PORTLAND, Ore.—A federal jury in Portland found David A. Katz, 48, of Tualatin, Oregon, guilty today for his role in a multiyear scheme to obstruct the IRS from collecting payroll and income taxes on construction workers’ wages.
Katz, the compliance officer of Check Cash Pacific, Inc., conspired with others in the construction industry to defraud the United States by facilitating under-the-table payments to construction workers from January 2014 through December 2017. To carry out the scheme, sham construction companies were created and used to cash more than $177 million in payroll checks at different Check Cash Pacific locations.
The cash was used to pay construction workers under-the-table, with no taxes being withheld or reported to the IRS. Construction companies would notify Katz when they planned to bring checks into one of his check cashing locations so that Katz could ensure he had enough cash on hand to complete the transaction.
Hundreds of thousands of dollars of payroll checks were cashed daily and Katz was aware that at least one of his co-conspirators used a false name and social security number. For his role in the scheme, Katz received a 2% commission on each transaction which, in total, amounted to more than $4 million.
Over the course of their conspiracy, Katz and his co-conspirators prevented the IRS from collecting more than $44 million in payroll and income taxes due on the cash wages. Katz was charged with five counts of conspiracy to defraud the United States and filing false currency transaction reports with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
“This defendant’s efforts to help others circumvent their tax responsibilities was thwarted thanks to the dedicated criminal investigators at the IRS. Business owners who abuse the system and help others hide taxable income will be held accountable,” said Natalie Wight, U.S. Attorney for the District of Oregon.
“Our tax system is based on the honesty and integrity of taxpayers who understand that taxes fund the common good. However, there are some, like Mr. Katz, who choose to line their own pockets at the expense of their friends and neighbors,” said Special Agent in Charge Adam Jobes, IRS Criminal Investigation (CI), Seattle Field Office.
Katz was found guilty of conspiracy to defraud the United States and filing false currency transaction reports with FinCEN. He faces up to five years in federal prison, a $250,000 fine, and three years’ supervised release for the conspiracy charge. Katz faces up to 10 years in federal prison, a $250,000 fine, and three years’ supervised release for the filing false currency transaction reports charge.
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Key Facts
- State: Oregon
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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