Marlborough Man Sentenced To Prison After Being Paid $1.6M Under The Table: USAO

MARLBOROUGH, MA — A Marlborough man has been sentenced to prison for a multi-year scheme to cheat the IRS by receiving more than $1.6 million in compensation and fringe benefits under the table, according to the U.S. Attorney's Office.

Stephen L. Hochberg, 78, a former accounting and real estate executive in Sudbury, was charged after he was paid and received under-the-table fringe benefits while lying to the U.S. Attorney's Office about his income.

He and his boss, Charles D. Katz, the owner of accounting firm CD Katz LLC and real estate firm Gebsco Realty Corporation, agreed to cheat the IRS, according to charging documents.

Hochberg was sentenced to two years in prison, followed by three years of supervised release. He was also ordered to pay $2,888,288 in restitution to the IRS, the state, and the victims of his prior securities and wire fraud crimes.

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Hochberg, who served as the Director of Corporate Services at the accounting firm and the CEO of the real estate firm, was paid off the books. This was so that Hochberg would have a tax-free income, and Katz would have lower employment taxes.

The fraudulent deal led Katz to pay Hochberg at least $1,668,487 in unreported income, which meant Katz avoided at least $835,105 in taxes, according to the USAO.

Katz also did this by paying Hochberg's family, providing rent-free housing to Hochberg's ex-wife, paying college tuition and other personal expenses. He also made a fraudulent application for more than $179,000 in pandemic relief, according to the USAO.

This is not the first fraud scheme Hochberg was involved in, the USAO said. In 2008, he was convicted of eight counts of wire fraud and nine counts of securities fraud. At the time, he was ordered to pay more than $1.7 million to his victims and was sentenced to more than five years in federal prison.

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