Thursday, March 31, 2011

Hussein Ali Mehdi Pleads Guilty to Investment Fraud and Tax Fraud


Source- http://portland.fbi.gov/dojpressrel/pressrel11/pd032911a.htm

EUGENE, OR—Today, Hussein Ali Mehdi, 48, of Eugene, Oregon, pleaded guilty to three counts of mail fraud and one count of tax fraud related to an investment fraud scheme.

According to court documents, the defendant admitted to submitting fraudulent claims for class action settlements associated with various securities litigation. The defendant further admitted to receiving more than $850,000 of fraudulent proceeds through his investment scheme.

In those claims, the defendant falsely asserted that he and others held stock in the companies subject to the class action settlements. To support the false claims, the defendant created fraudulent brokerage account statements purported to be from various investment brokerage firms, including Charles Schwab, TD Waterhouse, and Ameritrade, that falsely represented that he and others owned shares of the securities covered by the settlements. To pull off his scheme, the defendant used several nominees and addresses in at least two states.

In connection with the investment fraud scheme, the defendant also admitted filing a false federal income tax return on which he severely understated his income. On the false tax return, the defendant claimed his taxable income was only $58,241, when, in reality, he knew it was more than $290,000.


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Wednesday, March 30, 2011

Mohammad Jafar Nikbakht Pleads Guilty to Tax Evasion


Source- http://www.justice.gov/tax/txdv11390.htm

WASHINGTON - Mohammad Jafar Nikbakht, aka Freydoon Nikbakht, pleaded guilty to tax evasion before U.S. District Court Judge John A. Houston in San Diego, the Justice Department and Internal Revenue Service (IRS) announced today. According to the indictment and other documents filed with the court, Nikbakht ran a series of lucrative auto dealerships in the greater San Diego area. Between 1998 and 2007, Nikbakht significantly under-reported income earned from these businesses. The government claims that Nikbakht defrauded the U.S. Treasury of more than $400,000 in income tax revenue through the course of these years.

According to indictment and other documents filed with the court, Nikbakht pleaded guilty to tax evasion for the year 2007. Nikbakht admitted that during that year he earned income through auto dealership operations, including through a dealership called Southern California Car Exchange. Nikbakht further admitted that he willfully failed to file his personal tax return and pay his taxes, and that he engaged in various acts to conceal income from the IRS. For example, Nikbakht admitted that he ran an auto wholesale operation under another dealer’s license and that he instructed the other dealer to write his income payment checks to the order of a third-party or to “cash”.

The government contends that even at his plea hearing, Nikbakht only admitted to a fraction of his misconduct. Additional evidence concerning Nikbakht’s 2007 tax evasion and his alleged tax crimes for prior years as well as allegations that Nikbakht obstructed justice in the tax investigation, will be presented before Judge Houston at a preliminary sentencing hearing scheduled for April 12, 2011.

Nikbakht faces up to five years in prison. In addition, the government is seeking a fine of at least $250,000 and an order requiring Nikbakht to pay full restitution to the IRS as well as the costs of his prosecution.


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Tuesday, March 29, 2011

Federal Court has Permanently Barred Gerald A. Poynter II From Preparing Federal Tax Returns for Others and Promoting a Fraudulent Tax Scam



Source- http://www.justice.gov/opa/pr/2011/March/11-tax-382.html

WASHINGTON – A federal court has permanently barred Gerald A. Poynter II of Kansas City, Mo., from preparing federal tax returns for others and from promoting a fraudulent tax scam, the Justice Department announced today.

The court found that Poynter, who uses the business name “Jerry Love Ministries” prepares false Internal Revenue Service (IRS) forms to help his customers claim fraudulent tax refunds based on phony reporting of large income tax withholding. The court order states that Poynter’s scheme is a version of the repeatedly rejected “redemption” scheme used by tax defiers to evade tax obligations or obtain wrongful financial benefits. According to the court, proponents of that scheme claim that the U.S. government is in possession of money rightfully owned by taxpayers. The court found that Poynter told his customers that he could recover that money for them for a fee, and that he then generated fraudulent IRS forms to support false tax refund claims on their behalf.

According to the court, Poynter helped at least 165 customers make fraudulent refund claims totaling more than $64 million. The IRS catches the vast majority of false “redemption” claims, and civil and criminal penalties for taxpayers who file such claims can be severe.

The IRS recently advised taxpayers to beware of tax scams like return preparer fraud. In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions against tax-fraud promoters and dishonest tax return preparers.



