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ENGLEWOOD — A federal jury convicted an Englewood-based doctor of four counts of filing false tax returns and conspiring to defraud the IRS of more than $30 million in income and assets.
Dr. Patricia Lynn Hough faces a maximum potential penalty of five years in prison and a $250,000 fine for the conspiracy count, according to a statement from the U.S. Attorney's Office. The false return counts each carry a maximum penalty of three years in prison and a $250,000 fine. U.S. District Judge John Steele is scheduled to sentence Hough in February; she was convicted Oct. 25 after a trial in Fort Myers.
Authorities contend Hough and her husband, Dr. David Fredrick, who is awaiting trial on similar charges, concealed millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks. They then filed false individual income tax returns, which failed to report the existence of those foreign accounts or the income earned in those accounts. Hough and her husband, according to prosecutors, then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condo in Sarasota.
“Dr. Hough's financial transactions were nothing more than a shell game to hide her income,” IRS Criminal Investigation Chief Richard Weber says in the release. “Her earned income was placed into foreign bank accounts to advance her tax fraud.”
Hough and Fredrick carried out the conspiracy, authorities say, by creating and using nominee entities, including a foundation, and undeclared accounts in their names and the names of nominee entities at UBS and other foreign banks. The goal was to conceal assets and income from the IRS, the release states.
Hough owned two Caribbean-based medical schools — The Saba University School of Medicine located in Saba, Netherlands Antilles, and The Medical University of the Americas located in Nevis, West Indies. Both schools and associated real estate were sold on April 3, 2007, for more than $35 million, all of which was deposited into undeclared accounts in the name of the nominee entities. The majority of the sale proceeds were not reported to the IRS on their tax returns, the release states, and no tax was paid.
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