RI Man Admits To Defrauding IRS, Investors Out of $6 Million

WEST WARWICK, RI — A West Warwick man who conducted a decade-long Ponzi scheme admitted in federal court Wednesday to defrauding investors and the IRS out of $6 million to live a lavish lifestyle.

Thomas Huling, 58, pleaded guilty to wire fraud and tax evasion.

Between 2008 and 2018, Huling orchestrated a scheme that raised about $14 million, and caused losses of more than $6 million to his victims. Huling defrauded investors by promoting several investment projects, including high-yielding bond trading platforms, car emissions reduction technology and an online advertising and marketing company.

He told investors the money would be used for the particular project he was promoting, and that the investments would achieve substantial returns with little or no risk within a short period of time. To enhance his credibility and build trust, Huling incorporated religion, the possibility of charitable good works and association with well-known individuals into his sales pitches, according to court documents.

In reality, prosecutors said Huling diverted investor money to live a lavish lifestyle that included high-end vehicles, membership and golf fees at various country clubs, gambling, clothing, restaurants, vacations and improvements to his home. He created and used shell companies, opened more than 50 bank accounts and engaged in convoluted financial transactions between various accounts before ultimately using the money personally.

When investors contacted Huling worried about the status of their investments, Huling lulled them with false excuses and promises, and at other times avoided their calls. To appease certain investors, Huling used money raised from new investors to pay off earlier investors, according to court documents.

At the same time that Huling was defrauding his investors, he also evaded paying taxes. Between 2009 and April 2018, Huling reported no taxable income, paid no income taxes, and for certain years, filed false and fraudulent individual and corporate income tax returns.

To further hide his income, Huling used nominee bank accounts and paid for personal expenses using cash and corporate debit cards. He also manipulated the books and records of his companies to record sham loans, titled personal assets in the name of shell companies, and made false statements to IRS special agents as to his income, expenses, and business activities, prosecutors said.

Huling is scheduled to be sentenced on Dec. 19. He faces a maximum penalty of 20 years in prison for wire fraud and five years for tax evasion.