First, a recap of where the case stands right now.

Bruce Gregory Harrison III was convicted December 21, 2011, following a jury trial in federal court in Winston-Salem, N.C. He had been charged in a 63-count indictment with large-scale payroll tax fraud and failure to file individual income tax returns.

The evidence at trial proved that Harrison failed to pay over more than $15 million dollars in federal taxes withheld from the pay of his thousands of staffing company employees in the years 2004-2006 and 2009. Prosecutor Jeffrey McLellan told the judge the actual amount of the fraud may be closer to $40 million. For various reasons, including statute of limitations, the government could not charge at that higher figure, however.

“Mr. Harrison not only defrauded his own employees, but he defrauded the American people as well,” said Ripley Rand, U.S. Attorney for the Middle District of North Carolina. “This sort of conduct is intolerable, especially during these difficult economic times, and we will do everything we can to make sure it is punished accordingly.”

“Mr. Harrison not only defrauded his own employees, but he defrauded the American people as well. This sort of conduct is intolerable, especially during these difficult economic times, and we will do everything we can to make sure it is punished accordingly.”

“Honest, hard-working taxpayers count on their payroll deductions for Social Security and Medicare being paid over to fund their retirement and health care needs,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division.  “They should rest assured that those who would steal those funds will be prosecuted to the fullest extent of the law.”

“The IRS-Criminal Investigation Division takes these violations of law very seriously. Payroll tax fraud results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” said Victor S.O. Song, Chief of the Internal Revenue Service (IRS) – Criminal Investigation.

Harrison did business under various corporate names including U.S.A. Staffing and Compensation Management Inc. He owned or controlled temporary staffing companies operating in at least nine states.

His staffing companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees. Instead, evidence showed he used company funds to open an Extreme Fitness Center, purchase multiple personal luxury residences, buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants. Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006.

Okay, here’s where you are going to need your score card. Harrison operated the network of staffing companies until 2006, when he reportedly sold the assets to former business partners Mark Griffin and Ray McDaniel, two men mentioned by Staffing Talk readers with knowledge of the case.

The following paragraph is from the indictment, and shows a pattern of a kind of shell game of shifting companies, presumably to confuse either creditors, the IRS, or both.

On or about August 15, 2006, Bruce Gregory Harrison III caused an Employer Identification Number (EIN) to be provided to the Internal Revenue Service revenue officer which he purported to be the EIN of the company that purported purchased Hobbs Staffing Services Inc. d/b/a USA Staffing, but in fact was that of staffing company owned by Bruce Gregory Harrison III’s mother and operated in the Myrtle Beach, SC area. In fact, as Bruce Gregory Harrison III well knew, his mother’s company did not purchase Hobbs Staffing Services Inc., d/b/a USA Staffing, or any other company from Bruce Gregory Harrison III, and his mother’s company was not responsible for the payroll taxes of Hobbs Staffing Services, d/b/a USA Staffing.

In 2008, Harrison took back the companies when his former partners defaulted.

Beginning in 2008, Bruce Gregory Harrison III resumed operation of staffing companies in Greensboro, North Carolina through two corporations incorporated under the laws of the state of Delaware: Compensation Management Inc. and Compensation Management of Iowa Inc. Each of these corporations had its headquarters in Greensboro, North Carolina. In 2009, another Delaware corporation to provide staffing services was formed named IHT of SC Inc. IHT of SC Inc had its headquarters in Guilford County, North Carolina. Although not formally an officer of Compensation Management Inc., Compensation Management of Iowa Inc. and IHT of SC Inc., Bruce Gregory Harrison III controlled the operations of each of the corporations including the payroll to employees of all major financial and banking transactions and was the de facto owner of these corporations despite his designation of nominee owners. At all times relevant to this indictment, Bruce Gregory III’s staffing companies withheld taxes from employers’ paycheck, including federal income taxes and Medicare and Social Security taxes (often referred to as Federal Insurance Contributions Act taxes or “FICA” taxes).

Got that?

Harrison took the stand in his own defense during the trial, and produced a document that reportedly bore the signatures of Griffin and McDaniel. Harrison said the document shows that he relinquished control of the companies – and subsequent taxes – around the time the IRS stopped receiving payroll tax deposits from the staffing companies.

For his part, McDaniel testified he didn’t sign the agreement, and said “it’s a false document.”

Bloomberg has a current business listing for StaffCo Management Group, Inc., in Greensboro. It lists Mark Griffin and Ray McDaniel as co-founders.

StaffCo Management Group provides commercial and industrial staffing services in the United States. Its services include temporary staffing, temp-to-hire, direct placement, and vendor-on-premise/managed staffing services. The company offers skilled and unskilled personnel in various trades, including general labor, machine operation, administrative duties, and nursing. Its programs include payroll and outsourcing services. The company was incorporated in 2005 and is headquartered in Greensboro, North Carolina.

In addition to his listing as Chairman of StaffCo, I also found listings for Griffin as Chairman, U.S. Labor; Chairman, Hobbs Staffing Services; Secretary, Director, U.S. Staffing of Florida.

I found McDaniel listed as Chairman, COO, U.S. Labor, President, StaffCo; Director, VP, Chairman, COO, U.S. Staffing of Florida, and COO and Director, U.S. Staffing of Texas.

After multiple attempts, what I did not find though, was a single working telephone number or website for any of the companies listed above.

Another Mark mentioned by Staffing Talk readers, who lists on his LinkedIn profile the past position as Chief Information Officer at American Staffing Resources, is now listed as Chief Information Officer at The Assurance Group.

Following the jury verdict, Chief Judge James A. Beaty Jr. ordered Harrison detained.  Sentencing is scheduled for April 6, 2012, at 9:30 a.m. in Winston-Salem.

So is the last we will hear of this? It seems likely that if other charges were going to come in connection with Harrison and his string of staffing companies, they would have surfaced by now.

Any Staffing Talk readers care to add to this in any way? We certainly agree with one of the commenters that this is indeed a sad saga, for the industry in general, and all the employees impacted by Harrison’s actions.