Charlotte Insurance & Financial Executive Indicted For Filing False Tax Returns And Obstructing Grand Jury Investigation

CHARLOTTE, N.C. – Patrick Emanuel Sutherland, 47, of Charlotte, was indicted by a federal grand jury sitting in Charlotte for filing false tax returns and obstructing a federal grand jury investigation, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  The indictment was returned on September 17, 2015, and was unsealed today in federal court.

Acting U.S. Attorney Rose is joined in making today’s announcement by Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to allegations contained in the indictment, from 2007 to the present, Sutherland was an actuary, and the owner and operator of numerous companies in the insurance and financial industries.  The indictment alleges that between 2007 and 2010, Sutherland and his affiliated companies received deposits from domestic and foreign sources exceeding $2.5 million, yet Sutherland fraudulently underreported his business receipts and his personal income to the IRS by more than $1.5 million.  For example, despite receiving substantial income for years 2007 to 2010, Sutherland reported a combined income of approximately $276,697, and paid a mere $12,483 in total federal income taxes.  During the same three-year period, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, the indictment alleges.

According to allegations in the federal indictment, to conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister and her company.  In reality, the indictment alleges, most of these funds were insurance commissions due to Sutherland or were funds obtained from a brokerage account in Bermuda which Sutherland controlled.

The indictment alleges that because Sutherland worked with offshore insurance companies, some of his commissions had to be paid to an offshore intermediary.  The indictment alleges that Sutherland used his Bermuda-based shell company, Steward Technology Services Limited (STS) to funnel personal and business funds to Sutherland’s U.S. bank accounts.  According to allegations contained in the indictment, on numerous occasions, Sutherland mischaracterized the wire transfers from STS’s bank account in Bermuda to Sutherland’s various domestic accounts as capital contributions and loans.

According to the indictment, on several occasions between June 2012 and September 2012, Sutherland attempted to obstruct a federal investigation by providing fraudulent documents, including fictitious loan agreements and documents purportedly alleging his lack of control over STS’s bank account in Bermuda.

Sutherland had his initial appearance today in federal court.  The penalty for filing a false tax return is a maximum term of three years in prison and a $250,000 fine per count.  The obstruction of official proceedings charge carries a maximum term of 20 years in prison and a $250,000 fine.

The charges 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.

IRS-CI is handling the investigation.  Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.