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Press Release

Albuquerque woman pleads guilty to conspiracy to defraud the United States

For Immediate Release
U.S. Attorney's Office, District of New Mexico
Business set up LLCs and bank accounts to assist clients in evading the IRS

ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, announced that Stacy M. Underwood pleaded guilty on Oct. 21 to conspiracy to defraud the United States. Underwood, 51, of Albuquerque, will remain on conditions of release pending sentencing, which has not been scheduled.

According to the plea agreement and other court records, beginning in January 2005, Underwood and her business partner, David Wellington, 62, of Albuquerque, operated National Business Services, which promoted, sold and created Limited Liability Companies (LLCs) under New Mexico State Law. For many clients, National Business Services would open bank accounts under the names and IRS employer identification numbers (EIDs) of the LLCs, and the clients – whose names were not associated with the bank accounts - would have access to the funds in those accounts. Clients received debit cards, online bank access information and pre-signed checks with Underwood’s signature, which clients could use to access the money despite the bank never associating the client with the account.

Underwood and Wellington organized at least 192 LLCs in New Mexico between 2005 and 2015 on behalf of clients seeking to shield income from the IRS. Underwood opened at least 114 bank accounts for these clients. Underwood was the sole signer for 99 such accounts. Between Jan. 1, 2011, and July 31, 2018, over $40 million was deposited into clients’ accounts that were in the nominal control of Underwood.

Wellington was indicted on June 23, 2021, along with National Business Services client Jerry Shrock, 47, of Meadowview, Virginia. Wellington was arraigned on July 9, 2021, and Shrock was arraigned on June 15, 2021. Wellington and Schrock are charged with conspiracy to defraud the United States. Wellington faces an additional count of operation of an unlicensed money transmitting business. Wellington and Shrock remain on conditions of release pending trial, which is scheduled for Feb. 21, 2023.

According to the indictment, National Business Services created multiple LLCs in New Mexico for Shrock. Between May 9, 2011, and June 30, 2015, Shrock allegedly deposited and withdrew approximately $4,875,940, of which at least $4,347,101 was income for which Shrock never filed a personal or business tax return with the IRS.

Underwood and Shrock face up to five years in prison. Wellington faces up to 10 years in prison.

IRS Criminal Investigation investigated this case. Assistant United States Attorney Jeremy Peña is prosecuting the case.

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Updated October 25, 2022

Topics
Tax
Financial Fraud
Release Number: 22-235