A Lowell, Massachusetts, temporary staffing agency owner was sentenced to 13 months in federal prison after hiding more than $6.2 million in payroll, according to the U.S. Attorney’s Office for the District of Massachusetts on September 30, 2026. Henry Lam was also ordered to pay $1,652,573 in restitution and will serve two years of supervised release.
How did the payroll scheme work?
From 2016 through 2023, Henry Lam owned and operated HL Temporary Services, a Lowell agency that supplied temporary employees to client companies in New England. Clients paid the agency based on the hours its workers performed. The Justice Department says Lam cashed client checks at check-cashing businesses in Massachusetts and paid workers primarily in cash, concealing payroll from reporting.
According to the sentencing announcement, prosecutors said the arrangement hid more than $6.2 million in payroll and allowed Lam to avoid more than $1.5 million in required payroll taxes. They also said he used false payroll figures from the agency to obtain workers’ compensation insurance at lower premium rates. The reported amounts are specific to this case, not estimates of industry-wide losses.
What sentence did Lam receive?
On September 30, 2026, U.S. District Court Chief Judge Denise J. Casper sentenced Lam, 68, to 13 months in prison, followed by two years of supervised release. The court ordered $1,652,573 in restitution. The U.S. Attorney’s Office said Lam pleaded guilty in May 2026 to failure to collect and pay over taxes and mail fraud. The sentencing announcement provides the final sentence and case figures.
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Why did the workers’ compensation figures matter?
Workers’ compensation premiums are affected by payroll information used to price coverage. Prosecutors said Lam’s false payroll figures secured lower premiums for HL Temporary Services. The announcement describes that alleged insurance conduct alongside the hidden payroll and unpaid tax obligations; it does not provide a separate amount for any premium reduction.
How did the case unfold?
| Date | Development |
|---|---|
| June 2025 | Federal indictment, according to the sentencing announcement. |
| July 2025 | Lam was arrested. |
| May 2026 | Lam pleaded guilty to failure to collect and pay over taxes and mail fraud. The May 28 plea announcement reported more than $6.1 million in hidden payroll. |
| September 30, 2026 | Lam was sentenced to prison, supervised release, and restitution. The later sentencing announcement reported more than $6.2 million in hidden payroll. |
The $6.1 million figure appeared in the May plea-stage release; the $6.2 million figure is from the later sentencing announcement and is the appropriate figure for the final sentencing account.
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Who handled the case?
The U.S. Attorney’s Office for the District of Massachusetts announced the sentence. The release says the Insurance Fraud Bureau of Massachusetts assisted with the case and Assistant U.S. Attorney Kristen A. Kearney prosecuted it. It also identifies U.S. Attorney Leah B. Foley and Thomas Demeo, Special Agent in Charge of IRS Criminal Investigation in Boston. The announcement contains no substantive case comment from a named speaker.
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