JACKSONVILLE, Fla. – A Ponte Vedra man who pleaded guilty to willful tax evasion was sentenced Tuesday to a year and a day in federal prison and ordered to pay $1,927,077.90 in restitution to the Internal Revenue Service.
Patrick Brian Hines pleaded on Nov. 2, 2022.
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Court documents show that Hines used multiple nominee owners for a company he established in his wife’s name in an attempt to distance himself from it and to evade and defeat the payment of income taxes and other obligations.
He also used the company to hide his personal assets and income for at least six years, by paying personal expenses from the company’s business accounts and diverting profits from the company into the bank accounts of other nominee entities he controlled and to individual bank accounts he controlled.
According to court documents, from 2012 through 2018, he arranged for $2.5 million to be spent on personal expenses from the nominee accounts, including $38,000 in personal training sessions, dues for two private clubs, $275,000 in mortgage payments for a multi-million-dollar house, and tuition for his children’s private schooling.
Prosecutors said that on June 29, 2016, Hines filed an IRS Form 433-A in which he falsely claimed to have no income, but said he was supported by his spouse who gave him $3,479 per month, even though he knew that he had received the personal benefit of at least $2 million from 2012 through 2018.
As early as Nov. 28, 2011, the IRS sent Hines collection notices of his unpaid taxes, but Hines failed to pay. Despite advice from his accountant to pay his taxes, Hines claimed to be “broke” and living off the proceeds from the sale of the house.
Prosecutors said Hines’ issues started earlier than that.
According to court documents, from 2004 through 2011, Hines owned and operated a network of telecommunication entities that purchased the rights to specific 1-800 phone numbers and charged consumers’ telephone bills for directory assistance services. Hines owned and operated the entities in his own name.
After several lawsuits against the entities and Hines, in April 2011, Hines dismantled most of his entities and the entities filed for bankruptcy.
Then, in October 2012, he established the new telecommunication company in his wife’s name, which he operated for his personal benefit from 2012 through 2018, during which time the company generated more than $4 million in revenue, prosecutors said.
During this time the Federal Communications Commission issued a forfeiture order for the entities and Hines to pay $1.6 million.
In addition, in 2016, the California Public Utilities Commission filed a complaint against Hines and his companies, which resulted in a finding that Hines was responsible for $9.8 million plus interest, which remains outstanding.
Hines has accrued penalties and interest as a result of his delinquent taxes, resulting in a total outstanding balance of $1,927,077.90.
“For over a decade, Mr. Hines lied to the Internal Revenue Service, cheated the tax system, and stole from honest American taxpayers,” said Brian Payne IRS-CI Special Agent in Charge. “Mr. Hines’ attempts to conceal assets and income to evade taxes were unsuccessful and a tough lesson that came with significant consequences.”