Sept. 22–A Charlotte insurance and financial executive has been indicted on charges of filing false tax returns and obstructing a federal grand jury investigation, Acting U.S. Attorney Jill Westmoreland Rose said.
According to the indictment, Patrick Emanuel Sutherland, 47, and his companies received deposits from domestic and foreign sources exceeding $2.5 million between 2007 and 2010, yet Sutherland fraudulently under-reported his business receipts and personal income to the IRS by more than $1.5 million.
For example, despite receiving substantial income for years 2007 to 2010, Sutherland reported a combined income of about $276,697 and paid a mere $12,483 in total federal income taxes, according to the indictment.
Over the same three years, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, prosecutors said.
The indictment was returned Thursday and unsealed Monday in federal court in Charlotte.
To conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister and her company, according to the indictment. In reality, the indictment says, most of the money was insurance commissions due Sutherland or was from a brokerage account in Bermuda that Sutherland controlled.
Because Sutherland worked with offshore insurance companies, some of his commissions had to be paid to an offshore intermediary, according to the indictment. Sutherland, who is an actuary, used his Bermuda-based shell company, Steward Technology Services Limited, to funnel personal and business funds to his U.S. bank accounts, the indictment says.
Sutherland mischaracterized the wire transfers from STS’s bank account in Bermuda to his various domestic accounts as capital contributions and loans, prosecutors said.
According to the indictment, Sutherland tried several times in 2012 to obstruct a federal investigation by providing fraudulent documents, including fictitious loan agreements and documents claiming his supposed lack of control over STS’s bank account in Bermuda.
Sutherland had his initial appearance in federal court Monday. Efforts by the Observer to reach him for comment were unsuccessful Tuesday.
The penalty for filing a false tax return is a maximum three years in prison and a $250,000 fine per count. The obstruction of official proceedings charge carries a maximum 20 years in prison and a $250,000 fine.
Sutherland’s trial date has yet to be announced.
Joe Marusak: 704-358-5067, @jmarusak
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