A federal grand jury in Greensboro returned an indictment Tuesday charging a Pinehurst couple with federal employment tax and individual income tax violations, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew G.T. Martin for the Middle District of North Carolina.
As alleged in the indictment, from 1992 through the present, James Rice is an orthopedic surgeon who owns Sandhills Orthopaedic and Spine Clinic.
The indictment further alleges that his wife, Susan Rice, worked at Sandhills Orthopaedic and handled the administrative operations, including payroll and employment tax obligations. Susan Rice also purportedly owned and operated a truffle business.
The Rices have been charged with a variety of tax offenses, including conspiring to not pay any taxes on their business and personal income and to defraud the United States by failing to pay employment taxes owed by Sandhills Orthopaedic.
Between 2007 and 2014, the Rices allegedly withheld employment taxes from Sandhills Orthopaedic’s employees but failed to pay over approximately $580,000 in social security and other tax withholdings to the IRS.
The indictment also alleges that the Rices did not file individual income tax returns for the 2014 through 2016 tax years, despite earning gross income in excess of the filing threshold, and that James Rice did not file corporate tax returns for an entity over which he was president for the 2014 through 2017 tax years.
If convicted, the Rices face a statutory maximum sentence of five years in prison and a $250,000 fine for each conspiracy, tax evasion, and employment tax count. They also face one year in prison for each of the charges relating to failing to file individual and corporate tax returns. They are also subject to additional monetary penalties, supervised release, and restitution.
An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.