Federal authorities announced that a Connecticut investment advisor has pleaded guilty to a charge of filing a false tax return, according to a report by ThinkAdvisor.
64-year-old Thomas Pacilio of Westport entered the plea last week in federal court after waiving his right to be indicted.
Details of the case were disclosed in court documents and statements made in court. Pacilio and his partner started a financial services business called Clapboard Hill Advisors LLC in 2011. Two years later he transferred his partnership interest to another firm he created, Alcamo Holding Corporation Inc., an 1120-S corporation.
In 2014, through Alcamo, his partner and a separate corporation, Pacilio sold Clapboard Hill Advisors to McGladrey Wealth Management LLC. Under the sale agreement, McGladrey agreed to make a lump sum payment at closing and Pacilio was to become an employee for three years subject to a non-competition provision. Along with a salary from McGladrey, Pacilio was to receive $350,000 on each anniversary of the sale for three years. He would also receive a portion of McGladrey’s annual gross revenue, which would be up to $150,000 for the first year, $350,000 the second year and $450,000 the third year.
The U.S. Attorney’s Office said Pacilio admitted that from the 2015 to 2018 tax years, he filed tax returns that omitted the installment payments related to the sale of Clapboard to McGladrey. These funds should have been reported either as regular income or as capital gains. Pacilio’s failure to report the payments was determined to have resulted in a tax loss of $286,000 to the Internal Revenue Service.
Following the guilty plea, Pacilio was released on $350,000 bail and sentencing was scheduled for April 6. He could receive a maximum prison term of three years. Pacilio remains a registered investment advisor but is no longer a registered broker.
Financial advisor misconduct takes many forms. The attorneys at Lewitas Hyman have experience dealing with a broad range of claims that rise to the level of financial advisor misconduct, and we understand the financial and emotional ramifications of investment losses caused by financial professionals. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a free consultation.
