Under the Table No More: The Payroll Scandal That Rocked New York!

[00:00:04] Welcome to our podcast, It's About Payroll. We're your hosts, Brian Escobar and Walter William Duncan III. Whether you're new to the payroll game or a seasoned veteran, we have something for you. Welcome back, folks. This is episode one, full zero, 140 episodes deep. And today we're going to talk about some true crime, some payroll, true crime, always a fun subject.

[00:00:34] Negligence in New York. Before we get into it, what's up, Walt? What's up and happy day to you. Hell happy day. Who's that? It was a song from Sister Strike. Oh, is it? Oh, yeah. I felt like it was religious. Tied it to the movie with Whoopi. Yes, that's a good one. Yeah, I think it was Sister Strike too.

[00:01:04] Oh, really? Oh, that was the one with Lauren Hill in it, right? Oh, shoot. Yeah, man, I'm good. No complaints. I'm good. I'm still rapping with my Dolphins. Yeah, I know all that. That's alright. Hey, better luck next season. You know? Yeah. Well, you know what I think? I didn't win with any league. Yeah, see? Winning. That's what I'm saying. Wow, that's huge, right? How you doing there? First time ever, right? First time to play, I'll still win. And how many years have you been playing for Fantasy League?

[00:01:34] Honestly, the same league? No, just period, in general. This league is the only league I've ever been in. Oh, okay. It's been like five or six years. Oh, okay. I thought it was long, though. All right. That's not that, but still a good long run. How you doing? Good. South Florida is a little cool right now. We got a little cool front. Very comfortable outside. It's very nice. Yeah, let's get into it. We're just getting a little pay news and... So I have something a little different. I know we normally do marbles. Yeah.

[00:02:04] But I did a search ring pool, and I wanted to see if you agreed. Start some conversation, why don't we? Yes. Yes. So search for what the top five characteristics of a payroll professional are. Okay. This is what Google provided, right? One is exceptional attention to detail. Two, strong analytical skills. Three is excellent communication skills. Four, deep understanding of compliance regulations.

[00:02:34] The number five is the ability to manage multiple tasks and deadlines with accuracy. Do you feel like those are the top five characteristics as said for a payroll ring? The personal attention, the strong analytical, excellent communication, deep understanding, the ability and management, and also, the challenge of deadlines. The number of accuracy essentially.

[00:03:01] I think one of them has got to be, and it brings me back to our days at Charter Schools USA. GRIT. GRIT. I think the acronym GRIT. Oh, I don't know the acronym, but I'm just saying the word GRIT. Okay. To have the, of course you remember the acronym part of it. Just like that thick skin. I don't know what the right word is. Thick skin. You got to be resilient. Because Pete, right? You, whatever, you can't take things personal.

[00:03:31] They're good. Those are good. If you have skills, you will definitely be a good payroll person. But I think that you can't be like, saint hearted. I don't know the faint hearted. The faint of emotion. Not for the faint hearted. You can't be easily offended. You can't be easily offended. You know what I'm saying? Because look, I'll tell on myself, there's been times, especially early in my career, I did get offended. Oh, yes. I did say somebody is coming to payroll. Yes. And I get guarded. No, no, for real. Hey, what's up?

[00:04:00] Like, you're coming at us. You're coming like, we didn't do it. It wasn't at fault. Not myself. Not myself being defensive. Defensive. Yes. Yes. In my mind, I still get defensive in my mind. Like when I see something, I'll be like, we didn't do jack. But now I laugh at all. I know I'm in a good place now because my coworkers now will be like, wow, the world, things are falling apart. Brian's over there. Cool hand loop. What is it? Unfazed. Unfazed. So I'm like, oh, wow. Look at that. In my head.

[00:04:29] I'm like, spung in both. Come on, man. Yeah. I've gotten to a place now where I'm common collective. Come outwardly, but inside I'm, I still get like defensive. I take it personal, but it just, it's a flash, right? It's a flash and it goes away. And I'm like, you are those thoughts, right? Yeah. You don't think of that. So let me not say anything. You have to quit all our smash rush. Conquer. Conquer. An urge to say in that moment. Yep.

[00:04:57] Like, I find myself there too. I'm sure other people too. Illins. Yeah. We're emotionally sometimes. And you want to protect ours and our people. Yes. But at the same time, I guess that's also the good trait about it. When you do, it's not taking it personal. It's taking ownership. It's taking ownership of your work and your work product.

