A Methuen woman faces felony charges that she reduced her Lawrence asbestos removal company's insurance and tax bills by directing employees to cash paychecks at a local liquor store, allowing her to mask the size of her payroll.

An Essex County grand jury last week handed up six indictments against Regina Guzman and AG Asbestos Inc. charging workers' compensation fraud, larceny by false pretenses and unemployment tax evasion.

To make her work force look smaller than it was, Guzman, in 2003, allegedly told employees to cash paychecks at the liquor store, according to a statement from the state Office of the Attorney General. She would then buy the paychecks from the liquor store, paying a two percent fee for the service, according to the statement.

By circumventing banking institutions, Guzman was able to under-report the size of her payroll and save about $138,000 on the company's workers' compensation insurance premium, according to the release. The company also under-reported its payroll to the state Division of Unemployment Assistance, reducing its tax payments.

AG Asbestos reported $223,809 in payroll in 2003, more than $1.3 million less than it actually paid to employees, according to the statement.

Harry Pierre, a spokesman for the Office of the Attorney General, would not provide further information about the case, saying it is department policy not to comment on active court cases. Guzman could not be reached for comment yesterday afternoon.