Patrick Emanuel Sutherland, Tax Evasion, North Carolina 2007

A federal jury in Charlotte, North Carolina, has convicted Patrick Emanuel Sutherland, 48, of Charlotte, of filing false tax returns and obstructing a federal grand jury investigation.

According to U.S. Attorney Jill Westmoreland Rose, Sutherland was an actuary and owner 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, filing 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.

For example, despite receiving substantial income for the relevant time period, Sutherland reported a combined income of approximately $276,697, and paid less than a mere $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 over $80,000 in private school tuition for his daughter and high-end jewelry purchases.

According to evidence presented at trial, witness testimony and filed court documents, 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.

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.

The federal jury delivered the guilty verdict following a five-day trial. Sutherland is currently released on bond. 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.

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