FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
JULY 11, 2007
FOR IMMEDIATE RELEASE
OWNER OF ACCOUNTING FIRM SENTENCED FOR DEFRAUDING INVESTORS OF $1.3 MILLION AND FAILURE TO PAY OVER $500,000 IN TAXES
BALTIMORE, Maryland -- U.S. District Judge Andre M. Davis sentenced Wilkins McNair, Jr., age 49, of Ellicott City, Maryland today to 51 months in prison followed by five years of supervised release for wire fraud and money laundering in connection with a scheme to defraud investors in an obesity treatment clinic; and for failing to pay federal taxes and filing false tax returns in a separate scheme relating to his accounting firm, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Davis also ordered McNair to pay restitution of $1.369 million to the investors.
U.S. Attorney Rod Rosenstein said, "Mr. McNair defrauded innocent investors of more than $1.3 million by spending their money for his personal benefit instead of investing in a legitimate business, as he represented he would do. He also cheated the taxpayers by depriving the IRS of more than $560,000 in payroll and income taxes."
Fraudulent Diversion of $1.3 Million in Investor Funds
According to his plea agreement, McNair, a certified public accountant and the owner of Wilkins McNair, P.C. (WMPC), an accounting firm formerly located at 201 North Charles Street in Baltimore, provided accounting and other financial services to Bariatric Care Associates, LLC, (BCA), a corporation established by several investors, including a surgeon and cardiologist, who intended to open a clinic treating patients who suffered from morbid obesity. McNair helped find additional investors to provide start-up funding for BCA, as well as provided accounting and other financial services to BCA.
The original group of BCA investors incorporated themselves under the name M.O.M. Investment Group, Inc. (“M.O.M.”). The investors gave control of M.O.M. and its funds to McNair, who controlled M.O.M.’s bank accounts and appointed one of his family members as M.O.M.’s incorporator and registered agent. Between March 2004 and October 2005, five investors provided approximately $1.550 million to M.O.M. and/or McNair to finance BCA’s business operations. Most of these funds were provided by way of interstate wire transfers. Each of the investors executed escrow agreements with Wilkins McNair, P.C. authorizing it to conduct certain transactions with their funds for the benefit of the M.O.M. Investment Group and BCA. However, McNair used approximately $1.3 million of the $1.550 million entrusted to him by the M.O.M. investors for his personal benefit and to pay other expenses of his accounting firm.
Failed to Pay $566,940 in Taxes
In a separate scheme, McNair falsely reported that income and other taxes had been deducted from his wages on his individual tax returns for 1999 to 2001 in the amount of $160,951.27; under-reported $209,992.53 of payroll taxes due on reports filed by WMPC for 1999 to 2001; and failed to collect and pay $195,996.71 owed as payroll taxes. In all, McNair failed to pay to the IRS $566,940.51 in taxes between 1999 and 2005. Judge Davis ordered McNair to cooperate with the IRS in establishing the total amount of taxes, interest and penalties due as a condition of his supervised release.
United States Attorney Rod J. Rosenstein commended the Federal Bureau of Investigation and Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein thanked Assistant U.S. Attorneys Jefferson M. Gray and Jonathan Biran, who prosecuted the case.