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Monday, March 28, 2011

James and Theresa Demuro Sentenced For Failing to Pay Employment Taxes


Source- http://www.justice.gov/tax/txdv11362.htm

WASHINGTON - James and Theresa Demuro of Bridgewater, N.J., were each sentenced by U.S. District Judge Garrett E. Brown Jr. to 51 months in prison, followed by three years supervised release, the Justice Department and the Internal Revenue Service (IRS) announced today. Judge Brown also ordered the Demuros to pay restitution to the IRS in the amount of $1,337,952.12.

The DeMuros were convicted following a jury trial that began on Nov. 9, 2010, of one count of conspiracy to defraud the United States and 21 counts of willfully failing to pay over employment taxes. According to the indictment and evidence introduced during trial, the DeMuros co-owned and operated an engineering and surveying firm called TAD Associates LLC dba DeMuro Associates. From 2002 through 2008, they withheld employment taxes from their employees’ paychecks but failed to pay approximately $546,247.39 in taxes to the IRS. In addition, they operated under a prior entity name DA Resources Inc., which they ceased operating in an effort to thwart the ability of the IRS to collect unpaid employment taxes related to that entity.

At trial, the government introduced evidence that, beginning with the first quarter of 2007 through the last quarter in 2008, the defendants paid employees’ wages and withheld employment taxes from paychecks but did not pay any of the employee withholdings to the U.S. Treasury. In addition, the DeMuros withheld funds from their employees’ pay checks for health insurance, child support and retirement savings accounts, and failed to pay these funds over to the appropriate entities.

Evidence was also introduced that the Demuros converted withheld funds for their business and personal use, including more than $280,000 in purchases from QVC, Home Shopping Network and Jewelry Television.


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Sunday, March 27, 2011

Murphy Hubbard Pleads Guilty to Mail Fraud and Tax Evasion


Source- http://www.justice.gov/tax/txdv11355.htm

WASHINGTON - Murphy Hubbard, a Springfield, Mo., CPA, pleaded guilty to two counts of mail fraud and one count of tax evasion before Judge James England in the Western District of Missouri, the Department of Justice and Internal Revenue Service (IRS) announced today.

According to the terms of Hubbard’s plea, he has agreed to be sentenced to 42 months in prison and shall be ordered to pay full restitution to the victims in this case, including the IRS.

According to court documents, Hubbard owned and operated an accounting and tax business known as The Hubbard Group PC. Hubbard embezzled more than $400,000 from two trusts placed under his control by local families between 1998 and 2009. The first of these trusts, created by Ms. Hazel Beatrice S. Hirst, of Springfield, designated four local charities as the beneficiaries of her life’s savings. The second trust, established by the heirs of Mr. Noel C. Rummens, of Rogersville, Mo., was created for the express purpose of funding educational expenses for Mr. Rummens’s surviving heirs and relatives. Rather than fulfilling the wishes of these families by faithfully executing their trust agreements, Hubbard instead took the vast majority of this money for himself, using it to pay personal expenses, to buy items such as automobiles and farm equipment, and for travel. Virtually all of the money taken from these trusts went unreported to the IRS, resulting in a tax loss of approximately $79,434.


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Saturday, March 26, 2011

Caesars Palace Nightclub Host Ali “Shawn” Olyaie Pleads Guilty to Tax Crime


Source- http://www.justice.gov/tax/txdv11368.htm

WASHINGTON - Ali “Shawn” Olyaie, a former “VIP host” at the Pure Nightclub located in Caesars Palace Hotel and Casino in Las Vegas, pleaded guilty in Las Vegas before U.S. District Court Judge Kent Dawson to one count of filing a false federal individual income tax return for the 2006 tax year, the Justice Department and Internal Revenue Service (IRS) announced today.

According to information disclosed at Olyaie’s plea hearing, during the years 2005 and 2006, Olyaie’s responsibilities as a VIP host at the Pure Nightclub included promoting the club, booking reservations and catering to the club’s clientele. In addition to paying an admissions fee, some Pure patrons typically made cash payments to Pure door personnel and VIP hosts to bypass the general admissions line and to obtain more desirable seating inside the nightclub. The cash payments were collected, pooled and generally distributed on a weekly basis to Pure managers, door personnel and VIP hosts, including Olyaie. Olyaie’s cash distributions from the pool of money collected from patrons of Pure comprised the bulk of his compensation during the time he worked at Pure. Olyaie concealed the cash payments he received by not reporting the income to the IRS on his individual income tax returns during the years he worked at the Pure Nightclub.

Judge Dawson set Olyaie’s sentencing for June 29, 2011, at 9:00 a.m.

