Editor’s note: This is a comprehensive view of my day as an attendee in Federal Court on Wednesday 10/30/2024.
If this were a cooking blog, it would begin with “As I walked through fields of Tuscany…” It’s a bit longer than most posts will be, but it will give you a comprehensive overview of my morning. I hope you enjoy it!
Matt Brown, CEO of Elite Payroll, made his first appearance in federal court today. He is facing two charges – 1) willful failure to pay trust fund taxes and 2) aiding and assisting in the filing of false tax returns. According to the charges filed, Mr. Brown failed to pay over $13,000,000 in trust fund taxes and he failed to pay over $9,000,000 in employment taxes.
If you’ve never been to the Federal Courthouse, it’s a bit of an experience.
No cell phones, no smart watches, and no computers are allowed for the general public. You have to provide ID to enter and go through a metal detector.
The proceedings were scheduled to begin at 10am so I made sure to arrive by 9:30am to give myself enough time to get in and find the courtroom. There was only one courtroom in use today and it was on the 4th floor.
As I was finding my way into the courtroom, Mr. Brown’s wife, Kristin, was leaving the adjacent Attorney – Client conference room with Mr. Brown’s attorney, Jeffrey Neiman.
Mr. Neiman is a partner with Marcus Neiman Rashbam & Pineiro LLP. His profile states he is “an experienced trial lawyer who regularly defends individuals and corporations in white collar criminal litigation, matters involving tax controversies, government regulatory enforcement matters, internal investigations, compliance counseling, and complex civil litigation.”
Like many attorneys in private practice, he began his career working for the prosecution, specifically the US Department of Justice Tax Division, who is trying the case against his client.
His appearance was entered into the docket on 10/28.
The filing is very informational and lays out the case against Mr. Brown.
Included on page 5 of the filing is “Instead of paying over the funds, he held interest for his clients, BROWN purchased residential and commercial real estate including his multi-million-dollar home and luxury vehicles including a Valhalla 55-Sport Yacht, a Falcon 50 Aircraft, and a collection of cars, including Ferraris, Porsches, and Rolls Royce’s (sic).”
Interestingly, the Valhalla Boatworks shared a post congratulating Mr. and Mrs. Brown for their purchase of a Valhalla 55-Sport Yacht.
The Courtroom
The courtroom consists of panels of light-colored wood covering the walls and a royal blue carpet.
The magistrate judge’s seat is before you when you walk in and her seat is elevated above the rest of the courtroom.
There is a jury box to the left that also serves as the seating area for the defendants.
There is a defendant table and prosecution table with seats behind them for, at least for today, US Marshalls. There is a pre-trial employee to the right of the prosecution table and today there were two translators, one who spoke Portuguese and one who spoke Spanish, to her right. There are 4 bleachers or benches – 2 on each side – for family member and gallery members. The room is very small considering the bigness of what takes place in there.
On the right side of the room were IRS agents and FBI agents. It was not clear who was there for which cases but based on the cases presented today, it is safe to assume the IRS agents were in attendance for Mr. Brown’s case.
I sat on the left not realizing I was sitting on the defendant’s side. When people were asked to leave one bench for the attorneys, Mrs. Brown took a seat next to me.
She was dressed in jeans and a black shirt and black heels. I wondered if the attorney told her to “dress down” though her outfit was not casual, although maybe it was for her.
The U.S. Marshalls escorted in the various defendants, all of whom where in handcuffs, who took their seats in the jury box. The defendants were seated in their order of appearance, regardless of their charges.
Translation devices were provided to each defendant whose first language was not English.
Today’s court proceedings were overseen by U.S. Magistrate Judge Shaniek M. Maynard. She was sworn in as a United States Magistrate for the Southern District of Florida in June 2017.
I’ve watched other court proceedings recently and while she runs her courtroom similarly, she is different in how she speaks to the defendants. Her tone was one of compassion and she made sure every defendant understood their charges and the implication of their charges, regardless of the language they primarily spoke.
There were a series of other first appearances for a variety of charges including immigration violations and firearms. Defendants were guided by the U.S. Marshalls to their seats at the defense table as their cases were called.
United States vs. Matthew S. Brown
Mr. Brown was presented to the magistrate judge for his initial appearance.
