BOSTON — A Lowell employment agency owner has pleaded guilty to running a years‑long scheme that hid more than $6 million in payroll, allowing him to avoid paying over $1.5 million in federal employment taxes and secure cut‑rate workers’ compensation insurance.
Henry Lam, 68, owner and operator of HL Temporary Services, recently pleaded guilty in federal court in Boston to failure to collect and pay over taxes and mail fraud, according to U.S. Attorney Leah Foley’s office, which is recommending a 15‑month prison sentence.
Lam was arrested in July 2025 following a June 2025 indictment that detailed a sweeping payroll‑tax‑evasion operation stretching from 2016 to 2023.
According to court filings, Lam supplied temporary workers to multiple Massachusetts companies, which paid HL Temporary Services by the hour — typically by check. Instead of depositing those checks, Lam cashed more than $6.2 million of them at check‑cashing businesses across the state.
He then paid many of his workers in cash, some by check, and others through a mix of both. Prosecutors say Lam either filed false IRS Forms 941 — quarterly payroll tax returns — or failed to file them at all. Prosecutors said that in doing so, he concealed roughly $6.1 million in wages and avoided more than $1.5 million in required payroll taxes.
Prosecutors also said Lam submitted false payroll journals and tax forms to two insurance companies between 2015 and 2022, dramatically understating his payroll and misrepresenting the type of work his employees performed. Those misrepresentations allowed him to obtain workers’ compensation insurance at artificially low premiums.
The tax‑related charge carries a maximum of five years in prison, while the mail‑fraud charge carries up to 20 years, with both counts allowing for fines up to $250,000, restitution, and supervised release. Under a plea agreement filed with the court, Foley’s office agreed to recommend the 15-month prison sentences, no fine, two years of supervised release, and $1,652,573.31 in restitution, including $1,564,459.31 to the IRS.
The agreement notes that Lam has no prior criminal record.
Lam is scheduled to be sentenced in federal court on Aug. 27.
His attorney, Jennifer McKinnon, was not immediately available for comment.
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