On Nov. 9, 2010, Richard Chu, another former VIP Host at the Pure Nightclub, pleaded guilty to filing a false 2006 federal individual income tax return that did not report the cash payments he received at Pure. Chu is also awaiting sentencing.

This case is being investigated by IRS – Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Christopher J. Maietta and Joseph A. Rillotta.


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Friday, March 25, 2011

Richard Jaensch Charged with Obstructing the IRS


Source- http://www.justice.gov/opa/pr/2011/March/11-tax-372.html

WASHINGTON - Richard Jaensch, a resident of Annandale, Va., has been indicted by a Alexandria, Va., federal grand jury with one count of corruptly endeavoring to impede the Internal Revenue Service (IRS), one count of filing a false claim for a refund and four counts of failing to file a tax return for 2004 through 2007, the Justice Department and the IRS announced today.

According to the indictment, Richard Jaensch, a self-employed plumber, failed to file personal income tax returns between 2001 and 2007, despite the fact that he was required to do so by law. Between 2002 and October 2009, Jaensch obstructed and impeded the IRS by, among other acts: filing numerous documents and pleadings in Fairfax County, Va.; claiming, that he and his wife, a federal employee, were not persons required to file federal income tax returns; that his wife was not a party to the Constitution of the “united States of America” (sic) and that she was not a taxpayer; providing false information to the IRS; and filing with the IRS a false 2008 federal income tax return, Form 1040.

In addition, Jaensch caused his wife to yearly present a letter to her employer directing them to stop withholding federal income taxes from her salary. The IRS began levying his wife’s paycheck and bank accounts to satisfy her outstanding tax liability, and Jaensch continued his obstructive conduct by filing or causing his wife to file correspondence with the IRS claiming that the IRS could not instruct her employer to withhold taxes from her paycheck. In addition, in April 2009, Jaensch electronically filed with the IRS a false 2008 individual income tax return claiming a tax refund of $774,052, which he knew to be false and fraudulent.

An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendant faces a maximum potential sentence of 12 years in prison. The court has not yet set a trial date.


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Thursday, March 24, 2011

Reynaldo Orozco Pleads Guilty to Employment Tax Fraud


Source- http://www.justice.gov/tax/txdv11361.htm

WASHINGTON - Reynaldo Orozco pleaded guilty to one count of filing a false tax return before U.S. District Court Judge Adalberto Jordan in the Southern District of Florida, the Department of Justice and the Internal Revenue Service (IRS) announced today. The court set sentencing for June 17, 2011.

According to court documents, during tax years 2004 through 2007, Orozco owned and operated Rock Construction Builders Inc. (RCB), a construction business located in Miami-Dade County, Fla. Orozco issued RCB corporate checks to various other corporations holding them out to be legitimate subcontractors. In truth, these corporations did not perform work for RCB. Orozco cashed the checks at local check cashing stores and used the bulk of the cash obtained in this manner to pay RCB employees. Orozco failed to report the cash wages on quarterly employment tax returns and failed to withhold and pay employment taxes on the wages. From 2004 through 2007, RCB failed to report approximately $3,294,426 in cash wages to the IRS.

Court documents also stated that on Feb. 11, 2005, Orozco made and subscribed to a false IRS Form 941 (Employer’s Quarterly Federal Tax Return) for the quarter ending Dec. 31, 2004. Orozco knew this return was false because it failed to report the substantial cash wages paid to RCB employees that quarter.

Based on the conduct described above, the U.S. Treasury suffered an employment tax loss of approximately $504,047. Orozco faces a maximum of three years in prison.


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Wednesday, March 23, 2011

Kathryn Charles Miles and husband John Scott Miles Pleads Guilty to Tax Fraud Conspiracy


Source- http://www.justice.gov/opa/pr/2011/March/11-tax-356.html

WASHINGTON – Kathryn Charles Miles and husband John Scott Miles, of Mathews County, Va., pleaded guilty to conspiring to impair and obstruct the IRS in the ascertainment and assessment of federal income taxes from 2001 through 2010.

The pleas were announced by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division John A. DiCicco and the Internal Revenue Service (IRS).

Kathryn Miles, who was charged in October 2010, pleaded guilty March 19, 2011, before U.S. District Judge Raymond A. Jackson in Norfolk, Va. John Miles pleaded guilty today.