He must have also gotten the memo to dress down because, similarly to his wife, he was dressed in jeans and a black shirt. His shirt was an untucked black pique knit polo. He, like the other defendants, was in handcuffs.
He declined to have his charges read but stated he understood the charges filed and the penalties if convicted.
He submitted a Waiver of Indictment.
A wavier of indictment is when a defendant gives up their right to be indicted by a grand jury for a felony offense. The defendant must waive their right in open court.
If you look at Mr. Brown’s filing, it’s a Criminal Information filing and not an indictment. From what I understand, this often happens when a defendant believes the prosecution has sufficient evidence to go to trial. Many attorneys who represent a client with an Criminal Information (vs. Indictment) seem to pursue resolving the case with a plea.
But really there is no difference between an Information filing and Indictment as the charges are the charges.
The Magistrate Judge stated that for Count 1, willful failure to pay trust fund taxes, is punishable up to 5 years with supervision post release for up to 3 years and a fine. For Count 2, aiding and assisting in the filing of false tax returns, is punishable up to 3 years with a supervised release for up to 1 year and a fine.
Mr. Brown plead “not guilty” to both charges and requested a trial by jury.
At this point, Judge Magistrate Maynard cited the 1963 Supreme Court case Brady vs. Maryland and stated that the Court has a duty to disclose any evidence upon request.
The State and the defense agreed that a surety bond of $500,000 was acceptable in lieu of bond. A surety bond in federal court is a financial guarantee that a defendant will appear in court and meet other bail conditions.
So what are the conditions?
- Brown must be present for all court appearances.
- He must surrender his passport in the next 48 hours and he is not permitted to obtain any other travel documents.
NOTE: The defense attorney pushed for this not to be the case as he stated Mr. Brown sometimes travels overseas for business. It was also disclosed that Mr. Brown has property in California. It was agreed the passport must be turned in and if he wishes to travel internationally his attorney must file a motion and they must obtain court permission to do so.
- He must report to pre-trial services after the court proceedings earlier today.
- He must maintain full-time employment.
- He must refrain from possessing any firearms and had 48 hours to remove them.
NOTE: Mr. Brown stated he had already removed them from his home.
- He must reside at the address provided on his paperwork.
- Domestic travel is permitted.
What's next?
At the time of this posting, Mr. Brown’s next appearance is scheduled for December 10, 2024 in front of Judge Aileen Cannon. His jury trial has been scheduled to begin December 16, 2024. Per the court filing, “Any change of plea must be taken prior to 5:00 p.m. on the last business day before trial is scheduled to begin.”
In between now and then, I would expect that there might be some negotiations to possibly reach a plea deal. The rumor mills are busy with what Mr. Brown knew and who else benefitted from his efforts, beyond him and his wife.
Interestingly, there is a pending lawsuit between Aaron Schamback, DMD, and Aaron Brown & Associates d/b/a Elite Payroll Solutions. Aaron Brown & Associates’ officers include Barrie Brown and Janet Brown. Dr. Schamback is seeking damages and is suing for Florida’s Deceptive and Unfair Trade Practices, Breach of Contract, Breach of Fiduciary Duty, and Fraud. There is also a complaint and lawsuit filed by Duraseal of the Treasure Coast for fraud “seeking the imposition of a constructive trust and for breach of fiduciary duty seeking restitution, also filed after the raid. There is also an injunction from Lake Oconee Bistro against Aaron Brown & Associates that was issued after the initial raid at Elite Payroll.
Will we see other civil lawsuits filed as this court case proceeds and evidence of the false tax returns come to light? According to Sunbiz.org, Florida’s Division of Corporations, Mr. Brown owns or is involved in a number of other companies. Are those being investigated as well? There are multiple companies listed at the same address used by Elite Payroll. We will definitely keep checking the various court dockets to see what other charges, if any, are filed.
And while Matt Brown was the only accused defendant standing in front of the magistrate judge, there are, more than likely, more people involved in the alleged tax fraud and failure to pay trust fund taxes. It is implausible that one man was the only complicit person in this effort, though he may be the only one to be prosecuted… until he shares with the FBI and the IRS what he knows.
More to surely come as this case unfolds and the other players begin to become known.