Providence Tax Fraud Lawyers

Providence Tax Fraud Lawyers

Peter Leach was a Rhode Island personal injury attorney. His clients trusted him with their settlement money – the payments they received after accidents, injuries, and losses. Leach forged client signatures and deposited settlement checks into his attorney trust account. Then he used the money for himself. Over $540,000 withdrawn in cash for personal expenses. When earlier clients demanded their money, he paid them with funds stolen from newer clients – a classic Ponzi scheme run from an attorney trust account. He made false statements to clients about case status. He promised to pay medical bills using money he had already taken. Meanwhile, he made false statements to the IRS about his assets and claimed he couldn’t pay taxes he clearly owed. His sentence: 33 months in federal prison plus $299,774 to fraud victims and $320,622 to the IRS. The attorney whose job was protecting injured clients stole their settlements and lied about his taxes.

The District of Rhode Island has seen tax fraud at scales that destroyed careers and lives across Providence and the surrounding region. An investment advisor who ran a decade-long Ponzi scheme while reporting no income to the IRS. A tax preparer who defied a court order banning him from the profession and prepared returns that were 92% inaccurate. A business owner who withheld $1.2 million in employment taxes from employee paychecks and never sent the money to the government. When federal prosecutors in Providence bring tax charges, the defendants often include professionals who exploited positions of trust – and their sentences reflect the depth of that betrayal.

The Attorney Who Stole Client Settlements

Peter Leach was a personal injury attorney in Rhode Island. His clients came to him after accidents and injuries – people in vulnerable situations who needed legal help getting compensation they were owed. The attorney trust account where he deposited their settlement checks was supposed to protect their money. Leach turned it into his personal piggy bank.

Heres the thing about attorney trust accounts. The money in those accounts belongs to clients – its held in trust for them by the attorney. When personal injury clients receive settlements, the funds typically go into the trust account first. The attorney takes their fee, pays any liens, and distributes the rest to the client. The system depends entirely on attorney honesty. Leach exploited that trust systematicaly for years.

Leach forged client signatures and deposited settlement checks into his attorney trust account. Then instead of distributing the money properly, he used it for himself:

• He withdrew over $540,000 in cash from the trust account for personal expenses
• When clients started asking questions about there settlements, he made false statements about case status
• He promised to pay medical expenses and bills using settlement funds he had already taken

The scheme became a Ponzi operation. When earlier clients demanded there money, Leach paid them using funds stolen from newer clients. The payments kept the scheme running – each satisfied client created time to steal from the next one. The fraud continued untill there werent enough new victims to cover the growing demands from old ones. The house of cards eventualy collapsed under its own weight.

Heres the uncomfortable truth about attorney fraud. Between 2014 and 2019, while stealing from clients, Leach was also evading taxes on his ill-gotten gains. He made false statements on IRS forms regarding his assets. He falsely claimed inability to pay taxes to revenue officers. The attorney who lied to clients also lied to the IRS – and both sets of lies eventualy produced federal charges.

U.S. District Court Judge Leo T. Sorokin sentenced Leach to 33 months in federal prison. The court ordered:

• $299,774 in restitution to fraud victims
• $320,622 to the IRS

Nearly three years in federal prison for the personal injury attorney who injured his own clients financialy. As the U.S. Attorney stated: “Peter Leach egregiously abused the core responsibility of any lawyer – the trust of his clients.” The attorney who was supposed to protect vulnerable people stole from them instead.

For anyone in Providence who entrusted money to professionals – attorneys, financial advisors, accountants – the Leach case demonstrates the exposure. The trust account that should protect your money can become the mechanism of theft. The professional whose job is protecting your interests may be serving there own interests instead. And the fraud that seems invisible for years eventualy produces criminal charges when investigators trace the money.

Eight Years For The Investment Fraudster

Thomas Huling of West Warwick ran a decade-long Ponzi scheme while reporting no income to the IRS. Between 2008 and 2018, he promoted investment projects to victims and collected there money. Between 2009 and 2018, he reported no taxable income. Zero. A man running investment schemes generating substantial funds filed returns showing nothing. The combination of investment fraud and tax evasion produced an eight-year federal sentence.

Heres the paradox of Hulings situation. He was soliciting investments and receiving money throughout the decade. The funds were flowing. The investor payments were arriving. Yet his tax returns showed no income – as if the money materialized from nowhere and belonged to nobody. The returns were completly disconnected from the reality of his financial activity.

Huling didnt just fail to report income – he activly hid it:

• He used nominee bank accounts to conceal funds
• He paid personal expenses using cash and corporate debit cards to avoid creating traceable records
• The elaborate concealment shows he understood the income was taxable and chose to evade rather then report
• The hiding was deliberate and sustained across an entire decade

Think about the scale of deception required. For ten years, Huling maintained the fraud on two fronts – lying to investors about there money while lying to the IRS about his income. Each false tax return was another year of evasion. Each investment pitch was another opportunity for fraud. The parallel deceptions ran simultaniously untill investigators connected the patterns.

