Charles D. Katz, a Boston accounting and real estate firm owner, was sentenced after prosecutors found he arranged at least $1.6 million in unreported, under-the-table compensation and used pandemic relief funds as part of the scheme; courts ordered prison time, supervised release, and significant restitution payments tied to tax and loan fraud.
The case centers on Katz, 64, who was sentenced by U.S. District Court Judge Leo T. Sorokin to two months in prison followed by two years of supervised release. Prosecutors say Katz orchestrated a multi-year plan to pay an executive, Stephen Hochberg, off the books to conceal income and reduce employment taxes for Katz’s firms, CD Katz LLC and Gebsco Realty Corporation. Katz pleaded guilty in November 2025 to conspiracy to defraud the United States and two counts of loan fraud.
According to the government’s account, Katz routed payments to Hochberg and his family, provided rent-free housing to Hochberg’s ex-wife, covered college tuition for Hochberg’s children, and paid personal expenses charged to corporate cards. Those unreported transfers totaled at least $1,668,487, with the scheme allowing Katz’s businesses to avoid paying roughly $835,105 in employment taxes. Prosecutors say Katz and Hochberg also applied for Paycheck Protection Program loans in 2020 and obtained $179,900, funds Katz used in part to support the off-the-books compensation.
The tax-evasion tie to Hochberg had another consequence: it helped Hochberg sidestep court-ordered restitution from a prior criminal case, United States v. Stephen Hochberg, No. 08-cr-10126-NMG. As part of Katz’s sentence, he agreed to pay $333,697.40 in restitution to Hochberg’s prior victims, while also owing $751,683.62 to the IRS. Additional restitution obligations include $83,422 to the Massachusetts Department of Revenue and $179,500 to the Small Business Administration.
Hochberg himself faced sentencing earlier in 2026, and Judge Sorokin sentenced him in April 2026 to 24 months in prison, followed by three years of supervised release. Hochberg was ordered to pay $2,888,288 in restitution, a figure reflecting both the fraud on taxpayers and the damage tied to the broader scheme. The court records show this case pooled multiple strands of financial abuse, from payroll manipulation to fraudulent loan applications.
Federal authorities framed the prosecutions as part of a broader effort to crack down on benefit and pandemic-relief fraud across Massachusetts. On March 26, 2026, United States Attorney Leah B. Foley announced a Benefit & Voter Fraud Team for the district, intended to coordinate investigations into misuse of taxpayer-funded benefits. Those local efforts dovetail with the Department of Justice’s April 7, 2026 announcement creating a National Fraud Enforcement Division to prioritize fraud prosecutions nationwide.
Investigative and enforcement leaders named in public statements include Thomas Demeo, Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office, and Ted E. Docks, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. Assistant U.S. Attorney Carol E. Head, Chief of the Asset Recovery Unit, prosecuted Katz’s case on behalf of the government. The authorities emphasized that coordinated prosecution and asset recovery are central to deterring similar schemes.
Officials also urged residents to report suspected fraud, supplying a tip line for Massachusetts: 1-855-SCAM-MA-1 (855-722-6621). That public channel is intended to surface leads tied to misuse of federal and state benefit programs, including pandemic relief and other taxpayer-funded assistance. Prosecutors say community reporting helps them identify patterns and pursue the networks enabling fraud.
This prosecution illustrates how seemingly internal payroll maneuvers can ripple into criminal charges when they intersect with tax evasion and federal loan programs. Sentences, fines, and restitution in these matters reflect both loss calculations and the courts’ effort to make victims whole where possible. The case also underscores federal commitment to coordinated enforcement tools and new divisions focused on fraud across benefit and relief programs.
