A Michigan man was sentenced to three
years in prison Monday for money laundering and obstructing the IRS.
According to court documents and
statements made in court, from approximately 2008 through 2017, Matthew D.
Adams, of Grosse Point Park, sold illegal narcotics to Individual A. Individual
A was the president of Company A. Individual A paid Adams for the illegal
narcotics with funds embezzled from Company A. Adams and Individual A agreed to
make the payments for illegal narcotics appear like they were payments from
Company A to Adams’ company, MDA Property Services, for legitimate work
performed by Adams’ business. From 2013 through 2017, Adams was paid more than
$10 million by checks from Company A for illegal narcotics he sold to
Individual A.
Adams did not report the millions of dollars in income he received from selling illegal narcotics on his 2013 to 2016 income tax returns and failed to file a 2017 income tax return. Adams deposited some of the checks into his personal and business bank accounts, and cashed the remainder, totaling approximately $5.3 million, at a local liquor store. Adams told his tax preparer about the deposits in just one of the bank accounts, which caused the preparer to file returns that did not report all of Adams’ income from his illegal narcotics sales.
In 2017, Adams and MDA came under audit by the IRS. During the audit, Adams lied to the IRS revenue agent multiple times, including by telling the agent that 90% of the money MDA Property Services was paid by Company A was for legitimate work, when the true figure was 3%.
Adams withdrew more than $1 million in cash of his illegal narcotics proceeds from his business bank accounts and used the funds to acquire real estate. He also spent over $1.25 million on personal expenses such as private flights, golfing, jewelry, gambling, court-ordered child support, hotels and to purchase a firearm. Adams purchased vehicles including a Cadillac Escalade, a Hummer and multiple classic cars.
In addition to the term of imprisonment, U.S. District Court Judge Matthew F. Leitman, Eastern District of Michigan, sentenced Adams to three years of supervised release and ordered him to pay $3,354,973 in restitution to the IRS.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS Criminal Investigation investigated the case.
Trial Attorneys Sam Bean and Jeffrey McLellan of the Tax Division prosecuted the case.
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