Alfred Eugene Parker Who Collected $2 Million from Victims Sentenced to Nearly Four Years in Federal Prison

Source- http://losangeles.fbi.gov/dojpressrel/pressrel11/la012811b.htm

LOS ANGELES—A Woodland Hills man who bilked more than 20 victims out of approximately $2 million in less than one year has been sentenced to 46 months in federal prison.

Alfred Eugene Parker, 32, was sentenced Monday by United States District Judge R. Gary Klausner, who remanded the defendant into custody at the conclusion of the sentencing hearing. Parker was sentenced after pleading guilty in September 2010 to three counts of wire fraud and one count of making a false statement to a bank.

Parker was a counselor at a non-profit agency that provided credit-repair advise to low-income families. In late 2006, Parker started an investment company—Skyline Investment Group—that he used to solicit investors with promises that their money would be used to help needy homeowners who were facing foreclosure on their homes. Targeting primarily African-American victims, including professional athletes and people in the entertainment industry, Parker and Skyline lured investors with “guaranteed” returns as high as 40 percent in less than three months.

Instead of using investors’ money to help distressed homeowners, Parker used the money to finance a luxurious lifestyle, which included a Rolls-Royce Phantom, two Ferraris, a $2.5 million home, and trips to high-end resorts in Hawaii and Santa Barbara. Parker also used some of the money to make Ponzi payments to earlier investors.

In November 2007, Parker sought a $1 million line of credit from Broadway Federal Bank. When applying for the loan, Parker submitted forged documents to the bank and falsely claimed that he had $2 million in savings and that he owned valuable real estate in Los Angeles and Cleveland. When the bank approved a $200,000 line of credit, Parker drew down the funds in less than two months.

During Monday’s sentencing hearing, victims told Judge Klausner that Parker had preyed on African American victims in their community and that he had presented himself as a religious man who would use their investments to help needy homeowners in the area.

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Carl Lawrence Estep Sentenced in U.S. District Court

Source- http://saltlakecity.fbi.gov/dojpressrel/pressrel11/slc012811.htm

The United States Attorney’s Office announced that during a federal court session in Missoula, on January 27, 2011, before U.S. District Judge Donald W. Molloy, CARL LAWRENCE ESTEP, a 66-year-old resident of Belgrade, appeared for sentencing. ESTEP was sentenced to a term of:

Prison: 48 months
Special Assessment: $200
Restitution: $1,379,700
Supervised Release: Three years

ESTEP was sentenced in connection with his guilty plea to wire and mail fraud.

In an Offer of Proof filed by Assistant U.S. Attorney Ryan M. Archer, the government stated it would have proved at trial the following:

In April 2003, ESTEP moved from Las Vegas, Nevada to the Bozeman area and shortly thereafter engaged in a far-reaching, multi-state investment fraud scheme. The scheme defrauded numerous investors out of significant amounts of money by promising them large returns from overseas investments that were allegedly realized by leveraging “gold ore” as collateral for overseas trading.

In 2003 ESTEP met K.L. who allowed him to store 200 barrels of rock and sand in a Belgrade barn. Along with the barrels, ESTEP obtained an “assay” that purported to show that the rock and sand in the barrels contained large amounts of gold and/or platinum. K.L. provided this assay to ESTEP, which was allegedly done by a company called Rogers Research. Rogers Research was contacted in the investigation and stated that the assay is a forgery.

Nonetheless, when ESTEP obtained access to the 200 barrels, he used them as the basis for his scheme to defraud. He enticed potential investors, often over singles dating web sites, by claiming that he used to work for the Howard Hughes Corporation and operated their mining division. He claimed that he was paid in barrels of gold ore that was worth millions, and often gave them the Rogers Research assay report as proof. He further solicited investors by stating that he owned a gold refinery in Montana and was trying to build others in the area that could refine the gold and investors stood to make large profits by investing in the gold barrels and refinery operations. ESTEP stated that the barrels were in a “warehouse” that was guarded by a private security guard and investor money would be used for business operating expenses and building refiner! ies. He claimed to use the gold barrels as collateral for a unique overseas investment that would make huge profits. He also told investors that the money never left the accounts because the “gold” was being leveraged.

ESTEP gave investors a contract that allowed them to “call” their investment which would be returned in full within 6 months. But when investors did not see their money again, ESTEP made elaborate excuses as to why they could not be paid. He claimed that “Homeland Security has tied the money up overseas due to terrorist related activities around the world.” In reality, ESTEP did not own any refineries. He did not own the barrels of rock and sand. He did not make any expenditures to develop refineries, and he did not invest money overseas. He simply used the money for numerous personal expenditures, including cars, overseas travel, daily expenses, and unreasonably large expenses on his hunting dogs. Agents confirmed that ESTEP never worked for the Howard Hughes Corporation.

V.H. was a victim-investor based out of Florida who was defrauded out of $220,000 in 2008 and 2009. V.H. wired $100,000 to ESTEP to invest in his scheme on December 30, 2008. V.W. was an investor based out of Texas, and she mailed a $100,000 investment to ESTEP on February 6, 2008. Both V.H. and V.W. met ESTEP over the Internet on a church-related dating website.

Through additional investigation, the FBI recorded numerous calls with ESTEP and visited the barn with the 200 barrels of rock and sand. Agents subsequently executed a search warrant and seized several of the barrels and other documentary evidence. Analysis on the barrels indicate that there is no gold value in the barrel samples that were seized, and it would be more profitable to use the rock and sand as road grade rather than attempt to extract any gold.

