Tuesday, May 16, 2017

Former Massachusetts Police Sergeant Pleads Guilty to Embezzling Funds From Disabled Veterans and Running Fraudulent Tax Preparation Business

A former Whitman, Massachusetts police sergeant pleaded guilty today to wire fraud, preparing false income tax returns for clients of his tax preparation business, obstructing the internal revenue laws and misappropriating funds from the accounts of disabled veterans while he was a fiduciary appointed by the U.S. Department of Veterans ffairs (VA), announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney William D. Weinreb for the District of Massachusetts.
According to documents filed with the Court, from 2007 to 2012, Glenn P. Pearson, 61, was appointed a VA fiduciary for eight disabled veterans of the U.S. armed forces. A veteran, who has been awarded VA benefits but is unable to manage his or her funds due to injury, disease, mental incompetence or infirmities of advanced age, can have another individual, referred to as a fiduciary, appointed by the VA to receive funds on the veteran’s behalf and to manage those funds for the benefit of the veteran. Pearson used his position as a fiduciary to misappropriate and embezzle more than $250,000 in VA-issued benefit money from the accounts of several veterans.

Moreover, beginning in 2012, Pearson operated FTS Tax Services, a tax preparation business through which he prepared false tax returns for clients for a fee. From 2012 through 2015, Pearson prepared numerous tax returns that included false credits and fictitious deductions in an effort to get his clients bigger refunds than they were entitled to receive. When Pearson’s clients were audited by the Internal Revenue Service (IRS), Pearson took steps to obstruct the IRS—including making false statements to the IRS and preparing false documents for his clients to submit to the IRS during the audits. Pearson admitted to causing a tax loss of more than $1.5 million.

“Glenn Pearson took advantage of disabled military veterans who could not manage their own financial affairs, by diverting hundreds of thousands of dollars in VA payments to his personal benefit,” said Acting Deputy Assistant Attorney General Goldberg. “He then used his tax preparation business to generate more than $1.5 million in bogus refunds and obstructed IRS audits looking into the fraudulent returns he prepared. Today, Pearson is held fully accountable for his abuse of trust and fraudulent conduct.”

“Mr. Pearson abused his position as a fiduciary and took advantage of vulnerable members of our society,” said Acting U.S. Attorney Weinreb. “Our veterans deserve the best care, and we will hold accountable those who seek to profit at their expense.”

“Mr. Pearson now finds himself on the opposite end of the very laws he was once sworn to uphold,” said Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Division. “He took advantage of his position as a fiduciary to steal hundreds of thousands of dollars from disabled veterans. The FBI will do everything we can to protect citizens against fraud, and stop those who steal from them.”

“The American tax system is designed to provide vital government services to our citizens, especially disabled veterans, who have paid the highest price for our freedom,” said Acting Special Agent in Charge Kristina O’Connell of the IRS Criminal Investigation (CI). “Mr. Pearson took advantage of both, motivated by greed and his desired lifestyle. The IRS will use all lawful means to identify and prosecute those, like Pearson, who prepare false tax returns.”

“Pearson deliberately targeted our most vulnerable veterans – those who were unable to handle their own financial affairs,” said Special Agent in Charge Donna L. Neves of the VA Office of Inspector General (OIG), Northeast Field Office. “Fiduciary fraud, especially in this case of multiple victims, is considered a high priority and aggressively investigated by the VA Office of Inspector General because those veterans deserve protection, not deceit.”

Sentencing is scheduled for Sept. 19 before Judge Saris. Pearson faces a statutory maximum sentence of 20 years in prison for wire fraud, five years in prison for misappropriation of funds by a fiduciary, three years in prison for preparing false tax returns, and three years in prison for attempting to interfere with the administration of internal revenue laws. As part of the terms of the plea agreement, Pearson will make restitution to the veterans, the VA and the IRS. Pearson also faces a period of supervised release and monetary penalties. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Weinreb thanked special agents of IRS–CI, FBI and VA-OIG, who conducted the investigation, and Assistant U.S. Attorney Vassili Thomadakis and Assistant Chief Karen Kelly of the Tax Division, who are prosecuting the case.

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