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A Massachusetts certified public accountant has agreed to plead guilty to concealing nearly $1.7 million in off-the-books employee pay and lying on pandemic relief loan applications, federal prosecutors said Monday.

The CPA, Charles D. Katz, based in Sudbury, a suburb west of Boston, ran a tax and financial advisory business — CD Katz LLC — and co-owned Gebsco Realty Corp., a real estate management company. But according to prosecutors, behind the balance sheets and ledgers, Katz orchestrated a long-running tax evasion scheme that blurred the line between employee benefits and outright deception.

Secret Pay, Luxury Perks, and Tax Dodging

Federal charging documents allege that, starting around 2014, Katz arranged for one of his employees — who worked for both companies but didn’t appear on Gebsco’s payroll — to receive over $1.6 million in unreported compensation.

That hidden pay allegedly came in many forms:

• Free family housing,

• Tuition payments for the employee’s children,

• Cash, and

• Personal use of company credit cards.

Prosecutors said Katz even provided the employee with a personal driver — all while ensuring none of these perks ever appeared on official tax documents.

The IRS was kept in the dark for years, and none of the income was reflected in tax filings by Katz or the employee.

False Pandemic Loan Claims

The scandal deepened during the COVID-19 pandemic, when Katz allegedly secured $179,000 in federal relief loans through programs meant to keep small businesses afloat.

Investigators say Katz falsely certified that he was not involved in criminal activity when applying for the funds, only to divert part of the money into his off-the-books compensation scheme — a move prosecutors likened to “robbing the Treasury during a crisis.”

The Plea Deal and Penalties

Under a plea agreement filed in Massachusetts federal court, Katz will plead guilty to:

• Two counts of conspiracy to defraud the U.S. government, and

• One count of loan fraud.

Federal prosecutors are seeking a sentence at the low end of the guidelines — 33 to 41 months in prison — followed by supervised release. Katz must also pay over $1 million in restitution, including:

• $751,683 to the IRS,

• $83,422 to the Commonwealth of Massachusetts, and

• $179,000 to the Small Business Administration for the COVID relief loans.

Attorneys Stay Silent as Case Moves Forward

Katz’s attorney, William A. Korman of Rudolph Friedmann LLP, declined to comment on Tuesday. The U.S. Attorney’s Office also did not issue a statement beyond court filings.

The government’s case is being handled by Assistant U.S. Attorney Kriss Basil for the District of Massachusetts.