In speaking with agents, ESTEP acknowledged that he spent investor money on personal items and his statements to investors were not 100% true since they did not know their money was used for his personal gain. ESTEP told investors their funds would be used for operating expenses and trading overseas, and were safe in his account. Although he acknowledged that he pushed the truth and spent money inappropriately, ESTEP said that Count Ugo Di Carpegna from Geneva, Switzerland, will be sending him millions of dollars very soon and he will pay investors back. This has never happened.

Because there is no parole in the federal system, the “truth in sentencing” guidelines mandate that ESTEP will likely serve all of the time imposed by the court. In the federal system, ESTEP does have the opportunity to earn a sentence reduction for “good behavior.” However, this reduction will not exceed 15% of the overall sentence.

The investigation was a cooperative effort between the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service.

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The former owner of Buddy's Carpet, Leif D. Rozin, and Alan W. Koehler, the company's former in-house counsel sentenced to prison for their roles in a tax fraud

Source- http://www.justice.gov/tax/txdv11119.htm

CINCINNATI - The former owner of Buddy's Carpet, Leif D. Rozin, and Alan W. Koehler, the company's former in-house counsel, were sentenced to prison for their roles in a tax fraud scheme for which they were convicted in 2008, the Justice Department announced today. Both men were formerly full-time Cincinnati residents. Rozin now resides in Westchester, Ohio, and Bonita Springs, Fla., and Koehler resides in Purcellville, Va. In 2008, a jury found Rozin and Koehler guilty of a conspiracy to defraud the United States. In addition, the jury found Rozin guilty of filing a false corporate income tax return and tax evasion, and found Koehler guilty of assisting in the filing of a false corporate income tax return. Buddy's Carpet was a retail chain with more than 30 stores in Ohio, Kentucky and Indiana.

Rozin, 68, was sentenced by U.S. District Court Judge Susan J. Dlott to serve 12 months and one day in prison, a three-year period of supervised release, 2,000 hours of community service, and to pay a $30,000 fine as well as the cost of his prosecution and a special assessment. Koehler, age 50, was sentenced to serve 18 months in prison, a three-year period of supervised release, and to pay a $20,000 fine and a special assessment.

Another former owner of the company, Burton B. "Buddy" Kallick; their investment and insurance advisor, Milton Liss, of Cincinnati; and unlicensed financial and insurance salesman Bruce M. Cohen of Louisville, Ky., were indicted along with Rozin and Koehler. Kallick passed away in January 2007, and both Liss and Cohen pleaded guilty to the charged conspiracy to defraud the United States. Cohen was sentenced by Judge Dlott in 2008 to 37 months in prison for his role in the scheme. Liss, 67, was sentenced at the same time as Rozin and Koehler to serve 12 months and one day in prison, a three-year period of supervised release, 1,000 hours of community service, and to pay a $10,000 fine and a special assessment. Although Rozin had already deposited $387,687 with the Internal Revenue Service (IRS), which is the amount he was found guilty of evading on his 1998 income tax return, the court ordered Rozin, Koehler and Liss to pay to the IRS jointly an additional $387,687, which was the amount of Kallick's unpaid 1998 income taxes.

John DiCicco, Acting Assistant Attorney General for the Justice Department's Tax Division; Carter M. Stewart, U.S. Attorney for the Southern District of Ohio; and Jose A. Gonzalez, Special Agent in Charge, IRS-Criminal Investigation, Cincinnati, announced the sentences today.

During the three-week trial, the evidence showed that Rozin and Koehler conspired with Liss, Cohen and others to defraud the United States by having Rozin, Inc., dba Buddy's Carpet, purchase several sham "Loss of Income" insurance policies from an insurance company in the U.S. Virgin Islands. The co-conspirators used these sham insurance policies to evade approximately $775,000 in income taxes on the 1998 tax returns of Rozin and Kallick. In addition, the evidence showed that the co-conspirators intended to evade a similar amount of income taxes for the 1999 tax returns of Rozin and Kallick, but they did not file the returns because the IRS disclosed its criminal investigation.

The evidence showed that, prior to selling the business in 2000, the defendants caused the firm to spend a total of $3.6 million on eight "Loss of Income" insurance policies, the purpose of which was to provide substantial tax deductions to the company and to the owners, Rozin and Kallick. The evidence also demonstrated that these insurance policies were a sham. The evidence further showed that Rozin, Kallick, Koehler, Cohen and Liss attempted to conceal their participation in these sham arrangements by establishing offshore nominee entities in foreign countries, such as Nevis.

The former owners and operators of the source of the "Loss of Income" policies, Security Trust Insurance Company in the U.S. Virgin Islands, along with their attorney, were also prosecuted and convicted in a federal court in Grand Rapids, Mich., in 2009.

During the trial, the evidence revealed that Rozin and Koehler engaged in a series of purchases of these insurance policies and took numerous steps to conceal their scheme, including creating backdated documents. In addition, the evidence showed that Rozin, Koehler and others shared Liss's commissions from their purchases of the policies, as well as the commissions from others' purchases.

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Federal Court Permanently Barred Sidney Dove from Preparing Federal Tax Returns for Others

Source- http://www.justice.gov/opa/pr/2011/January/11-tax-116.html

WASHINGTON – A federal court in Chicago has permanently barred Sidney Dove, a tax-return preparer from Joliet, Ill., from preparing federal income tax returns for others, the Justice Department announced today. U.S. District Judge Charles Kocoras also ordered Dove, who does business under the name "Sid’s Tax," to prepare a list of every person for whom he has prepared a federal income tax return since Jan. 1, 2006, and to provide the list to the government. The court had previously entered a preliminary injunction order against Dove on April 16, 2010.

