On Monday, October 30, 2017, it was announced that a St. George, Utah financial advisor had pleaded guilty to his role in selling fraudulent tax-avoidance and investment strategies to his clients. Court documents and information provided to the court show that Henry Brock pleaded guilty to tax evasion, securities fraud and wire fraud. Brock created a financial services company in 2009. He served as the president of the company from 2009 to 2017.
While serving as president, Brock marketed and sold a fraudulent tax scheme called “IRA Exit Strategy”. He promised investors that it would provide them with a way to avoid paying taxes on IRA withdrawals, which would typically be subject to IRS penalties and taxes. To carry out the scheme, Brock caused his business to issue tax forms to his clients falsely representing that they were investors in his business and had incurred losses. The losses were used to offset the clients’ tax liabilities.
In return, Brock caused his clients to file fraudulent income tax returns claiming roughly $3.8 million in bogus business losses. His scheme caused a tax loss of more than $1.1 million. During this period of time, Brock fraudulently raised more than $10.8 million in investments by making false representatives to investors about the “IRA Exit Strategy”, as well as the financial condition of his company and other matters.
In one incident, Brock transferred $196,323 of his client’s investment funds and used the money for personal and business purposes. Brock is now scheduled to be sentenced on March 5, 2018. He will face a maximum sentence of five years in prison for tax evasion, 20 years for securities fraud and 20 years for wire fraud.