An Oregon CPA has pleaded guilty to charges of conspiracy to commit wire fraud and conspiracy to commit money laundering with his business, misusing over $44 million of customer funds and causing 91 of his customers to lose $13.7 million.
Brian D. Stevens, age 55, of Bend, Ore., admitted Thursday that he and others defrauded customers of his business, Summit Accommodators Inc., from 1999 to 2008. Stevens agreed to be sentenced to between four and eight years’ imprisonment. His sentencing hearing is scheduled for Sept. 13.
Stevens and his alleged co-conspirator Mark A. Neuman, age 56, also of Bend, were charged on March 18, 2010 with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering offenses. Neuman pleaded not guilty to both charges on Wednesday.
At his guilty plea hearing, Stevens acknowledged that he and others created Summit to help customers take advantage of lawful federal income tax deferral transactions. In a typical transaction, a customer would sell income-producing property, let Summit hold the proceeds of the sale, and then buy another income-producing property within 180 days. Federal income tax laws then allowed the customer to defer paying taxes on the profits from sale of the first property. Summit eventually opened affiliate offices in Texas, Washington, Utah, Montana, Wyoming, Nevada, and Lake Oswego, Ore.
Stevens admitted that through Summit, he and his co-conspirators promised Summit’s customers their money would be deposited in a bank, where it would remain for the 180-day period until used to purchase another income producing property. Stevens acknowledged that from 2004 through October 2008, Summit held between $49 million and $109 million of its customers’ money in a typical month.
Stevens admitted that contrary to their promises to Summit’s customers, he and his co-conspirators used Summit customers’ money to invest in over 100 real estate projects and that he and his co-conspirators had direct personal interests in most of these projects. Stevens also admitted the conspirators loaned a portion of this money to individuals and businesses, and to themselves.
Stevens admitted he and his co-conspirators concealed this activity, in part, by creating a company called Inland Capital Corporation, loaning Summit customer money to Inland Capital, then causing Inland Capital to loan the money to small corporations they created to own each real estate investment.
Stevens admitted he and his co-conspirators further hid the fraud scheme by concealing from most of Summit’s employees and from most of the owner-operators of Summit’s affiliates that the conspirators were using Summit customer money to invest in real estate and to loan to themselves and others. When Summit’s customers and affiliate owner-operators began to express concern about the safety of Summit customer money, the conspirators used statements in e-mails and other media to convey the false impression that all Summit customer money was deposited and maintained in financial institutions.
Stevens was a CPA during the period when the activity was taking place, according to his plea agreement. According to the Oregon Society of CPAs, he has resigned from the society, but is still listed as active on the state Board of Accountancy database.