A Michigan man was sentenced to three years in prison on Monday for not reporting the millions of dollars in income he made from selling illicit drugs, according to the US Department of Justice.
The official charges against Matthew D Adams are money laundering and obstructing the Internal Revenue Service, the US government’s federal tax authority.
In addition to serving time in prison and another three years in supervised release, Adams was ordered by the judge presiding over the case to pay the IRS $3,354,973 in restitution.
An IRS criminal investigation found that Adams sold drugs, for years, to an unnamed individual, who in turn paid Adams for narcotics with funds embezzled from the private company he owned, referred to as “Company A” by the justice department. Together, Adams, through his own company, MDA Property Services, and this individual made it look like the narcotics transactions were legitimate business expenses.
Adams did not report the millions of dollars in income he received from selling the illegal narcotics on his income tax returns from 2013 to 2016, and failed to file a 2017 income tax return. During these years, Adams was paid more than $10m by this individual’s company for the narcotics.
Notably, in 2017, Adams and MDA Property Services were audited by the IRS.
In a statement, the justice department said: “Adams lied to the IRS revenue agent multiple times, including by telling the agent that 90% of the money MDA Property Services was paid by Company A was for legitimate work, when the true figure was 3%.”
Adams’ tax preparer was only informed about the deposits in just one of the bank accounts, resulting in filing tax returns that omitted the rest of Adams’ income.
“Adams deposited some of the checks into his personal and business bank accounts, and cashed the remainder, totaling approximately $5.3m, at a local liquor store” the statement said.
The justice department reported that Adams spent millions he made by selling narcotics on purchasing $1m worth of real estate in cash, as well as on personal expenses such as “private flights, golfing, jewelry, gambling, court-ordered child support, hotels and to purchase a firearm”, and vehicles such as a Cadillac Escalade, a Hummer and other luxury and classic cars.