[00:05:22] And that is, well, again, you can't take it personal because there's so many things that they come at payroll for because, and it's not our, I have nothing to do with us. So I think, what do you think? So I think a lot of these are good characteristics on top five. Yeah. Maybe I might want to take one out. I don't know which one, but like, I'm thinking about, I think about the thing that you said, right? That would be sad all along. We're sitting on this podcast. You said, you said it when I first met you.

[00:05:53] Is that I can, I could teach you the skill. I can't teach you an attitude. Yes. Right. And it's funny. You said that. Cause I thought about that as I was reading these things. Yeah. And so that, that's what kills the most in mind is, is like maybe having people skills, especially in today's climate. Oh, today's climate for sure. It is, it's more important.

[00:06:19] There should be higher on the list than one of those, like, but maybe you fall under excellent communication skills. Maybe people skill or whatever. Yeah. Cause we do need to understand compliance and be able to hold tight, multitask. Oh, that's what I said. They're all good. If you have these, you will be a good payroll person. I feel like it's sectional attention to detail and analytical skills. You want it the same. Oh yeah, for sure.

[00:06:49] Oh, I think if I had 10, one hour, I think you can have a look of skills. Yeah. And still have that and attention to detail with those analytical skills in there. And I would just place one of either one of those with like people skills. Yes. Agreed. We say, we said soft skills in the new hard skills, right? Yeah. That's a good one. I like that. I like the good spur of conversation here.

[00:07:19] Big, big on LinkedIn today because that's our social network. That's our social media. That's our first go to is that paychecks is rumored to be buying pay core. Yeah. Consolidating those peas. That's funny. It's funny because when we were at the payroll Congress this past spring, somebody there was like, Oh, the peas. And I was like, I'm sorry, what do you mean? And they were like, paychecks, pay core, pay this, pay that.

[00:07:48] And it's so it's like a. Yeah. There's a bunch of payroll companies that start with P. So I was like, Oh, all the data. They said like, they said something like all the peas. And I was like, huh? It would be one less P in that pea soup. It's this. Before we move on, I need to let you know about my friend, Mark Pfeffer and his show people tech. If you're looking for the latest on product development, marketing, funding, big deals happening in talent acquisition,

[00:08:16] HR, H.C.M., that's the show you need to listen to. Go to the work to find network. Search up people tech, Mark Pfeffer. You can find them anywhere. If this goes through, paychecks will be buying pay and all the comments were flying out there. And at the end of the day, I go back to immediate.

[00:08:38] I like I now when I think about vendors and companies and technology and the evolution of things, I keep thinking about Giver and Elena and Cynthia. And just because I want the new blood to become that powerhouse. Right. Because it's changed the game, disrupted.

[00:09:02] I love what Elena kept saying was like, we're going to simplify payroll or we have already. Right. They have. And they and it's going to be a continued evolution for sure, because new problems come. So new solutions have to come.

[00:09:16] But I feel like I don't know, I feel like that is a step in that direction of consolidation or companies getting together, put pooling their resources and then building new tools because we have to get away from these old freaking tools. Right. If we want something different from payroll, we really have to get away from the tools. We have to get away from the back office thing of things and, oh, on the backside and the front side.

[00:09:46] And, you know, that it's old like I you know what I mean? We have to adapt. We got to adapt. We got to adapt. We have to. So and I don't know if you peeped it yet, but on the list for our next episode, I said I propose that we speculate about what A.I. what we want, what we want out of A.I. and payroll, put a list of things together, each of us. Right. And we just speculate on that. What do you want A.I. to do for you in payroll?

[00:10:15] And be fearless because I think we're already I think we're past the part of being scared is going to take our job. Well, and I welcome that. Right. I know folks, some folks out there may be like, oh, no, I won't have a job. I don't think anybody working payroll right now is at risk of losing their job to A.I. yet in this day and maybe 10, 20 years from now, maybe 5, 10. Let me not maybe not because shit is moving fast. Right. It is moving fast.

[00:10:45] So maybe five to 10 years from now, that could be a reality. But, oh, that's what I was going to say. I was watching this move, random Netflix movie with Megan Fox, though. And it was a subservient or something. So, of course, like, you know, B level. But it was it was fine. But I'm I'm I'm thinking about it from payroll. Like I see this A.I. stuff and I'm like, I'm watching it from payroll. It was very I robot ish the movie.

[00:11:15] But I'm thinking about it in that respect. Yeah. Hold on now. Wait. So, again, I'm ushering it in. I'm like, let's go. Let's do it. Let's because I want to be a part of that. It's here to stay. It is. Yep. Oh, yeah. It's going to impact our jobs and how payroll is rare and how the process is behind that. Or it's here. It's going to impact us. We have to adapt. Yes.

