Tech entrepreneur David Erickson has been acquitted of all charges — 16 in total — in an alleged tax evasion scheme. After a two-week trial, defense counsel William Mauzy and William Dooling, of Mauzy Law Office, prevailed.
“This case was very challenging, one of the more complex I have been involved with in a very long career,” Mauzy said.
Erickson, an Excelsior resident and licensed CPA through the North Dakota Board of Accountancy, was indicted in 2024 in an alleged offshore tax evasion scheme. At issue was Erickson’s insistence that he received loans, rather than income.
Loans are not taxed as income, as those who receive loans must pay them back. However, if the loan is forgiven, it becomes income, and it is taxable. Known as cancellation of debt income, or COD income, the loan converts into income if the debt is canceled.
Erickson opened a bank account in 2010 for Halstead Bay Holdings (HBH), a corporation formed in 2000. The company apparently provided consulting services and electronic transactions. According to the indictment, through exclusive ownership of HBH, Erickson controlled several companies across the globe, including in Anguilla, the Netherlands, Curaçao, Canada, and Ireland. These foreign companies provided marketing and payment processing systems for an adult content website.
According to the indictment, Erickson directed and caused subordinates to transfer funds held by foreign companies to the HBH U.S. bank account and to falsely code the transactions as “loans.” Erickson was accused of then using the funds for personal purchases, including a $1.3 million home and a $180,000 Tesla Model X.
Erickson was accused of falsely reporting $5.7 million dollars of loans on his tax returns. The government maintained that these were actually dividends, rather than loans, that came from overseas companies that Erickson had an ownership interest in. It portrayed what Erickson maintained were loans as sham arrangements that Erickson orchestrated through international shell companies. The government also asserted that Erickson did not report owing debt during his 2019 mortgage refinancing application or his 2017 purchase of the Tesla.
The government alleged that Erickson was involved in a tax evasion scheme that apparently ran from 2014 to 2019. It ultimately contended that Erickson concealed millions in offshore income by falsely labeling the funds as loans through his company, HBH.
The government’s investigation began in 2015 and ran through 2024. The investigation involved Mutual Legal Assistance Treaty requests from seven countries. Erickson’s home was continuously monitored by cameras for two months. In total, the government produced electronic-form documents totaling 1 million pages.
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