Natalie K. Wight, U.S. Attorney | U.S. Attorney for the District of Oregon
A Tualatin, Oregon resident has been sentenced to federal prison for his involvement in a payroll tax scheme. David Katz, 48, was sentenced to 48 months in federal prison followed by three years of supervised release. Additionally, he has been ordered to pay $44,877,254 in restitution to the Internal Revenue Service (IRS).
The court documents and trial testimony revealed that from January 2014 through December 2017, Katz, serving as president of Check Cash Pacific, Inc., conspired with individuals in the construction industry to defraud the United States. The scheme involved creating sham construction companies that cashed over $177 million in payroll checks at various Check Cash Pacific locations. This allowed under-the-table payments to construction workers without taxes being withheld or reported.
Katz coordinated with construction companies regarding their plans to cash checks at his locations, ensuring sufficient cash availability for transactions. Daily operations saw hundreds of thousands of dollars in payroll checks cashed. It was noted that Katz knew one co-conspirator used a false identity and social security number but still permitted the filing of false regulatory reports.
Katz earned a 2% commission on each transaction within this scheme, accumulating over $4 million. The conspiracy ultimately prevented the IRS from collecting more than $44 million in due payroll and income taxes.
On December 2, 2021, Katz faced a five-count indictment by a federal grand jury in Portland. He was charged with conspiracy to defraud the United States and four counts of filing false currency transaction reports with FinCEN. A federal jury found him guilty on all charges on June 12, 2024.
The case investigation was conducted by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Robert S. Trisotto and Andrew T. Ho for the District of Oregon.