[00:11:39] My point to bring up that movie is in the movie, they a part of it was A.I., the robots, because this is A.I. personified. These are robots. Right now, our A.I. lives on our devices. It hasn't become mainstream yet to have a robot in your home. Well, they although I see the commercials and I see the stuff. Anywho, in a part of the movie, this construction crew was about to lose all their jobs except the foreman.

[00:12:07] They said the insurance still wants a human on site to monitor progress and blah, blah, blah, blah, blah, blah. I think that's the, I think that's going to be the formula for most things that A.I. takes over that a human still be involved. So again, it is going to be a pilot. Yes. Look, I totally agree. And I think it's going to be just like that. Yep.

[00:12:32] Where A.I. is going to do some of the, a lot of the auditing. Making sure that we're still quiet. Yes. Making sure those things. But as far as the, having autonomy to finalize the payroll by itself. Right. No. We're going to trust A.I. to do that. Cause we'll all say, okay, Hey, maybe A.I. makes a mistake. Yeah. We programmed it wrong or whatever. And you post the payroll for the whole year or whatever. I don't know. Something. Oh yeah. Who knows? A million different things. Yeah.

[00:13:01] I think you absolutely right. Be fun to be speculate that next show. Yeah. So that was my article, just payroll folks. Be aware. Yeah. If you process using paychecks or pay core, expect some change in the near future. Yeah. Let's get into it. Let's pay some bills. Shout out to TimeTrackGo.

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[00:13:53] Best clocking app on the market. Great time clock for the modern office. Intuitive and efficient. Simple to use and priced right. Everybody likes to hear that part. And customer support is awesome. I think those are the two that matter the most. It's price right and customer support is awesome. Maybe three. Intuitive and efficient. Right? Come on to TimeTrackGo.

[00:14:15] Both learn more about a simply better solution for time tracking, real-time reporting, PTO automation, PRR integrations, and more. Visit www.timetrackgo.com. That's T-I-T-R-A-K-Go.com. You can start your 14-day free trial today. Let's go. Let's go. So today's true crime.

[00:14:45] Man, I had fun reading through these. Thank you as always for procuring our true crime, uh, uh, information, cases and articles and things that people are running amok. Oh, yeah. So yeah, share. Want to split it up somehow? Yes. Why don't you do this? You want to start off with the case overview and deny? No. Absolutely. Takeaways and prevention? Absolutely. Fittingly, New York man, not a Florida man this time.

[00:15:14] New York man pleaded guilty to employment tax crimes. He failed to collect and pay over-employment taxes from the wages of his company's employees. This resulted in significant tax losses for the government. According to court documents and statements made in court, Victor Aguayo of Nassau County was owner and president of Mabel and interior, interior design, Inc.

[00:15:41] and interior painting business in Westbury, New York. I know it well. Aguayo was responsible for withholding social security, Medicare, federal, the norm from employee wages, payroll taxes, and reporting those wages and paying those withheld taxes to the IRS on a quarterly basis. Instead, Aguayo paid his employees approximately $3.6 million in cash wages, but did not withhold or pay taxes from those wages.

[00:16:11] In addition, he caused false quarterly tax returns to be filed that did not report those cash wages. And as a result, Aguayo caused the tax loss of $545,000 and $745,000, $743,000 basically. Aguayo was scheduled to be sentenced on April 21st, 2025. He faces a maximum penalty of five years in prison. Maybe this was nonviolent.

[00:16:38] He should probably do three, two and a half, three. He also faces a period of supervised release, restitution, and monetary penalties. If he has a good lawyer, you might not do a time at all. Yeah. This is a classic case, right? We hit, we see, we, a lot of the cases we find. And I am George LaRock, and I'm looking forward to exploring the critical trends shaping the future of work and technology with you over on the WorkTech podcast.

[00:17:09] Now, this podcast is a little different. I bring together industry leaders, innovators, and investors, and we go deep into market intelligence that matters to HR pros and tech providers alike. So give the WorkTech podcast a listen here on the WorkDefined Podcast Network, and please subscribe if you like it. See you there. I don't know. I don't know how we get these shows to the masses so, so business owners can see.

[00:17:39] Oh, snap. Let me stop before I face jail time. Because look, they might be running us. This might be a smaller business. Even when he's making good money, might be a smaller business, right? And so he's probably been, he probably has friends and stuff like that. And me have done the same thing. Who knows who's giving him advice? That's right. Hey, just pay him under the table.

