By David J. Neal
As some fully employed people found their Social Security contributions were “$0” for recent years, a Stuart man and his wife luxuriated in a 7,700-square-foot three-bedroom, eight-bathroom house with a small dock and cove.
The missing money and the house connect through Matthew Brown and his $22.4 million tax fraud.
Brown, 51, soon will be relocating from that home to federal prison after being sentenced in Fort Pierce federal court to 50 months of incarceration and two years of supervised release. He also was fined $200,000 and ordered to pay $22,401,585 in restitution.
Brown pleaded guilty to failure to account for and pay over trust fund tax and assisting in the filing of a false tax return, crimes he committed through Matthew Brown & Associates, which did business as Elite Payroll Solutions. Elite Payroll handled payroll functions, employee benefits and tax services for several businesses from Miami-Dade to St. Lucie counties.
Some of those functions included paying payroll taxes.
How the tax fraud worked
Starting in 2014, the Justice Department said, Brown worked a pretty simple tax scam on his business clients. He told them how much they owed in taxes, and they paid him the full amount. Then, he understated the employment tax obligation to the IRS. Brown kept the difference.
Brown’s admission of facts says he did this to a Miami private security company in the business quarter that ended June 30, 2021. He understated the security company’s tax by $150,000 in a false quarterly filing to the IRS. He did this to several companies over eight years or 32 quarters.
“On multiple occasions, the IRS sent Brown and the EPS clients notices that it had detected underreporting for a specific quarter,” his admission said. “Brown sent correspondence to the IRS and to the EPS Clients claiming any underreporting was the result of an Elite Payroll error and offered to pay any balance and interest due for that quarter. Brown knew this to be false and did so to avoid further scrutiny from the IRS and EPS clients.”
Instead of paying the payroll taxes, Brown bought a home in 2016 for $1.2 million (current market value in county property records: $3.7 million), commercial properties, a Valhalla 55 Sport Yacht, a Falcon 50 jet, and a fleet of cars that included Porsches, Rolls-Royces, and 27 Ferraris.
Here’s a list of companies included in Brown’s restitution and the unpaid employment taxes that went into his pocket:
▪ Miami’s Gruber Saks Construction, $695,118.
▪ Davis Brothers, LLC, $2,113,984
▪ Factory Direct Supply WPB, LLC, $1,992,692
▪ Miami’s Haynes Security Services, $1,509,015
▪ Palm City’s VM Iron Work and Structural Steel Corp., $648,811
And three companies partially-owned by Brown
▪ Palm City’s Propane Services, Inc., $1,297,823
▪ AC Care Heat and Air, Inc., $382,315
▪ Matthew Brown & Associates, Inc., $13,761,827
An employee at one of Brown’s companies sent a victim impact email to the court before Brown’s sentencing:
“One day, a colleague urged me to check my Social Security records. To my shock, my SSA contributions for three years were listed as $0 — despite full-time employment. It took months of persistence during the COVID shutdown to have this corrected. Afterward, I encouraged others to review their records, and many found the same issue.”
This was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Michael Porter and Trial Attorney Andrew Ascencio.
Since 1989, David J. Neal’s domain at the Miami Herald has expanded to include writing about Panthers (NHL and FIU), Dolphins, old school animation, food safety, fraud, naughty lawyers, bad doctors and all manner of breaking news. He drinks coladas whole. He does not work Indianapolis 500 Race Day.
