Physician Sentenced To Prison For Obstructing Tax Investigation

Richard MacAuley, M.D., lied to the IRS, withheld information, and provided a false document to impede an investigation of his company, Sleep Diagnostics of Michigan, P.C.

          GRAND RAPIDS – U.S. Attorney Andrew Birge announced today that Richard MacAuley, M.D., 74, of Farmington Hills, Michigan, was sentenced to two years of imprisonment by U.S. District Judge Janet T. Neff. In January 2020, Dr. MacAuley pleaded guilty to corruptly endeavoring or obstruct and impede the due administration of the internal revenue laws, including by misleading IRS officers, withholding records from the IRS, and providing a false document in response to an IRS summons.

          In December 2017, the IRS was investigating Dr. MacAuley’s chain of sleep study clinics, Sleep Diagnostics of Michigan, P.C. (“SDM”), for failing to pay over $500,000.00 in federal payroll taxes. The IRS sought to determine whether there was any basis to transfer and collect SDM’s outstanding taxes from an Okemos-based provider, Advanced Sleep Diagnostics of Michigan, P.C. (“ASDM”). While Dr. MacAuley was ASDM’s owner on paper, he withheld the ownership document from the IRS and falsely denied any relationship between the companies. Dr. MacAuley then falsely claimed that he sold SDM’s assets to ASDM in 2016. When the IRS issued a summons for the sales contract—a document that did not exist—two individuals created a fraudulent and backdated Asset Purchase Agreement for Dr. MacAuley to give the IRS. Dr. MacAuley signed the fake Asset Purchase Agreement and gave it to the IRS in May 2018 along with a cover letter claiming that the agreement was “in effect as of July 18, 2016.”

          In imposing the sentence, Judge Neff noted that Americans “enjoy tremendous advantages being tax paying citizens of this country, but those advantages don’t come for free. Everyone must stand up and pay their taxes” and “tax evaders really do undermine our whole system.” Such tax evaders, Judge Neff emphasized, must know that there are “serious consequences if they are caught.”

          “Dr. MacAuley obstructed the IRS’s efforts to collect over half a million dollars in payroll taxes, including tax revenue that funds the federal unemployment trust fund on which millions of Americans rely,” U.S. Attorney Birge said. “We will continue to work with our IRS partners to hold accountable those who defraud our tax system.”

          “Obstructing or impeding an IRS officer or the administration of the Internal Revenue laws is a serious crime,” said Sarah Kull, Special Agent in Charge of IRS-Criminal Investigation for the Detroit Field Office. “Withholding material records and providing false or misleading documents to the IRS undermines the integrity of our financial system and will not be tolerated.”

          This case was investigated by the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Adam B. Townshend represented the United States.

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