[00:18:04] I've known people that have been in my circle that were paid under the table. Oh yeah, of course. Absolutely. Especially because we old and we were older. Absolutely. And I don't know. I don't know. I guess it always, as long as there's cash, there's always that chance that somebody's working just for cash. And look, another point here is that he was the owner and president. Yes. Isn't that the case? Every time we find these, right? It's the owner.

[00:18:33] Somebody in the C-suite or whatever. Or there's no oversight on the payroll person. But usually with the payroll taxes, it's in, see, and we're formulating like, I don't know, trends. Cause we do this so much. We got, maybe we got to do something with it. Right. It's usually if it, if they're the owner, if their leadership ownership, it's going to be the payroll taxes that they evade. If it's a payroll person, they it's, they're just redirecting payroll money.

[00:19:03] They're not so much evading payroll taxes. They just like creating a ghost employee, skimming somewhere from the creating, changing data up and. And then look, phantom data, cash flow. Right. They do, they finagling with the mess up with the data because somebody's doing the everything. So it's that pattern. And we really got to find a way to get these episodes out to the masses because business owners need to be aware, like, stop what you're doing.

[00:19:33] If you're doing this. No, we have to. Right. And look, you're right. It might be ignorance, right? Not willful and just, Hey, I just don't know. I've been doing this. I didn't think it was a problem or whatever. And I've been like, look, I just thought I was avoiding that event. I thought I was saving some money, blah, blah, blah. I am reporting some, blah, blah, blah, blah. But all right. Give us some of the key takeaways here and the solutions. Yeah.

[00:20:02] Key takeaways from this is that basically Victor did not fulfill his legal obligation to withhold and admit, blame factors, which is a serious defense. Such crimes not only the government, but also potentially harm employees as attached by social security and Medicare. Yep. They go to like retirement for the benefits of leaving or something like that. And so, and not reporting this stuff actually taken away from them. And I do want to think about that. He thought he was doing good.

[00:20:29] I'm paying the cash, not taxing him, but actually harm them in the end. Yeah. So some for prevention strategies here. What the last episode we did is the importance of regular audits. Oh, payroll. Yep. Regular audits. Yep. Regular audits. Regular audits. Period processes to ensure compliance. That's the number two is training and educating. You said a little bit. Just a couple of them. How do we get this out to the masses? Yep.

[00:20:56] How can we train them and educate these business owners and these staff to understand and comply as pieces of this and make sure that they're not doing anything illegal and not committing fraud. Yeah. Yeah. Number three. Automating system. Use an automated car payroll system. Ensure accurate calculations and timely relents. Touch. Number four, separation of buildings. Yeah. Having that oversight. Yes. Having those checks and dialysis in place. Yep.

[00:21:25] One person does this thing. Forwarding does the other part. With Ed, Penn, St. Bay. Number five, externally. Over time. Has external auditors or consultants review your payroll practices and your information regularly. And so by implementing these strategies, you can significantly, a business can significantly reduce the risk of payroll tax room. I, and I think the last two are really important.

[00:21:55] The separation of duties, they're all important, but I think what I, what pops out at to me is if you, cause it's temptation, right? Like we say all the time, it comes down to, especially in this case where the business owner is the one, it comes down to that temptation piece. And it's like, I would love to help a new business owner understand, separate this task.

[00:22:21] And you're separating the temptation of, cause you, you, you may do it every now and you, and it may become addictive where you're like, you know what? All I gotta, all I gotta do is hold back a $10,000 right here. I'm going to report 40, not 50. And then you, and then, oh wow. Maybe some time goes by. Oh man, nobody ever said anything about that $10,000 that I held back. That really helped me out in my life.

[00:22:50] I'm going to do it again. And that's where you get caught up in it. Some of these folks may like you, like you always say, you gotta give people grace. You don't know what they're going through. Maybe that could be it. But if you come out the gate as a business owner and you right away, separate the, get like a Valor payroll, get Christina on your team, right? To process your payroll so that, yeah, shards of Valor. What's that? Give us all your team. Or us.

[00:23:19] We can be, we can help guide you there. And it could be just a separate person. You don't even have to outsource it. Do a separate person that, you know what? I'm going to do this. Especially in our case, like we're, we're a business, business partner. Look, well, you're going to figure out what everybody gets paid. I am going to get it all paid and filed away. You don't have access to do that. But you need to true up the time, the gross, and I'll break it down to the net or vice versa.

