Pecoy did not deposit the majority of these cash payments into his business’s bank accounts. Instead, he used the cash to pay vendors and subcontractors directly. For instance, Pecoy admitted to paying approximately $135,700 in cash to subcontractors for work on the Cape Cod property. To cover up these transactions, Pecoy kept separate ledgers, fabricated contracts, and made false entries in his company’s accounting system.
To further evade detection, Pecoy structured his cash deposits in amounts under $10,000 to avoid mandatory currency transaction reports.
The fraudulent activities extended to mortgage applications as well. In January 2010, Pecoy and Kennedy created two versions of a contract for the East Longmeadow home. One contract reflected the true purchase price, the amount Kennedy had paid in cash as a down payment, while the other showed a price of $160,000 lower. This deflated contract was used to deceive the bank into approving a mortgage based on the lower price.
These actions resulted in a tax loss of over $250,000 to the IRS.
Pecoy also obstructed justice during the IRS investigation. Despite receiving a grand jury subpoena, Pecoy failed to provide numerous relevant documents. IRS agents later discovered these documents during a search of his business.
