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Justice News

Department of Justice
U.S. Attorney’s Office
District of Utah

FOR IMMEDIATE RELEASE
Wednesday, June 6, 2018

Utah Financial Advisor Sentenced To Prison For Tax Evasion, Securities Fraud And Wire Fraud

Defrauded Investors Out of More Than $10 Million and Caused Tax Loss of More Than $1 Million

ST. GEORGE, UT - A St. George, Utah, financial advisor was sentenced to 72 months in prison in U.S. District Court in St. George, Utah, Monday for his role in selling fraudulent tax-avoidance and investment strategies to his clients.  Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah announced the sentencing.

Henry Brock pleaded guilty to tax evasion, securities fraud and wire fraud earlier this year.  According to documents and information provided to the court, Brock founded a financial services company in 2009 and served as the president from 2009 through 2017.  As President, he marketed and sold a fraudulent tax scheme, called “IRA Exit Strategy,” to potential investors.  Brock promised investors that he could provide a way for them to avoid paying taxes on IRA withdrawals, which would otherwise be subject to Internal Revenue Service (IRS) penalties and taxes. 

To implement his scheme, Brock caused his business to issue tax forms to his clients falsely representing that they were investors in his business who incurred losses, which served to offset the clients’ tax liabilities.  As a result, Brock caused clients to file fraudulent income tax returns claiming a total of approximately $3.8 million in bogus business losses and resulting in a tax loss of more than $1.1 million.

During this period, Brock fraudulently raised more than $10.8 million in investments by making false representations to investors regarding the “IRA Exit Strategy,” the financial condition of his company and other matters.  On at least one occasion, Brock also transferred $196,323 of a client’s investment funds and used the money for his own personal and business expenses.

In addition to the term of imprisonment, U.S. District Court Judge Ted Stewart ordered Brock to serve three years of supervised release and to pay restitution in the amount of $12 million.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber thanked special agents of IRS Criminal Investigation and the Utah Division of Securities, who conducted the investigation, and Assistant U.S. Attorney Trina Higgins and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting this case.

 

Topic(s): 
Tax
Component(s): 
Updated June 6, 2018