When Rick Matsa, an attorney from Worthington, Ohio first failed to file a tax return for one of his trusts in 1990, he began a 15 year journey of lies and deceit. Matsa was an attorney, architect, real estate broker, and a licensed minister who seem to have a bright future ahead of him, but in 2010 he was charged with tax fraud, obstruction of justice, witness tampering and making a false statement and sentenced imprisonment.
Between 2003 and 2005, Matsa had at least five trusts and an offshore bank account holding $300,000 that reported significant interest income. However he was charged with failing to report any of that income to the IRS. He created numerous “shell” companies in an apparent effort to hide his assets from the IRS. And he allegedly embezzled $24,000 from one of his clients. But all of the hiding and deceit wasn’t something he did alone. His accomplices included his mother, a tenant and another attorney.
When federal agents began investigating Matsa’s shady financial affairs, he and his accomplices had a plan to thwart the investigation. George Pappas, an attorney, falsely claimed ownership of Matsa’s law firm in an effort to block the agents from gaining access to financial records. P. Maria Galloway, Matsa’s tenant and the owner of an art gallery located next door to Matsa’s law firm, signed fraudulent documents and made false statements that were designed to mislead the IRS. Loula Z. Matsa, Matsa’s mother, made false statements and committed perjury in an effort to derail IRS actions to collect on taxes owed.
Like many tax evaders, Matsa and his gang of accomplices may have believed that their ruse could work on the IRS and the justice system, but hiding significant amounts of money is difficult, especially in this very connected internet age. International financial records are more accessible now than ever before since the passage of the Bank Secrecy Act (FBAR) which requires that Americans report to the IRS their foreign bank accounts.
One thing that Matsa did that allowed him to evade detection for so long was use “shell” companies with “phantom” owners that concealed his financial dealings. Using those companies and a trio of committed accomplices, he was able to sustain his charade for many years without detection.
On November 2, 2012 Rick Matsa was sentenced to 85 months in prison. His mother, Loula Z. Matsa was sentenced to three years in prison, while George Pappas and P. Maria Galloway were sentenced to 2 years probation and home confinement. In the end Matsa lost his freedom, his right to practice law and the trust of those around him.
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