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Ponzi scheme investigation nabs one of IRS' own

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ST. LOUIS • An IRS investigation into one of its former employees uncovered a $4 million Ponzi scheme, authorities announced on Friday.

Richard Saunders, 62, formerly of St. Louis, was apprehended in Thailand and taken into U.S. Custody on Thursday. Prosecutors allege Saunders spent, paid and diverted more than $1.3 million in investor funds, some of which he sent to offshore accounts, from November 2004 to January 2008.

Saunders ultimately netted more than $4 million in the Ponzi scheme, in which he used funds from investors to pay returns on other investments, rather than actual profits. Saunders is alleged to have fled to Southeast Asia in 2008 without paying investors. He is also charged with evading income taxes from 1992 to 1997.

Saunders, who operated Advisors Capital Holdings in St. Louis County and a handful of other businesses, was previously employed at the IRS, although the indictment does not say when or in what capacity.

A federal grand jury here charged Saunders in July with four counts of wire fraud, three counts of money laundering and six felony counts of tax evasion. The indictment was unsealed after Saunders' arrest. Saunders could face up to 20 years in prison for each count of wire fraud, up to 10 years for each count of money laundering, and up to five years for each count of tax evasion.

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