The court found that an Internal Revenue Service investigation of Dove revealed a pattern of overstated deductions for charitable contributions, employee business expenses and Schedule C business expenses. The court also found that Dove prepared a number of returns that significantly understated individuals’ tax liabilities because they contained positions that had no possibility of being sustained on the merits. For example, according to the court, Dove habitually deducted 10 percent of his customers’ income as charitable donations without ensuring that the customers had documents to support the deductions. The court concluded that a permanent injunction order against Dove was necessary because of his continuous and knowing violations of the tax laws over the last three years and his stated intention to continue preparing tax returns in the future.

The court’s order also requires Dove to mail a copy of the court’s order to all customers for whom he has prepared federal income tax returns.

In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of false tax returns.

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Boulder Man, Mark Yost, Charged with Fraud, False Statements and Money Laundering

Source- http://denver.fbi.gov/dojpressrel/pressrel11/dn012611.htm

DENVER—Mark Yost, manager of Yost Partnership, L.P., based in Boulder, Colorado, was charged today by Information with fraud, false statements to banks and money laundering, the U.S. Attorney’s Office, the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General announced today. Yost appeared before a U.S. Magistrate Judge in U.S. District Court in Denver this afternoon, where he was advised of the charges pending against him, as well as the related penalties to those charges. He was also arraigned. At the conclusion of the hearing Yost was released on a personal recognizance bond. A change of plea hearing has been scheduled for February 3rd at 9:30 a.m., where Yost will be given an opportunity to plead guilty.

According to the Information filed today, Yost received investor funds to trade in securities and to make other investments. On February 4, 2005, and continuing thereafter to on or about July 6, 2010, Yost devised and intended to devise a scheme to defraud Yost Partnership and the limited partners by means of materially false and fraudulent pretenses. As part of the scheme, Yost, at the conclusion of each quarter of each year, beginning with the first quarter of 2005 and continuing through the second quarter of 2010, prepared account statements and caused them to be delivered to the limited partners, knowing each one of the statements to be false in that it overstated the value of the limited partner’s share of the assets of Yost Partnership. Yost failed to disclose to the limited partners that a certified public accountant had not completed an audit because the financial statements included inflated and improperly recorded values of the partnership’s interests in a privately held company and a publicly traded company. During the course of the scheme, Yost diverted money which he was not entitled to and converted those funds for his own use and benefit. He also made multiple false statements to banks and in reports.

The Information also alleges that from January 15, 2009 through July 7, 2010, Yost, the acting president of Flatirons Bank at the time, devised a scheme to defraud the bank and to obtain money by and under the control of the bank by means of materially false and fraudulent pretenses. Specifically, on two separate occasions, Yost caused Flatirons Bank to grant lines of credit to two individuals. The defendant ultimately converted those funds to his own use and benefit.

“Financial fraud, like this one have been all too common in recent years, and the U.S. Attorney’s Office is determined to fight them,” sais U.S. Attorney John Walsh. “In many cases investors are misled by unrealistic profit projections and impossibly high returns. This case is yet another reminder that thoroughly checking out an investment is crucial for all investors.”

“Everyday people entrust their hard earned money with banking and investment professionals,” said FBI Special Agent in Charge James Davis. “The FBI will aggressively investigate and pursue prosecution of financial professionals who breach this trust and misuse other people’s money for their own gain.”

“The IRS, along with our law enforcement partners, will pursue corporate officers who victimize their investors and violate the public trust,” said Sean Sowards, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.

Yost faces one count of wire fraud, four counts of false statements or reports to banks, one count of bank fraud, and one count of money laundering. If convicted, the defendant faces not more than 20 years’ imprisonment, and up to a $250,000 fine for wire fraud, not more than 30 years’ imprisonment, and up to a $1,000,000 fine for each false statements or reports to banks, not more than 30 years imprisonment, and up to a $1,000,000 fine for bank fraud, and not more than 20 years imprisonment, and up to a $500,000 fine (or twice the value of the property involved in the transaction) for money laundering.

This case was investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service – Criminal Investigation (IRS CI), and the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG).

The defendant has been charged by Information, which means he has waived his Constitutional right to be indicted by a federal grand jury.

The charges contained in the Information are only allegations, and the defendant is presumed innocent unless and until proven guilty.

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Jason Eric Fischer Sentenced for Stealing More Than $3 Million in Mortgage Fraud Scheme

Source- http://minneapolis.fbi.gov/dojpressrel/pressrel11/mp012511.htm

A 40-year-old lawyer from Hudson, Wisconsin, was sentenced earlier today in federal court in Minneapolis for stealing more than $3 million in a mortgage fraud scheme. United States District Court Judge Patrick J. Schiltz sentenced Jason Eric Fischer to 50 months in prison on one count of mail fraud and one count of money laundering. Fischer was charged on January 28, 2010, and pleaded guilty on February 9, 2010. Judge Schiltz also ordered Fischer to pay more than $3 million in restitution.

In his plea agreement, Fischer admitted that from 2006 through May of 2009, he orchestrated a scheme to divert funds from the escrow account at Real Source Title, a company he jointly owned and managed. The company, which had offices in Mahtomedi and Burnsville as well as in Illinois and Hudson, Wisconsin, routinely accepted wire transfers and checks from buyers and lenders. Those funds were to be held in escrow for the sole purpose of closing residential real estate transactions. Fischer, however, used the diverted funds for personal benefit.

Following today’s sentencing, Kelly R. Jackson, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division’s St. Paul Field Office, said, “Mortgage fraud causes much harm to individuals, businesses, and our economy; but today’s sentencing is a strong reminder how serious our courts consider this criminal activity. Those who line their pockets with profits from these schemes should know they will be held accountable and brought to justice.”

