Crime

Charlotte financial executive found guilty in federal court

U.S. Attorney Jill Rose
U.S. Attorney Jill Rose dhinshaw@charlotteobserver.com

A Charlotte insurance and financial executive faces up to 29 years in prison, after a federal jury found him guilty of filing false tax returns and obstructing a federal grand jury investigation, U.S. Attorney Jill Rose said Friday.

According to court records, Patrick Emanuel Sutherland, 48, filed false tax returns with the IRS between 2007 and 2010. The returns under-reported business receipts and personal income of about $2 million that he received from an offshore bank account in Bermuda and domestic sources, records show.

Sutherland reported a combined income of about $276,697 and paid less than $10,000 in total federal income taxes, according to court records.

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, prosecutors said.

Sutherland was an actuary who owned numerous insurance and financial companies from 2007 to 2015, records show.

To conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister’s company. Most of the money was insurance commissions due to Sutherland or was obtained from a brokerage account in Bermuda that he controlled, according to an indictment unsealed in September 2015.

Records show Sutherland worked with offshore insurance companies, and some of his commissions had to be paid to an offshore intermediary.

Sutherland used his Bermuda-based shell company, Steward Technology Services Limited, to funnel personal and business money to his U.S. bank accounts, according to court records. Sutherland many times mischaracterized the wire transfers from Steward Technology’s bank account in Bermuda to his various domestic accounts as capital contributions and loans, records show.

Several times between June and September 2012, Sutherland tried to obstruct a federal investigation by providing fraudulent documents, including records of sham loans and documents he claimed reflected his lack of control over his foreign business bank account in Bermuda, prosecutors said.

Sutherland was found guilty after a five-day trial and is free on bail. He could not be reached for comment on Friday.

The penalty for filing a false tax return is a maximum three years in prison and a $250,000 fine per count. The obstruction of official proceedings charge carries a maximum 20 years in prison and a $250,000 fine.

Sutherland’s sentencing date has yet to be announced.

Joe Marusak: 704-358-5067, @jmarusak

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