On Friday, two former executives of First Priority Pay pleaded guilty in U.S. District Court, in Newark, to charges of conspiracy to commit wire fraud and filing false tax returns.
Jose Figueroa and Carlos Chorro allegedly diverted nearly $1 million from the Hoboken-based company’s clients’ payroll taxes to personal accounts and prepaid debit cards from January of 2008 through November of 2009.
First Priority Pay filed for bankruptcy protection in 2010.
According to U.S. Attorney Paul Fishman, the two manipulated the company’s computer system to divert payroll tax funds into accounts controlled by Figueroa and Chorro, who then used the money for personal expenditures.
Figueroa, the former vice president of operations for FPP, allegedly did not disclose $894,477 of income to the IRS, and Chorro, the former director of sales, failed to disclose $373, 125 in income related to the activity.
The two face up to 20 years in prison for the wire fraud and three years in prison for the tax fraud charges, in addition to restitution and fines. Sentencing will occur in January 2012 for both men.
