GoLocalProv | News | RI Man Sentenced to Prison for “Funding Lavish Lifestyle” by Defrauding Investors & Tax Evasion
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Tuesday, March 19, 2024
A Rhode Island man was sentenced to eight years in prison for running a decade-long Ponzi scheme to defraud investors and evade his taxes, announced United States Attorney Zachary A. Cunha and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to court documents and statements made in court, between 2008 and 2018, Thomas Huling, formerly of West Warwick, orchestrated a scheme to defraud investors by promoting several investment projects, including high-yielding bond trading platforms, a car emissions reduction technology and an online advertising and marketing company.
He solicited funds for these investments by representing, among other things, that the investments would achieve quick and substantial returns with little or no risk.
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Crimes Committed
According to the U.S. Attorney’s office, Huling instead “diverted investor money to fund a lavish lifestyle that included high-end vehicles, membership and golf fees at multiple country clubs, gambling, clothing, restaurants, vacations and travel, as well as improvements to his residence. He created and used multiple shell companies, opened over 50 bank accounts and engaged in convoluted financial transactions between accounts to conceal his personal use of the funds. When concerned investors contacted Huling about the status of their investments, Huling lulled them with false excuses and promises, and at other times avoided their calls. To appease certain early investors, Huling used money raised from new investors to pay them off.”
And while Huling was defrauding his investors, he was also evading his taxes, said the U.S. Attorney.
Between 2009 and April 2018, Huling reported no taxable income, paid no income taxes and for certain years filed fraudulent individual and corporate income tax returns. To hide his income, Huling used nominee bank accounts and paid for personal expenses using cash and corporate debit cards. He also falsified the books and records of his companies by recording sham loans, titled personal assets in the name of shell companies and made false statements to IRS special agents.
In addition to his prison sentence, U.S. District Court Judge Mary S. McElroy ordered Huling to serve three years of supervised release and to pay restitution to the United States and victims of the fraud in an amount to be determined later.
IRS Criminal Investigation and the FBI investigated the case.
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