A federal grand jury indictment unsealed last week accuses the owner of a group of New York City-area glass, metal and electrical subcontractors, along with three people who worked for him, of running years of payroll tax fraud and lying to lenders and surety companies to keep the money flowing (via U.S. Department of Justice).
The man at the center of the case is Arthur Nelson, who splits his time between Staten Island and Sunny Isles Beach, Florida. According to the Justice Department's Oct. 26 announcement, he owns MTB AMG Inc. and PAL AMG Inc., which install commercial glass, MTB Metal Fabricators Inc., a manufacturing outfit, and Wired NYC LLC, an electrical installation company. Prosecutors say the businesses were based in Brooklyn until March 2022 and then relocated to New Jersey.
Also charged are Joseph Free of Staten Island, described as a construction foreman for the Nelson companies from March 2017 to about 2022; Paul Vasquez of Englishtown, New Jersey, the companies' senior director of operations until about 2025; and Ulysses Jude Devocion of Queens County, who worked as an accountant and office manager from about 2021 to 2023.
From April 2017 through May 2024, prosecutors say, at least about $5 million in employee wages went out with no federal employment taxes withheld. The indictment also accuses the defendants of filing false tax returns, booking personal expenses as business costs and issuing false W-2s. Nelson alone is accused of underreporting roughly $13 million in gross receipts from the businesses.
The second piece involves credit. Between July 2019 and March 2025, according to the indictment, Nelson, Vasquez and Devocion submitted false financial documents to get loans, mortgages, lines of credit, credit cards and surety bonds. For a commercial sub, bonding capacity is what opens the door to public and larger private work.
Nelson faces conspiracy to defraud the United States, six counts of willfully failing to collect and pay over employment taxes, attempted interference with the administration of the tax laws, two counts of tax evasion, conspiracy to commit wire fraud and two counts of failing to file FBARs, the reports required for foreign accounts. Free is charged with conspiracy to defraud the U.S., attempted interference, aiding in the preparation of a false return and failing to file his own income tax return. Vasquez faces the conspiracy, interference and wire fraud conspiracy counts. Devocion is charged with conspiracy to defraud the U.S., failing to file a return, wire fraud conspiracy and obstruction of justice tied to his grand jury testimony.
The stakes are steep on paper. The wire fraud conspiracy and obstruction counts each carry up to 20 years. Conspiracy to defraud, the employment tax counts, tax evasion and the FBAR counts each carry up to five years. A federal judge would set any actual sentence.
IRS Criminal Investigation handled the case, and trial attorneys from the Justice Department's Tax Section are prosecuting it. The release didn't name the court or list a trial date. An indictment is only an allegation, and all four defendants are presumed innocent unless proven guilty beyond a reasonable doubt. The case is pending.
The company's own website says Nelson started out installing residential windows at 17 and worked his way into mid- and high-rise windows, storefronts, curtain walls and full facades before adding a metal fabrication shop. The Signatory Wall and Ceiling Contractors Alliance flagged the indictment to its members the day after it was announced.
Why it matters for Contractors
Strip away the loans and the offshore-account counts and this case is about payroll taxes, the same obligation every shop with even one W-2 employee carries. The income tax and employee share of Social Security and Medicare you withhold isn't your money. The IRS calls these trust fund taxes because you're holding them for your workers until you deposit them.
If those dollars don't get paid, the IRS doesn't stop at the company. Its Trust Fund Recovery Penalty can be assessed personally against anyone who had the authority to decide which bills got paid and willfully didn't pay the taxes. That can mean owners, officers or employees, and the agency says paying other creditors while the payroll taxes sit unpaid is a sign of willfulness. Once it's assessed, the IRS can go after personal assets with liens, levies and seizures. This case shows how far it can go when prosecutors think the failure was criminal.
For a small builder or remodeler, the fix is boring and it works: run payroll through a real system, make deposits on time, and never treat withheld taxes as a cash-flow cushion when a draw is late. And keep your financial statements honest. The books you hand a bank or a surety are the same books investigators will compare to your tax returns.