Owner of construction and building inspection businesses and two employees charged with tax fraud

Published 7:30 am Thursday, October 21, 2021

NEW ORLEANS – The U.S. Attorney’s Office and the Department of Justice’s Tax Division announced that Randy A. Farrell Sr., and David Farrell, both of Jefferson Parish, and Dawn Farrell Ruiz, of St. Tammany Parish, were charged in a superseding bill of information with conspiring to defraud the IRS.

According to court documents, from 2011 through at least June 2019, Randy Farrell, an owner of construction and building inspection businesses, and his two siblings and employees, David Farrell and Dawn Farrell Ruiz, conspired to defraud the IRS by failing to report their full personal income to the IRS and by failing to withhold employment taxes from employees’ wages. Randy Farrell and Mathew Reck co-owned two construction businesses, SES Construction Consulting Group (“SES”) and Global Technical Solutions (“GTS”). As co-owners, Randy Farrell and Reck caused certain SES and GTS employees, including David Farrell and Ruiz, to be paid outside of the normal payroll process such that employment taxes were not withheld from their paychecks. The three defendants and others then caused SES and GTS to issue Forms W-2 to employees that fraudulently underreported their actual compensation. Since David Farrell and Ruiz were paid outside of the normal payroll process and received false Forms W-2, they were able to fraudulently avoid paying federal income and employment taxes on their salaries. Reck previously pled guilty to conspiring with these three defendants to defraud the IRS.

In addition to SES and GTS, Randy Farrell has also co-owned a building inspection business, IECI & Associates LLC (“IECI”), since 2007.  After the IRS executed a search warrant at Randy Farrell’s home and companies’ offices in September 2017, he filed tax returns that falsely underreported the taxable income he earned from his businesses.

If convicted of these charges, Randy Farrell, David Farrell, and Ruiz each faces up to five years in prison, followed by up to three years of supervised release, as well as a fine, restitution, and a $100 mandatory special assessment fee. A bill of information is merely a charge, and the guilt of the defendants must be proven beyond a reasonable doubt.

The Justice Department’s Tax Division and the United States Attorney’s Office for the Eastern District of Louisiana praised the work of IRS Criminal Investigation. Trial Attorneys William Montague and Parker Tobin of the Justice Department’s Tax Division and Assistant U.S. Attorney Nicholas Moses of the Eastern District of Louisiana are in charge of the prosecution.