BAY CITY – A West Branch resident was sentenced yesterday to 30 months in federal prison on charges of filing false tax returns and aiding and abetting the filing of false tax returns and ordered to pay $844,945 in restitution to the IRS, announced Acting United States Attorney Saima Mohsin.
Mohsin was joined in the announcement by Acting Special Agent in Charge Brian Thomas, Internal Revenue Service, Criminal Investigation, Detroit Field Office.
Sentenced was Christopher Fratine, 53. Fratine pleaded guilty in July 2019 to five counts of making a false tax return and four counts of aiding and abetting the filing of false tax returns before United States District Judge Thomas Ludington. Sentencing was delayed due to the COVID-19 pandemic.
According to court documents, Fratine owned and operated a home health care business named Unity Home Care Services (UHCS). He also operated a separate home health care business named Unity Home Health Care (UHHC), which was owned by his wife. UHCS and UHHC provided in-home skilled nursing care, physical therapy, speech therapy and occupational therapy services in the general vicinities of Houghton Lake, Traverse City and Bay City, Michigan. From 2013 until 2016, Fratine willfully made and subscribed false and fraudulent Individual Income Tax Returns, for calendar years 2012 through 2015, and Form 1120, U.S. Corporation Income Tax Return for UHCS, for calendar year 2013. Fratine also reviewed the tax returns prepared by the CPA based on the information he provided to her and willfully aided and assisted in, procured, counseled and advised the preparation and presentation to the IRS of false and fraudulent tax Forms 1120, U.S. Corporation Income Tax Returns for UHHC, for calendar years 2012 through 2015. IRS records showed that between 2012 and 2015, UHCS earned approximately $3 million in gross receipts, all of which came from Medicare, and UHHC earned approximately $6.4 million in gross receipts, of which approximately $5 million came from Medicare and the rest from private insurers. Fratine deposited all of the revenue from private insurers and a portion of the Medicare revenue into business bank accounts. He provided bank statements from these bank accounts to a CPA, who prepared the Forms 1120 for UHCS and UHHC and individual income tax returns for the Fratine based on this information. Fratine deposited the rest of the Medicare revenue in accounts with other financial institutions, but failed to disclose this and failed to provide statements to his CPA, concealing the existence of this income and of these accounts from the CPA. Between 2012 and 2015, FRATINE diverted over $2,147,537 of business gross receipts into bank accounts hidden from his CPA. In addition, Fratine wrote several business checks in 2012 through 2015, with a total of approximately $114,000, payable to Medicare and Humana, from the business bank accounts known to the CPA, claiming they were overpayments by the insurance companies, and, as such, deductible from gross receipts as returns and allowances; he then deposited those checks into the concealed business accounts. The CPA received carbon copies of all of these business checks causing her to incorrectly report the checks payable to Medicare and Humana as returns’ and deduct the checks from the businesses’ gross receipts on the Forms 1120. Fratine transferred the funds from these undisclosed bank accounts into his personal bank accounts and used the funds for gambling and other personal purposes.
“Individuals like Mr. Fratine, who created elaborate schemes to purposefully mislead others and defraud the IRS should expect to be prosecuted,” said IRS – Criminal Investigation, Detroit Field Office, Acting Special Agent in Charge Brian Thomas. “The sentencing of Mr. Fratine demonstrates he intentionally falsified tax returns to hide millions of dollars of taxable income from the IRS. These types of crimes will always be investigated and prosecuted to the full extent of the law.”
This case was investigated by agents of the Internal Revenue Service, Criminal Investigation and was prosecuted by Assistant United States Attorney Anca Pop.
Department of Justice
Office of the U.S. Attorney
Eastern District of Michigan