At her plea hearing, Kathryn Miles admitted to earning taxable income as a nurse at various Virginia hospitals and with her husband, as an owner and operator of a construction business named “Scotts Construction” and “KCM Construction & Design.” Kathryn Miles and John Miles admitted that in 2001 they joined American Rights Litigators, a business they knew sold and promoted abusive tax schemes, and maintained an annual membership. Kathryn Miles also admitted that, in 2005 and 2006, she submitted six tax returns to the IRS in which she falsely claimed that she earned no wages and in which she did not disclose the operation of her construction business. Kathryn Miles submitted falsified tax documents with each tax return she filed with the IRS and John Miles admitted that he did not file tax returns for tax years 2004 and 2005, despite being required to do so by law.

Judge Jackson released the defendants on bond pending sentencing. Kathryn Miles’s sentencing is scheduled for June 30, 2011 and John Miles’s sentencing is scheduled for July 11, 2011. Both defendants face a maximum potential penalty of five years in prison and a $250,000 fine, and both defendants have agreed to pay all taxes, interest and penalties.


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Tuesday, March 22, 2011

Thomas Thorndike Charged with Preparing False Returns, Obstructing IRS


Source- http://newhaven.fbi.gov/dojpressrel/pressrel11/nh032111.htm

David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned an indictment charging THOMAS THORNDIKE, 60, of Milford, with 15 counts of aiding and assisting the preparation of a false federal income tax return and one count of obstruction of the administration of the Internal Revenue laws.

The indictment was returned on March 17 and was unsealed today following THORNDIKES’ arrest and arraignment before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport.

According to the indictment, THORNDIKE was the founder and owner of Cornerstone Financial Services of Woodbury, LLC (CFS), a tax preparation and financial services business. As the owner of CFS, THORNDIKE prepared federal tax returns for individuals and businesses in exchange for payment of a fee. THORNDIKE also offered individuals to whom he provided tax preparation services an opportunity to purchase audit insurance. Purchasers of audit insurance could elect to be represented by THORNDIKE in connection with any Internal Revenue Service audit of their individual federal income tax returns.

The indictment alleges that, in the course of preparing many of his clients’ tax returns, THORNDIKE improperly reduced the amount of tax due in a variety of ways, including falsely claiming deductions for charitable contributions and falsely claiming deductions for job expenses.

The indictment further alleges that, in December 2008, the IRS notified THORNDIKE that he was the subject of an IRS audit examining his preparation of tax returns for the tax years 2006 and 2007. In connection with the audit, THORNDIKE assisted in the preparation of, and then submitted to the IRS, falsified documents to support the false deductions claimed on tax returns that were subject to the audit.

After THORNDIKE entered a plea of not guilty to the charges, he was released on a $400,000 bond secured by property.

If convicted, THORNDIKE faces a maximum term of imprisonment of three years and a fine of up to $250,000, on each count.


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Monday, March 21, 2011

Gwenn Wycoff and Frank Ozak Pleaded Guilty to Help Individuals Evade Taxes



Source- http://www.justice.gov/tax/txdv11344.htm

WASHINGTON - A federal court has issued a preliminary injunction barring Gwenn Wycoff and Frank Ozak, both of Los Angeles, from promoting so-called “common-law trusts” that help individuals evade taxes, the Justice Department announced today. The injunction order, entered by U.S. District Judge Jacqueline H. Nguyen of the U.S. District Court for the Central District of California, will remain in effect while the government’s lawsuit seeking a permanent injunction is pending.

In granting the preliminary injunction, the court found that Wycoff and Ozak promote their scheme through personal appearances, a website and a self-published two-volume work they wrote with others called The Art of Passing the Buck, which contains false statements about the internal revenue laws. The court determined that the trusts promoted by Wycoff and Ozak (including one they created for themselves) are shams and have caused substantial harm to the government. The court found that the total amount of tax deficiencies assessed by the government with respect to four customers mentioned in the court order is more than $1.1 million.

The court also ordered Wycoff and Ozak to post a copy of the injunction order on their website and to provide the government with a list of all persons who have purchased their products, services, advice or publications in the past five years.



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Sunday, March 20, 2011

Irvin Hannis Catlett Jr., Sentenced to 17 1/2 Years In Prison in Fraudulent Tax Shelter Conspiracy


Source- http://www.justice.gov/tax/txdv11343.htm

GREENBELT, Md. - U.S. District Judge Roger W. Titus sentenced Irvin Hannis Catlett Jr., 64, of Crownsville, Md., today to 210 months in prison, followed by three years of supervised release for tax offenses in connection with a scheme to prepare individual income tax returns for clients, which reported bogus tax losses from a purported car leasing company. Judge Titus also entered an order of restitution against Catlett for $3,810,244. A federal jury convicted Catlett on Nov. 4, 2010.