To further his scheme, Fischer represented to buyers, lenders, underwriters, and others that the money deposited into the company’s escrow account was, in fact, used only to close real estate transactions. He made those representations by producing and mailing false HUD-1 settlement statements to people of interest. In truth, however, Fischer regularly withdrew escrow-account money to pay for personal and business expenses as well as to fund prior company real estate transactions. In 2008, for example, Fischer invested approximately $500,000 in escrow dollars into the opening and operation of a restaurant.

Between 2006 and May of 2009, Fischer diverted approximately $3 million from the escrow account at Real Source Title; and by May 2009, the account was depleted and unable to fund 15 loans. As a result, buyers, sellers, lenders, underwriters, and others suffered significant financial loss.

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Former Boston City Councilor Charles "Chuck" Turner Sentenced to 36 Months

Source- http://boston.fbi.gov/dojpressrel/pressrel11/bs012511.htm

BOSTON, MA—Former Boston City Councilor CHARLES “CHUCK” TURNER was sentenced today by U.S. District Court Judge Douglas P. Woodlock to 36 months in federal prison to be followed by three years of supervised release and forfeiture of $1,000, after being convicted of taking a $1,000 cash payment in exchange for official acts and then making false statements to FBI.

Turner, 70, of Boston, was convicted in October 2010 by a federal jury following 12 days of trial and one day of deliberations on charges of attempted extortion under color of official right as a Boston City Councilor and making false statements to federal agents.

“Mr. Turner was sentenced to prison today because of the choices he made and the actions he took during the course of this case,” said United States Attorney Carmen M. Ortiz. “In 2008, Mr. Turner had the chance to assist the FBI in an ongoing public corruption investigation. Instead of telling the truth, he lied. He then went on to testify falsely under oath. It is the obligation of every elected official to be ethical and honest, and in this case, Mr. Turner was neither. Public corruption is more than a violation of the law, it erodes the public’s trust in the very system that was designed to protect us.”

FBI Special Agent in Charge Richard DesLauriers said, “Crimes that undermine the public’s trust in the government will remain one of the FBI's top criminal priorities. The FBI’s steadfast commitment and unique ability to pursue any and all corruption in legislatures, courts, city halls, regulatory agencies and other local, state and government agencies is reflected in today’s sentencing.”

During Turner’s trial, it was established that in June 2007, former State Senator Dianne Wilkerson sought Turner’s assistance in obtaining a liquor license for Roxbury businessman Ronald Wilburn. Wilkerson accepted $23,500, in bribes from Wilburn, a witness secretly cooperating with the FBI. In August 2007, Turner called Wilburn and invited him to his district office. Wilburn told the FBI that he believed that Turner was asking him for cash in exchange for official acts. Wilburn suggested to the FBI that he meet with Turner and pay him money. A video recording played at trial showed Turner accepting the $1,000 bribe, while simultaneously discussing his efforts to assist Wilburn in obtaining a liquor license.

On the day of Wilkerson’s arrest, agents visited Turner in his City Hall office to discuss that August 2007 cash payment. The agents wanted Turner to assist them in their ongoing investigation of public corruption and admit taking the cash. However, Turner repeatedly lied to agents to conceal his criminal conduct.

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Robert C. Welti Sentenced for Tax Crimes

Source- http://www.justice.gov/opa/pr/2011/January/11-tax-106.html

CINCINNATI – Robert C. Welti, a resident of Ripley, Ohio, was sentenced today in U.S. District Court for the Southern District of Ohio, the Justice Department announced. Welti previously pleaded guilty to one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue Code.

U.S. District Court Senior Judge Sandra S. Beckwith sentenced Welti to six months in prison and one year of supervised release. The court also ordered Welti to pay $5,000 in fines.

According to court documents, in April of 2002, Welti, who represented Douglas and Donald Frichtl in an Internal Revenue Service (IRS) audit, attempted to obstruct the audit by preventing properly summonsed documents from being turned over to the IRS, preventing the Frichtls from responding to the auditors’ questions, proposing meritless and frivolous questions and arguments to the IRS auditors, and accusing the IRS auditors of engaging in a criminal racketeering conspiracy.

The case resulted from an investigation by the IRS, Criminal Investigation. IRS Special Agent Ankur Arora conducted the investigation. Tax Division attorneys Thomas Voracek and Rita Calvin prosecuted the case.

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Stephen Sparks Pleads Guilty to Defrauding Investors

Source- http://detroit.fbi.gov/dojpressrel/pressrel11/de012511.htm

Stephen Sparks, 37, of Monroe, Michigan, a business partner of Global Points, pleaded guilty to federal fraud offenses, announced United States Attorney Barbara L. McQuade. In December 2010, Sparks was charged with wire fraud and money laundering.

McQuade was joined in the announcement by Erick Martinez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, and FBI Special Agent in Charge Andrew Arena.

According to court records, during 2006 through 2009, Sparks took part in a scheme that solicited over $1 million from individual investors. Sparks represented to these investors that his business, Global Points, had an opportunity to purchase a warehouse full of Chinese electronic equipment and sell it in the United States at a substantial profit, returning over five times the amount invested. Sparks also represented that Global Point was in a position for a second had a second deal to acquire CD and DVD players that had been seized n Chicago, Illinois, and were being sold for the payment of back taxes. Sparks indicated that there would be a quick turn around and the profit would be twice the original investment.

