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Date: 09-20-2021
Case Style:
Case Number: 1:20-cr-00458-CCE
Judge: Catherine C. Eagles
Court: United States District Court for the Middle District of North Carolina ( County)
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Description: Greensboro, NC: Criminal defense lawyer represented defendants charged with conspiring to defraud the IRS and other federal employment tax and income tax violations.
From 1992 through the present, James Edwin Rice, M.D. was an orthopedic surgeon who owned and operated Sandhills Orthopaedic, a medical practice located in Pinehurst, North Carolina. His wife, Susan Rice, worked at Sandhills Orthopaedic and handled the administrative operations. Susan Rice also owned and operated a truffle business.
Between 2007 and 2016, the Rices conspired to defraud the United States with respect to Sandhills Orthopaedic’s employment taxes and their individual income taxes. The Rices withheld nearly $580,000 in Social Security and other tax withholdings from Sandhills Orthopaedic’s employees’ wages, but rather than pay the withheld taxes to the IRS, used the withheld taxes to fund personal expenditures. The Rices also did not file individual tax returns for the 2014 through 2016 tax years despite being required to do so by law.
To conceal their income, the Rices transferred funds from Sandhills Orthopaedic’s bank accounts to other accounts that they controlled, such as those for Susan Rice’s truffle business. The Rices also used their business bank accounts to fund personnel expenditures, including a country-club membership, dog kennel boarding and rent for their personal residence. In total, from June 2013 through December 2016, the Rices diverted at least $1 million in cash and check co-payments to Sandhills Orthopaedic directly into their personal bank accounts.
James and Susan Rice will be sentenced at a later date. They face a statutory maximum sentence of five years in prison for each count of conspiracy, tax evasion and employment tax fraud, and they face an additional one year in prison for each count of failing to file individual and corporate tax returns. The Rices are further subject to additional monetary penalties, supervised release and restitution.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorneys Alexander Effendi and Michael Jones and paralegal Kim Better of the Tax Division are prosecuting this case.
18:371 Conspiracy to defraud
(1)
26:7201 Tax Evasion
(2)
26:7202 Failure to pay over trust fund taxes
(3-4)
26:7203 Failure to file individual income tax returns
(5-7)
26:7203 Failure to file corporate tax returns
(8-11)
Outcome: 09/20/2021 Minute Entry for proceedings held before JUDGE CATHERINE C. EAGLES:JURY TRIAL Day 4 completed on 9/20/2021. Trial Attorneys Alexander Effendi and Michael Jones appeared on behalf of the Government. Attorneys Robert Barnes and Arthur Blue appeared as counsel for the defendants. Defendants present on bond. 12 jurors and 2 Alternate Jurors present. Closing Statements. Jury Retired at 12:00 noon and returned with GUILTY VERDICT at 12:41 p.m.; jury polled and discharged. Sentencing set for 12/16/2021 02:00 PM in Greensboro Courtroom #3 before JUDGE CATHERINE C. EAGLES. The defendants shall remain on bond under the present terms and conditions of release. (Court Reporter Lori Russell.) (Winchester, Robin) (Entered: 09/20/2021)
09/20/2021 47 JURY VERDICT as to JAMES EDWIN RICE (1) Guilty on Counts 1,2,3-4,5-7,8-11 and SUSAN EILEEN RICE (2) Guilty on Counts 1,2,3-4,5-7. (Winchester, Robin) (Entered: 09/20/2021)
Plaintiff's Experts:
Defendant's Experts:
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