Utah Financial Advisor Pleads Guilty to Tax Evasion, Securities Fraud and Wire Fraud

SALT LAKE CITY – A St. George, Utah, financial advisor pleaded guilty Monday afternoon to his role in selling fraudulent tax-avoidance and investment strategies to his clients, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah.

According to documents and information provided to the court, Henry Brock, pleaded guilty to tax evasion, securities fraud and wire fraud. Brock founded a financial services company in 2009 and served as the president from 2009 through 2017.  As President, he marketed and sold a fraudulent tax scheme, called “IRA Exit Strategy,” to potential investors.  Brock promised investors that he could provide a way for them to avoid paying taxes on IRA withdrawals, which would otherwise be subject to Internal Revenue Service (IRS) penalties and taxes.  To implement his scheme, Brock caused his business to issue tax forms to his clients falsely representing that they were investors in his business who incurred losses, which served to offset the clients’ tax liabilities.  As a result, Brock caused clients to file fraudulent income tax returns claiming a total of approximately $3.8 million in bogus business losses and resulting in a tax loss of over $1.1 million.

During this period, Brock fraudulently raised more than $10.8 million in investments by making false representations to investors regarding the “IRA Exit Strategy,” the financial condition of his company and other matters.  On at least one occasion, Brock also transferred $196,323 of a client’s investment funds and used the money for his own personal and business expenses.

Sentencing is scheduled for March 5, 2018, before U.S. District Court Judge Ted Stewart. Brock faces a statutory maximum sentence of five years in prison for tax evasion, 20 years in prison for securities fraud and 20 years in prison for wire fraud. He also faces a period of supervised release, restitution, and monetary penalties.

Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Huber thanked special agents of IRS Criminal Investigation and the Utah Division of Securities, who conducted the investigation, and AUSA Trina Higgins and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting this case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.