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Virginia man pleads guilty to defrauding the United States | USAO-NM

ALBUQUERQUE, NM — Alexander MM Uballez, the United States Attorney for the District of New Mexico, announced that Jerry Shrock, 47, of Meadowview, Virginia, pleaded guilty on November 28 to conspiracy to defraud the United States. Shrock remains on terms of release pending sentencing, which was not planned.

According to court records, as of January 2005, David Wellington, 62, of Albuquerque, and his business partner Stacy Underwood, 51, of Albuquerque, operated, sold, and formed National Business Services, which promoted limited liability companies (LLCs) under New Mexico state law. For many customers, National Business Services opened bank accounts under the LLCs’ names and IRS Employer Identification Numbers (EINs), and the customers – whose names were not linked to the bank accounts – would have access to the funds in those accounts. Customers were given debit cards, online bank access information, and pre-signed checks signed by Underwood, allowing customers to access the money, although the bank never linked the customer to the account.

In his plea agreement, Shrock admitted that in 2006 he turned to the National Business Services for help avoiding federal taxes by starting a business in New Mexico. Shrock spoke to Underwood and Wellington and became a customer of National Business Services.

Wellington and Underwood formed three LLCs in New Mexico for Shrock: White Top Enterprise LLC; Poultry Company LLC; and TALC Properties LLC. Shrock was not listed in the statutes. Instead, Underwood was listed as the “organizer” and National Business Services was the first registered agent for each of the three LLCs.

On May 9, 2011, Underwood opened a bank account using the company EIN under the company name White Top Enterprise, LLC. Shrock’s name was not on the signature card for the account. Underwood provided Shrock with online access to the bank account and a book of checks presigned with her signature. Between May 9, 2011 and June 30, 2015, Shrock arranged for approximately $4,875,940 to be deposited into White Top Enterprise LLC’s bank account, and during the same period, Shrock and his wife withdrew or arranged for withdrawal approximately $4,875,940 . Among the withdrawals was a transfer of approximately $352,216 towards a home purchase.

Prior to his June 23, 2021 indictment in this case, Shrock did not file a personal or business tax return with the IRS reporting White Top Enterprises LLC’s income. At the time of the deposits and withdrawals, Shrock had a large outstanding IRS assessment for unpaid taxes, penalties and interest. Because it was not opened in his personal name, the White Top Enterprises LLC bank account enabled Shrock to generate and deposit income while escaping outstanding assessment and avoiding personal and business taxes on the income.

Wellington was charged on July 9, 2021 with conspiracy to defraud the United States and operating an unlicensed money-transmission business. Wellington remains on terms of release pending trial, which is scheduled for June 12, 2023. If convicted, Wellington faces up to 10 years in prison.

On October 23, Underwood pleaded guilty to conspiracy to defraud the United States. Underwood is scheduled to be sentenced on January 30, 2023.

Underwood and Shrock face up to five years in prison.

The IRS Criminal Investigation investigated this case. Assistant United States Attorney Jeremy Peña is prosecuting the case.

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