U.S. District Court Judge Mary S. McElroy sentenced Huling to eight years in federal prison. The court ordered three years of supervised release and restitution to victims. Eight years for the West Warwick man who thought nominee accounts and cash payments would hide a decade of fraud. The investors he cheated will never recover there losses. The taxes he evaded will never be fully collected. The eight years in prison cant undo the damage to people who trusted him with there savings.

For anyone in Providence running investment schemes while failing to report income, the Huling case demonstrates the exposure. The IRS compares lifestyle and business activity against reported income. When someone lives well while reporting nothing, investigators notice. The nominee accounts that seem to provide concealment actualy create documentary evidence of evasion. The decade-long scheme eventualy produces a decade-level sentence.

The Tax Preparer Who Defied The Court

Michael Brier owned Refunds Now Inc. in Rhode Island. In March 2011, a federal court permanantly barred him and his employees from preparing federal income tax returns for others. The court found that at least 300 returns prepared by his firm understated customer tax liabilities through fabricated deductions and credits. Brier kept preparing returns anyway.

Heres the irony of Briers situation. Of aproximately 24,000 returns his firm prepared between 2003 and 2007, an IRS examination of 350 returns showed 92 percent required adjustments. Ninety-two percent wrong. Nearly every return the IRS examined was inaccurate. The tax preparer whose job was ensuring accurate returns was getting them wrong almost every time.

The court order should have ended Briers career. It didnt. After being permanantly barred from preparing returns, Brier continued the very activity the court prohibited. The injunction that was supposed to protect taxpayers from his incompetence became just another rule he chose to ignore. Criminal contempt was the predictable consequence.

While violating the court order, Brier was also evading his own taxes:

• Between 2004 and 2009, he underreported income of $1,152,679
• The unpaid federal taxes totaled $399,424
• The tax preparer who couldnt prepare accurate returns for clients also couldnt – or wouldnt – prepare accurate returns for himself

The pattern of inaccuracy extended to his personal filings.

U.S. District Court sentenced Brier to 27 months in federal prison plus three years supervised release. The court ordered him to pay back taxes to the IRS. Over two years in prison for the tax preparer who defied a court order banning him from the profession. The permanent bar that should have stopped him eventualy became criminal contempt that sent him to prison.

For anyone in Providence using tax preparers with questionable histories, the Brier case demonstrates the exposure. Court injunctions against preparers are public record. The preparer who seems to get great refunds may be fabricating deductions. And when the IRS audits returns with fabricated claims, the taxpayer faces the liability – even if the preparer created the fraud. The signatures on your returns make them your responsibility regardless of who prepared them.

Employment Taxes That Never Reached The IRS

Gail Hynson was president of Hynson Electrical Services Inc. in Rhode Island. Between 2016 and 2020, her company employed aproximately 13 employees. She withheld federal income taxes, Medicare, and Social Security taxes from there paychecks. Then she kept the money instead of sending it to the government. Total amount withheld but never remitted: over $1.2 million.

Heres what makes employment tax fraud so serious. Those withholdings belong to the government – there trust fund taxes held temporarily by the employer. The employees who had money taken from there paychecks beleived it was going to the IRS and Social Security:

• There W-2 forms would show deductions
• But if the employer kept the money, those contributions never reached there Social Security accounts
• The employees retirement security was basicly stolen

Hynson served as the company bookkeeper. She knew exactly what was happening with the withheld funds. She created fraudulent W-2 forms indicating taxes had been paid when no money had been sent to the government. The false W-2s compounded the fraud – creating documents that showed compliance where none existed. The paperwork looked correct while the payments never happened.

The company also failed to file required quarterly federal tax returns. The returns that would have shown the liability were simply not submitted. No returns meant no obvious debt showing up in IRS systems. The scheme depended on staying invisible – and avoiding required filings helped maintain that invisibility untill investigators started looking.

Hynson pleaded guilty to:

• Ten counts of failure to account for and pay over payroll taxes
• Three counts of filing false tax returns

She faced sentencing in early 2025. The businesswoman who withheld $1.2 million from employee paychecks and kept it for herself discovered that employment taxes are a priority enforcement area for the IRS. The employees who worked for Hynson Electrical Services had money taken from every paycheck that never reached Social Security.

For business owners in Providence who havent remitted employment taxes, the Hynson case is a warning:

• The IRS treats trust fund taxes as a priority
• The responsible persons – owners, officers, managers – can be held personaly liable
• The taxes you withheld but didnt remit will follow you personaly
• Corporate structure dosent protect against employment tax obligations

Rhode Islands Moderate Tax Creates Federal Focus

Rhode Island has a moderate state income tax rate – maxing out at 5.99% for income over $176,050. With three brackets at 3.75%, 4.75%, and 5.99%, its neither the lowest nor highest in the nation. But that moderate rate dosent reduce federal exposure.

