An Oregon man is facing prison time, after being sentenced for running a multimillion-dollar payroll tax evasion scheme. David Katz, 48, from Tualatin, received a sentence of 48 months in federal prison, followed by three years of supervised release. He's also been ordered to pay a hefty sum of $44,877,254 in restitution to the IRS, a reflection of the scale of his offense.
The case, which was prosecuted by Assistant U.S. Attorneys for the District of Oregon, Robert S. Trisotto and Andrew T. Ho, unveiled a conspiracy against the United States lasting from January 2014 through December 2017. Katz utilized his position as president of Check Cash Pacific, Inc. to enable under-the-table payments to workers in the construction sector, resulting in a substantial tax loss. As reported by the U.S. Attorney's Office, Katz and his co-conspirators cashed over $177 million in payroll checks through sham companies, money that was then used to compensate workers off the books.
Katz's operations were sophisticated, involving close coordination with construction companies to ensure sufficient cash was on hand for check cashing. His method entailed collecting a 2% commission on each cashed check, netting him more than $4 million. The fallout from the scheme resulted in the IRS missing out on over $44 million in taxes that should have been collected from the cash wages paid out to workers.
A December 2, 2021, federal grand jury indictment led to Katz's conviction by a Portland federal jury on June 12, 2024. The jury found Katz guilty on all counts, including one count of conspiracy to defraud the United States and four counts of filing false currency transaction reports with FinCEN. This case serves as a stark reminder of the serious consequences, of dishonest financial dealings involving tax evasion and fraud.
The investigation into Katz's operations was led by IRS Criminal Investigation. The evidence presented at trial showed Katz's deep involvement and awareness of the illegality, with him even disregarding the use of false identities for filing regulatory documents. As the justice system closes this chapter on Katz's fraudulent business practices, it also highlights the government's ongoing efforts to clamp down on tax evasion schemes and uphold the integrity of the nation's financial systems.
