Owner of Boston Forensic Accounting Firm Charged with Tax Fraud

BOSTON – The owner of a Boston forensic accounting firm was arrested today and charged with tax fraud.

James Carey, 49, a certified public accountant and owner of Carey & Company, was indicted on one count of filing a false federal tax return. 

As alleged in the indictment, Carey & Company administered bank accounts on behalf of insurance companies into which the insurance companies and their clients could make deposits, and from which payments could be made on behalf of and to the insurance companies.  In or about November 2009, a customer of one of the insurance companies sent Carey & Company a payment of $594,217 intended for the insurance company, but during the months that followed, Carey allegedly transferred almost all of that money out of the account and used it for his own purposes.  The money Carey allegedly misappropriated from the insurance company was taxable income, and Carey failed to report this income on both his U.S. Individual Income Tax, Forms 1040, and U.S. Income Tax Returns for S Corporations, Forms 1120S, for 2009 and 2010.

The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $100,000.  Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Joel Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today.  Assistant U.S. Attorney Stephen Heymann of Ortiz’s Economic Crimes Unit is prosecuting the case.

The details contained in the Indictment are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.