A St. George financial adviser pleaded guilty Monday to defrauding clients of millions of dollars while teaching them fraudulent investment strategies to avoid paying taxes.
According to a news release from the Utah District of the U.S. attorney’s office, Henry Seth Brock, 64, admitted to tax evasion, securities fraud and wire fraud for his role in the scheme.
Phone numbers listed for Brock either were disconnected or rang unanswered Monday night. Calls requesting comment from Brock’s attorneys were not returned Monday night.
Brock founded a financial services company eight years ago and served as its president until this year, the release says. As president, he marketed and sold the “IRA Exit Strategy” to potential investors, which he told them was a way to avoid paying taxes on IRA withdrawals.
Brock’s business issued tax forms to his clients, falsely representing that they had invested in his business and incurred losses, which offset the clients’ tax liability.
“As a result, Brock caused clients to file fraudulent income tax returns claiming a total of approximately $3.8 million in bogus business losses and resulting in a tax loss of over $1.1 million,” the release says.
At the same time, the release says that Brock fraudulently raised more than $10.8 million in investments through the false representations to investors regarding the strategy, the financial condition of his company and other matters.
At least once, Brock transferred $196,323 of a client’s investment funds and used the money for personal and business expenses, the release says.
Brock is scheduled for sentencing March 5 before U.S. District Court Judge Ted Stewart. He’ll face a maximum of five years in prison for tax evasion, 20 years for securities fraud and 20 years for wire fraud, as well as a period of supervised release, restitution and fines.