LOS ANGELES—
A California businessman has been sentenced to eight years in federal prison for orchestrating a decades-long employment tax evasion scheme that caused a staggering $60 million in losses to the United States.
Luis E. Perez, the owner and operator of numerous staffing agencies across California—including Check Mate Inc., BaronHR LLC, BaronHR West Inc., and Fortress Holding Group LLC—was sentenced to three years behind bars and ordered to pay over $38 million in restitution, according to a Department of Justice release.
Perez’s companies, which had offices in Southern California cities including Los Angeles and Irvine, were responsible for hiring temporary workers for other businesses.
These staffing agencies were legally obligated to withhold and remit Social Security, Medicare, and federal income taxes from employee paychecks—and to pay employer taxes themselves. But according to court documents and statements made in court, Perez shirked these responsibilities for over 20 years.
“Perez caused a tax loss to the IRS of approximately $60 million,” the Justice Department said.
Starting as early as 2001, Perez began failing to remit the full tax amounts withheld from employees’ wages. By 2007, his tax debt from one company—Check Mate Inc.—was already under IRS scrutiny.
Instead of paying his growing tax liabilities, which reached nearly $30 million by 2017, Perez allegedly diverted company funds to support a lavish lifestyle, federal prosecutors stated.
He used business accounts from BaronHR and Fortress Holding Group to purchase luxury items like Lamborghinis, Bentleys, a private jet, courtside seats to Los Angeles Lakers games, a yacht, and multiple high-end homes.
To hide these purchases, he titled assets under other people’s names and used nominees to mask personal expenditures, federal prosecutors added.
Even after being charged in 2018, Perez continued to falsify wage and tax data. For example, between January 2018 and June 2019, BaronHR West reported $54 million in wages and $7 million in taxes to the IRS. In reality, the company had paid $185 million in wages and owed $37 million in taxes—most of which went unpaid. As late as 2022, the company paid only $76,000 of an almost $6 million tax bill for that quarter.
Judge Kenly Kiya Kato of the U.S. District Court for the Central District of California also sentenced Perez to three years of supervised release following his prison term.
