Jacksonville, Florida – Chief U.S. District Judge Timothy J. Corrigan today sentenced Patrick Brian Hines to a year and a day in federal prison for the willful evasion of taxes due and owing. The court also ordered Hines to pay $1,927,077.90 in restitution to the Internal Revenue Service. Hines had pleaded on November 2, 2022.
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 these 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. In October 2012, a new telecommunication company was established in Hines’s wife’s name. Hines operated the company established in his wife’s name for his personal benefit from 2012 through 2018, during which time the company generated more than $4 million in revenue. Rather than owning and operating the company in his own name, Hines operated it through nominees. This was done during the 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 used multiple nominee owners for the company in an attempt to distance himself from it and to evade and defeat the payment of income taxes and other obligations.
From 2012 through 2018, Hines used a system of nominee entities and individuals to conceal his assets and income. Hines paid personal expenses from the company’s business accounts, and he diverted profits of the company into the bank accounts of other nominee entities he controlled and to individual bank accounts he controlled. From 2012 through 2018, Hines arranged for $2.5 million to be spent on personal expenses from these nominee accounts, to include $38,000 in personal training sessions, dues for two private clubs, $275,000 in mortgage payments for a multi-million-dollar residence, and tuition for his children’s private schooling.
Beginning as early as November 28, 2011, the IRS sent Hines collection notices of his unpaid taxes, yet Hines failed to pay. Despite advice from his accountant to pay his taxes, Hines claimed to be “broke” and living off of the proceeds from the sale of the house.
On June 29, 2016, Hines filed an IRS Form 433-A in which he falsely claimed to have no income, but 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. Hines has accrued penalties and interest as a result of his delinquent taxes, resulting in 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’s attempts to conceal assets and income to evade taxes were unsuccessful and a tough lesson that came with significant consequences.”
This case was investigated by the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Kelly S. Karase.
Originally published at https://www.justice.gov/usao-mdfl/pr/ponte-vedra-man-sentenced-prison-and-ordered-pay-more-19-million-taxes-he-willfully