Thanh Viet Jeremy Cao of Rancho Santa Margarita, Calif. Sentenced in Las Vegas for Filing False Liens Against Federal Employees

Source- http://www.blogger.com/post-create.g?blogID=969208024914575125

WASHINGTON – Thanh Viet Jeremy Cao of Rancho Santa Margarita, Calif., was sentenced today in Las Vegas before Judge Kent J. Dawson to 41 months in prison for six counts of filing false liens against employees and officers of the federal government, the Justice Department, the Internal Revenue Service (IRS) and the Office of the Treasury Inspector General for Tax Administration (TIGTA) announced.

According to the documents filed in the case, Cao was named defendant in a civil fraud action brought by the Securities and Exchange Commission (SEC) related to an investment scheme. He was also identified as the owner of an asset seized by the U.S. Secret Service (USSS) related to this fraud. Cao was additionally under investigation by the U.S. Attorney’s Office for the Southern District of California and the USSS for criminal offenses arising from the investment scheme. Additionally, he was under investigation by IRS-Criminal Investigation for tax returns he prepared for himself and others that claimed large refunds based upon fictitious tax withholdings.

In response to these proceedings and investigations, Cao filed 22 false liens in the public records of the state of Nevada and Clark County, Nevada, against SEC attorneys, U.S. District Court Judges, U.S. District Court Magistrate Judges, the U.S. Attorney for the Southern District of California, Assistant U.S. Attorneys, USSS special agents and special agents of the IRS. Each lien alleged that the lien victims were “debtors” of Cao for hundreds of millions of dollars. According to the documents filed in the case, Cao admitted that all 22 liens were false and agreed that the liens should be expunged from the public record.

In August 2010, through the joint efforts of the U.S. Attorney’s Office and the Justice Department’s Tax Division, Cao and his business, Phoenix Financial Management Group, were enjoined from preparing tax returns.

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Timothy J. Roth Pleads Guilty in $16 Million Mail Fraud, Money Laundering Scheme

Source- http://www.fbi.gov/springfield/press-releases/2011/former-investment-adviser-pleads-guilty-in-16-million-mail-fraud-money-laundering-scheme

PEORIA, IL—A former Urbana, Ill., investment adviser, Timothy J. Roth, 56, currently of Stonington, Ill., appeared this morning in federal court in Peoria, where he waived indictment and pled guilty to an information charging him with engaging in a fraud scheme that resulted in victim losses of approximately $16 million. During today’s hearing, before Senior U.S. District Judge Michael M. Mihm, Roth entered guilty pleas to one count each of mail fraud and money laundering. Roth admitted that from May 2004 through March 2011, he defrauded 11 victims, including companies and individual victims, of approximately $16 million.

According to court documents and statements during today’s hearing, Roth admitted that from August 2006 to March 2011, he fraudulently transferred, liquidated, and removed mutual fund shares from clients’ accounts for his own personal and business use. Since June 2002, Roth had worked as a federally registered investment adviser for a capital management company in Champaign, Ill., and had also formed and operated several personal consulting companies. These companies provided software, and tracking and management programs various outside third party administrators for mutual fund option plans.

Over the years, clients developed a level of trust in Roth and, according to court documents, the level of authorizations extended to Roth increased. For example, standing client authorizations allowed clients to verbally authorize Roth to move funds, thereby removing the need for, and the inconvenience of, a written authorization to move funds.

The investigation, by the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations Division; the U.S. Postal Inspection Service; the Securities Department of the Illinois Secretary of State; and, the Champaign Police Department, began with a telephone inquiry by an investment advisory company to the Champaign Police Department in March 2011.

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Federal Court Bars Tracy Bonds From Preparing Improper Tax Returns

Source- http://www.justice.gov/tax/txdv111404.htm

WASHINGTON – A federal court in New Orleans has permanently barred Tracy Bonds from preparing federal tax returns that willfully or recklessly understate her customers’ tax liabilities, the Justice Department announced today. The civil injunction order, to which Bonds agreed without admitting the government’s allegations, was signed by Judge Eldon E. Fallon of the U.S. District Court for the Eastern District of Louisiana.

