Charlotte Insurance & Financial Executive Sentenced To Prison For Filing False Tax Returns And Obstructing Grand Jury Investigation

CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Patrick Emanuel Sutherland, 48, of Charlotte, to 33 months in prison, followed by three years of supervised release, for filing false tax returns and obstructing a federal grand jury investigation, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Sutherland was also ordered to pay $597,122 as restitution to Internal Revenue Service.

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 Investigations (IRS-CI).

According to filed court documents, evidence presented at trial, and today’s sentencing hearing, from at least 2007 to 2015, Sutherland was an actuary, and the owner and operator of numerous companies in the insurance and financial industries. Between 2007 and 2010, Sutherland engaged in an elaborate scheme to conceal a substantial amount of income. According to evidence presented at trial, Sutherland filed false tax returns with the IRS which underreported business receipts and personal income of approximately $2 million in income received from an offshore bank account in Bermuda, as well as from domestic sources. Trial evidence established that despite receiving substantial income for the relevant time period, Sutherland reported a combined income of approximately $276,697, and paid less than $10,000 in total federal income taxes. During the same four-year period, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, including paying over $80,000 in private school tuition and purchases of high end jewelry.

To conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister’s company. In reality, most of these funds were insurance commissions due to Sutherland or were funds obtained from a brokerage account in Bermuda, which Sutherland controlled.

According to trial evidence, Sutherland worked with offshore insurance companies and some of his commissions were paid to an offshore intermediary. Sutherland used his Bermuda-based shell company, Steward Technology Services Limited (STS) to funnel personal and business funds to Sutherland’s bank accounts in the United States. 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 court records and evidence presented at trial, on several occasions between June 2012 and September 2012, Sutherland sought to obstruct a federal investigation by providing fraudulent documents, including records of sham loans and documents purportedly reflecting his lack of control over his foreign business bank account in Bermuda.

In announcing today’s sentence, Judge Cogburn stated that, “The defendant used his intelligence to the detriment of paying taxes due,” and emphasized the importance of deterrence in tax cases, noting that they are difficult to detect.

Sutherland will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

IRS-CI led the investigation. Assistant United States Attorneys Jenny G. Sugar and Daniel Ryan of the U.S. Attorney’s Office in Charlotte prosecuted the case.