Maryland man sentenced for defrauding clients of over $1.6M

BALTIMORE (AP) — A Maryland man has been sentenced to four years in prison after he took more than $1.6 million from clients at his payroll processing business used them to pay his personal expenses, federal authorities said.

U.S. District Judge George L. Russell, III sentenced David Richison, 64, of Frederick, Maryland, to 48 months in federal prison for wire fraud and aiding in the filing of a false tax return, the U.S. Department of Justice said in a news release on Thursday.

According to his plea agreement, Richison admitted that from at least 2012 through 2014, the tax forms prepared and filed by Richison on behalf of his clients properly reported the amount of taxes owed, but a corresponding amount of tax deposits was not made with the IRS. Richison began taking money from the client escrow fund to pay for his own personal and business-related expenses, such as legal fees, rather than paying those funds to the IRS, as he told his clients.

By the end of 2014, there were insufficient funds in the client escrow account to cover the mounting debts and Richison closed his business. By that time, the difference between the amount taken from clients and reported to have been paid to the IRS per the tax returns filed on behalf of clients, and the actual payments made as required by those returns totaled at least $1,622,481.56.