The government complaint in the case alleged that Bonds, of Tickfaw, La., whose business is called Tracy’s Tax Service, prepared federal income tax returns that understated her customers’ tax liabilities by improperly claiming the earned income tax credit (EITC). The injunction order requires that Bonds obtain information from her customers to verify that they are eligible for the EITC. Under the order, Bonds must also complete six hours of tax preparation education and must post the injunction order in her place of business for two years so that customers will be aware of the requirements imposed on her.

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Veronica Sharon Cunningham Arrested for Filing False Tax Return, and Use of Fraudulently Obtained Social Security Number

Source- http://www.fbi.gov/richmond/press-releases/2011/richmond-woman-arrested-for-health-care-fraud-filing-false-tax-return-and-use-of-fraudulently-obtained-social-security-number

RICHMOND, VA—Veronica Sharon Cunningham, 48, of Richmond, Va., was arrested today on an indictment charging her with health care fraud in connection with her operation of Community Neurological Services (CNS), a Richmond business that administered Intravenous Immune Globulin (IVIG) to patients suffering from immune deficiency disorders.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement, along with Michael F.A. Morehart, Special Agent in Charge of the Federal Bureau of Investigation’s Richmond Division; Jeannine A. Hammett, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation; Nick DiGiulio, Special Agent in Charge, United States Department of Health and Human Services Office of the Inspector General, Office of Investigations; and Michael McGill, Special Agent in Charge, Social Security Administration-Office of Inspector General.

A federal grand jury in Richmond indicted Cunningham on October 4, 2011 for 30 counts of health care fraud, eight counts of making false statements in health care matters, a single count of failing to file a tax return for the year 2006, a single count of filing a false tax return for the year 2005, and a single count using a fraudulently obtained Social Security number in interviews with federal agents regarding this matter. Cunningham faces a maximum penalty of 10 years on each of the health care fraud counts, a maximum penalty of five years on each of the health care false statement counts, a maximum penalty of 12 months on the failure to file tax return count, a maximum penalty of three years on the false tax return count, and a maximum of five years on the Social Security number count.

The indictment alleges that Cunningham regularly and systematically billed insurance companies and the Medicare and Medicaid programs for IVIG not actually administered. She also allegedly failed to a file tax return for the year 2006, falsely reported the gross income of CNS in her 2005 tax return, and used a fraudulently obtained Social Security number in an interview with agents during the investigation.

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Mary Ayers-Zander a Former Tax Examiner Pleads Guilty in Scam Involving More Than $400,000 in Refunds

Source- http://www.fbi.gov/washingtondc/press-releases/2011/former-district-of-columbia-government-tax-examiner-pleads-guilty-in-scam-involving-more-than-400-000-in-refunds

WASHINGTON—Mary Ayers-Zander, 47, a former tax examiner for the District of Columbia Office of Tax and Revenue (OTR), pled guilty today to a federal charge of wire fraud stemming from a scheme involving more than $400,000 in fraudulent refunds.

The guilty plea, in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Ronald C. Machen Jr., James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, Charles J. Willoughby, Inspector General for the District of Columbia, and Natwar M. Gandhi, Chief Financial Officer for the District of Columbia.

Ayers-Zander, of College Park, Md., pled guilty before the Honorable Richard W. Roberts. She is to be sentenced February 2, 2012. Under federal sentencing guidelines, Ayers-Zander faces a likely sentence of 33 months and potentially up to 63 months in prison. As part of the plea agreement, Ayers-Zander also will be subjected to forfeiture of the proceeds of her crimes and required to pay restitution of more than $410,000 to the District government.

According to the government’s evidence, Ayers-Zander used her position to issue fraudulent tax refunds that went into the bank accounts of herself and others. Her activities came under scrutiny as a result of enhanced control techniques by the Office of the Chief Financial Officer’s Office of Tax and Revenue to detect tax fraud and criminal activity. An audit uncovered abnormalities in the amount of tax credits Ayers-Zander was issuing. The findings were shared with the Chief Financial Officer’s Office of Integrity and Oversight. The Office of Integrity and Oversight reported the matter to the FBI’s Washington Field Office and the Inspector General’s Office for the District of Columbia.

A joint investigation was conducted. Ayers-Zander was placed on administrative leave and her employment was subsequently terminated in June 2011 by the Office of Tax and Revenue.

