Sam Neill accused of federal tax fraud (NC)

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Disbarred Hendersonville attorney Samuel Neill has been charged with federal tax fraud and making false statements, according to U.S. District Court records. And Neill’s lawyer says he will plead guilty to a tax violation on Monday.

Neill lost his license to practice law in May when a Wake County Superior Court judge signed an order finding that Neill misappropriated funds belonging to his clients.

The U.S. Attorney’s Office detailed the federal charges against Neill Thursday in a bill of information, which the government uses to accuse a suspect directly without going before a grand jury. The fraud charge includes the understatement of taxable income by $857,632 on a tax return in 2008, according to the bill.

In 2008 and continuing through May 2011, Neill devised and was engaged in a scheme to embezzle from his law firm’s trust account, the bill states. Neill, at times, would deposit funds from various trusts into the law firm’s trust account, but not use the funds as directed, according to court records.

Neill is slated to appear in U.S. District Court in Asheville on Monday to have his arraignment, initial appearance and to plead to charges, court records show.

“Sam has been charged with a tax violation in federal court. He will enter a plea of guilty to that charge on Monday,” said his attorney, Joe B. Cheshire of Cheshire Parker Schneider & Bryan PLLC in Raleigh.

“Sam has fully accepted responsibility for his actions and has been cooperating completely with both state and federal authorities for months. He is extremely remorseful for his actions and has also worked tirelessly to ensure that each client who lost money as a result of his conduct is completely secured for losses they incurred, including interest and attorney’s fees.”

Cheshire said no state charges are pending as of yet. Online court records also show no state charges and state prosecutors could not be immediately reached for comment.

Court records indicate that during the course of his practice, Neill served as attorney for various trusts established by his clients.

“As attorney, Neill has a duty, among other things, to receive funds from the clients individually and from the various trusts and pay those funds as directed,” the bill of information reads. “Frequently those purposes included things such as the payment of inheritances to beneficiaries.”

The bill of information alleges that Neill embezzled funds by check and used the money to improve his lifestyle, make payments to lenders holding unpaid liens, satisfy potential debts and demands related to his business obligations, and additional reasons unknown to the U.S. Attorney’s office.

Neill also had control of an estate trust account from which he embezzled in order to cover shortfalls in his law firms trust account, according to court records.

“Neill did not report the majority of the embezzled income on his tax returns,” the bill of information reads.

Attribution:

Sam Neill accused of federal tax fraud
John Harbin/Times-News Staff Writer
April 9, 2012
BlueRidgeNow.com
http://www.blueridgenow.com/article/20120409/NEWS/120409799/1008/sports?Title=Sam-Neill-accused-of-federal-tax-fraud

Additional coverage:

Feds in Asheville charge former congressional candidate Neill with fraud
Sam Neill accused of embezzling funds from client accounts, trusts
Jon Ostendorff
April 9, 2012
Citizen-Times.com
http://www.citizen-times.com/article/20120410/NEWS/304100032/Sam-Neill-accused-embezzling-funds-from-clients?odyssey=tab%7Ctopnews%7Ctext%7CFrontpage

ASHEVILLE — Former attorney and congressional candidate Sam Neill stole money from his clients to improve his lifestyle and cover losses at his law firm, according to federal prosecutors.

And now he’s reached a deal with the government, though the details are not public.

Neill will be prosecuted under a bill of information, which is sometimes used in place of an indictment, according to new documents filed in U.S. District Court in Asheville.

The federal action comes a year after Neill surrendered his law license and the State Bureau of Investigation started a probe into an allegation he misappropriated a client’s money.

Federal prosecutors, according to court papers filed last week, say his criminal activity went beyond one client and spanned years.

They said in court papers he embezzled from his law firm’s trust accounts from 2008-11.

He was supposed to receive money from clients and trusts and pay them as directed for inheritances and to beneficiaries.

The court papers don’t say how much prosecutors believe he embezzled.

Instead, according to the government, he spent the money “to improve his own lifestyle, to make lulling payments to lenders holding unpaid liens, (and) to satisfy potential debts and demands related to (his) business obligations.”

Neill also embezzled from an unnamed estate trust to cover shortfalls at his law firm and under-reported his income by $857,632 in 2008, prosecutors said in court papers.

Neill has a plea hearing set for April 16 in U.S. District Court.

Neill was the Democratic nominee for Congress in 2000 and 2002, losing both times to then-incumbent Republican Charles Taylor.

He served 12 years on the UNC Board of Governors, including two years as chairman.

He’s also served on the boards of AdvantageWest and Flat Rock Playhouse and as chair of the Arts of Henderson County and the WNC Film Commission.

District Attorney Jeff Hunt, the state prosecutor for Henderson, Transylvania and Polk counties, ordered the SBI probe.

The N.C. Attorney General’s Office agreed to handle the case because Hunt said he had been close friends with Neill.

Neill said in an affidavit filed when he surrendered his law license that he acknowledges misappropriating “entrusted funds.”

“My resignation is submitted because I know that if charges were predicated upon my misconduct, I could not successfully defend against them,” he said at the time.

He could not be reached Monday.

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