Heres what that means practicaly:

• Rhode Island residents still face federal income tax rates up to 37% for high earners
• The state tax is secondary compared to federal obligations
• When Rhode Island residents evade taxes, there primary exposure is federal – not state
• Federal prosecutors in the District of Rhode Island pursue that exposure aggressivly

The Huling case involved eight years for investment fraud and tax evasion. The Leach case involved 33 months for attorney fraud and tax evasion. The Brier case involved 27 months for defying a court order and evading taxes. The biggest exposure in Rhode Island isnt the 5.99% state rate. Its the federal system that prosecutes evasion with substantial sentences.

State and federal agencies do coordinate there investigations. The Rhode Island Division of Taxation pursues violations of state tax law. But the major prosecutions – the ones generating multi-year sentences – come from federal prosecutors handling IRS cases. The moderate 5.99% rate that makes Rhode Island easier then states like California dosent protect anyone from federal prosecution.

For taxpayers who evaded both Rhode Island and federal taxes, dual exposure exists. But the federal exposure dominates. The prison sentences, the restitution orders, the supervised release periods – all flow from federal prosecution. The state tax obligation almost becomes a secondary concern when federal charges are pending.

Defense Strategy In Providence

If your facing tax fraud exposure in Providence, the calculus involves understanding how the District of Rhode Island operates.

The cases establish clear patterns:

• Leach case: Attorneys who steal client money and evade taxes face nearly three years plus restitution to both victims and the IRS
• Huling case: Decade-long Ponzi schemes combined with tax evasion generate eight-year sentences
• Brier case: Defying court orders while evading taxes produces over two years in prison
• Hynson case: Employment tax fraud generates criminal charges even when prison is avoided

Heres what these cases have in common. By the time defendants faced prosecution, there options had narrowed dramaticaly. The investigations were complete. The evidence was gathered. The schemes were documented. The 90% federal conviction rate means fighting the charges rarely succeeds. The only questions were conviction and sentencing.

The time to address tax fraud exposure is before any of that happens. Voluntary disclosure programs exist. Coming forward before the IRS finds you creates opportunities to resolve issues civily – with penalties and interest, but potentialy without prison. Rhode Islands moderate state tax means federal exposure is the primary concern – and federal voluntary disclosure can address that exposure before criminal investigation begins.

If an investigation has already begun, damage control becomes the priority:

• Understanding what investigators know
• Protecting against self-incrimination
• Navigating toward the least damaging outcome possible in a district where attorneys receive 33-month sentences and investment fraudsters receive eight years

The investigation timeline in District of Rhode Island cases typicaly runs 18-24 months from initial detection to indictment. During that window, what you say and do creates the evidence prosecutors will eventualy use against you. Every decision during an active investigation either helps your defense or makes conviction more certain and the sentence more severe. The professionals who address exposure proactivly – with proper legal guidance – generaly face better outcomes then those who wait for investigators to finish building cases against them. The window for voluntary resolution closes permanantly once criminal charges are filed.

Why Providence Specificaly Creates Exposure

Providences economy creates particular tax fraud exposure:

• The professional services community where attorneys like Leach gain access to client trust accounts
• The investment advisory industry where advisors like Huling manage other peoples money
• The tax preparation businesses where preparers like Brier handle thousands of returns annually

The Leach case reveals how attorney trust accounts can be exploited to run Ponzi schemes that generate tax evasion charges. The Huling case shows how investment fraud and tax evasion combine for eight-year sentences. The Brier case demonstrates how tax preparers can defy court orders and continue fraudulent activity untill criminal prosecution stops them. The Hynson case shows how employment taxes can be withheld and kept for years before detection.

And Rhode Islands moderate 5.99% state income tax rate creates a misleading sense of comparative safety. The Rhode Island Division of Taxation pursues violations of state tax law with its own investigators. Federal prosecutors handle IRS cases. Both systems are active. Combined fraud exposure from both jurisdictions changes everything about your risk calculation. The federal tax due on unreported income is what matters most. The federal penalties accumulate fast. The dual system means federal agencies investigating while state agencies may also be reviewing.

If theres tax fraud exposure in your situation – client funds you misappropriated, income you didnt report, employment taxes you didnt remit – the time to address it is before investigators start looking. Not after the investigation begins.

Heres the thing about prosecution in Providence. The District of Rhode Island has shown through the Leach case, the Huling case, the Brier case, and dozens of others that it pursues tax fraud aggressivly. The sentences can be extraordinary – eight years for Huling. The 90% federal conviction rate means most people charged get convicted. Your exposure persists untill you address it. Rhode Islands moderate state tax dosent protect you from aggressive federal prosecution.