Introduction to the Case
A Florida man who bought a yacht, a private jet and a fleet of luxury cars including more than two dozens Ferrari’s thanks to a $22 million tax fraud scheme has been sentenced to prison.
The Mastermind Behind the Scheme
Matthew Brown, of Palm Beach Gardens, was sentenced to 50 months in prison last week in connection with a years-long scheme to defraud the U.S. out of millions in taxes, the Department of Justice said.
Business Operations
Brown owned and operated multiple businesses in Palm Beach, St. Lucie and Martin counties including a payroll services company known as Elite Payroll. The company was hired to collect and pay Social Security, Medicare and federal income taxes for the employees of small businesses.
The Tax Fraud Scheme
But between 2014 and 2022, Brown didn’t pay some $22 million in taxes that were withheld from employees’ wages, pocketing the money for himself, authorities said. Under the scheme, Brown charged his clients the full amount of their tax liabilities, then filed false employment tax returns with the IRS that substantially underreported their liabilities, and pocketed the difference, authorities said.
Example of the Scheme
In one instance, a client owed approximately $219,000 in taxes, which Elite Payroll collected from the client but filed a false tax return with the IRS claiming that the client only owed approximately $32,000, which Elite paid. Brown then kept the remaining approximately $190,000, authorities said.
Lavish Spending
The massive scheme allowed Brown to buy commercial and residential real estate, including his multimillion-dollar home, a Valhalla 55 Sport Yacht, a Falcon 50 Aircraft, and a large collection of cars including Porsches, Rolls Royces, and 27 Ferraris.
Sentencing and Restitution
In addition to the prison sentence, Brown will serve two years of supervised release and must pay $22,401,585 in restitution and a $200,000 fine to the United States.
Conclusion
The case of Matthew Brown serves as a reminder of the severe consequences of tax fraud and the importance of compliance with tax laws. The lavish spending and luxurious lifestyle that Brown was able to afford through his scheme were ultimately his downfall, and he will now face significant time in prison and financial penalties.
FAQs
Q: How much time will Matthew Brown spend in prison?
A: Matthew Brown was sentenced to 50 months in prison.
Q: How much did Brown’s tax fraud scheme cost the U.S.?
A: The scheme cost the U.S. approximately $22 million in unpaid taxes.
Q: What assets did Brown purchase with the proceeds of his scheme?
A: Brown purchased a yacht, a private jet, and a collection of luxury cars, including 27 Ferraris.
Q: What is the total amount of restitution that Brown must pay?
A: Brown must pay $22,401,585 in restitution and a $200,000 fine to the United States.
