A former Certified Public Accountant from Middletown has been indicted by a federal grand jury numerous accounts related to embezzling nearly $3 million from a trust account.
Donald R. Rice, age 54, of Middletown, faces charges of wire fraud, bank fraud, money laundering and tax offenses.
He faces up to 30 years in prison on the bank fraud charges, 20 years in prison on the wire fraud charges, up to 10 years on the money laundering charge, and three years on the filing a false tax return charge and up to one year on the failure to file a tax return offense.
The indictment alleges that between 2013 and 2015, Rice who was at the time a certified public accountant, embezzled almost $3 million dollars from a trust created to pay the tax obligations of a dissolving company.
While serving as the trustee, he allegedly used funds deposited into the trust account to finance his own business investments, including the purchase of multiple tax preparation franchises. The defendant also used trust account funds for his personal expenses, including the purchase of a luxury vehicle.Donald Rice Sealed Indictment
The Indictment goes on allege that Rice had previously defrauded another client. In 2011, while providing estate-planning services for a client, Rice misappropriated $100,000, which the client provided to Rice to invest on her behalf.
Rice instead used this money to fund his own business ventures and pay personal expenses, the indictment alleges.
Following that client’s death in 2012, Rice, who was also the executor of her estate, continued to collect her pension payments from a public employee retirement system, again using the funds for his personal benefit.
The defendant instead used this money to fund his own business ventures and pay personal expenses.
Rice instead used this money to fund his own business ventures and pay personal expenses. Following that client’s death in 2012, Rice, who was also the executor of her estate, continued to collect her pension payments from a public employee retirement system.
The Indictment also alleges that Rice was engaged in income tax fraud. The federal tax return Rice filed for 2013 did not include, as required by law, his illegal income from his fraud scheme and understated his income. After seeking an extension of time to file a tax return for 2014, defendant never filed a return for that tax year.
Acting U.S. Attorney David C Weiss stated, “I want to thank both the Internal Revenue Service and the Federal Bureau of Investigation for their efforts in building this case. The theft of millions of dollars by a trusted professional is a brazen crime. Defendant’s further actions, victimizing an elderly woman who had entrusted him with funds and failing to abide by his own tax obligations, similarly demonstrate a blatant disregard for the law. We are committed to the prosecution of these types of offenses.”
This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. The prosecution is being handled by Assistant United States Attorney Lesley Wolf.
Rice also saw state regulatory actions, with a fine, and suspension of his CPA license. The state charged that Rice did not disclose his license had been suspended and kept a sign on a north Wilmington office, using the CPA initials. (See document below)PublicDocuments-02-Rice-Donald-Discipline-2016