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Friday, February 20, 2015

REAL ESTATE BUSINESSMAN PLEADS GUILTY TO FRAUD

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, February 19, 2015
Detroit Real Estate Businessman Pleads Guilty to Tax and Bank Fraud

On Feb. 18, a Detroit man pleaded guilty in the U.S. District Court for the Eastern District of Michigan to obstructing and impeding the Internal Revenue Service (IRS) and conspiring to commit bank fraud, Principal Deputy Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.

According to the information and other court documents, Richard Pierce failed to report over $9 million in gross business receipts during 2007 through 2013, derived from the various Detroit-area businesses that he operated and controlled, including Phoenix Real Estate Company, Phoenix Preferred Properties LLC, Detroit Matrix, First Metro Properties LLC, First Metro Real Estate Services LLC, Phoenix Office Plaza-II LLC, Rosedale/Grandmont Properties LLC, and RFP Ventures LLC.  In addition, on Nov. 26, 2007, Pierce participated in a bank fraud scheme wherein he caused the submission of a false loan application to a mortgage lender on which he falsely reported that the buyer was paying $77,900 for a residential property without disclosing that the buyer received a $46,340 “kickback” from the seller.

Sentencing is scheduled for July 8 before U.S. District Court Judge Arthur J. Tarnow of the Eastern District of Michigan.  Pierce faces a statutory maximum sentence of three years in prison for filing a false tax return and a statutory maximum sentence of 30 years in prison for conspiring to commit bank fraud, with maximum potential fines totaling $1.25 million.

Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS – Criminal Investigation, who investigated the case, and Trial Attorneys Mark McDonald and Christopher O’Donnell of the Tax Division, who are prosecuting the case.  She also thanked the U.S. Attorney’s Office in the Eastern District of Michigan for their assistance.