Tax Scam Hit Local Companies Hard

By Erika Mahoney

Tax Scam Hit Local Companies Hard

August 24, 2012 Updated Aug 24, 2012 at 10:09 PM EDT

(WBNG Binghamton) On Thursday, William Stiles, 42, of Deposit, admitted to scamming thousands of dollars from his clients.

Stiles used to be the Chief Operating Officer at Aeden Waterford, a payroll and human services company in Binghamton.

For most of the clients he scammed, it has taken the past two years to recover.

One such client is Patrick Malyszek, president of M3 Federal Contract Practice in Endicott.

He says he estimates the scam cost his company nearly $50,000 in lost time and money.

He says in order to make up for those loses, he had to re-structure his company and put in a lot of extra hours, making any apology ring hollow.

"You know, he tried to come out and be honest and say "yeah," I stole from you and here is a letter and everything else," said Malyszek. "But that still doesn't get over the fact that all of us were injured by that financially. And he was actually putting himself over all of the families and companies that actually need financial support. And he didn't care what happened to any of us."

On Thursday, Stiles admitted to felony wire fraud and tax evasion in federal court. He admitted to stealing money from 100 clients, money that was supposed to pay for client employment withholding taxes. Instead, he deposited that money into his own personal account.

"It was almost like being kicked in the stomach because I had already paid the taxes and we were told we had to pay them again," said President of Silo Restaurant Gary Kurz.

Kurz was another victim. He says he had to borrow money to pay the IRS a second time, in addition to cutting hours for employees, and working hard to save on electricity bills.

All of this in an effort to to fill a sudden $24,000 loss for the restaurant, a loss that's still affecting his business.

William Stiles faces up to 20 years in prison and a $250,000 fine.

Kurz says if it was up to him, that fine would go back to the 100 people who were duped by his scam.

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