Court records further showed that Sparks knowingly failed to inform the investors that he gave most of their money to his uncle, Barry Sparks, who had past criminal convictions for fraud. Sparks continued to provide excuses for the failure of the deals to close, and continued to solicit additional funds, claiming that the closings were imminent. Regarding the specific charges, in 2007, Sparks withdrew $12,000 in cash from his bank account knowing that these funds had been wired from Ohio to Michigan by an investor and, therefore, derived from the proceeds of wire fraud.

"Investment fraudsters prey on trusting investors by enticing them with a can't miss deal and then steal their hard earned money," said Special Agent in Charge Erick Martinez. "IRS Criminal Investigation is committed to investigating investment schemes in an effort to protect the financial well being of the American investor."

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Phyllis Stevens and Marla Stevens Sentenced for Multi-Million Dollar Embezzlement Scheme and Tax Fraud

Source- http://omaha.fbi.gov/dojpressrel/pressrel11/om012111.htm

DES MOINES, IA—Phyllis Stevens and Marla Stevens were sentenced today for multiple felony offenses, announced United States Attorney Nicholas A. Klinefeldt. Phyllis Stevens was sentenced to a term of 72 months in prison, based upon her earlier guilty pleas to the crimes of conspiracy to commit money laundering, conspiracy to file false income tax returns, wire fraud, computer fraud, and filing a false income tax return. Her term of imprisonment will be followed by three years of supervised release. The judge also imposed a mandatory $600 special assessment payable to the Crime Victim Fund.

Marla Stevens was sentenced to a term of 40 months in prison, based upon her earlier guilty pleas to the crimes of conspiracy to commit money laundering and conspiracy to file false income tax returns. Her term of imprisonment will be followed by three years of supervised release. The judge also imposed a mandatory $200 special assessment payable to the Crime Victim Fund.

The sentences were imposed by Senior District Judge Ronald E. Longstaff, who also ordered restitution to be paid by both defendants in the amount of $6,757,069.62, payable to Aviva USA, the victim of the embezzlement. The defendants also were ordered to forfeit real estate located in Iowa and Indiana, and the balance of a bank account, because these assets were obtained from the crimes alleged against them.

In a written plea agreement, Phyllis Stevens had admitted to a long-time pattern of embezzlement by making false and fraudulent entries into the computer system of her employer. She admitted to using large sums of this money to purchase real estate and for making large payments to American Express. She further admitted to filing false income tax returns which failed to report the embezzled income in her own name, and which sometimes falsely reported the income in the names of other individuals as part of an effort to conceal the fraud. Marla Stevens admitted that she knew or had reason to know that Phyllis Stevens was receiving income from some form of unlawful activity, that she participated in financial transactions with the proceeds of Phyllis Steven's unlawful activity, and that she participated in the filing of false income tax returns.

"These sentences show that so-called 'white collar' offenses are serious crimes, and that committing these crimes can bring severe consequences," stated United States Attorney Nicholas A. Klinefeldt. "I would like to commend the FBI and IRS for their fine work in investigating this case and AUSA Andrew Kahl for his good work in prosecuting it. While this was a complex case, at the end of the day, it came down to one thing: greed. Phyllis and Marla Stevens lived a lavish lifestyle on stolen money, and now they are going to pay the price. Let this case be a lesson to others who might think about stealing from their employer. We will catch you, we will prosecute you, and you will pay the price."

Weysan Dun, Special Agent in Charge of the Omaha Division of the FBI, which covers the states of Iowa and Nebraska stated, "White collar crime is not a victimless crime. Fraud or embezzlement is essentially a robbery committed by paper rather than brute force. It results in financial loss to someone and it ultimately undermines confidence in our nation's economic infrastructure so everyone ends up paying for it in some way. The FBI is committed to investigating white collar crimes and we encourage anyone who has information about fraud or embezzlement to report it to the FBI."

"The role of IRS-Criminal Investigation becomes even more important in embezzlement cases due to the complex financial transactions that can take time to unravel," said Toni Weirauch, Special Agent in Charge of IRS Criminal Investigation. "The Federal Tax laws are normally violated in these cases. As we often see, the victims are not only the taxpayers, but also the entities who suffer financial harm."

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Janika Fernae Bates Charged With Conspiring to use Stolen Identities of Student Loan Borrowers on False Tax Returns

Source- http://www.justice.gov/tax/txdv11087.htm

WASHINGTON – Janika Fernae Bates of Millbrook, Ala., was indicted by a federal grand jury on charges of identity theft, wire fraud and conspiracy to make false claims for tax refunds, the Justice Department and Internal Revenue Service (IRS) announced today. Bates was previously employed at Electronic Data Systems in Montgomery, Ala.

According to the indictment filed against her, Bates obtained the names and Social Security numbers of student loan borrowers from the databases at her employer and conspired to use the stolen identifying information to steal money from the government. The indictment further alleges that Bates and a co-conspirator fraudulently obtained refund anticipation loans from the bank HSBC predicated on the fraudulently filed tax returns.

 An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Janika Fernae Bates faces a minimum of two years in prison, a maximum of 354 years in prison and a maximum fine of $6,250,000.

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Former Webster Bank Employee Susan A. Curtis, Admits Role in $6 Million Embezzlement Scheme

Source- http://newhaven.fbi.gov/dojpressrel/pressrel11/nh012011.htm

David B. Fein, United States Attorney for the District of Connecticut, announced that SUSAN A. CURTIS, 49, of Naugatuck, pled guilty today before United States District Judge Janet C. Hall in Bridgeport to bank fraud and tax charges stemming from CURTIS’ involvement in a scheme to defraud Webster Bank and Bank of America of more than $6 million.