The sentence was announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; Principal Deputy Assistant Attorney General for the Department of Justice’s Tax Division John A. DiCicco; Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service (IRS) - Criminal Investigation Washington, D.C., Field Office; and Special Agent in Charge Robert Geary of the Treasury Inspector General for Tax Administration (TIGTA).

"Irvin Catlett’s ‘tax shelter’ scheme was a fraud," said U.S. Attorney Rosenstein. "People who want to reduce their taxes should seek reliable and independent advice and avoid con artists selling magical schemes that are too good to be true."

"Sentences like this one send a loud and clear message that crooked tax return preparers will be investigated, prosecuted and punished for their actions," said Principal Deputy Assistant Attorney General DiCicco.

"People who create elaborate schemes that have no purpose other than to defraud the Government will be prosecuted," stated Special Agent in Charge Sparkman. "Today’s sentencing further shows that the IRS-Criminal Investigation is working to stop fraud schemes whose activities unfairly shift the burden to honest taxpayers."

"Congratulations all around for the excellent work on this case," said Inspector General George. "This is another example of outstanding collaboration between TIGTA and the IRS’s Criminal Investigation unit to stop fraudulent schemes in their tracks. Those who engage in them will be investigated and prosecuted to the fullest extent of the law. Paid preparers are a critical component in our system of tax administration," he added. "When preparers violate the law, they harm their victims and severely damage the credibility and reputation of the tax preparation community."

According to testimony at the nine day trial, Catlett operated Tax Resolutions Inc. located in Laurel, Md. He falsely held out Motors Holding Company Inc., Motors Holding Company II through VI Inc. and Rentown Inc. to his clients as operating businesses involved in automobile leasing and sales. Catlett knew however that these entities were not engaged in automobile leasing and sales, nor in any other legitimate, profit-making business. From 1999 to 2009, Catlett worked with others to sell to clients purported "investments" in the tax shelter entities. These investments were payments to Catlett for the purchase of bogus tax losses, purportedly generated by the tax shelter entities’ automobile leasing operations. Catlett, Walter Cullum and James Unterreiner prepared fraudulent tax returns for their clients that included the fictitious business losses, thereby reducing the amount of taxable income and total tax reported by the clients, and resulting in the clients falsely claiming refunds from the IRS.

Trial testimony further showed that Catlett paid Mark Hunt, an IRS revenue officer, for providing Catlett with IRS taxpayer information on Tax Resolutions’ clients and for allowing Catlett to introduce Hunt to clients and potential clients as Catlett’s connection at the IRS, in order to assure them that the tax returns prepared by Tax Resolutions would not be the subject of adverse IRS actions.

As part of the scheme, Catlett and Cullum supplied clients with copies of stock certificates to assure the clients of the legitimacy of their investment in the tax shelter. Catlett and Cullum also provided clients with fraudulent IRS forms that reported the clients’ portions of fictitious business losses incurred by the tax shelter entities. Catlett instructed Cullum and Unterreiner to prepare client tax returns by first determining each client’s tax without the tax shelter loss, and then adding to the return a fictitious loss from a tax shelter entity large enough to reduce the client’s tax due to zero. Catlett also instructed Cullum and Unterreiner on how to prepare false tax returns so that they could maintain the scheme while Catlett was in prison from November 2002 to September 2004 on other charges.

As a result of the scheme, approximately 275 tax returns were filed with the IRS which reported $22,009,021 in bogus Schedule E losses, which resulted in a tax loss to the United States of $3,810,244.

Cullum Jr., 37, of Columbia, Md.; Hunt, 45, of Baltimore; and Unterreiner, 34, of Bowie, Md., pleaded guilty to their participation in the tax evasion scheme and were each sentenced to three years probation. Tressa Nivens, 45, of Frederick, Md., also pleaded guilty to her role in the scheme and was sentenced to two years probation.


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Saturday, March 19, 2011

Tara Denise Bonelli Arrested in Foreclosure Assistance Scam


Source- http://sanfrancisco.fbi.gov/dojpressrel/pressrel11/sf031711.htm

SAN JOSE, CA—Tara Denise Bonelli, 31, of Santa Cruz, Calif., was arrested today by agents from the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation. United States Attorney Melinda Haag announced. Yesterday, a federal grand jury in San Jose indicted Bonelli, charging her with 18 counts of wire fraud, one count of mail fraud, and three counts of money laundering.

According to the indictment, Bonelli was the founder and owner of Vista Holding Company (Vista Holding) and Vista Funding, Inc. (Vista). Vista Holding owned and operated eight different entities: Vista, Independent Financial, Equity Advisors, Bonelli Properties, Lost Dollar Services, Equity Inquiries, Outlook Enterprises, and Sovereign Property Management. Vista was a California corporation that claimed to offer a variety of real estate and financial services, including foreclosure assistance, the purchase of distressed properties, and the subdividing and development of properties.