“This tax examiner was supposed to be protecting the public’s tax dollars, not squandering them on herself and her friends,” said U.S. Attorney Machen. “Today’s guilty plea demonstrates how vigilant we must be to detect abuses of the public trust in government agencies and how committed we are to prosecuting those who seek to enrich themselves at taxpayer expense.”

“Through a scheme devised by Ms. Ayers-Zander, she lined her own pockets with D.C. taxpayer money,” said Assistant Director McJunkin.“This is another example of the FBI’s investigations which target financial corruption and hold accountable those who violate the public’s trust. Anyone with information about any type of corruption should contact the FBI.”

“The role the D.C. Office of the Inspector General played in this matter demonstrates how local and federal authorities can work together in combating fraud, waste and abuse for the benefit of District residents,” said Inspector General Willoughby.

“We are pleased that the internal controls we established in recent years, and the vigilance of the Office of Tax and Revenue staff, detected this breach,” said Chief Financial Officer Gandhi. “Once we brought this matter to the attention of federal law enforcement, we worked closely with them to bring it to a conclusion. We expect that Ms. Ayers-Zander will be prosecuted to the fullest extent of the law.”

According to a statement of offense, signed by the defendant, Ayers-Zander was hired by OTR in August 2001 as a tax examining assistant. She was promoted to the position of tax examining technician in June 2007. Her duties included discussing tax situations with taxpayers, researching and analyzing current and historical tax cases, interpreting and applying guidelines and policies of the District of Columbia code, and making adjustments to existing tax filings.

As a tax examining technician, Ayers-Zander had the ability to access a taxpayer’s account to make adjustments, including issuing refunds without contacting the taxpayer. If the amount was below $10,000, she could do this without supervisory approval. In addition, she could make electronic payments by entering a financial institution’s routing information and account number.

On 48 occasions, from February 2007 through January 2011, Ayers-Zander accessed taxpayer accounts of four individuals and credited them with fraudulent withholding credit adjustments. This caused a total of $365,281 in electronic fund transfers to be sent from OTR’s bank account to two personal accounts that Ayers-Zander maintained.

In addition to those payments, Ayers-Zander accessed the accounts of five other individuals 10 times, likewise crediting them with fraudulent withholding credits. This caused a total of $46,175 in fraudulent refunds to be issued directly to those individuals. Ayers-Zander also eliminated a $1,147 tax liability for one of these individuals.

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Juan Carlos Hernandez Pleads Guilty in $3.5 Million Mortgage Fraud Scheme

Source- http://www.fbi.gov/boston/press-releases/2011/former-loan-officer-pleads-guilty-in-3.5-million-mortgage-fraud-scheme

PROVIDENCE, RI—Juan Carlos Hernandez, 42, of West Warwick, R.I., a former loan officer with National City Mortgage Company, pleaded guilty today in U.S. District Court in Providence to his role in a “straw-borrowing” scheme that netted more than $3.5 million in fraudulently obtained mortgages on 13 properties in five Rhode Island communities. All of the properties were eventually foreclosed upon by the banks holding the mortgages.

United States Attorney Peter F. Neronha announced Hernandez’s guilty plea to seven counts of bank fraud, four counts of wire fraud, and two counts of conspiracy. No plea agreement was filed in this case.

Hernandez was named along with two others in a 13-count federal grand jury indictment returned on May 24, 2011. Miguel Valerio, 52, of Providence, R.I., a former loan processor with National City Mortgage Company; and James D. Levitt, 65, of Pawtucket, R.I., a former real estate attorney, are awaiting trial.

In addition, Levitt is awaiting trial on a separate eight count indictment alleging three counts of bank fraud, three counts of wire fraud, and two counts of tax fraud in connection with mortgage transactions in Providence separate from the conspiracies outlined in the indictment charging Levitt, Juan Carlos Hernandez, and Miguel Valerio.

At today’s court hearing, Hernandez admitted that he conspired with Miguel Valerio to recruit and pay “straw-purchasers” to purchase properties in Cranston, Central Falls, Coventry, Pawtucket, and Providence that the buyers would not normally qualify to purchase. He admitted that his intent was to take control of the properties, collect rent, and sell them within a short period of time, dividing the profits. The “straw-borrowers,” were paid various fees and were regularly advised that they would not be responsible for the mortgages for which they were applying.

