Naugatuck Man Pleads Guilty to Tax Fraud in $6 Million Bank Embezzlement Scheme

A Naugatuck man pleaded guilty Thursday to federal tax fraud charges stemming from the case of a $6 million embezzlement scheme against Webster Bank.

Gary J. Stocking, 45, is now facing a maximum sentence of three years in jail and is ordered to pay over $640,000 in back taxes to the U.S. Government, as well as any applicable interest and penalties to the Internal Revenue Service, according to a press release from the U.S. District Court in New Haven.

Federal authorities said Stocking willfully failed to report approximately $1.91 million in income he garnered between 2007 and 2009 on behalf Equity Realty LLC. The LLC was an entity he established on a request from a co-conspirator, Susan Curtis, who was at the time worked in managing property transfers for Webster Bank.

Authorities determined Curtis had filtered $5.04 million in fraudulent transaction fees — including the $1.91 million Stocking failed to report — from the bank to both Equity Realty LLC and New House LLC.

Curtis claimed the LLCs were legitimate brokerage companies, something that authorities later proved false. She pleaded guilty Jan. 20 to federal bank fraud charges and is awaiting sentencing.

Stocking’s failing to report report his gained income in the scheme meant the federal government was out $643,885 on taxes.

Stocking pleaded guilty to three counts of failing to file a tax return, supply information and pay federal income taxes, the release said. He is due to be sentenced on June 23.

Curtis is awaiting sentencing in her case on six of the eight bank fraud charges — each of which carries a maximum jail time of 30 years in prison. She is also ordered to pay $12 million in fines as well as restitution to the bank, back taxes and penalties to the government.

She is going to trial on April 18 on one count of money laundering and one count of bank fraud.

A third defendant in the scheme, Kevin Caffrey, pleaded guilty to one count of bank fraud in October and is also awaiting sentence. He was Curtis’ husband at the time who federal authorities said also helped establish both LLCs.