In addition, according to the indictment, Bonelli, with her spouse, and under Vista, owned properties in Aptos, Bonny Doon, and Scott’s Valley, California, that she used as collateral in her scheme to defraud. Bonelli solicited funds from various individuals representing that she would purchase distressed properties for resale and engage in the business of foreclosure assistance, when in fact she knew the money would not be invested, but rather go to finance an extravagant lifestyle.

Furthermore, according to the indictment, Bonelli offered the aforementioned properties as collateral for loans. In order to induce victims to send her money, Bonelli misrepresented the assessed value of the property used as collateral as well as her true interest in those properties. Bonelli caused prior deeds of trust on the collateral properties to remain unrecorded, thereby intentionally creating the appearance of less-encumbered collateral property to potential investors. She also utilized individuals as “door knockers” who solicited owners of properties in mortgage distress for so-called “mortgage assistance.” The door knockers, acting at Bonelli’s instruction, had the owners of distressed properties sign blank real estate sales contracts. Bonelli placated complaining investors by falsely telling them that escrows were about to close or that real estate deals were about to result in payments to Vista.

Bonelli made her initial appearance in federal court in San Jose today and was detained pending a detention hearing before Magistrate Judge Howard Lloyd on March 22, 2011 at 1:30 p.m.

The maximum statutory penalty for each count of wire fraud and mail fraud, in violation of Title 18, United States Code, Sections 1343 and 1341 is 20 years in prison and a fine of $250,000. The maximum statutory penalty for each count of money laundering, in violation of Title 18, United States Code, Section1957, is 10 years in prison and a fine of $250,000 or twice the value of the property involved. The indictment also contains two criminal forfeiture allegations. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.


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Friday, March 18, 2011

Nathan A. Peake Guilty to Tax Evasion, Conspiracy to Commit Bank and Wire Fraud


Source- http://www.justice.gov/opa/pr/2011/March/11-tax-347.html

WASHINGTON – Nathan A. Peake, 40, a sports manager and resident of Silver Spring, Md., entered a plea of guilty today in U.S. District Court for the the District of Columbia to one count of tax evasion and one count of conspiracy to commit bank and wire fraud.

The plea was announced by U.S. Attorney for the District of Columbia Ronald C. Machen Jr.; Principal Deputy Assistant Attorney General John A. DiCicco of the Department of Justice’s Tax Division; Rebecca A. Sparkman, Special Agent in Charge of the Washington, D.C., Field Office of the Internal Revenue Service (IRS) – Criminal Investigation; D.C. Office of Tax and Revenue Deputy Chief Financial Officer Stephen M. Cordi; and Assistant Inspector General for Investigations Scott Berenberg of the U.S. Department of Commerce Office of Inspector General.

According to court documents, Peake has managed professional basketball players and boxers since 1999 under the name Peake Management Group Inc. (PMG). Peake did not file income tax returns for the years 2000 through 2007, despite earning significant amounts of income over that period of time.

Between 2000 and 2007, Peake diverted approximately $5,836,940 in management and agent fees from his business to personal bank accounts or commercial bank accounts that he controlled in names other than PMG. Peake committed numerous affirmative acts of evasion, including misappropriating proceeds from a $3.5 million commercial line of credit that one of his client athletes guaranteed and ultimately paid off; paying himself and his wife out of those commercial bank accounts that he controlled in names other than PMG; using cash to pay personal and business expenses; withdrawing cash in amounts less than $10,000 (an amount greater would have required banks to file currency transaction reports); and paying personal expenses with business receipts.

In total, Peake admitted to evading in excess of $1 million in income taxes.

In addition, Peake and others conspired to provide false information to several mortgage lenders over a nine-year period regarding Peake employment, income, rental receipts and obligations to the federal government. This included fabricated letters that falsely represented that Peake had filed federal income tax returns, reporting self employment wages, which had been reviewed by a certified public accountant.

Judge Ricardo M. Urbina set a sentencing date of Aug. 2, 2011. Peake faces a maximum prison sentence of 10 years. Under federal sentencing guidelines, the likely range is a prison term of 41 to 51 months.


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Thursday, March 17, 2011

Timothy Devon Huntley, Jr., Pleads Guilty to Insurance Fraud



Source- http://portland.fbi.gov/dojpressrel/pressrel11/pd031511.htm

EUGENE, OR—Timothy Devon Huntley, Jr., 45, pled guilty today to committing wire fraud and aggravated identity theft as part of an insurance fraud scheme. He is scheduled to be sentenced on May 24, 2011 before U.S. District Judge Michael R. Hogan.