According to court documents and statements made in court, CURTIS was employed in the Property Services Division of Webster Bank with responsibilities that included negotiating and managing bank property leases where Webster Bank was a landlord or tenant. CURTIS and Kevin W. Caffrey, who were married from May 2000 to May 2006, established a company called New House, LLC. Later, CURTIS and a co-defendant established a company called Equity Realty, LLC. CURTIS falsely represented to Webster Bank’s Vendor Management Department that both companies were brokers, an exempted category for due diligence and annual review.

As part of a scheme to defraud Webster Bank, CURTIS submitted paperwork to Webster Bank’s Accounts Payable Department in which she falsely represented that New House and Equity Realty were due fees in approximately 108 real estate related transactions. As a result, Webster Bank made payments of approximately $5.04 million to New House and Equity Realty.

In addition, CURTIS caused persons doing business with Webster Bank to send approximately $723,620 in payments for tenant improvements and reimbursements, which were owed to Webster Bank, directly to CURTIS. Certain of these checks were altered to make them payable to Webster Bank c/o Equity Realty, and then were deposited into an Equity Realty account at another bank.

CURTIS also caused a representative of Webster Bank to send another $450,000 payment, which was owed to Webster Bank, directly to CURTIS. The check was made payable to Equity Realty c/o Webster Bank, and was subsequently deposited into the Equity Realty bank account.

In pleading guilty, CURTIS also admitted that she fraudulently applied for, and received, a $649,000 mortgage loan from Bank of America for a property in East Hampton, Connecticut. CURTIS submitted false loan applications on which she misrepresented and concealed the real source of her income and extent of her liabilities.

Finally, CURTIS admitted that she filed false federal tax returns for the 2006 through 2009 tax years, during which she failed to report more than $3.79 million in embezzled funds.

On November 10, 2010, a federal grand jury in Hartford returned a second superseding indictment charging CURTIS and a co-defendant with various offenses stemming from this embezzlement scheme. Today, CURTIS plead to six of the eight counts in which she is charged, namely two counts of bank fraud and four counts of filing false tax returns. She has plead not guilty to one count of conspiracy to money launder and one count of bank fraud, and a trial on the remaining counts in the indictment is scheduled for April 18, 2011.

Each count of bank fraud carries a maximum term of imprisonment of 30 years, and each count of filing a false tax return carries a maximum term of imprisonment of three years. CURTIS also faces a maximum fine of more than $12 million. She also will be ordered to pay restitution to the victim banks, and back taxes, plus penalties and interest, to the Internal Revenue Service.

In addition, the government is seeking the forfeiture of an interest up to an amount of $1,105,790.79 in real property in East Hampton, several automobiles, two Harley Davidson motorcycles, two boats and boat trailers, approximately $300,000 in artwork, approximately $100,000 in jewelry, and a Steinway piano valued at more than $77,000. The government also is seeking a money judgment in the amount of $7,002,589.85.

U.S. Attorney Fein stressed that, as to the remaining counts against both CURTIS and her co-defendant, an indictment is only a charge and is not evidence of guilt. The defendants are entitled to a fair trial at which it will be the government’s burden to prove guilt beyond a reasonable doubt.

On October 14, 2010, Kevin Caffrey plead guilty to one count of bank fraud and one count of filing a false tax return. He awaits sentencing.

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Inmate Dimorio McDowell Who Ran a Quarter-Million-Dollar Identity Theft Ring from Inside Federal Prison Receives an Additional 14.5 Years in Prison

Source- http://cleveland.fbi.gov/dojpressrel/pressrel11/cl011811.htm

The man who led an identity-theft ring that ran up a quarter-million dollars worth of charges from inside a federal prison was sentenced to more than 14 years in prison, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today.

“The defendant thought he found a way to occupy his time in prison,” Dettelbach said. “With this prosecution and this sentence, he’ll have lots more time to learn to follow the rules.”

Dimorio McDowell, age 34, of Atlanta, Georgia, previously pled guilty to aggravated identity theft and conspiracy to commit wire fraud and bank fraud. McDowell was an inmate at Fort Dix Federal Correctional Institution at the time of the scheme, which took place between August 2009 and April 2010. U.S. District Judge Donald Nugent ordered McDowell’s 174-month sentence on this case begin in 2014, when he completes the current sentence that resulted in his incarceration at Fort Dix.

McDowell was the ringleader who obtained personal information on people who had credit card accounts at various retailers, including Best Buy, Home Depot, J.C. Penney, Lowe’s, Macy’s, Nordstrom’s, Saks Fifth Avenue, Sears and Staples, according to court documents.

McDowell contacted the retailers and impersonated the true account holders, store employees, or corporate fraud investigators. He used information about the account holders, such as name, address, or Social Security number during those calls to obtain additional information about them and adding co-conspirators names as authorized users of the accounts, thus taking over the accounts, according to court documents.

After taking over the accounts, adding additional users to the accounts and opening new accounts, McDowell communicated with his co-conspirators, all of whom lived in the Cleveland area.

McDowell continued to run his scheme from prison even after he was charged and after he pled guilty. He also posed as a deputy U.S. Marshal over the telephone and attempted to have prisoners moved, according to information presented during the sentencing hearing.

Overall, the ring purchased more than $254,000 worth of merchandise as part of their scheme, according to court documents.

Also charged in the case are: Andre Reese, 37; Jeffery McClain, 39; Kevin McBride, 34; Michael Sailes, 51; Edwin Peavy, 52; Daniel Ashford, 37; James L. Wiggins, 47, and Jay Williams, 27, all of Cleveland, Ohio. All have entered guilty plea to charges against them.

