A former certified public accountant will spend four years in federal prison on charges of looting a $3 million trust account and diverting money from an estate.
Donald R. Rice, formerly of Middletown, was sentenced last month by Chief U. S. District Court Judge Leonard P. Stark.
Rice pleaded guilty on October 26, 2017, to two counts of wire fraud and one count of making false statements on tax returns.
According to court filings, Rice became the trustee for a trust established to liquidate the assets of a closely-held investment company. Between January 2013 and January 2015, Rice diverted approximately $3 million into his personal accounts.
Rice then used this money for personal expenses, including the acquisition of several tax preparation franchises. Federal law requires that all income, whether obtained legally or illegally be declared on tax returns.
Rice failed to report the proceeds on his tax return for 2013.
Separately, while assisting an elderly widow with her state plannin in August 2011, Rice gained signature authority over her bank accounts and became executor of her estate.
Following her death in March 2012, Rice wrote a series of checks to himself and his related business account, and liquidated a certificate of deposit for his personal use. In addition, Rice failed to notify a public pension system of his client’s death and continued to collect and spend her pension payments until October 2013, for about 18 months after her death. Rice gained additional funds totaling about $120,000.
Delaware U.S. Attorney David Weiss stated, “The defendant preyed upon people who placed their trust in him, victimizing companies and vulnerable senior citizens alike. His actions were unconscionable. Individuals like Mr. Rice who take advantage their positions and of vulnerable members of society should understand that their conduct will be uncovered and will be met with serious consequences. The sentence the court imposed on Mr. Rice should send a clear signal to those thinking about abusing positions of trust and power.”
See earlier story:
Former CPA indicted on charges that include embezzling nearly $3 million