Hernandez also admitted that he, Valerio and Levitt conspired to obtain “straw-purchasers” to apply for and obtain mortgages on four properties in which all three had a financial interest.

Hernandez is scheduled to be sentenced on January 20, 2012. Bank fraud is punishable by a maximum sentence of 30 years’ imprisonment and a $1,000,000 fine. Wire fraud is punishable by a sentence of up to five years’ imprisonment and a $250,000 fine. Conspiracy is punishable by up to five years’ imprisonment and a $250,000 fine.

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Justice Department Sues Rodney Chestnut and Nafeesah Hines to Block Alleged Tax-Fraud Scheme

Source- http://www.justice.gov/opa/pr/2011/October/11-tax-1391.html

WASHINGTON - The United States has sued Rodney Chestnut and Nafeesah Hines to bar them from promoting an alleged tax fraud scheme, the Justice Department announced today. According to the civil injunction complaint, the scheme is based on a frivolous “redemption” theory, which promoters falsely claim allows taxpayers to obtain funds from supposed secret U.S. Treasury accounts. Scheme participants allegedly use Internal Revenue Service (IRS) forms, including Forms 1099-OID and 1099-A, to report large amounts of fictitious income tax withholding, in order to claim large tax refunds.

According to the complaint, Chestnut, of Middle Island, N.Y., is a former corrections captain who promotes the scheme and recruits participants, including some of his former co-workers at the New York City Department of Corrections. He allegedly prepares tax returns for his customers that fraudulently claim huge tax refunds based on the redemption theory.

The complaint also states that Hines, of Jamaica, N.Y., is an employee of the U.S. Food and Drug Administration who prepares or files false forms with the IRS, both for Chestnut’s customers as well as for others. According to the complaint, in 2009 and 2010 Hines prepared or filed more than 3,000 fraudulent forms that falsely reported over $54 million of purportedly withheld income taxes.

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Federal Court Bars Luvander Hollaway From Preparing Federal Tax Returns

Source- http://www.justice.gov/tax/txdv111368.htm

WASHINGTON - A federal court in New Jersey has permanently barred Luvander Hollaway from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Hollaway consented, was signed by Judge Stanley R. Chesler of the U.S. District Court for the District of New Jersey.

The government complaint in the case alleged that Hollaway, a resident of Newark, N.J., repeatedly failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on their customers’ returns. According to the complaint, Hollaway also allegedly falsified reported income and listed fake dependents on his customers’ returns in order to claim the maximum EITC for them.

According to the complaint, the Internal Revenue Service (IRS) assessed penalties against Hollaway in 2006 for failing to comply with due-diligence requirements, and a follow-up IRS investigation in 2011 revealed continuing failures and fraudulent claims.

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Veronica Dale Pleads Guilty to Two Tax Fraud and Identity Theft Conspiracies

Source- http://www.justice.gov/opa/pr/2011/October/11-tax-1366.html

WASHINGTON – Veronica Dale, a resident of Montgomery, Ala., pleaded guilty today to two tax fraud and identity theft conspiracies, the Justice Department and the Internal Revenue Service (IRS) announced. In addition to pleading guilty to two counts of conspiracy to defraud the government with respect to claims, Dale pleaded guilty to two counts of filing false, fictitious or fraudulent claims with the United States; two counts of theft of government money, property or records; one count of wire fraud; and one count of aggravated identity theft.

Along with four other defendants, Dale was indicted by a federal grand jury sitting in Montgomery on Dec. 14, 2010, on a variety of charges stemming from a large-scale tax fraud and identity theft conspiracy based in that city. According to the indictment, plea agreement and other court documents, the conspirators were part of a scheme that spanned from 2009 through 2010 and involved fraudulently obtaining tax refunds by filing false tax returns using stolen identities.

