San Francisco Tax Preparer Sentenced To 30 Months In Prison For Wire Fraud, Money Laundering
Defendant defrauded victim of over $1.3 million
SAN FRANCISCO – San Francisco former certified public accountant Cary S. Collins was sentenced to 30 months in federal prison for wire fraud and money laundering, announced United States Attorney Alex G. Tse and Acting Special Agent in Charge Internal Revenue Service (IRS-CI) Tara Sullivan. The sentence was handed down today by the Honorable Richard Seeborg, U.S. District Judge.
Collins, 56, pleaded guilty to the charges on January 31, 2018. According to his plea agreement, Collins admitted that between February 2012 and April 2013, he devised and executed a plan to defraud a client of more than $1.3 million. Collins described the victim as a “client and friend.” Nevertheless, the defendant admitted he used his education and experience as a CPA, the position of trust he had developed as a financial advisor, and his personal relationship to convince the client to provide funds for the fraud. To perpetrate the scheme, Collins promised the client that if funds were transferred directly into Collins’ company’s bank account, Collins would transfer the money to an account at a new investment firm in the client’s name. On the basis of these representations, Collins convinced the victim to complete wire transfers to Collins’ company’s bank account. The client made four wire transfers to Collins in the aggregate amount of $1,325,000 between February 21, 2012, and March 5, 2012.
Collins received the wire transfers but never deposited the funds with the new investment firm. Instead, Collins spent the money on his own personal expenses, debts, and liabilities, including, among other things, payments for a vacation rental in Hawaii, payment of a contempt order against him, and payments to other entities such as Audi Financial Services, American Express, CitiCards, and Bi-Rite.
In April of 2012, the client inquired with Collins as to why the money had not been transferred to her new investment account. Collins responded with numerous false excuses and fraudulent explanations over the course of the following year as to the whereabouts of the money and his purported intention to repay the funds. The client ultimately was able to obtain the money back in July 2013, but only after obtaining a security interest on Collins’ home.
On November 17, 2015, a federal grand jury indicted Collins, charging him with four counts of wire fraud, in violation of 18 U.S.C. § 1343; four counts of money laundering, in violation of 18 U.S.C. § 1957; and one count of aiding and assisting in preparing a false tax return, in violation of 26 U.S.C. § 7206(2). Pursuant to his plea agreement, Collins pleaded guilty to one wire fraud count and one money laundering count. The remaining wire fraud and money laundering charges were dismissed. The aiding and assisting in preparing a false tax return count remains pending.
In addition to the prison term, Judge Seeborg ordered that Collins be placed on a three-year term of supervised release following his release from prison and that he pay a criminal fine in the amount of $10,000. Judge Seeborg ordered Collins to begin serving his sentence on January 2, 2019.
Assistant U.S. Attorney Brian R. Faerstein prosecuted the case with the assistance of Rosario Calderon. The prosecution is the result of an investigation by the IRS.