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    Thursday, April 25, 2024

    Adams remains hospitalized pending federal tax evasion sentencing

    Flower entrepreneur David M. Adams, who was hospitalized two days before his scheduled Oct. 3 sentencing on federal tax evasion charges, remained hospitalized as of Thursday evening, according to his attorney.

    Adams, 57, who is facing years in prison, is under a court order to appear before U.S. District Judge Vanessa L. Bryant within 24 hours of his release from Yale New Haven Hospital.

    His attorney, William T. Koch Jr., said by phone that he has been checking daily and that his client remains hospitalized. Koch said he would be updating the court as soon as he has new information.

    Adams, 57, of Old Saybrook, pleaded guilty in October 2017 to two counts of tax evasion, three counts of making and subscribing a false tax return and one count of attempting to interfere with the administration of Internal Revenue Service laws.

    The sentencing initially was scheduled for January, postponed to March and then marked over until early October while a certified public accountant reviewed Adams' finances to determine if he does in fact owe $4.8 million in back taxes, penalties and interest, as the government claims.

    It is unclear whether Adams'  sentencing will go forward upon his release from the hospital. The judge has asked for an update on his medical condition and will be considering a motion by U.S. Attorney Susan L. Wines to revoke his bond.

    The government alleges Adams has engaged them in a decadeslong cat-and-mouse game, first by underreporting his income and underpaying his taxes, then by delaying his prosecution once he was arrested and pleading guilty at the eleventh hour before his trial was to begin. Then came the latest delayed sentencing and the discovery of information that had not been disclosed to the government.

    Wines said at the hearing earlier this month that the government has learned on the eve of sentencing that Adams failed to disclose a bank account containing $500,000 in life insurance proceeds. She said that Adams, who was required to disclose large money transactions, had made a $200,000 payment from the account to pay off his home on Cape Cod.

    The judge, citing a history of "questionable circumstances" that prevented Adams from attending court proceedings, told his lawyers she wanted credible information concerning his medical condition.

    Adams' brother had testified at the hearing that Adams' girlfriend texted him on Oct. 1 that Adams' blood pressure was high, he was sweating, red in the face and had a rapid heart rate. She said both she and their neighbors tried to convince Adams to go to the hospital but he refused. Dan Adams said he drove to his brother's house and convinced him to go to a medical clinic in Guilford, where the staff performed tests and indicated they were transferring him to Yale New Haven Hospital by ambulance.

    Adams' blood condition was so bad, he needed dialysis, and his heart stopped at Yale, according to testimony.

    Adams had founded USA Flowers, a national operation, from a shop in Groton and sold it in 2002 for $6 million, according to court documents. He later opened an internet flower business that he sold in 2006 for another $6 million gain. He also had an interest in the leases on the businesses at the Saybrook Junction marketplace on Boston Post Road.

    The government has liens on the Cape Cod home and on Adams' custom-built estate in East Lyme, which Adams has been renting out for events.

    At the sentencing, Adams' lawyers plan to argue that the amount of restitution he owes should be approximately $2.6 million rather than the $4.8 million the government is seeking, due to added interest and penalties.

    In fashioning the sentence, the judge will consider sentencing guidelines estimated in one court document at 53 to 61 months in prison based on several factors, including the offenses and Adams' prior convictions. His attorneys will argue for a sentence of 46 months, which is below the guidelines.

    According to court records, Adams avoided imprisonment in 1986, when he was convicted of using his flower business to submit hundreds of fraudulent credit card sales online, and in 1992, when he was convicted of willful failure to file tax returns for 1984 and 1985.

    His attorneys have requested that following his sentencing, Adams be allowed to turn himself in, or "self surrender," to a federal prison after taking care of family issues. The government objects.

    k.florin@theday.com

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