In her plea agreement, Dale admitted that she filed more than 500 fraudulent returns that sought at least $2.5 million in refunds. Dale also admitted that the returns were filed using the names of Medicaid beneficiaries, whose personal information she had obtained earlier when employed by a company that serviced Medicaid programs. According to court documents, Dale directed the refunds claimed by the fraudulent returns to an array of different bank accounts she and various co-conspirators controlled. All four co-defendants charged in the indictment - Alchico Grant, Laquanta Grant, Leroy Howard and Isaac Dailey - have already pleaded guilty, as have two other co-conspirators, Wendy Delbridge and Betty Washington, who pleaded guilty to criminal informations.

Veronica Dale and others were also charged in a separate superseding indictment by a federal grand jury in the Middle District of Alabama unsealed on Sept. 7, 2011, on a variety of counts stemming from another identity theft and tax fraud scheme. According to the indictment, plea agreement and other court documents, in 2011, Dale and others used stolen identities to file false tax returns claiming fraudulent refunds. In her plea agreement, Dale admitted that this scheme involved a fraud loss of between $400,000 and $1 million and that she provided the lists of Medicaid recipients she had obtained to a co-conspirator to use in the conspiracy. All of the co-defendants in this indictment – Alchico Grant, Melinda Clayton and Stephanie Adams, have also pleaded guilty, included most recently Adams, who pleaded guilty on Oct. 13, 2011.

Stephanie Adams pleaded guilty to one count of conspiring to defraud the United States with respect to claims. In her plea agreement, Adams admitted that between January and April 2011 she conspired with others to defraud the United States by filing false tax returns using stolen identities. Adams further admitted that she provided a co-conspirator with two bank accounts to receive the false refunds; almost $140,000 in false refunds were directed by Adams’s co-conspirators to the two bank accounts. When refunds were deposited, Adams retained a portion of the funds and distributed the rest of the money to her co-conspirators.

Sentencing has not yet been scheduled for either Dale or Adams. Dale faces a minimum of two years in prison, a maximum of 62 years in prison, three years of supervised release, restitution and a maximum fine of $1.75 million, or twice the loss caused by the offense. Adams faces a maximum of 10 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense.

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Jerald Bradford Pleads Guilty to Evading Over $587,000 in Income Tax in Connection with the Sale of Stolen Merchandis

Source- http://www.fbi.gov/baltimore/press-releases/2011/operator-of-pawn-shop-case-pleads-guilty-to-evading-over-587-000-in-income-tax-in-connection-with-the-sale-of-stolen-merchandise?utm_campaign=email-Immediate&utm_medium=email&utm_source=baltimore-press-releases&utm_content=37869

BALTIMORE—Jerald Bradford, age 47, of Glen Burnie, Maryland, pleaded guilty today to willfully attempting to evade income tax of more than $587,000 on income earned from the sale of stolen merchandise through Fast Money, the pawn shop he operated.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge Daniel S. Cortez of the U.S. Postal Inspection Service - Washington Division; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Baltimore Police Commissioner Frederick H. Bealefeld III; and Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service - Criminal Investigation.

“No matter what the source, all income is taxable,” said IRS Criminal Investigation Special Agent in Charge Jeannine A. Hammett. “The prosecution of individuals who willfully take from others what is not theirs, will get the full attention of the IRS Criminal Investigation Division.”

According to his plea agreement, from 2007 to March 2010, Bradford and others, including his brother Scott Bradford, operated Fast Money, a pawn shop located at 3529 S. Hanover Street in Brooklyn, Maryland. Bradford admitted that he and others were involved in the purchase and sale of mass quantities of stolen over-the-counter medications, health and beauty aid products, gift cards, DVDs, tools, and other merchandise. Bradford and others purchased large amounts of stolen items from shoplifters, also known as “boosters.” The boosters would steal products from Target, Safeway, Wal-Mart, Kohl’s, and other retailers in Maryland and other states. Several witnesses took stolen merchandise, often with retail security labels and merchandise tags still on the products, directly to Jerald Bradford and others at Fast Money. Jerald Bradford and others removed security labels from the stolen medications, tools, and other items, then sold the stolen items over the Internet using an eBay account. At one point, eBay closed Jerald Bradford’s account for non-payment. But Jerald Bradford used other people’s eBay accounts, so that the scheme could continue. Bradford made additional money with eBay and PayPal websites using nominee names and bank accounts, after eBay closed their account.

