Englewood doctor gets 2 years for tax evasion
An Englewood doctor convicted last fall of filing false tax returns and conspiring to defraud the Internal Revenue Service was sentenced Friday to two years in federal prison and three years of supervised release. Dr. Patricia Hough, 67, also must repay more than $15 million to the IRS, a judge ruled.
Hough bowed her head and leaned on a podium as Judge John Steele read her sentence in a Fort Myers federal courtroom Friday morning.
“I realize Dr. Hough is 67 years old,” the judge said before reading Hough's sentence. “The problem, unfortunately, is that you're not the oldest person I've sentenced, and you're not the oldest physician I've sentenced.”
Her attorney said he plans to appeal the sentencing.
Government prosecutors alleged that Hough and her now fugitive husband, Dr. David Leon Fredrick, worked in concert to hide millions of dollars from the IRS in foreign bank accounts.
A grand jury indicted the couple in May 2013. David Leon Frederick vanished after the indictment and was declared a fugitive in July, leaving Patricia Hough to face trial alone. She was convicted in October 2013 and resigned from her job as a psychiatrist with the Sarasota County Health Department.
The case against Hough and Fredrick stemmed from an investigation of the Swiss bank UBS AG, according to the Internal Revenue Service. Hough and Fredrick had an account with UBS.
Prosecutors contend the money she is convicted of not reporting to the IRS came from two medical schools in the Caribbean — Medical University of the Americas in the West Indies and The Saba University School of Medicine in the Netherlands Antilles — as well as offshore investment accounts.
Prosecutors say Hough and Fredrick sold the schools and associated real estate in April 2007 for more than $35 million. An IRS agent testified last Thursday that Hough also made more than $12 million in income from the two schools from 2003 until 2007.
Hough's primary defense attorney, Nathan Hochman, argued Friday that Hough's charitable actions — including mentoring incarcerated mothers in Mexico, working as a social worker with inner-city children in Chicago, volunteering at the North Port Center of Health and providing free medical care to thousands in Central America — needed to be part of the judge's consideration.
“I have never had a client like Pat Hough,” Hochman said. “This is a woman who has led a life of extraordinary public service. Many in Dr. Hough's situation don't have such a long record of doing good and contributing to society.”
But federal prosecutor Caryn Finley said the only reason Hough was able to participate in charitable activities was because she had so much extra income from lying on her tax returns.
“She was able to choose her employment because she was so wealthy,” Finley said. “But she was doing it off the backs of taxpayers who paid their fair share.”
After the sentencing, Hochman said he was disappointed with the trial's outcome.
“We intend to vigorously appeal the jury's wrong verdict that sent Dr. Hough, a woman with an extraordinary 50 years of public service helping thousands of people here and abroad,” Hochman said. “It's a tragic outcome for a woman who has dedicated her life in service and betterment of others here and around the world.”
In addition to the two years in federal prison, three years supervised release and $15 million she must repay the IRS, Hough must pay an additional $42,000 for the cost of prosecution and $400 in special assessment fees.
Hough was ordered to wear a GPS tracking device. She is scheduled to surrender to federal prison on July 18, unless the judge allows her to post bail and remain free until her appeal. Judge Steele is expected to make that decision by next week.