Utah Financial Planner Facing Decades in Prison Following Tax Evasion, Fraud Convictions

For 38 years, Henry “Hank” Brock, 64, of St. George, Utah, enjoyed a successful career as a financial planner, advising investors, serving on political panels, appearing on television, and even authoring the book Your Complete Guide to Money Happiness in 1997. Though Brock’s credentials were seemingly impeccable, the advisor’s decades-long career came to a crashing halt in October 2017, when Brock pleaded guilty to securities fraud, wire fraud, and tax evasion. Brock, who is currently scheduled to be sentenced in March 2018, will face massive fines, criminal restitution, and most threateningly, decades of prison time for his financial crimes.

Utah Man Defrauded Investors of Over $10M in IRA Tax Scheme

According to a press release issued by the Department of Justice (DOJ), defendant Henry Brock “pleaded guilty to tax evasion, securities fraud and wire fraud” in connection with an elaborate tax fraud scheme which prosecutors say defrauded investors of over $10 million, amounting to tax losses exceeding $1 million.

In 2009, Brock established an entity called Mutual Benefit International Group, Ltd., of which he was president from 2009 until his indictment in 2017. While serving as president of Mutual Benefit International Group, Brock pitched potential investors a tax scheme dubbed “IRA Exit Strategy.” Investors would “avoid paying taxes on IRA withdrawals,” Brock insisted, which would normally be taxed by the Internal Revenue Service (IRS) under provisions of the U.S. Tax Code. To give the scheme an appearance of legitimacy, Brock directed Mutual Benefit International Group to issue tax forms which, on paper, made it seem as though clients had sustained business losses, which could then be reported to lower the clients’ tax liabilities.

The financial effects of Brock’s machinations? More than $3.8 million in phony business losses reported using fraudulent tax returns, amounting to a tax loss in excess of $1 million. As described by court documents, “The scheme generally involved passing the business expenses of [Mutual Benefit International Group] through… subsidiaries and falsely attributing those expenses and additional inflated and fictitious subsidiary business expenses to the clients, allowing the clients to offset their tax owed from the IRA withdrawals.”

Meanwhile, Brock was raising considerable funds for himself – approximately $10.8 million – by misrepresenting not only the nature of the scheme, but also the financial health of the business. Court records indicate that, in at least one instance, Brock diverted investors’ contributions to his own financial accounts, using the money – a total of approximately $196,323, according to DOJ records – to cover both business and personal expenses.

Though Mutual Benefit International Group was not established until 2009, records indicate that Brock has been under investigation since at least the early 2000s, at which time Brock was being scrutinized by the Utah Division of Securities. Following a lengthy and contentious legal battle – during which Brock, along with previous business partner Jay Rice, sued the Division, then appealed unsuccessfully after the lawsuit was dismissed – Brock’s securities license was suspended.

Brock is presently scheduled to be sentenced by U.S. District Court Judge Ted Stewart on March 5, 2018. At sentencing, Brock may face the following prison terms, in addition to fines and restitution:

  • Up to five years in prison for tax evasion (26 U.S. Code § 7201, attempt to evade or defeat tax).
  • Up to 20 years in prison for wire fraud (18 U.S. Code § 1343, fraud by wire, radio, or television).
  • Up to 20 years in prison for securities fraud (18 U.S. Code § 1348, securities and commodities fraud).

Aggressive Criminal Tax Defense Lawyers Handling Felony Charges

Tax evasion is a serious criminal offense which can lead to prosecution in federal court. If convicted, the defendant may face up to five years in federal prison, in addition to debilitating financial penalties, to say nothing of the myriad consequences that come from having a criminal record permanently attached to one’s name, notwithstanding a successful expungement.

If you have been charged with tax evasion, failure to file tax returns, or related financial crimes involving violations of the Internal Revenue Code, or if you are facing civil penalties for tax avoidance, it is in your best interests to immediately seek legal guidance from a skilled and experienced tax evasion attorney. At the Tax Law Office of David W. Klasing, our zealous criminal tax attorneys bring over 20 years of experience to every case we handle, ensuring every client receives the robust defense to which he or she is entitled. To arrange a reduced-rate consultation with an experienced tax attorney serving California residents and other U.S. taxpayers, contact us online, or call the Tax Law Office of David W. Klasing at (800) 681-1295 today.

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Here is a link to our practice video on warning signs than an audit has gone criminal.

What is an eggshell tax audit?

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What is an effective tax defense in an IRS eggshell tax audit?

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So, you cheated on your taxes and you are under a tax audit…

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Why should I hire a tax attorney to represent me in a tax audit?

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