Temporary Help Agency Owner Hid $6M in Payroll to Skirt Taxes, Workers’ Comp

A Lowell, Massachusetts man was sentenced in federal court in Boston for his involvement in payroll tax avoidance and workers’ compensation insurance fraud, according to U.S. Attorney Leah B. Foley.

Henry Lam was sentenced to 13 months in prison, to be followed by two years of supervised release. Lam was also ordered to pay $1,652,573 in restitution.

Lam was arrested in July 2025, following his June 2025 indictment, and pleaded guilty to failure to collect and pay over taxes and mail fraud in May 2026.

According to prosecutors, between 2016 and 2023, Lam owned and operated HL Temporary Services – a temporary employment agency in Lowell that served New England companies. The client companies paid HL Temporary Services for the temporary employees’ work on an hourly basis. Lam cashed these client’s checks at check cashing businesses in Massachusetts and paid the temporary employees primarily in cash. By using cash payments, Lam hid over $6.2 million in payroll and avoided paying more than $1.5 million in required payroll taxes. Lam also used HL Temporary Services’ false payroll numbers to obtain worker’s compensation insurance at lower premium rates, according to prosecutors.

The Internal Revenue Service’s Criminal Investigations division joined Foley in the announcement. They acknowledged the Insurance Fraud Bureau of Massachusetts for its assistance in the case..