St. George investment adviser pleads guilty to defrauding clients of $10 million

ST. GEORGE, Utah, Oct. 30, 2017 (Gephardt Daily) — A St. George financial adviser has pleaded guilty to defrauding investors out of more than $10 million and causing a loss of more than $1 million in taxes.

Henry Brock on Monday pleaded guilty to his role in selling fraudulent tax-avoidance and investment strategies to his clients, said Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and John W. Huber, U.S. Attorney for the District of Utah.

According to information released by the Department of Justice, Brock pleaded guilty to tax evasion, securities fraud and wire fraud.

Brock founded a financial services company in 2009 and served as the president from 2009 through 2017. As president, he marketed and sold a fraudulent tax scheme, called “IRA Exit Strategy,” to potential investors.

Brock promised investors that he could provide a way for them to avoid paying taxes on IRA withdrawals, which would otherwise be subject to Internal Revenue Service (IRS) penalties and taxes. To implement his scheme, Brock caused his business to issue tax forms to his clients falsely representing that they were investors in his business who incurred losses, which served to offset the clients’ tax liabilities.

As a result, Brock caused clients to file fraudulent income tax returns claiming a total of approximately $3.8 million in bogus business losses and resulting in a tax loss of over $1.1 million.

During this period, Brock fraudulently raised over $10.8 million in investments by making false representations to investors regarding the “IRA Exit Strategy,” the financial condition of his company and other matters. On at least one occasion, Brock also transferred $196,323 of a client’s investment funds and used the money for his own personal and business expenses.

Sentencing is scheduled for March 5, 2018, before U.S. District Court Judge Ted Stewart. Brock faces a statutory maximum sentence of five years in prison for tax evasion, 20 years in prison for securities fraud and 20 years in prison for wire fraud. He also faces a period of supervised release, restitution, and financial penalties.


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