IRS Criminal Investigation
09/13/2024 | Press release | Archived content
U.S. Attorney's Office and IRS announce sentencing of Albuquerque man for tax evasion scheme
Date: Sept. 13, 2024
Contact: [email protected]
ALBUQUERQUE - An Albuquerque man was sentenced to 40 months in prison for devising and operating a tax evasion scheme and ordered to pay over $5.5 million in restitution.
There is no parole in the federal system.
According to court records, in January 2005, David Wellington and Stacy Underwood founded National Business Services, LLC in New Mexico, specializing in creating LLCs for clients seeking to "beat the IRS" by evading taxes. Wellington focused on marketing and client development, while Underwood managed corporate filings and bank accounts.
The company obtained employer identification numbers (EINs) for clients and opened bank accounts under Underwood's sole signature authority. From 2005 to 2015, they created 192 LLCs and opened 114 bank accounts, with approximately $41.7 million deposited into accounts under Underwood's control, representing concealed income.
One notable client, Jerry Shrock, had three LLCs formed by National Business Services while undergoing an IRS audit. Despite the audit, Shrock transferred his home into one of the LLCs to shield it from the government. Between 2011 and 2015, he deposited nearly $4.9 million into a bank account opened for one of his LLCs, concealing over $4.3 million in income without ever filing tax returns.
Stacy 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.
Jerry Shrock pleaded guilty to conspiracy to defraud the United States and was sentenced to 5 years' probation and ordered to pay $1,542,769.70 in taxes, interest, and penalties.
Upon his release from prison, Wellington will be subject to three years of supervised release and is prohibited from ever running any business advising clients or dealing with the IRS.
U.S. Attorney Alexander M.M. Uballez and Carissa Messick, Acting Special Agent in Charge, IRS Criminal Investigation (IRS-CI), made the announcement today.
IRS Criminal Investigation investigated this case. Assistant United States Attorney Jeremy Peñais prosecuting the case.
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.