[00:23:47] So that is an easy separation of duty. And then neither one of us are ever going to feel like, oh wait, I'm going to do this and do that. We, you check checks and balances, right? Yeah. Let me ask you this. Let me throw this question in here. I know this is the extra question that we didn't have, but you feel that there's a difference. Obviously there's a difference when I show this between, there's a difference between guardian.

[00:24:12] I said, and not let anybody be privy to that data, which may be justified or made not. First is separation of duty. Right? When I named guardian something, it's okay. I worked for someone to teach me certain things. Oh yeah. Perfect. Oh, it was already that part of the process. And I was just like, and I'm asking, Hey, can I just watch you? Am I not?

[00:24:40] Did he do it for good reasons or just cause it was bad reasons? It was like malicious. Yeah. I think it was in security and securities and stuff like that to protect his own. And I think that is what we have to clearly define as we're in leadership roles, no matter

[00:25:06] what role you're in, even if you're just a peer or whatever, or subordinate or whatever. Still, I think you need to know the difference between guarding something like stiff arming somebody away. Right. And, and versus having a separation of duty. That makes sense. Yeah. Yeah. Yeah. Cause today, yeah. If you're in a decent system, how we talk about reliable systems a lot. If you're in a reliable system, I should be able to teach you what you want to know, but not give you access to do it.

[00:25:38] I don't know about you, but I don't know very many people that are hopeful about the world. And I'd like to change that. My name is Marcus Mossberger and I started the hope at work podcast where you'll find two things. Number one, really interesting guests. And number two, innovative ideas about the future of work. Check it out.

[00:26:00] You know, and that's because there's a, there is some value in separation of duties and active missions, but yeah, we, we talk about all the time. Knowledge is nothing if it's not shared. Yeah. And I like this, the, the question of the day, should people have people who have been committed payroll crimes in the past be permitted to work in the same industry after they've served their time?

[00:26:22] I think that the regulator there is, if you have been charged with a felony that dictates what you could do right there. That's going to, it's going to be self-regulating. If you've been charged with a felony, that felony is going to restrict what you can do after you pay your debt to society. So let me ask you, because I was thinking about this earlier, right? The reason I asked because this is one of the reasons I wore a jersey here.

[00:26:51] I was thinking about certain agreements in their contracts that they have to adhere, the apts have to adhere to certain drugs they can't take and stuff like that. And then they, they get suspended. They get suspended. But after they've served, after they served their suspension, I've seen dudes get suspended for a year. It's cause they, they, they did something wrong. They took a steroid and they spoke marijuana or whatever. Right.

[00:27:20] And they got another chance in industry. So that's what prompted me to say, so somebody in this industry, I know it's not a felony. Look, I don't want to say that. Okay. Totally different level of, of thing. Look, well look, some of them do commit felonies though. Some of them don't have these. They get suspended for a year or six games or whatever. And then they're allowed.

[00:27:47] I understand the industry is different because this entertainment and they're making last so much. Yeah. So that's what kind of prompted me to write this question today. That's a good, that's a good, that's a good separation. Cause then yeah, you, you shouldn't be one of you come out with a felony, but that's what I'm saying. It's self-regulating because I may not, I don't think they shouldn't be given a chance at all. I think that, but that felony should definitely dictate what you get a chance at doing. What? Yes. Agreed.

[00:28:17] Yeah. So if you financial crime, yeah, you best believe I'm not putting you anywhere near my finances. You don't have, you don't have zero. I can't even lie. I can't lie in the ADP. No, you can't. Sure. I can't. Because honestly, look, as we saw with this guy, Victor, he was the owner and president. Yeah. And it's usually, yep. Yep. What's preventing him from opening up another business?

[00:28:41] A felony, a felony because he can't under his name, he will be restricted to own things and different things. He, he'll be very restricted. A lot of people with felonies, they come out, they want to start a business. They have to start it in somebody else's name. He will be restricted. Yep. So that's it folks. As we figure out how to get a, a tutorial out there to the business owners of the world. Don't do it. Don't do it.

[00:29:11] Check yourself before you wreck yourself. Any who. Yep. All right, folks. Till the next time. We love you. Peace. Before we sign off. Here are a couple of quick things. Don't forget to follow. It's about payroll LinkedIn. And it's about your paycheck on Facebook and ticked. Thank you for being part of our payroll community.

[00:29:38] And thank you for being a part of this journey with us until the next time. Keep learning, keep growing, and most importantly, keep going.