On March 25, 2010, agents from the United States Postal Inspection Service, Baltimore County Police Department, and the Federal Bureau of Investigation executed search warrants at Fast Money and the pawn and buy/sell shops in this case. Agents recovered in total well over $1 million in stolen merchandise, approximately $1 million in bank accounts, and over $140,000 in cash from these shops.

Jerald Bradford and others sold at least $3,355,433 in stolen items from 2005 through 2009 and his gross income during that time was at least $2,348,803. None of this income was reported on his federal income tax return, since he failed to file any personal income tax returns during this time.

In order to conceal the income from the IRS and evade the income tax due, Jerald Bradford opened a PayPal account and a bank account in another individual’s name, without that person’s knowledge, and used these accounts to transact business on behalf of Fast Money, thereby concealing the true ownership of the income earned. In addition, Bradford failed to deposit the majority of income earned from the operation of Fast Money into the business bank account; used PayPal debit cards to withdraw money from the PayPal account which would have normally been deposited into the business account; purchased, or caused to be purchased, at least 620 United States Postal Service money orders, totaling approximately $1.6 million, using a PayPal debit card linked to the PayPal account opened in the name of another individual. Operating in this manner allowed Jerald Bradford to avoid depositing this income into the business bank account, which helped him to avoid reporting that income to the IRS.

Jerald Bradford admitted that the total tax loss from his failure to file tax returns for tax years 2005 through 2009 was at least $587,200.

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Collette Snyder Pleads Guilty to Filing False Tax Returns After Embezzling More Than $382,000

Source- http://www.fbi.gov/baltimore/press-releases/2011/former-towson-title-company-employee-pleads-guilty-to-filing-false-tax-returns-after-embezzling-more-than-382-000?utm_campaign=email-Immediate&utm_medium=email&utm_source=baltimore-press-releases&utm_content=37899

BALTIMORE—Collette Snyder, age 42, of Timonium, Maryland, pleaded guilty today to filing false tax returns in 2007 and 2008, after she did not claim over $382,000 she embezzled from her employer, Maple Leaf Title.

The guilty plea 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; Special Agent in Charge Barbara Golden of the United States Secret Service - Baltimore Field Office; and Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service - Criminal Investigation, Washington D.C. Field Office.

“Mortgage fraud adds to the underground economy that erodes the integrity of our tax system and threatens the financial health of our communities. IRS Criminal Investigation is committed to ‘following the money trail’ to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice,” said IRS - Criminal Investigation Special Agent in Charge Jeannine A. Hammett.

According to her plea, beginning in 2005 Snyder worked at Maple Leaf Title (MLT), a real estate title agency located in Towson, Maryland, processing the recording of deeds and other post-settlement requirements at courthouses throughout Maryland. In order to accomplish her duties, Snyder was granted signature authority over MLT’s operating, settlement, and recording accounts, among others. Beginning in 2007, Snyder began embezzling money from MLT accounts by depositing MLT checks into her personal bank account. She made checks payable to her husband, without his knowledge, then forged her husband’s signature and deposited the checks into an account she controlled. She also made checks out directly to herself and deposited them. In the memo section of some of the checks Snyder embezzled from MLT accounts, she would falsely claim the checks were for “payroll,” even though she had already received her salary from MLT. Snyder embezzled approximately $149,560 in 2007, and $232,968 in 2008, using the funds to purchase jewelry, antique furniture, clothing, a BMW, home improvements, travel, and tuition payments to a private school, among other things.

Snyder did not report this income on either her 2007 or 2008 tax returns, resulting in a tax loss of $115,529.37.

Because of the embezzlement from MLT’s escrow account by Snyder and by Anthony Weis, MLT’s president, MLT did not have sufficient funds to pay off existing mortgage loan notes on properties for which MLT had performed settlement services. As a result, Weis directed MLT employees in 13 real estate closings conducted in 2009 to withhold the payoff checks from institutions that held the existing mortgage loan notes on the properties. Because the existing mortgages had not been paid off, clear title could not be passed to the new lender and borrower. An insurance company that had issued title insurance policies to the borrowers guaranteeing clear title ultimately paid out $3.9 million to financial institutions that held mortgage notes.

Weis pleaded guilty to wire fraud, was sentenced to 78 months in prison and was ordered to pay restitution of $4,007,705, which includes the loss to the title insurance company and the expenses of the individual victims.

