By Tiffany Williams
July 29, 2025 | Boston, MA
A Lowell man was arrested Tuesday in connection with an alleged years-long scheme to avoid payroll taxes and defraud workers’ compensation insurance providers, federal prosecutors announced.
Henry Lam, 67, was indicted by a federal grand jury on June 25 on charges of failure to collect and pay over taxes and mail fraud. He is scheduled to appear in federal court in Boston this afternoon at 3:45 p.m.
According to court documents, Lam owned and operated HL Temporary Services, a Lowell-based temporary employment agency that provided staffing services to client companies throughout Massachusetts between 2016 and 2023.
Prosecutors allege that Lam routinely cashed checks from his client companies at check cashing businesses and paid temporary workers primarily in cash. By doing so, Lam allegedly concealed over $6.1 million in payroll, allowing him to avoid paying more than $2.4 million in federal payroll taxes.
Additionally, Lam is accused of using the false payroll figures to obtain workers’ compensation insurance coverage at lower premium rates, defrauding insurance providers.
The charge of failure to collect or pay over taxes carries a maximum sentence of five years in prison, up to three years of supervised release, and a fine of up to $250,000 or twice the gross gain or loss, whichever is greater. The charge of mail fraud carries a maximum sentence of 20 years in prison, three years of supervised release, the same financial penalties, and potential forfeiture.
Actual sentences are determined by a federal district court judge and based on the U.S. Sentencing Guidelines and relevant statutes.
The case is being prosecuted by the U.S. Attorney’s Office for the District of Massachusetts.