The day Robert Emmett Newsholme shot himself in the chest–on August 24, 2021–he was supposed to pay clients and friends who had hired him as their tax accountant at least $70,000 in payments. The long-time owner of Flagler Tax Services had looked up how to load a gun on the internet shortly before he shot himself. The suicide attempt failed. He was taken to Halifax hospital in Daytona Beach, some 10 hours after the shooting.
It would be almost exactly three years of dogged pursuit and two investigations by the Flagler County Sheriff’s Office–one before the IRS got involved, one after the IRS informed the Sheriff’s Office that it was ending its investigation because of a “federal technicality,” as the Sheriff’s Office put it–before detectives secured a warrant and had Newsholme arrested on August 7.
Newsholme, the investigation found, had essentially been running what amounted to his own Ponzi scheme, taking money from clients who thought they were paying their IRS taxes, using that money to pay debts from lending companies, then borrowing more money from different lending companies to pay previous lending companies while putting off his clients who wanted their money back, plying them with promises and bad checks.
He was arrested in Las Vegas, where he had evaded sheriff’s detectives even there, refusing to speak with them when they first knocked at his door at 7575 West Diablo Drive, then moving from that house and into an independent living facility for seniors. Newsholme is 71. The Las Vegas Metropolitan Police Department, in collaboration with the United States Marshals Service Nevada Violent Offender Task Force, located him on Aug. 7. He was arrested on nine counts of grand theft and one count of organized scheme to defraud. He is being held at the Clark County Detention Center in Las Vega on no bond before his extradition to Flagler County.
His wife Linda and his son Thomas had apparently been clueless about the mountain of debt he owned clients. They told Flagler County Sheriff’s detectives a few days after the shooting that they’d located paperwork at the business, at the time at 608 East Moody Boulevard in Bunnell, that showed some people were suing Robert, others were demanding their money back. Robert’s phone had been “blowing up” since the shooting, in his son’s words, with calls and texts from clients wanting their money.
By the time detectives tallied the money he owed, the sum came to $305,600. Clients with losses in the tens of thousands of dollars included local individuals and businesses, among them Davidson and Sons Automotive ($10,000), Geraldo Malagisi of Malagisi Enterprise ($31,250), ESV LLC ($21,900), Istvan Gergely of Serenitas Construction ($35,000) and David Ayres, president of Flagler Broadcasting, who’d been a friend of the Newsholmes, and to whom Robert owed $65,000. Newsholme defrauded Ayres’s daughter Natalie Ayres’s business, Massage by Natalie in Palm Coast, of $13,150, according to the investigation.
All the clients were under the impression that Newsholm was properly filing payments with the clients’ taxes. If Newsholm was filing the taxes, he was not including the payments that the clients were giving him, pocketing the money instead, according to the sheriff’s investigation. Clients would discover that something had gone wrong when the IRS would contact them and let them know that unpaid taxes were accruing fines and interest. The amounts listed above do not include those costs, which in most cases were not disclosed to the investigators.
Newsholm would make promises to his clients again and again, assuring them that the money would be returned, only to write bad checks.
“There is no evidence to support the fact that Robert paid or attempted to pay the taxes of the listed victims in this case,” the sheriff’s investigation states. “Robert was confronted by the victims in this case and would make excuses and promises to make things “right.” Robert displayed a consciousness of guilt and even attempted to take his own life after being confronted by the multiple customers of his business.”
Why the debts and the alleged fraud? The sheriff’s investigation examined Newsholme’s bank accounts and discovered that he had essentially been racking up debts to high-risk lending companies such as Green Capital, Fox Business ACH, EBF Partners and ROC funding Group, and through his credit cards. Subpoenaed records showed that he charged up 181,278 on an American Express credit card in his and his wife’s name between December 2019 and September 2021, paying over $180,000 of that, $14,226 to the IRS.
Flagler Tax Services at one point had its bank account at Ameris Bank. Subpoenaed records show that for the 2019 calendar year, the account accumulated $910,000 in deposits, but only $1,500 was paid to the IRS. Meanwhile, $112,500 was withdrawn in cash, and over $300,000 was paid to the high-risk lending or funding companies, from which the majority of the deposits had originated.
In the 202 calendar year, the same pattern emerged: There were nearly $1.2 million in deposits, mostly from deposits from some of the same–and some new–funding companies, such as Crystal Springs, AJ Equity, Money Store Factor and ML Factors. That year he made almost $30,000 in payments to the IRS (it’s not clear if those payments were for his own tax liabilities or on behalf of clients), while taking out over $80,000 in cash, and making half a million dollars in payments to the funding companies. “The last month this account was active,” the investigation found, “Flagler Tax Services accumulated over $154,000 worth of returns due to not sufficient funds.”
Newshomle’s financial conditions were getting worse quickly.
Newsholm closed the Ameris Bank account and opened an account at Intracoastal Bank in November 2020 in the name of Flagler Tax Services. The following 10 months–leading up to the time when he shot himself–$1.25 million was credited to the account, though many of the deposits in June and July were “returned items with insufficient funds which inflated the amounts deposited,” the investigation states. He paid $13,281 to the IRS on clients’ behalf during those months, but the investigation notes that the checks were directly to the IRS, with none of the victims’ names on the checks. “Many of the charges on this account were paid to companies that do high interest loans for businesses as well as other large payments to his American Express card.”
After initially cooperating with detectives, Newsholme’s family members and Alessandra Heffern stopped speaking, saying they would do so only with an attorney present, as is their right. They do not currently face charges. “All these individuals worked at Flagler Tax Services during the time of the fraudulent activity and prepared many of the tax forms that were presented to the victims,” the investigation states.
Three years ago, Linda had told detectives she was not sure where the money was because “Robert then took all the money from Intracoastal Bank,” according to the investigation, which paraphrased Linda’s account. She didn’t know which bank he was using by then.
“This was an extensive and thorough investigation that kept our detectives busy with thousands of documents, many subpoenas, and dozens of interviews starting in 2021 and then again over the past year after we took the investigation back from the IRS,” Sheriff Rick Staly was quoted as saying in a handout from the Sheriff’s Office that included few of the details above. “Although we were disappointed to learn that federal authorities would not be pursuing charges, we knew when we took back over the investigation that our General Assignment Unit had a solid case that would result in an arrest.”
The sheriff added: “The arm of the law is long, and this thief learned that hiding out and trying to be a hermit in Las Vegas was not far enough to get away. I thank the Las Vegas Metropolitan Police Department and the U.S. Marshals for helping us find and apprehend him so that he can face justice for stealing the hard-earned money of Flagler County residents that trusted him with their taxes.”
