Rhode Island Man Indicted for Defrauding Investors and Tax Evasion
Allegedly Ran Multi-Million Dollar Ponzi Scheme to Fund Lifestyle and Used Shell Companies to Evade Taxes
A federal grand jury in Rhode Island indicted a Rhode Island man yesterday on multiple counts of wire fraud, money laundering, and tax evasion after allegedly running decade-long schemes to defraud investors and the United States Treasury, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Aaron Weisman for the District of Rhode Island.
According to the indictment, between 2008 and 2018, Thomas Huling of West Warwick, Rhode Island, 55, formerly a mortgage broker, orchestrated a scheme to defraud investors by promoting several investment projects, including offshore high-yielding bond trading platforms, a car emissions reduction technology, and an online advertising and marketing company. Huling allegedly solicited funds for these investments by representing, among other things, that the money would be used for the particular project, and that the investments would achieve substantial returns - with little or no risk - within a short period of time. The indictment alleges that to enhance his credibility and build trust, Huling incorporated religion and the possibility of charitable good works into his sales pitch, and would claim association with well-known individuals who in turn had an interest in his investments.
In truth, and contrary to the representations and promises he made to investors, the indictment alleges that Huling used investor monies to support his lifestyle that included purchases of high-end luxury vehicles, membership and golf fees at multiple country clubs, clothes and fashion, food and restaurants, vacations and travel, and improvements to his residence.
The indictment further alleges that when investors contacted him with concern about the status of their investment, Huling lulled them with false and fraudulent excuses and promises to string them along, and other times refused and avoided calls. To appease certain investors, Huling allegedly used money raised from new investors to pay off the earlier investors. To conceal the source and disposition of funds, the indictment alleges that Huling established multiple shell companies and more than 50 bank accounts to deposit, commingle, withdraw, and transfer funds.
In all, Huling’s fraud scheme against investors allegedly yielded approximately $14 million in funds raised from investors, causing a loss to investors of more than $6 million.
The indictment further alleges that while defrauding investors Huling also defrauded the United States by evading taxes. It charges that between 2009 and April 2018, while living his lifestyle through millions in personal expenditures using the investors’ funds, Huling reported no taxable income, paid no income taxes, and committed multiple affirmative acts in an effort to conceal his income and mislead the IRS. As part his tax evasion scheme, Huling allegedly filed false and fraudulent individual and corporate income tax returns, used multiple nominee entities and bank accounts to conceal income, used corporate account debit cards to pay for personal expenses, used cash extensively, manipulated the books and records of his purported companies to record sham loans so as to conceal personal expenditures and income, titled personal assets in the name of shell companies, and lied to IRS special agents concerning his income, expenses, and business activities. Allegedly, while specifically evading the assessment of his 2009 through 2011, 2012, and 2016-2017 taxes, Huling also evaded payment of his 2007 taxes.
If convicted, Huling faces a statutory maximum sentence of twenty years in prison for each wire fraud charge, ten years in prison for each money laundering charge, and five years in prison for each tax evasion charge. Huling also faces a potential period of supervised release, substantial fines and penalties, and orders of restitution and forfeiture.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Weisman thanked special agents of IRS-Criminal Investigation and the FBI and an IRS revenue agent, who all investigated the case. They also thanked Assistant Chief John N. Kane, Jr. of the Tax Division and Assistant United States Attorney Sandra Hebert, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.