|Published:||Oct 25, 2013 10:42 AM EDT|
|Updated:||Oct 25, 2013 1:14 PM EDT|
FORT MYERS, Fla.- Dr. Patricia Lynn Hough, of Englewood, was convicted of conspiring to defraud the IRS by concealing millions of dollars in assets and income in foreign bank accounts. According to the IRS, Hough filed false income tax returns that failed to report the those foreign accounts.
According to court documents and court proceedings, Hough owned two Caribbean-based medical schools (The Saba University School of Medicine located in Saba, Netherlands Antilles, and The Medical University of the Americas located in Nevis, West Indies). Hough conspired to defraud the IRS with her husband, Dr. David Fredrick, who is awaiting trial. They carried out the conspiracy by creating and using nominee entities, including a foundation, and undeclared accounts in their names and the names of nominee entities at UBS and other foreign banks to conceal assets and income from the IRS. Both schools and associated real estate were sold on April 3, 2007, for more than $35 million, all of which was deposited into undeclared accounts in the name of the nominee entities. The majority of the sale proceeds were not reported to the IRS on their tax returns and no tax was paid.
The evidence at trial further proved that Hough and her co-conspirator used emails, telephone calls and in-person meetings to instruct Swiss bankers and asset managers to make investments and transfer funds from their undeclared accounts at UBS. The evidence established that Hough and her co-conspirator caused funds from the undeclared accounts in the names of the medical schools to be transferred to undeclared accounts in their individual names or in the names of nominee entities. Hough and her husband then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condominium in Sarasota, Fla.
Hough was also convicted of four counts of filing false tax returns for 2005, 2006, 2007 and 2008. The evidence at trial established that Hough filed false tax returns that substantially understated her total income because she failed to report substantial interest and investment income and in 2007 because she failed to report her half of the proceeds from the sale of the medical schools. In addition, Hough failed to report on Schedule B of the tax returns that she had an interest in or signature or other authority over bank, securities or other financial accounts located in foreign countries.
The conspiracy count carries a maximum potential penalty of five years in prison and a $250,000 fine. The false return counts each carry a maximum potential penalty of three years in prison and a $250,000 fine.