from their employees $1,179,842.55 in back wages, plus interest.

Force Corp., AB Construction Group Inc. and dos Santos failed to present any evidence in response to the department’s petition, resulting in the court holding them in contempt, according to the July release.

Fernandes argued that he was unable to pay the amounts owed under the consent judgment, but the court found that his “inability to pay argument is significantly undercut by the facts,” according to the release.

While Fernandes should have been paying his employees under the consent judgment, the court determined that he purchased over a million dollars worth of real estate and, in what the court stated “can only be viewed as an act of hubris, (and) he voted himself and his wife a raise” from one of his other companies, Turn Key Lumber Inc., “and (they) chose to take an expensive vacation at the Fountainebleau Resort,” according to the release.

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