Snyder faces a maximum sentence of three years in prison and a fine of $250,000. U.S. District Judge Catherine C. Blake has scheduled his sentencing for February 3, 2012 at 11:00 am.

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Judy Grace Seller Allegedly Filed More Than $6 Billion in False Refund Claims

Source- http://www.justice.gov/opa/pr/2011/October/11-tax-1353.html

WASHINGTON – The United States has sued Judy Grace Sellers to bar her from promoting an alleged scheme involving fraudulent tax refund claims, the Justice Department announced today. The government’s amended complaint for a civil injunction alleges that Sellers, of Chipley, Fla., helps her customers create false documents to support a fraudulent “Secured Party Creditor” argument. According to the lawsuit, this frivolous argument maintains that the federal government has created a “strawman” for each U.S. citizen and an account exists at the Treasury Department for the strawman. Sellers allegedly assists her customers in preparing documents to obtain funds from their supposed Treasury accounts.

According to the amended complaint, this scheme, also called the “commercial redemption” scheme, involves Sellers’s customers filing fraudulent tax returns with false Internal Revenue Service (IRS) Forms 1099-OID. The government alleges that the forms falsely claim huge amounts of tax withholding and that the returns claim large tax refunds based on the false withholding amounts.

Sellers’s customers have allegedly filed federal income tax returns claiming false refunds exceeding $6 billion. The amended complaint states that, in 2008, Sellers referred some customers to Teresa Marty for assistance with the Form 1099-OID submission process. The complaint alleges that, in 2009, the U.S. District Court for the Eastern District of Californiabarred Marty from preparing federal tax returns for others as a result of her participation in the Form 1099-OID scheme.

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Elmo Antonio George and Nasheba Necia Hunte Charged with Conspiracy and Filing False Tax Returns in a Corporate Scheme Based in South Florida

Source- http://www.justice.gov/opa/pr/2011/October/11-tax-1359.html

WASHINGTON – Elmo Antonio George and Nasheba Necia Hunte were indicted today by a federal grand jury in the Southern District of Florida on charges of conspiring to defraud the Internal Revenue Service (IRS) and with filing false tax returns for 2005 and 2006 which claimed false refunds totaling more than $1.2 million, the Justice Department and the IRS announced.

According to the indictment, between January 2003 and at least October 2008, George and Hunte conspired to defraud the IRS by, among other acts, incorporating and using Winco Holdings Inc. Winco had no employees and paid no money to employees for wages, and prepared and filed false individual, employment and corporate tax returns, as well as false promissory notes with the IRS. According to the indictment, George and Hunte also transferred ownership of property to each other and to corporate entities to conceal the proceeds of their fraud.

If convicted, George and Hunte each face a maximum of five years in prison for the conspiracy charge and a maximum of three years in prison for each false tax return charge, for a total of 11 years. Each defendant also faces a maximum of $750,000 in fines.

An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

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Dennis Glick of Huntington Valley, Penn.,Convicted of Tax Crimes

Source- http://www.justice.gov/opa/pr/2011/October/11-tax-1343.html

WASHINGTON – Dennis Glick of Huntington Valley, Penn., was found guilty today by a federal jury in Philadelphia of corruptly endeavoring to obstruct and impede the Internal Revenue laws and willfully preparing false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. District Judge Petrese Tucker presided over the case.

According to testimony and evidence presented at trial, Glick, a certified public accountant, prepared materially false tax returns for his client Jonathon Felix, previously indicted for the years 1999 through 2002. The evidence showed that Glick did this in 2004, despite knowing that Felix was the owner of an S corporation called United Professional Plans Inc. (UPPI) and that Felix had removed such significant funds from UPPI during these years that he caused UPPI to lose its clients and close down.

Glick falsified Felix’s tax returns by including fabricated management fee figures on these returns to get to a “break even point”—i.e., to yield a small refund in each year. In addition, the testimony and evidence proved that when federal law enforcement agents asked Glick about these management fees, he lied about what he did on two occasions. Glick’s criminal conduct caused a tax loss of over $400,000 to the IRS.

