NEWBURYPORT — A federal judge sentenced a former local bookkeeper, who pleaded guilty in February to stealing money from her clients, to three years in prison Thursday and ordered her to pay $1,422,122 in restitution.
Patricia Lindau, 66, who ran Northeast Abacus Inc. on Boardman Street in Newburyport for several years before closing the business and moving to Newburgh, Maine, pleaded guilty to a count of wire fraud and a count of tax evasion in February.
On Thursday, U.S. District Court Judge Denise Casper also mandated two years of supervised release once Lindau completes the prison sentence.
Assistant U.S. Attorney Mackenzie Queenin asked Casper to sentence Lindau to 57 months in federal prison while Lindau's attorney, Carmine Lepore, asked for 24 months behind bars.
In a plea agreement filed in federal court in January, the government recommended a prison sentence at the low end of the guidelines sentencing range – which can range up to 20 years – along with one year of supervised release and restitution of $1,393,430 to be paid to the clients.
During a status hearing in March in Newburyport District Court, where a case against Lindau remains open, Lepore told a judge that his client was looking at a sentence of 5 to 6½ years in prison.
Now that Lindau has been sentenced in federal court, the case against her in Newburyport District Court will be dropped.
Federal authorities said Lindau "engaged in a scheme to defraud many of her clients by failing to pay over to the Internal Revenue Service and Massachusetts Department of Revenue the payroll taxes that she withdrew from her clients’ bank accounts" between 2017 and spring 2020.
Lindau then sent each client a weekly report, falsely indicating the money had been paid to the IRS and DOR.
When Lindau’s clients received letters from the IRS and DOR indicating their payroll taxes had not been paid, the bookkeeper lied to the clients, telling them the IRS or DOR letters were a mistake and that she would take care of it, U.S. Attorney Andrew Lelling's office said. In some instances, she then paid the taxes late.
Lindau’s scheme continued into the first quarter of 2020 when most of her clients closed their businesses due to the pandemic and then discovered their employees’ payroll taxes had not been paid.
Lindau failed to pay more than $2 million, causing a net loss to her clients of more than $1.1 million.
The case began when the Essex District Attorney’s Office received complaints from two former clients of Northeast Abacus and launched an investigation. The complaints alleged Lindau stole about $60,300 from two small businesses in Danvers and Haverhill when she failed to pay their state taxes.
Queenin said Lindau's actions were not a momentary lapse of judgment but rather a "cold and calculated scheme" that destroyed the trust of her victims, who she described as "hardworking people trying to do the right thing."
Lindau and her website disappeared in May 2020, leaving her clients owing back taxes to the state and the IRS, according to several business owners interviewed by The Daily News.
Lindau and her husband, Kjell Morgan Lindau, listed $1.3 million in debt to their 20 largest creditors when they filed for bankruptcy in Maine on June 20. Just how much their clients owe is unknown, but Lindau is estimated to owe between $1 million and $10 million to all of her roughly 60 creditors, according to court documents.
Lindau and her husband listed 27-29 Boardman St., Newburyport, as their company’s principal address in court documents that also indicate 29 Boardman St. was sold in 2014.
Before Lindau's sentence was pronounced, two of her victims gave impact statements. One of them, the wife of a Haverhill small-business owner, said she was told repeatedly by Lindau that she and her husband did not have to worry — only to find out later the bookkeeper had been deceiving them.
"Something in my gut told me everything was OK because she had been with us for years," the victim said. "You ruined a lot of people and I don't trust the way I used to."
Lindau apologized for her actions and conceded she stole from acquaintances and friends to keep her business afloat.
"I am so so sorry, I can't apologize enough," Lindau said.
The Gloucester Daily Times contributed to this report.