This prosecution is the result of cooperation from a number of law enforcement agencies who identified the defendants, gathered the evidence and prepared the case for prosecution. The investigative team included the Federal Bureau of Investigation’s Cleveland Division and Trenton Resident Agency, the U.S. Bureau of Prisons, the Postal Inspection Service, Bath Township Police Department, Stow Police Department, Mentor Police Department and other state and local law enforcement agencies. The case was prosecuted by Assistant U.S. Attorney Matthew B. Kall.

“This case is a stark reminder about the need to protect yourself from identity theft and fraud,” Dettelbach said. “I want to thank the FBI, the Bureau of Prisons and all our partners who made prosecuting this case possible.”

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Provident Capital Indemnity, Its President Minor Vargas Calvo and Auditor Jorge Castillo Charged in $670 Million Fraud Scheme

Source- http://www.justice.gov/opa/pr/2011/January/11-crm-075.html

RICHMOND, Va. – The president and the auditor of a Costa Rican company selling reinsurance bonds to life settlement companies were arrested and charged, along with the company itself, in a seven-count indictment unsealed today for their alleged role in a $670 million fraud scheme involving victims throughout the United States and abroad.

The charges were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.

An indictment unsealed today in U.S. District Court for the Eastern District of Virginia charges Costa Rica-based Provident Capital Indemnity Ltd. (PCI), Minor Vargas Calvo, 59, and Jorge Castillo, 55, each with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. The indictment also seeks forfeiture of more than $40 million from all three defendants. Vargas was arrested on Jan. 18, 2011, at the John F. Kennedy International Airport, and Castillo was arrested earlier today in New Jersey.

“PCI is accused of lying to investors across the globe to sell more than half a billion dollars worth of ‘guaranteed’ bonds which turned out to be worthless,” said U.S. Attorney MacBride. “This case is another example of how the members of the Virginia Financial and Securities Fraud Task Force are working to detect, deter and punish financial fraudsters who target investors throughout Virginia, the nation and the world.”

“These defendants allegedly sold $670 million in bonds by making numerous false representations, which were disseminated to thousands of investors,” said Assistant Attorney General Breuer. “They stand accused of defrauding victims at home and abroad. As these charges show, the Justice Department is committed to rooting out investment fraud wherever we find it.”

According to the indictment, Vargas, a citizen and resident of Costa Rica, is the president and majority owner of PCI, an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. Castillo, a resident of New Jersey, is the purported independent auditor for PCI. If convicted, Vargas and Castillo face up to 20 years in prison on each count.

The defendants allegedly engaged in a scheme to defraud clients and investors by making misrepresentations about PCI’s reinsurers, PCI’s financial statements and PCI’s Dun and Bradstreet rating, in connection with PCI’s marketing and sale of “financial guarantee bonds” to companies that sold life settlements or securities backed by life settlements to investors. PCI’s bonds were allegedly marketed as a way to eliminate one of the primary risks of investing in life settlements, namely the possibility that the individual insured by the underlying life insurance policy will live beyond his or her life expectancy.

The indictment alleges that from 2004 through 2010, PCI sold approximately $670 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany, Canada and elsewhere. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were allegedly required to pay up-front payments of 6 to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.

This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board, and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica A. Brumberg of the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr. of the Criminal Division’s Fraud Section.

In a parallel investigation, the U.S. Securities and Exchange Commission announced today its filing of a parallel emergency enforcement action against PCI, Vargas and Castillo.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.

The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.

President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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Robert Dewain Venson Sentenced to 10 Years in Prison for Mortgage Fraud Scheme

Source- http://baltimore.fbi.gov/dojpressrel/pressrel11/ba011911b.htm

GREENBELT, MD—U.S. District Judge Alexander Williams, Jr. sentenced Robert Dewain Venson, age 38, of Fort Washington, Maryland, today to 10 years in prison followed by three years of supervised release for mail and wire fraud, money laundering, and failing to file tax returns in connection with a three-year mortgage fraud scheme involving at least a dozen residential properties. Judge Williams also ordered Venson to pay restitution of $2,060,021.76 and to forfeit $892,368, his proceeds from the scheme.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation - Baltimore Field Office; Assistant Director in Charge James W. McJunkin of the Federal Bureau of Investigation - Washington Field Office; Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation, Washington D.C. Field Office; and Acting Postal Inspector in Charge Keith A. Fixel of the U.S. Postal Inspection Service - Washington Division.

“This lengthy sentence sends a powerful message that people who commit mortgage fraud will be held accountable,” said U.S. Attorney Rod J. Rosenstein.

"IRS-Criminal Investigation special agents work diligently to identify and bring to prosecution those who fail to meet their tax obligations,” stated Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington D.C. Field Office. "We work together with other federal law enforcement agencies to follow the money to financially disrupt criminal activities such as Mr. Venson’s money laundering scheme."

According to evidence presented at his two-week trial, from 2004 to 2007 Venson negotiated the purchase of at least a dozen residential properties in Maryland and the District of Columbia, including houses in Hyattsville, Ocean City, Fort Washington, and Salisbury, Maryland. Rather than purchase the properties in his own name, the evidence proved that Venson paid straw buyers to appear at the settlements posing as the buyers. Witnesses testified that Venson typically would represent to the straw buyer that he would pay the loan obligation. Venson inflated the price listed on the sales documents to an amount substantially larger than the actual price, causing the mortgage lender to provide funds for the purchase substantially in excess of the actual price. Venson misrepresented and concealed the true purchase price, his arrangement with the straw buyer and other information from the mortgage lender. Under this scheme, the trial evidence showed that Venson reaped $892,368 from the scheme.

