Orthopedic Surgeon Convicted in Tax Fraud Scheme
Source: Pixabay /stevepb A federal jury has convicted James Rice, M.D., a North Carolina orthopedic surgeon, and his wife, Susan Rice, in an employment and income tax scheme.
Since 1992, Dr. Rice has owned and operated a Pinehurst, North Carolina-based medical practice. Over the years the practice has changed its name while continuing to operate with the same employees from the same location. Dr. Rice operated the practice (referred to as “Sandhills Orthopaedic”) under the following names: Sandhills Orthopaedic and Spine Clinic, PA; Sandhills Orthopaedic and Spine Holdings, PLLC; and Orthopaedic Care, LLC.
Dr. Rice’s wife oversaw administrative operations of Sandhills Orthopaedic. She also owned and operated a truffle business.
From 2013 through 2016, the couple withheld at least $580,000 in tax withholdings from Sandhills Orthopaedic’s employees’ wages. Instead of using the withheld funds to pay taxes, the couple used the funds for other personal expenditures.
During that same time, according to court documents, the couple attempted to conceal income by transferring at least $990,000 in funds from Sandhills Orthopaedic's bank accounts into their personal bank accounts. The couple used these funds for their own purposes, including funding the truffle business. The couple also used these funds for personal expenditures including dog kennel boarding, a spiritual advisor, a country club membership, and rent at their personal residence.
Per court documents, the couple failed to file and pay individual taxes for several years. Dr. Rice also failed to make income tax returns for the corporation.
A jury found Dr. Rice and his wife guilty of the following: conspiracy to defraud the United States; tax evasion; failure to pay trust fund taxes third quarter 2014; failure to pay trust fund taxes fourth quarter 2014; failure to file personal tax return for 2014; failure to file personal tax return for 2015; and failure to file personal tax return for 2016. The jury also found Dr. Rice guilty of failure to file corporate tax return for 2014, 2015, and 2016.
The couple will be sentenced at a later date. For each count of conspiracy, tax evasion, and employment tax fraud the Rices could face a statutory maximum of five years in prison. For each count of failing to file personal and corporate tax returns the Rices could face an additional year in prison.
