The owner of a Sudbury, Massachusetts-based real estate company and accounting firm was sentenced to two months in prison, followed by two years of supervised release, for his role in a multi-year scheme to cheat the Internal Revenue Service (IRS) with under-the-table pay of more than $1.6 million in compensation and fringe benefits.
According to the charges brought against him, Charles D. Katz owned the CD Katz LLC accounting firm and Gebsco Realty Corporation. Stephen Hochberg served as the director of corporate services at the accounting firm and as chief operating officer at the real estate firm.
The pair agreed that Katz would pay Hochberg off the books so that Hochberg would have tax-free income and Katz’s firms would have lower employment taxes. Over time, Katz paid Hochberg’s family, provided rent-free housing to Hochberg’s ex-wife, paid college tuition for Hochberg’s children, and paid personal expenses that Hochberg and his ex-wife charged on corporate credit cards.
All told, Katz paid Hochberg at least $1.6 million in unreported income and avoided taxes of at least $835,105. In 2020, Katz and Hochberg fraudulently applied for Paycheck Protection Program loans for both of Katz’s firms and obtained $179,900, which Katz used in part to fund the under-the-table compensation he paid Hochberg.
Katz and Hochberg’s tax scheme allowed Hochberg to avoid paying court-ordered $1.79 million restitution to the victims cited in his 2008 conviction on eight counts of wire fraud and nine counts of securities fraud, for which he was sentenced to more than five years in federal prison. In addition to the tax scheme, Hochberg lied to the US Attorney’s Office about his income from Katz’s firms and obstructed the collection of restitution owed to his victims.
In April, Hochberg was sentenced to two years in prison followed by three years supervised release and was ordered to pay $2.8 million in restitution. Katz was charged last November and pleaded guilty to conspiracy to defraud the United States and two counts of loan fraud.
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