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Man charged with embezzling $1.2 million from Upper Valley small businesses



Valley News Correspondent
Saturday, April 13, 2019

WEST LEBANON — The former operator of a payroll processing service for small businesses in the Upper Valley has been charged with embezzling $1.2 million from clients through wire fraud, according to federal court records.

Ryan Wall, as the sole employee of TSBS Payroll in West Lebanon, withheld payroll taxes intended for the Internal Revenue Service and state tax departments in Vermont and New Hampshire but personally pocketed money that should have been forwarded to the government accounts, according to an indictment unsealed late Friday afternoon in U.S. District Court in Burlington.

Now an unspecified number of area businesses in the Twin States owe “substantial sums of money for unpaid payroll taxes,” the indictment said. The indictment was unsealed following notification of Wall’s arrest in Florida, where he has a Tampa address.

Wall, who according to his Facebook page grew up in Barnard and graduated from Woodstock Union High School in 1995, bought a home in Quechee in 2009 and lived there with his then-wife, Vanessa Wall.

Her parents, John and Jacquelyn Rezzonico, started TSBS, which also is known as Twin State Business Services and does tax-preparation work as AccounTax USA, in 1997, according to court records. Wall joined the firm and started the payroll services division for small businesses in 2012, according to a bankruptcy filing for TSBS LLC.

Court records say Wall diverted the $1.2 million from TSBS Payroll from about March 2012 until early 2018.

The indictment also charges Wall with an unrelated felony count of being an unlawful drug user and addicted to oxycodone, heroin and crack cocaine while improperly possessing three firearms in August. The weapons listed are a 9 mm rifle, a 9 mm pistol and a .22-caliber Marlin rifle.

A federal grand jury in Vermont also issued a forfeiture notice ordering Wall, if convicted, to pay the U.S. government $1.2 million from the proceeds he obtained, directly or indirectly, as a result of his alleged criminal conduct. The government also wants the three firearms forfeited, if convicted.

TSBS filed for Chapter 7 bankruptcy in New Hampshire in January, a measure that allows a business to make a fresh start.

John and Jacquelyn Rezzonico and their daughter, Vanessa — who is a manager at the business and is no longer married to Wall — are trying to reorganize the company, according to court records.

John Rezzonico declined comment when reached by phone on Saturday. A man working at the business at 50 Main St. in West Lebanon on Saturday morning also declined comment.

The TSBS bankruptcy filing includes several allegations that Wall skimmed money from the company. One note said the debtor’s insolvency is due “solely to the discovery in late 2018 that former employee, Ryan Wall (also the debtor’s principals’ former son-in-law) was allegedly engaged in fraud, embezzlement and other nefarious activities resulting in payroll tax deficiencies for the debtor’s clients” and that “hundreds of irregular transfers” between 2012 and 2018 totaling more than $750,000 had been made payable to Wall or his associates.

Wall was paid $50,472 a year, records show. The indictment said TSBS Payroll had its payroll escrow account at Mascoma Savings Bank and all electronic transfers of funds passed through the computer servers in Vermont for the bank. Wall is the only person blamed in the indictment.

“He accomplished this theft by regularly issuing checks payable to himself, in excess of his authorized compensation, then cashing the checks or depositing them into a personal bank account,” the indictment said.

“Wall also issued, without authorization, hundreds of checks to third parties. Those third parties then cashed the checks and gave the money back to Wall, or used the funds to buy drugs that were given to Wall,” the indictment said.

In June 2018, Wall also opened an account at Green Dot Bank, an online bank that offers reloadable prepaid debit cards, court records show. They note that between June and September 2018, Wall transferred about $39,000 in TSBS Payroll funds to Green Dot Bank and then used his debit card to access the money for his personal benefit. The computer servers were in California and/or Nevada, the indictment said.

As a result of these misappropriations, TSBS “had insufficient funds to pay over to the Internal Revenue Service and to the Vermont and New Hampshire taxing authorities all payroll taxes it had withheld from client paychecks,” the indictment said.

It is that lack of forwarding money to government accounts that makes the TSBS Payroll clients responsible for the tax liability, according to the court records. The TSBS bankruptcy filing indicates more than 60 small businesses in the Upper Valley, ranging from landscapers to restaurants to a dentist, are now listed as creditors because of payroll taxes handled by the firm.

A federal grand jury sitting in Rutland returned the two-count indictment against Wall on March 13, but the file was ordered sealed by Chief Federal Judge Geoffrey W. Crawford at the request of prosecutors until Wall was arrested.

Court records unsealed Friday show Wall had been arrested in Florida, but no details were provided. At some point Wall is expected to return to Vermont to face arraignment.

The Valley News late last year inquired about a possible investigation at the West Lebanon business. Lebanon Police Chief Richard Mello said at the time his department in September 2018 received an initial report of a possible internal theft at the company. He said the FBI in Burlington had subsequently taken over the investigation.

News staff writer Liz Sauchelli contributed to this report. Mike Donoghue can be reached at vermontnewsfirst@gmail.com.