The case arose from an investigation by the National Insurance Crime Bureau into multiple suspicious insurance claims associated with Huntley. The investigation was referred to the Financial Crimes Unit of the Eugene Police Department. It was ultimately determined that Huntley filed at least 30 fraudulent claims resulting in $196,854.20 in losses to at least 11 different insurance companies.

In pleading guilty, Huntley admitted that, among other things, he obtained insurance policies for recently acquired used vehicles and used fictitious names, addresses, dates of birth, and Social Security account numbers (SSANs), as well as names, addresses, dates of birth, and SSANs belonging to actual persons. Shortly after insuring a vehicle, he would claim to have damaged a parked car with the vehicle. The parked car would generally be another used vehicle recently acquired by him in some variation of his name or that of his wife. Posing as the owner of the damaged parked car, Huntley would make a claim on the recently issued insurance policy. He would then be mailed a check to settle the claim.

Public records show that Huntley has over 20 prior convictions, including at least 10 prior felony convictions for a variety of offenses: forgery in the first degree, robbery in the third degree, theft in the first degree, possession of a prohibited firearm, hindering prosecution, and driving while suspended/revoked. He is currently in federal custody pending sentencing.

The maximum statutory penalty for wire fraud is 20 years in prison and a $250,000 fine, followed by a three-year term of supervised release. The statutory penalty for aggravated identity theft is a 24-month term of prison, consecutive to any other sentence, and a $250,000 fine, followed by a one-year term of supervised release.



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Tuesday, March 15, 2011

Jeffrey Chatfield Sentenced in San Diego for Hiding Assets in Secret Bahamian and Swiss Bank Accounts



Source- http://www.justice.gov/opa/pr/2011/March/11-tax-328.html

WASHINGTON – Jeffrey Chatfield of San Diego was sentenced before U.S. District Judge Michael M. Anello to three years probation for hiding assets in secret offshore UBS bank accounts, the Justice Department and the Internal Revenue Service (IRS) announced today. Chatfield was also ordered to pay more than $96,000 to resolve his civil liability with the IRS for failing to file the required Reports of Foreign Bank and Financial Reports (FBARs) on Forms TD F 90-22.1.

According to court documents and statements made in court, Chatfield filed false tax returns for 2000 through 2008 in which he failed to report that he had an interest in or a signature authority over Bahamian and Swiss financial accounts at UBS and Credit Suisse. He also failed to report income earned on these Swiss bank accounts and never filed any FBARs disclosing his interest in any offshore financial accounts.

According to court documents and statements made in court, in or about 2000, with the assistance of a UBS banker, Chatfield opened a bank account at UBS Bahamas Ltd. in the name of nominee entity Alder West. Chatfield deposited into the account approximately $900,000 in untaxed securities and cash that he received in 2000 from his consulting work, which included advising private companies seeking to go public.

In August 2002, Chatfield closed the Alder West account and with the assistance of his UBS banker and others, formed Iberia West Ltd., a Bahamian nominee entity. Chatfield then opened a new Swiss account at UBS in the name of Iberia West and transferred into that account securities and cash previously held at UBS Bahamas Ltd. In August 2004, Chatfield closed his Iberia West account and transferred all remaining assets to an account at Credit Suisse, also held in the name of the nominee entity Iberia West. In 2008, Credit Suisse told Chatfield that it was closing all accounts held by U.S. taxpayers. Chatfield closed this account in 2008.

In February 2009, UBS entered into a deferred prosecution agreement under which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business, including Chatfield.



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Monday, March 14, 2011

Eric Bernard Caldwell Indicted in Tax Fraud & Identity Theft Conspiracy


Source- http://www.justice.gov/tax/txdv11319.htm

WASHINGTON - Eric Bernard Caldwell was indicted by a federal grand jury in the Middle District of Alabama on charges of conspiracy and theft of government funds, the Department of Justice and the Internal Revenue Service (IRS) announced today. The indictment was returned on Feb. 16, 2011, and unsealed today.

Caldwell, a resident of Montgomery County, Ala., was charged with conspiring to defraud the United States by filing false claims and also charged with one count of theft of government funds. According to the indictment, Caldwell was part of a conspiracy that filed false tax returns using stolen identities. Caldwell provided identifying information to co-conspirator Ora Mae Adamson, who filed the returns, in exchange for a share of the illicit proceeds generated by the false tax returns.

