ViaTROON is required by law to withhold taxes from wages paid as part of an employment arrangement, and to pay the employer portion of Social Security and Medicare taxes. For someone to be considered an independent contractor, they must
meet specific criteria (note that some states have rules that are more strict than the IRS).
So this would not be tax fraud on Russ's part (unless he doesn't report it), but it would be on ViaTROON's if they had acquiesced. The only way around not deducting taxes would be for them to "net up" the payment, by increasing the gross amount until the net matched the proposed amount ex-withholding.