Virginia Man Sentenced to 5 Years Probation and Ordered to Pay Over $1.5 Million in Restitution for Defrauding the United States
For Immediate Release
U.S. Attorney's Office, District of New Mexico
ALBUQUERQUE – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, and Carissa Messick, Acting Special Agent in Charge, IRS Criminal Investigation, announced that Jerry Shrock was sentenced to 5 years’ probation and ordered to pay $1,542,769.70 in taxes, interest, and penalties. Shrock, 48, of Meadowview, Virginia, pleaded guilty on Nov. 28, 2022, to conspiracy to defraud the United States. Prior to sentencing, Shrock paid more than $430,000 toward his tax debt.
According to court records, beginning in January 2005, David Wellington and his business partner Stacy Underwood 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 (EINs) 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.
In his plea agreement, Shrock admitted that he contacted National Business Services in 2006 for help avoiding federal taxes by incorporating a business in New Mexico. Shrock spoke with Underwood and Wellington and became a client of National Business Services.
Wellington and Underwood created three LLCs in New Mexico for Shrock: White Top Enterprise LLC; Poultry Enterprises LLC; and TALC Properties LLC. Shrock was not listed on the Articles of Organization. Instead, Underwood was listed as the “Organizer,” and National Business Services was the initial registered agent for each of the three LLCs.
On May 9, 2011, Underwood opened a bank account in the business name of White Top Enterprise, LLC, utilizing the company EIN. Underwood was the sole signer on the bank account. Shrock’s name was not associated with the account. Underwood provided Shrock with online access to the bank account and a book of pre-signed checks with her signature. Between May 9, 2011, and June 30, 2015, Shrock caused approximately $4,875,940 to be deposited into the White Top Enterprise LLC bank account, and over the same time period, Shrock and his wife withdrew or caused the withdrawal of approximately $4,875,940. Among the withdrawals was a wire transfer of approximately $352,216 for the purchase of a home.
Prior to his indictment in this case on June 23, 2021, Shrock did not file a personal or business tax return with the IRS reporting the White Top Enterprises LLC income. At the time of the White Top Enterprise LLC deposits and withdrawals, Shrock had a large outstanding IRS lien of approximately $1,026,858 for unpaid taxes, penalties and interest. the White Top Enterprises LLC bank account enabled Shrock to generate and deposit income while evading the outstanding assessment and avoiding personal and business taxes on the income.
On April 24, 2023, Wellington pleaded guilty to conspiracy to defraud the United States and remains on conditions of release pending sentencing, which has not been scheduled. Under the terms of his agreement, Wellington faces up to 5 years in prison followed by up to 3 years of supervised release.
On Oct. 21, 2022, Underwood pleaded guilty to conspiracy to defraud the United States and remains on conditions of release pending sentencing, which has not been scheduled. Under the terms of her agreement, Underwood faces up to 5 years in prison followed by up to 3 years of supervised release.
IRS Criminal Investigation investigated this case. Assistant United States Attorney Jeremy Peña is prosecuting the case.
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Updated February 7, 2024
Press Release Number: 24-63