What a Pile of Scrap

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18260311 - background with money american hundred dollar bills

Fraudsters are always coming up with new and innovative ways to carry out their crimes, however, today’s “Fraud of the Day” shines the spotlight on a North Carolina businessman who used a simple and oft used technique to hide his fraudulent acts. He thought he could escape the long arm of the law by not disclosing some pretty important information to the North Carolina Division of Employment and the Internal Revenue Service.

The man at the center of today’s case not only failed to disclose that he was employed while collecting unemployment benefits, he also neglected to mention the substantial amount of income he earned on his tax returns. (Did I mention that he ran a pretty successful business at the same time he was illegally collecting unemployment checks?)

The 31-year-old man collected unemployment payments from the state of North Carolina for just under a year while also owning and operating a profitable scrap metal recycling business. He also concealed a significant amount of earnings ,$529,622.44 to be exact, from the Internal Revenue Service (IRS) by not reporting it on his tax returns over four years. (Supposedly, he did not provide records from his bank accounts to his bookkeeper and tax return preparers.)

The fraudster pleaded guilty to filing a false tax return. He is facing a maximum prison sentence of three years plus a $250,000 fine. And that’s not all. As part of his plea agreement, he also owes an additional tax of $116,409.38 for not reporting the income from his recycling business.

While piles of scrap can be recycled and made into new and useful things, let’s hope that a little time behind bars will also redeem this man’s fraudulent actions and provide an incentive for telling the truth about his wages in the future.

Source: Today’s “Fraud of the Day” is based on an article entitled, “Man pleads guilty to tax fraud,” published by The News-Herald on February 15, 2017.

A Taylorsville man who received unemployment benefits at the same time he was running his own business pleaded guilty Wednesday to filing a false tax return.

Matthew Moretz, 31, was released on bond after his plea hearing in federal court but faces a maximum prison sentence of three years and a $250,000 fine, according to a release from United States Attorney Jill Westmoreland Rose.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.