CHARLOTTE, N.C. – A federal jury convicted Patrick Emanuel Sutherland, 48, of Charlotte, of filing false tax returns and obstructing a federal grand jury investigation charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).
According to filed court documents and evidence presented at trial, from at least 2007 to 2015, Sutherland was an actuary and the owner and operator of numerous companies in the insurance and financial industries. Between 2007 and 2010, Sutherland engaged in an elaborate scheme to conceal a substantial amount of income. Trial evidence established that Sutherland filed false tax returns with the IRS which underreported business receipts and personal income of approximately $2 million in income received from an offshore bank account in Bermuda, as well as from domestic sources. For example, according to the evidence, despite receiving substantial income for the relevant time period, Sutherland reported a combined income of approximately $276,697, and paid less than a mere $10,000 in total federal income taxes. During the same four-year period, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, including over $80,000 in private school tuition for his daughter and high-end jewelry purchases.
According to evidence presented at trial, witness testimony, and filed court documents, to conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister’s company. In reality, most of these funds were insurance commissions due to Sutherland or were funds obtained from a brokerage account in Bermuda which Sutherland controlled.
Trial evidence established that Sutherland worked with offshore insurance companies and some of his commissions had to be paid to an offshore intermediary. Sutherland used his Bermuda-based shell company, Steward Technology Services Limited (STS) to funnel personal and business funds to Sutherland’s U.S. bank accounts. On numerous occasions, Sutherland mischaracterized the wire transfers from STS’s bank account in Bermuda to Sutherland’s various domestic accounts as capital contributions and loans.
Evidence presented at trial demonstrated that on several occasions between June 2012 and September 2012, Sutherland sought to obstruct a federal investigation by providing fraudulent documents, including records of sham loans and documents purportedly reflecting his lack of control over his foreign business bank account in Bermuda.
The federal jury delivered the guilty verdict following a five-day trial. Sutherland is currently released on bond. The penalty for filing a false tax return is a maximum term of three years in prison and a $250,000 fine per count. The obstruction of official proceedings charge carries a maximum term of 20 years in prison and a $250,000 fine.
IRS-CI led the investigation. Assistant United States Attorneys Jenny G. Sugar and Daniel Ryan of the U.S. Attorney’s Office in Charlotte prosecuted the case.