A metro Detroit man was sentenced to three years in prison today after failing to report money he made to the IRS and money laundering.
According to court documents and statements made in court, from approximately 2008 through 2017, Matthew D. Adams sold illegal narcotics to Individual (A). Individual A was the president of Company A. Individual A paid Adams for the illegal narcotics with funds embezzled from Company (A), according to federal court documents.
Adams and Individual A agreed to make the payments for illegal narcotics appear like they were payments from Company A to Adams’ company, MDA Property Services, for legitimate work performed by Adams’ business. From 2013 through 2017, Adams was allegedly paid more than $10 million by checks from Company A for illegal narcotics he sold to Individual A.
Adams did not report the millions of dollars in income he received from selling illegal narcotics on his 2013 to 2016 income tax returns and failed to file a 2017 income tax return. Adams deposited some of the checks into his personal and business bank accounts and cashed the remainder, totaling approximately $5.3 million, at a local liquor store. Adams told his tax preparer about the deposits in just one of the bank accounts, which caused the preparer to file returns that did not report all of Adams’ income from his illegal narcotics sales, according to court documents.
In 2017, Adams and MDA came under audit by the IRS. During the audit, Adams lied to the IRS revenue agent multiple times, including by telling the agent that 90% of the money MDA Property Services was paid by Company A was for legitimate work, when the true figure was 3%, according to court documents.
Adams withdrew more than $1 million in cash of his illegal narcotics proceeds from his business bank accounts and used the funds to acquire real estate. He also spent over $1.25 million on personal expenses such as private flights, golfing, jewelry, gambling, court-ordered child support, hotels and to purchase a firearm. Adams purchased vehicles including a Cadillac Escalade, a Hummer and multiple classic cars, according to court documents.
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