David Katz, a 48-year-old man from Tualatin, Oregon, was sentenced on Tuesday for conspiring to defraud the United States government and filing false currency transaction reports. Katz, who served as the compliance officer for Check Cash Pacific Inc., orchestrated a scheme that lasted from January 2014 to December 2017, resulting in substantial financial losses for the IRS.
According to the U.S. Attorney’s Office for the District of Oregon, Katz conspired to facilitate under-the-table payments to construction workers. To carry out the fraudulent activity, Katz helped create sham construction companies that cashed over $177 million in payroll checks at various Check Cash Pacific locations. These checks were used to pay workers off the books, without any taxes withheld or reported to the IRS.
The conspiracy was structured in such a way that construction companies would notify Katz in advance when they planned to bring payroll checks, ensuring enough cash was available for the transactions. Katz was aware that some of the co-conspirators used false names and Social Security numbers to carry out the scheme.
In return for his role in the illegal operation, Katz received a 2% commission on each transaction, which amounted to more than $4 million. Over the course of the conspiracy, Katz and his co-conspirators managed to prevent the IRS from collecting more than $44 million in payroll and income taxes.
In addition to his prison sentence, Katz was ordered to pay $44,877,254 in restitution to the IRS for the taxes evaded through his actions. His sentencing serves as a reminder of the serious consequences of attempting to defraud the U.S. government.