Venson also failed to file individual federal income tax returns for 2004, 2005, and 2006 during the period of the scheme.

Venson has been detained since his conviction.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available http://www.justice.gov/usao/md/Mortgage-Fraud/index.html.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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Martin Maurice Lewis, Jr., Nicole Lashawn Ware and Brittni Lashawn Fleming, Indicted in Counterfiet Money Scheme

Source- http://www.justice.gov/usao/vae/Pressreleases/01-JanuaryPDFArchive/11/20110118lewisnr.html

RICHMOND, Va. – Martin Maurice Lewis, Jr., 38; Nicole Lashawn Ware, 21; and Brittni Lashawn Fleming, 20, all of Georgia, were indicted by a federal grand jury today on charges of conspiracy, money laundering, and uttering counterfeit obligations.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement. Lewis, Ware and Fleming face a maximum penalty of twenty years’ imprisonment.

According to the indictment, Lewis, Ware and Fleming traveled to various Target stores throughout the Richmond and Tidewater, Virginia areas as part of a scheme to purchase merchandise, mostly electronics, using counterfeit money. Shortly after the initial purchase, the indictment alleges, the defendants would return the items to the same or a different Target location, and would receive genuine United States currency in exchange for the items.

This case was investigated by the United States Secret Service. Assistant United States Attorney Jamie Mickelson is prosecuting the case on behalf of the United States.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

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Federal Inmate Danilo Suarez and Family Sentenced for Tax Fraud Charges

Source- http://www.justice.gov/usao/fls/PressReleases/110114-01.html

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Daniel W. Auer, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, announced that Danilo Suarez, 49, formerly of Key West, a prison inmate, was sentenced today to 60 months’ imprisonment to be followed by 3 years of supervised release for his participation in a scheme to file fraudulent tax returns on behalf of inmates in the Monroe County Jail, in Key West, FL, and others. Defendant Suarez was also ordered to pay restitution in the amount of $58,022.

Sandra Suarez, 25, of Key West, his daughter, and Belkis Mendez, 54, of Key West, his sister, were each sentenced on November 9, 2010 and November 10, 2010, respectively, to 6 months’ imprisonment, to be followed by 3 years of supervised release for their participation in the scheme. Additionally, Sandra Suarez was ordered to pay $33,010 in restitution and Belkis Mendez was ordered to pay $43,959 in restitution. Danilo Suarez, Sandra Suarez, and Belkis Mendez all previously pled guilty to conspiracy to file false, fictitious and fraudulent claims to the IRS in violation of Title 18, United States Code, Section 286.

According to the indictment, defendant Danilo Suarez was a federal prisoner housed primarily at the Monroe County Jail. While incarcerated in the Monroe County Jail, Danilo Suarez began a scheme to defraud the IRS by recruiting and submitting false tax return forms in the name of fellow inmates, former inmates and relatives, for tax years 2004 through 2006. These returns falsely claimed that the purported taxpayers had been employed and paid withholding taxes during the years in question. In fact, however, Danilo Suarez knew that the purported taxpayers had not worked as reported, had not earned the reported income, and had not had income withheld as claimed.

To execute the scheme, Danilo Suarez recruited his daughter, sister and brother, co-defendants Sandra Suarez, Belkis Mendez, and Gilbert Suarez, 47, of Deland, FL, respectively, to receive the resulting IRS refund checks. Danilo Suarez also instructed the co-defendants to cash the checks, sometimes using fraudulent powers of attorneys. Once the checks were cashed, the co-defendants gave the cash to inmate Danilo Suarez, who divided the proceeds between himself, the co-defendants, and the complicit inmates. Danilo Suarez also caused the checks to be cashed, sometimes using fraudulent powers of attorneys. Once the checks were cashed, the money was distributed amongst the complicit inmates, Danilo and his family members.

On December 17, 2010 Gilbert Suarez was found not guilty after a jury trial.

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David A. Cusumano and Henry Nino, Both are Charged With Tax Evasion

Source- http://www.justice.gov/tax/txdv11045.htm

WASHINGTON - A federal grand jury in Detroit has returned a 14-count indictment against Michigan residents David A. Cusumano and Henry Nino, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to the indictment, Cusumano was a mechanical engineer from Plymouth, Mich., and Nino was an electrician from Northville, Mich. Both men are alleged to have committed multiple counts of tax evasion by failing to file income tax returns and maintaining Employee's Withholding Allowance Certificates (IRS Forms W-4) which their employers falsely claimed were exempt from tax withholding.

Both are also charged with corruptly endeavoring to obstruct the administration of the internal revenue laws through the services of Florida-based American Rights Litigators/Guiding Light of God Ministries (ARL) and by other means. The indictment alleges that Cusumano and Nino used ARL to falsely accuse Internal Revenue Service (IRS) workers of criminal acts and to send false documents to the IRS.

Cusumano is also accused of sending fake financial instruments called "Registered Bonds" to the IRS and the Treasury Department while Nino is accused of sending fake financial instruments called "Registered Bills of Exchange" to the Treasury. Nino is also alleged to have willfully failed to file income tax returns for 2007 and 2008.

In August 2004, a federal district judge permanently enjoined ARL and two of its promoters from the sale of a nationwide tax scam. According to court documents, the purpose of ARL's scheme was to thwart the IRS in its attempts to assess and collect taxes by various means. These schemes included manufacturing and selling worthless "bills of exchange" supposedly drawn on the U.S. Treasury for customers to use in purported payment of their taxes, as well as producing false and harassing complaints against IRS employees that were sent to the Treasury Inspector General for Tax Administration in Washington, D.C.

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