Tuesday, January 30, 2024

CPA Tech Entrepreneur Charged in Offshore Tax Evasion Scheme

According to DoJ, an indictment was unsealed in St. Paul, Minnesota, charging a former Excelsior, Minnesota, man with tax evasion, assisting in the preparation of false tax returns and making false statements to federal agents. 

According to the indictment, from 2014 through 2018, David V. Erickson, a licensed CPA, engaged in a scheme to conceal from the IRS income that he earned abroad by falsely characterizing the funds he received as loans. Erickson allegedly owned and operated Halstead Bay Holdings (HBH), a Minnesota-based consulting company. HBH allegedly received payments from several foreign companies that Erickson partially owned. These foreign companies allegedly provided marketing and payment processing systems for an adult content website.

Erickson allegedly caused his foreign companies to transfer millions of dollars held offshore to bank accounts in the United States that he controlled. He allegedly directed his bookkeeper and others to falsely characterize those payments as nontaxable loans in HBH’s accounting records. HBH’s purported debt allegedly grew to nearly $5 million by the end of 2018. Erickson allegedly used the funds for personal expenses, including the purchase of a $1.3 million home and a luxury vehicle.

The indictment further alleges that Erickson provided false information to his accountants and bookkeepers, and, in turn, filed false federal income tax returns with the IRS. Erickson also allegedly lied to IRS Criminal Investigation special agents by claiming he had no authority to direct the foreign companies to send money.

If convicted, he faces a maximum penalty of five years (5) in prison for each tax evasion count and for making a false statement to IRS-CI agents and three years (3) in prison for each count of assisting in the preparation of false tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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