BOSTON – March 11, 2013 – (RealEstateRama) — A former Quincy man, now living in New Hampshire, was convicted yesterday for carrying out two elaborate tax evasion schemes and theft of federal housing assistance funds.
Raymond Stebbins, 70, of Manchester, NH, pleaded guilty before U.S. District Judge George A. O’Toole, Jr. to two counts of conspiracy, five counts of tax evasion, two counts of making false statements and theft of public money.
Stebbins was engaged in two schemes – first, a false invoice scheme aimed at evading the ascertainment and assessment of income taxes and, second, a Section 8 housing fraud scheme.
In 2001, Christopher McGadden, the General Manager of Xcel Fire Protection, a fire protection indoor sprinkler business, hired Stebbins in a quasi-sales position. Stebbins purportedly owned numerous businesses, among them a trucking company, a moving company, a real estate company, and two or more business equipment resale companies. Stebbins prepared and sent bogus invoices in the names of the companies he purportedly owned to Xcel. The invoices falsely reflected that one of the Stebbins’ companies had provided goods or services to Xcel when they had not. Knowing the invoices were bogus, McGadden authorized Xcel to pay the invoices by check. Stebbins then deposited the Xcel checks into various bank accounts he’d opened, structuring the withdrawals of funds from those accounts. Thereafter, Stebbins gave McGadden 90 percent of the proceeds of those checks in cash and kept 10 percent for himself. In addition, McGadden caused Xcel’s customers to write checks directly in the name of one of Stebbins’ companies. Stebbins deposited those checks in to his bank account and did the same 90/10 split with McGadden. Neither Stebbins nor McGadden paid the proper income taxes on the $490,000 they took from Xcel checks and Xcel’s customer checks.
In a second conspiracy, starting around December 30, 1999, Stebbins conspired with another individual, identified as FV, to defraud the IRS. Stebbins carried out a nearly identical false invoice tax evasion scheme in which the two men fraudulently diverted more than $3.3 million in funds rightfully belonging to FV’s construction company based in Nashua, NH.
This scheme, although larger in scope, worked virtually identically to Stebbins’ scheme with McGadden. Neither Stebbins nor FV paid the proper income taxes on the money they took from FV’s company checks.
For the tax years 2005 through 2009, Stebbins attempted to evade a large part of income tax due he owed to the IRS by filing erroneous returns which under-reported his income.
Furthermore, Stebbins made false statements to the U.S. Department of Housing and Urban Development when applying for the Section 8 Housing Assistance Program which provides housing assistance payments to people who need rent subsidy in order to obtain adequate housing.
Beginning in December 1997, Stebbins represented to HUD that he was unable to afford adequate housing. As a result, Stebbins received Section 8 benefits from June 1998 through May 2008. During this time, HUD periodically attempted to establish Stebbins’ continued eligibility for Section 8 benefits, and the level of those benefits, by sending him annual re-certification forms which requested information concerning his household income level and assets. Stebbins filled out the forms with false entries that under-reported his household income and assets. At the time he was receiving Section 8 benefits from HUD, Stebbins was an approved Section 8 housing assistance landlord for two multi-family properties, one in Quincy and another in Nashua, NH. Between January 1, 2002 and May 31, 2008, Stebbins effectively stole money from HUD in the form of Section 8 housing payments that he was not entitled to.
Judge O’Toole scheduled sentencing for June 11, 2013. Defendants convicted under these statutes are subject to serve a maximum sentence of five years in prison, followed by three years of supervised release and a $250,000 fine for each count of conspiracy and false statements; a maximum of five years in prison, followed by three years of supervised release and a $100,000 fine for each count of tax evasion; and a maximum of 10 years in prison, followed by three years of supervised release and a $250,000 fine for theft of public money.
In September 2011, McGadden was sentenced by U.S. District Judge William G. Young to one year in prison, followed by two years of supervised release, a fine of $7,500 and $178,435 in restitution to the IRS. In March 2011, McGadden pleaded guilty to conspiracy to defraud the United States and tax evasion.
United States Attorney Carmen M. Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Cary Rubenstein, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, New York Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Diane Freniere of Ortiz’s Public Corruption and Special Prosecutions Unit.