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    Monday, May 06, 2024

    Businessman Adams to serve more than 7 years for tax evasion

    Businessman David M. Adams was sentenced to 7½ years in federal prison Tuesday for tax evasion during a lengthy sentencing hearing at which his former accountant and members of his family addressed U.S. District Judge Vanessa L. Bryant.

    A U.S. Marshal handcuffed Adams, 58, in the Hartford courtroom after the judge denied his request to turn himself in at a later date to begin serving the sentence. Adams' sentencing had already been delayed for months while he hired an accountant to review his tax liability and more recently because of a health problem.

    Bryant imposed three years of supervised release to follow the 90-month prison term — of which Adams is required to serve at least 85 percent — and ordered him to repay the government $4,872,172.91, which includes penalties and interest. While on supervised release, he would be required to make payments of at least $3,000 a month, the judge said.

    Adams, whose East Lyme estate was sold for $1.8 million at a foreclosure auction last month, brought to the sentencing a deed quitclaiming his vacation home in Mashpee, Mass., on Cape Cod, to the government. Attorney William T. Koch Jr. said Adams had signed the deed Monday night. Adams has also offered to help teach business skills to people enrolled in the federal Support Court Program for those who struggle with drugs and alcohol.

    Adams apologized to the court, his family, the Internal Revenue Service and his former accountant, Thomas J. Satalino, saying he wished he had resolved his tax issues "before things got so complicated."

    "I'm very sorry it got this far," he said. "I have no excuses. It's all on me. I'm sorry, your honor."

    Adams had pleaded guilty on the eve of trial 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 the IRS laws. According to the government, he filed false tax returns or failed to declare income for the tax years 2002, 2006, 2007, 2008, 2009, 2011 and 2012.

    A native of East Lyme, he had started two successful internet flower businesses, sold both for more than $12 million and had been involved in other business enterprises. He had previously been convicted of a tax crime in 1982 and of credit card fraud in 1996, serving no prison time for either offense.

    In her sentencing remarks, the judge listed myriad government services funded by American tax dollars, from traffic signals to the regulation of pharmaceuticals, the work of the Immigrations & Customs Enforcement Agency and even "the lights in this room." Bryant said nonpayment of taxes by some results in the increase of taxes for all. She said while choosing not to pay, Adams had lived in luxury homes, owned luxury vehicles and drunk champagne at exclusive resorts.

    "He's lived a lifestyle more lavish than any defendant who has sat before me in my more than 20 years on the bench," she said. "He's wracked up a tax liability in the highest echelons. His criminal history understates the persistent pattern of criminal conduct over a period of decades."

    Assistant U.S. Attorney Susan L. Wines introduced three of the four collection agents from the IRS who had been assigned to Adams' case and said he had engaged them in persistent dishonesty and gamesmanship, repeatedly stalled them, led them on wild goose chases and told them he was going to send a payment.

    "He hid income," Wines said. "He had the money to pay this at any time."

    Wines said Adams had misled his personal accountant about his tax history and the timing of payments and that, even after he pleaded guilty, had maintained a "secret" bank account containing the proceeds of a life insurance policy on his late wife, Sandra Adams.

    Satalino,  Adams' former accountant, told the judge his trust in Adams began to waiver in 2013 and was fully shattered in 2015 when a grand jury was convened to hear his case. Satalino said he was unaware of Adams' past with the IRS and disparaged him to the agency. Satalino said Adams cost him $14,000 in financial losses, sleepless nights and canceled family vacations. Satalino said he had not been paid the $4,500 Adams owed him for the last tax return he had prepared.

    Adams' family members conceded he had made mistakes but characterized him as an exceptional person while asking the judge for leniency. His daughter, Avery, a senior at the University of Connecticut, said that after her mother became ill, and then died, her father was "one parent playing the role of two with a grace that not a million people have."

    "He's the reason me and my brothers are able to be productive members of society," she said.

    David Adams' sister, Carol Adams, said he had set the standard for hard work, mowing 60 lawns a week while all other kids were going to the beach, bringing family members into his businesses and treating his employees well, with stacks of pizza and pots of coffee during long days.

    She said the family needed Adams, who still has much to offer.

    "If they're dangerous, you put them behind bars," she said.

    The judge said she did not see Adams as a demon.

    "We enjoy the benefits of our talents, but must also endure the consequences of our failures," Bryant said.

    k.florin@theday.com

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