Owner of Boston Forensic Accounting Firm Charged With Tax Fraud

BOSTON – James Carey, the owner of Boston forensic accounting firm Carey & Company, was arrested Monday and charged with tax fraud by the office of U.S. Attorney for the District of Massachusetts Carmen Ortiz.

Carey, 49, is a certified public accountant and owner of Carey & Company. He has been indicted on one count of filing a false federal tax return.

As the indictment alleges, Carey & Company administered bank accounts on behalf of insurance companies, "into which their clients could make deposits, and from which payments could be made on behalf of and to the insurance companies," according to a statement from the Department of Justice.

In 2009, a customer of one of the insurance companies sent Carey & Company a payment of $594,217 intended for the insurance company, but found that almost all of that money had been used by Carey for his own purposes.

Carey allegedly failed to report this income on multiple forms to the Internal Revenue Service, including his U.S. Individual Income Tax, Forms 1040, and U.S. Income Tax Returns for S Corporations, Forms 1120S, for 2009 and 2010. The sentence for the violated state has a sentence of no more than three years in prison, one year of supervised release, and a fine of $100,000.

Assistant U.S. Attorney Stephen Heymann of Ortiz’s Economic Crimes Unit is prosecuting the case.