Middletown Man Charged with $3MM in Wire and Bank Fraud, Money Laundering and Tax Offenses
WILMINGTON, Del. – David C. Weiss, Acting United States Attorney for the District of Delaware, announced that an Indictment was handed down by a federal grand jury on Tuesday, June 6, 2017, charging Donald Rice, age 54, of Middletown, Delaware, with wire fraud, bank fraud, money laundering and tax offenses. The defendant faces up to 30 years in prison on the bank fraud charges, 20 years in prison on the wire fraud charges, up to 10 years on the money laundering charge, and three years on the filing a false tax return charge and up to one year on the failure to file a tax return offense.
The Indictment alleges that between 2013 and 2015, the defendant, who was at the time a certified public accountant, embezzled almost $3 million dollars from a trust created to pay the tax obligations of a dissolving company. While serving as the trustee, defendant used funds deposited into the trust account to finance his own business investments, including the purchase of multiple tax preparation franchises. The defendant also used trust account funds for his personal expenses, including the purchase of a luxury vehicle.
The Indictment further alleges that Rice had previously defrauded another client. In 2011, while purportedly providing estate-planning services for a client, Rice misappropriated $100,000, which the client provided to Rice to invest on her behalf. The defendant instead used this money to fund his own business ventures and pay personal expenses. Following that client’s death in 2012, Rice, who was also the executor of her estate, continued to collect her pension payments from a public employee retirement system, again using the funds for his personal benefit.
The Indictment also alleges that Rice was engaged in income tax fraud. The federal tax return Rice filed for 2013 did not include, as required by law, his illegal income from his fraud scheme and materially understated his income. After seeking an extension of time to file a tax return for 2014, defendant never filed a return for that tax year.
Acting U.S. Attorney Weiss stated, “I want to thank both the Internal Revenue Service and the Federal Bureau of Investigation for their efforts in building this case. The theft of millions of dollars by a trusted professional is a brazen crime. Defendant’s further actions, victimizing an elderly woman who had entrusted him with funds and failing to abide by his own tax obligations, similarly demonstrate a blatant disregard for the law. We are committed to the prosecution of these types of offenses.”
This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. The prosecution is being handled by Assistant United States Attorney Lesley Wolf.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.