Westfield business owner charged in connection with scheme to defraud state of sales tax on meals

Local News

Paul Backholm allegedly sold software to restaurants that deleted cash sales

BOSTON (USDOJ) – A Westfield man has been indicted and arraigned in connection with a scheme to defraud the state by selling sales suppression software to restaurants that enabled them to delete cash sales and keep meals taxes paid by customers, Attorney General Maura Healey announced.

A Suffolk County Grand Jury returned a 15-count indictment against Paul K. Backholm, age 53, on March 18. Backholm was arraigned in Suffolk Superior Court on Friday in a virtual hearing on the charges of Conspiracy (5 counts), Aiding False Meals Tax Returns (5 counts), and Aiding Failure to Account for and Pay Over Meals Taxes (5 counts). Backholm pleaded not guilty to the charges and was released on his own personal recognizance. He is due back in court on May 17 for a pretrial conference.

“We allege this defendant orchestrated an illegal scheme that falsified restaurant sales records and deprived the state and municipalities of much needed tax revenue,” said AG Healey. “We continue to work with our state partners to investigate and prosecute those who cheat the system to steal from our state.”

These charges are the result of an investigation by the Attorney General’s Office, after a referral from and with assistance from the Massachusetts Department of Revenue (DOR).

“One of the core responsibilities of the Department of Revenue is combating tax evasion and we appreciate the collaborative efforts of the Attorney General’s Office following our referral of this case,” said Massachusetts DOR Commissioner Geoffrey E. Snyder. “The Department remains committed to vigorously pursuing those who falsify their records to obstruct the Commonwealth and any parties who advise, assist, or counsel taxpayers in the pursuit of these fraudulent aims.”

Backholm is the president, treasurer, and sole shareholder of Forbes Snyder Tri-State Cash Register Company, Inc., an Easthampton-based firm which sells software and technical support for Point-of-Sale (POS) cash register systems. Restaurants use the POS systems to enter a customer’s order, communicate that order to kitchen staff, generate the check and then record how the check was paid – whether by cash or credit card. The AG’s Office alleges from 2010 to 2015, Backholm sold sales suppression software to restaurants for cash that enabled the restaurants to delete cash sales, keep the meals tax that had been paid by the customer, and renumber the remaining transactions to cover-up the deletions.

These charges are allegations and the defendant is presumed innocent until proven guilty.

This case is being prosecuted by Assistant Attorney General Peter A. Mullin in AG Healey’s White Collar and Public Integrity Division, with assistance from Financial Investigator Molly Parks of AG Healey’s Financial Investigations Division, in collaboration with the DOR Criminal Investigations Bureau and DOR’s Audit Division.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Only on WWLP.com | Digital First

More Digital First

Trending Stories

Donate Today