Adamson pleaded guilty to conspiracy and identity theft charges on Dec. 2, 2010, and was sentenced to 46 months in prison on March 10, 2011. Another co-conspirator, Jeffery Leon Ceaser, has also pleaded guilty and was sentenced, on March 2, 2011, to 36 months in prison.

An indictment merely alleges that crimes have been committed, and defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Caldwell faces a maximum of 20 years in prison and a fine of $500,000.



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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
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Saturday, March 12, 2011

Former Alabama Mayor John Jackson, Pleads Guilty to Filing False Tax Return


Source- http://www.justice.gov/opa/pr/2011/March/11-tax-312.html

WASHINGTON – John Jackson, the former mayor of White Hall, Ala., pleaded guilty before U.S. Magistrate Judge Susan Walker in U.S. District Court in Montgomery, Ala., to one count of filing a false tax return, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to the court documents, Jackson admitted filing a false joint 2004 U.S. Individual Income Tax Return, Form 1040, that did not report all of the total income earned by Jackson and his spouse. Jackson also admitted in his plea to filing false joint Individual Income Tax Returns, Forms 1040, for 2005 and 2006, which failed to report all of the total income earned by him and his spouse.

No sentencing date has been scheduled. Jackson faces a maximum of three years in prison, three years of supervised release and a maximum fine of $250,000 or twice the loss resulting from his offense.

The case was investigated by special agents of the IRS - Criminal Investigation. Trial Attorney Michael Boteler of the U.S. Department of Justice, Tax Division, Southern Criminal Enforcement Section, and Todd Brown, Assistant U.S. Attorney for the Middle District of Alabama, handled the case.


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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
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Friday, March 11, 2011

Ora Mae Adamson Sentenced to 46 Months in Prison for Tax Fraud and Identity Theft



Source- http://www.justice.gov/opa/pr/2011/March/11-ag-303.html

WASHINGTON – Ora Mae Adamson, a resident of Montgomery County, Ala., was sentenced to 46 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to court documents, between March 2009 and September 2009, Adamson conspired with others to defraud the United States by filing 158 false federal income tax returns. As part of the scheme, Adamson and her co-conspirators fraudulently obtained the names and Social Security numbers of individuals. Adamson would then file false tax returns in these individuals’ names, without their authorization. The tax returns falsely claimed the first-time homebuyer’s credit and fuel tax credit. The refunds from the false returns were deposited into bank accounts controlled by Adamson and other co-conspirators.

In all, the conspiracy defrauded the United States of $621,738. One of Adamson’s co-conspirators, Jeffery Ceaser, was sentenced to 36 months in prison on March 2, 2011.

In addition to 46 months in prison, Adamson was also ordered to pay $621,738.41 in restitution to the United States.



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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
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Thursday, March 10, 2011

Michael Brier, the Owner of the Tax Return Preparation Firm Refunds Now Inc., and his Employees, Jeffrey Sroufe, Esther Santiago and Carmen Miranda, be Permanently Barred From Preparing Federal Income Tax Returns for Others


Source- http://www.justice.gov/tax/txdv11298.htm

WASHINGTON - A federal court in Providence, R.I., has ordered that Michael Brier, the owner of the tax return preparation firm Refunds Now Inc., and his employees, Jeffrey Sroufe, Esther Santiago and Carmen Miranda, be permanently barred from preparing federal income tax returns for others, the Justice Department announced today. The permanent injunction order, to which the four individuals consented, applies to them personally and doing business under the names Refunds Now Inc., RNTS Inc., FTIRS Inc., POTIRS Inc. and IHIRS Inc.

In November 2010 the court entered a preliminary injunction against Brier, Sroufe and Santiago after finding that at least 300 tax returns prepared by Brier and Refunds Now understated customers’ tax liabilities and that Brier and his employees fabricated tax deductions and credits on the returns. The court also noted that a Refunds Now employee had offered to provide one of Brier’s customers with fake receipts in order to substantiate amounts reported on the customer’s tax return.

According to the court, Brier and his employees prepared approximately 24,000 federal income tax returns between 2003 and 2007. The court found that the Internal Revenue Service examined 350 of those returns and determined that 92 percent of them required adjustments, resulting in a government-estimated loss of more than $1.1 million in tax revenue based on the examined returns.

The court’s permanent injunction order requires Brier, Sroufe and Santiago to mail a copy of the order to all customers for whom they have prepared tax returns since Jan. 1, 2004. The order additionally requires Brier to remove or cover all exterior signs at 381 Wickenden Street in Providence indicating that tax preparation service is offered there and to post a copy of the court’s order at the front and back entrances of that address.


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