In tax evasion sentencing, a question of character
In tax evasion sentencing, a question of character
SARASOTA – Before sentencing a Sarasota psychiatrist in a $15 million tax fraud case today, a federal judge will consider attorneys’ contrasting depictions of her character.
Click here to read court documents in the Hough case.
Patricia Lynn Hough’s lawyer will cite her “extraordinary history of public service” and refer to dozens of letters of support collected from her family, friends and professional colleagues as he urges Judge John E. Steele to be lenient, and not send Hough to prison.
Federal prosecutors will describe Hough as a calculating white-collar criminal who knew she and her husband were engaged in a federal crime, hiding their money in a Swiss bank. They want her to go prison for more than six years.
Hough resigned from the Sarasota County Health Department in October, after a jury convicted her of one count of conspiracy to defraud the Internal Revenue Service and three counts of subscribing to false tax returns.
The case against Hough, 67, is one of the largest income tax evasion cases brought by federal prosecutors since they started scrutinizing offshore accounts several years ago.
Prosecutors say Hough and her husband, David Leon Fredrick, sold two medical schools — The Saba University School of Medicine in Saba, Netherlands Antilles, and The Medical University of the Americas in Nevis, West Indies — and associated real estate in April 2007 for more than $35 million.
The case against them stemmed from an investigation of the Swiss bank UBS AG, where prosecutors say the couple hid their assets.
“Dr. Hough’s financial transactions were nothing more than a shell game to hide her income,” Richard Weber, criminal investigation chief for the IRS, said in a statement released after her conviction.
Fredrick disappeared and remains a fugitive, leaving his wife to face the federal case against them.
Her attorney, Bruce Udolf, told the judge that his client maintains her innocence and her conviction is “a terrible mistake.” He insists Fredrick is the guilty party.
Although he intends to appeal the conviction, Udolf will urge the judge to show leniency. He says Hough has lost her career, income, marriage and Englewood home — and that, at her age, she would be a likely abuse victim in prison.
Letters of praise
In a court document, Udolf describes a woman “whose entire adult life has been defined by service to others.”
According to that court record:
Hough grew up on welfare living in public housing in Youngstown, Ohio. She tutored inner-city children and visited elderly shut-ins while in high school.
Her “hard work ethic” earned her a work-study scholarship to Phillips University. She earned a master’s degree in social work, a doctorate in philosophy and sociology and, at age 46, a medical degree.
She was hired as a social worker at a school for the mentally handicapped, where she volunteered while in college.
Her volunteer work took her overseas, providing health screenings and medical care in impoverished communities in Central America.
At the Sarasota County Health Department, she assisted indigent and uninsured patients with behavioral problems.
Udolf entered dozens of letters of support for Hough into the court record.
“I have known Pat for about six years and have worked closely with her in medical clinics in Venice and North Port where she worked part time serving patients of the Sarasota County Health Department,” wrote the department’s medical director, Dr. William Heymann. “I am aware that she also made at least annual trips to Central America working with patients with her foundation. . . Her reputation as I am aware has been one of high moral and ethical integrity.”
Dr. Deborah Sauder, a colleague at the North Port Health Center, wrote that Hough volunteered there to assist “a very complex, very sick and medically-socially marginalized population. . . Her compassion for these underserved is irreplaceable.”
Jose David Eschevarria Diax, a member of Congress in Guatemala, wrote that he accompanied Hough during hospital visits in isolated areas of that country and that she has been essential in providing medicine and equipment. “Please allow this kind lady to continue her work with my people,” he wrote the judge.
“I have seen her giving food to those that have none, helping small villages get water for drinking and cooking, and providing safe stoves to cook on,” her cousin Beth McCann wrote, referring to Hough’s work in Guatemala.
Feds want prison term
Udolf also provided the judge with information about nearly 30 other tax evasion cases involving undisclosed foreign accounts and millions of dollars in which the convicted received sentences that were typically combinations of probation, home detention and community service.
A “prison term for Dr. Hough would create an unwarranted sentencing disparity with other defendants found guilty of similar or more egregious conduct,” Udolf wrote.
“Dr. Hough’s advanced age renders her vulnerable to victimization, abuse, adjustment problems and a shortened life span in prison,” he added.
Udolf recommends a year of home detention and 1,000 hours of community service.
Prosecutor Caryn D. Finley is arguing for a prison sentence of 6.5 to eight years.
She contends that documentary evidence proves Hough went to Switzerland, participated in the opening of foreign accounts and knowingly filed false tax returns.
Finley wrote the judge that, without prison time, “white-collar criminals stand to lose little more than a portion of their ill-gotten gains and practically none of their liberty.”
Hough is “hardly elderly, infirmed or suffering from serious health issues that cannot be appropriately treated by the Bureau of Prisons,” she stated in response to Udolf’s leniency argument.