Las Vegas man sentenced for $5M payroll tax scam

LOS ANGELES (AP) — A Las Vegas man who bilked dozens of small businesses out of more than $5 million with a phony payroll company scheme was sentenced Monday to seven years and three months in prison, authorities said.

Jason Newling, 47, who is a former Southern California resident, was sentenced in Los Angeles federal court after pleading guilty last year to wire fraud and conspiracy to defraud the United States, according to a statement from the U.S. Internal Revenue Service.

U.S. District Judge Michael W. Fitzgerald called Newling's conduct “heinous and reprehensible”and said it had caused the victims “many sleepless nights,” the IRS said.

Prosecutors alleged that between 2013 and 2017, Newling and others ran a payroll processing operation under a number of different business names from offices in Las Vegas and the Los Angeles suburb of Hawthorne.

The business promised to take care of paying payroll and other taxes using money transferred to accounts controlled by Newling and his co-conspirators, authorities said.

Instead, the funds were used for their personal expenses, while Newling and others created phony documents to make it appear that the taxes were being paid, prosecutors said.

When some clients sued, Newling avoided paying the civil judgments by moving money around to hide it, authorities said.

The company had at least 40 clients in California and Nevada, many of them small businesses, authorities said.