In a recent case, a Massachusetts Accounting Firm Owner, Charles D. Katz, 64, was sentenced for paying an executive, Stephen Hochberg, under the table and for fraudulently applying for pandemic loan relief to partially fund the payments. The scheme assisted Hochberg in avoiding paying restitution for a previous crime in which he was sentenced in 2008 to 63 months in federal prison and ordered to pay $1.8 million in restitution for securities and wire fraud. In December 2025, Hochberg pleaded guilty to tax fraud and obstruction, and admitted to hiding over $1.6 million in under-the-table compensation to evade his ongoing restitution payments. Hochberg’s original conviction centered on a real estate fraud scheme that involved deceiving investors about a non-existent real estate investment company.

Both Hochberg and Katz are now on the hook for substantial restitution, and Katz has been ordered to pay a portion of restitution to Hochberg’s prior victims.

Multi-Year Under-the-Table Compensation Scheme

Charles D. Katz was sentenced after pleading guilty to conspiracy to defraud the United States and two counts of loan fraud.

According to prosecutors, the defendant and Hochberg, who was director of corporate services at his accounting firm and chief operating officer at his real estate firm, orchestrated a years-long scheme to conceal compensation from tax authorities. Rather than paying wages through normal payroll channels, Hochberg allegedly received a variety of undisclosed benefits, including payments to family members, rent-free housing for his former spouse, college tuition for his children, and personal expenses charged to corporate credit cards.

Federal authorities alleged that Hochberg received at least $1.66 million in unreported compensation. This allowed Hochberg to receive tax-free income and Katz’s companies to avoid significant federal employment taxes. Investigators estimated the resulting tax losses exceeded $835,000.

Fraudulent PPP Loan Applications

Prosecutors alleged that fraudulent applications were submitted for Paycheck Protection Program (PPP) loans on behalf of both companies. The businesses ultimately received approximately $179,900 in pandemic relief funding, some of which investigators alleged was used to continue funding the off-the-books compensation arrangement.

Hochberg’s Prior Criminal Conduct

According to prosecutors, the concealed compensation allowed Hochberg to avoid paying court-ordered restitution owed to victims from his prior conviction. As part of the recent sentence, Katz agreed to pay more than $333,000 toward restitution owed to those earlier victims.

In total, the restitution obligations included:

Approximately $751,684 to the IRS;

$83,422 to the Massachusetts Department of Revenue;

$179,500 to the Small Business Administration; and

$333,697 benefiting victims from the executive’s prior federal case.

Hochberg was sentenced earlier this year to 24 months in federal prison, followed by three years of supervised release, and was ordered to pay nearly $2.9 million in restitution.

Meanwhile, Katz received two months in federal prison, followed by two years of supervised release, after accepting responsibility through a guilty plea.

Federal Fraud, Prior Convictions and High Dollar Restitution

Although both Katz and Hochberg both pleaded guilty, their cases were complex, with far-reaching implications. As the prosecution endeavored to prove that they worked together to avoid responsibility for Hochberg’s previous restitution obligations and to benefit Katz’s business, their fates became inextricably intertwined. Despite Katz receiving a shorter sentence, the prosecution did not spare either of the defendants when it came to financial restitution. When individuals or the taxpayer are victims of substantial alleged fraud, high-dollar restitution is often sought by the prosecution. No matter the length of the prison sentence that may result, these numbers can be devastating.

Federal Fraud and Benefit Fraud Crackdown

Federal prosecutors have announced specialized initiatives targeting benefit fraud, tax fraud, pandemic relief fraud, and other schemes involving taxpayer-funded programs. In Massachusetts, federal authorities recently established a dedicated Benefit & Voter Fraud Team to aggressively investigate misuse of public funds. At the national level, the Department of Justice has also expanded its fraud enforcement efforts through the creation of a National Fraud Enforcement Division.

In this environment, it is extremely important to retain experienced white-collar criminal defense as soon as you become aware that you are being investigated on suspicion of fraud.

The Value of Experienced White Collar Defense

Federal fraud investigations frequently begin long before charges are filed. By the time an indictment is returned, investigators may have spent months or years reviewing financial records, interviewing witnesses, and building their case. These investigations are becoming more sophisticated as dedicated government task forces use detailed forensic accounting to pore over electronic records, tax filings, banking transactions, and corporate documents.

White collar criminal defense attorneys have strategies for challenging the prosecution’s framing of the loss and the restitution owed, for example:

Challenging Actual Losses: Requiring the prosecution to prove the net loss caused directly by the offense and offsetting the total figures with the value of any returned property, legitimate services rendered, or recovered assets.

Disputing “Relevant Conduct”: Ensuring that the restitution amount is only based on the exact counts of conviction, rather than broader uncharged or dismissed conduct.

Proving Third-Party Recoveries: Deducting amounts victims have already recouped through civil settlements, insurance payouts, or separate forfeiture actions.

Negotiating Payment Plans: If restitution is mandatory (such as under the Mandatory Victims Restitution Act in the U.S.), the attorney can advocate for a reasonable, scheduled payment plan based on the client’s actual ability to pay.

Raising Procedural Time Bars: Objecting to the prosecution’s failure to provide accurate victim loss statements or attempting to have the order dismissed if the court fails to establish the restitution amount within statutory deadlines.

Experienced, hard-hitting federal criminal defense represents concrete value when it comes to high-dollar fraud allegations. A highly experienced white collar criminal defense attorney can evaluate the government’s evidence, identify weaknesses in the prosecution’s case, protect your constitutional rights, and pursue every available strategy to achieve the best possible outcome. If you or someone you know has been accused of federal fraud, contact a member of our award-winning team to find out how we can respond strategically to protect your rights and future.

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