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Former IRS employee sentenced for wire fraud and tax evasion

March 8, 2012

St. Louis, MO - The United States Attorney’s Office announced today that Richard Saunders was sentenced to 72 months of imprisonment for operating a Ponzi-style investment scheme in which investors were promised guaranteed returns, based on off-shore annuities. In reality, the investors who were paid returns on their investments were normally paid using investment funds obtained from other investors, rather than from returns on legitimate investments. Between 2002 and January 2008, Saunders spent, paid and diverted millions of dollars in investor funds. Some of the funds were transferred to overseas accounts, including accounts in Thailand. Saunders used substantial funds for personal purposes. Saunders was also sentenced to 60 months of imprisonment for tax evasion, to run concurrent with the sentence for his fraud conviction.

In 2008, Saunders left the U.S. and relocated to Thailand without paying investors. Saunders was deported from Thailand and returned to the United States in early 2011 by the Royal Thai Police.

Saunders operated and was affiliated with a business known as Advisors Capital Holdings, Inc. ("ACH"), in St. Louis County, as well as other businesses. ACH was a primary company used in the investment scheme.

Additionally, Saunders, who formerly worked for the IRS, did not file timely returns for the tax years 1992 to 1998, but subsequently returns were filed, leaving a total of $445,836 tax due for those years. While the IRS was trying to collect the taxes due, Saunders provided false information regarding his assets and accounts.

"Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money" said Stephen Boyd, Special Agent in Charge of IRS Criminal Investigation. "In addition, as a former IRS employee, Mr. Saunders shirked his income tax responsibilities and will now have to suffer the consequences of his criminal actions."

Saunders was also ordered to pay more than $6 million in restitution to victims of his fraud scheme, and almost $446,000 to the IRS.

RICHARD SAUNDERS, formerly of St. Louis, MO, pled guilty in October 2011 to one felony count of wire fraud and one felony count of tax evasion, and appeared today for sentencing before United States District Judge Carol E. Jackson.

This case was investigated by Internal Revenue Service Criminal Investigation. Assistant United States Attorney John Bodenhausen is handling the case for the U.S. Attorney’s Office.

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