Owner of Accounting Firm Pleads Guilty to Wire Fraud, Money Laundering and Tax Charges

Wilkins McNair, Jr., age 49, of Ellicott City, Maryland pleaded guilty today to wire fraud and money laundering in connection with a scheme to defraud investors in an obesity treatment clinic; and to failing to pay federal taxes and filing false tax returns in a separate scheme relating to his accounting firm, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

U.S. Attorney Rod Rosenstein said, "Mr. McNair defrauded innocent investors of more than $1.3 million by spending their money for his personal benefit instead of investing in a legitimate business, as he represented he would do. He also cheated the taxpayers by depriving the IRS of more than $560,000 in payroll and income taxes."

Fraudulent Diversion of $1.3 Million in Investor Funds

According to the statement of facts presented to the court as part of his plea agreement, McNair, a certified public accountant and the owner of Wilkins McNair, P.C. (WMPC), an accounting firm formerly located at 201 North Charles Street in Baltimore, provided accounting and other financial services to Bariatric Care Associates, LLC, (BCA), a corporation established by several investors, including a surgeon and cardiologist, who intended to open a clinic treating patients who suffered from morbid obesity. McNair helped to find additional investors to provide start-up funding for BCA, as well as provided accounting and other financial services to BCA.

The original group of BCA investors incorporated themselves under the name M.O.M. Investment Group, Inc. ("M.O.M."). The investors gave control of M.O.M. and its funds to McNair, who controlled M.O.M.’s bank accounts and appointed one of his family members as M.O.M.’s incorporator and registered agent. Between March 2004 and October 2005, five investors provided approximately $1.550 million to M.O.M. and/or McNair to finance BCA’s business operations. Most of these funds were provided by way of interstate wire transfers. Each of the investors executed escrow agreements with Wilkins McNair, P.C. authorizing it to conduct certain transactions with their funds for the benefit of the M.O.M. Investment Group and BCA. However, McNair spent for his personal benefit approximately $1.3 million of the $1.550 million entrusted to his care by the M.O.M. investors.

Failed to Pay $566,940 in Taxes

McNair falsely reported that income and other taxes had been deducted from his wages on his individual tax returns for 1999 to 2001 in the amount of $160,951.27; under-reported $209,992.53 of payroll taxes due on reports filed by WMPC for 1999 to 2001; and failed to collect and pay $195,996.71 owed as payroll taxes. In all, McNair failed to pay to the IRS $566,940.51 in taxes between 1999 and 2005.

The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine; 10 years in prison and a fine of $250,000 for money laundering; three years in prison and a $250,000 fine for making false statements on a tax return; and five years in prison and a $250,000 fine for failing to collect or pay taxes.