Glick faces a maximum punishment of up to 15 years in prison and a $1.25 million fine. Judge Tucker scheduled sentencing for Jan. 9, 2012.

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Jeffrey Lynn Walker Pleads Guilty to $2.2 Million Fraud Scheme and Tax Evasion

Source- http://www.fbi.gov/jackson/press-releases/2011/former-mississippi-resident-pleads-guilty-to-2.2-million-fraud-scheme-and-tax-evasion

JACKSON, MS—Jeffrey Lynn Walker, 47, of Franklin, TN, pled guilty in U.S. District Court today to wire fraud and tax evasion, U.S. Attorney John Dowdy, FBI Special Agent in Charge Daniel McMullen, and Special Agent in Charge James C. Lee, of IRS Criminal Investigation New Orleans Field Office announced.

Walker, a former NFL football player who previously resided in Madison County, Mississippi, was indicted on October 20, 2010 by a federal grand jury for his involvement in a scheme to defraud and obtain approximately $2.2 million from investors located in Mississippi, Tennessee, Florida, and Arizona by making false representations relating to a resort project in China being developed by Charter Resources International. To further the scheme, Walker executed joint venture agreements between companies, in which he held an interest, and investors to share in profits to be generated from the sale of estate homes, town homes and patio homes in the China resort. Walker caused investors to make interstate bank wire transfers and, as part of the scheme, he then deposited investor funds into Sterling Group Holdings, Inc.’s bank account in Las Vegas, Nevada. Walker would then wire transfer portions of those funds from Sterling Group Holdings, Inc.’s bank account in Las Vegas, Nevada to his personal bank account in Madison, Mississippi. Walker then converted portions of those funds to his own personal use and benefit, purchasing 4-wheelers, a luxury conversion van and a Hummer H-2 vehicle. Walker also pled guilty to making false declarations to the Internal Revenue Service, through which he failed to report all of his taxable income for the year 2006.

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Emma Bell a Former Fundraiser for Kwame Kilpatrick Pleads Guilty to Tax Offenses

Source- http://www.fbi.gov/detroit/press-releases/2011/former-fundraiser-for-kwame-kilpatrick-pleads-guilty-to-tax-offenses

Emma Bell, 66, of Detroit, a former fundraiser for Kwame Kilpatrick, pleaded guilty today before United States District Judge Nancy G. Edmunds to two counts of tax evasion, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Erick Martinez, Special Agent in Charge of the Internal Revenue Service, Criminal Investigations, and Andrew G. Arena, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.

According to Bell’s plea agreement, between 2003 and 2008, Bell worked as a fundraiser for nonprofit entities that included Kilpatrick for Mayor, the Kilpatrick Inaugural Committee, and the Kilpatrick Civic Fund. Bell was paid a percentage of the funds she raised for these entities, as determined by former Detroit Mayor Kwame Kilpatrick—usually a commission of between 10 percent and 15 percent. Bell received payments from the Kilpatrick-related entities totaling over $900,000, none of which she reported as income to the Internal Revenue Service.

At the direction of Kilpatrick, Bell split her commission checks with him, giving him cash whenever she received a check of $5,000 or more. When Kilpatrick’s portion of the commission checks exceeded $10,000, Bell would make multiple deliveries of cash to Kilpatrick on different occasions so that she would not cause her bank to create a currency transaction report by obtaining over $10,000 in cash at one time. Bell also failed to report gambling winnings, interest, and other income during this time period.

“This is one more step forward in our prosecution of public corruption in the City of Detroit,” McQuade said. “We continue to make progress in bringing public officials to justice.”

“This plea shows that Emma Bell recognizes the seriousness of concealing the income she received from the Kilpatrick-related entities. There are severe consequences when one hides income from the federal government to evade taxes,” said Erick Martinez, Special Agent in Charge of IRS-Criminal Investigation.

FBI Special Agent in Charge Arena said: “The FBI will continue to investigate and expose the public officials and their associates who participate in schemes involving blatant greed.”

Emma Bell is released on bond pending her sentencing. She was referred to the United States Probation Department for a presentence investigation. Bell faces a statutory maximum sentence of up to ten years in prison or a fine of $500,000, or both.

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Commodity Pool Operator Victor E. Cilli Admits to Fraud Schemes and Tax Evasion in New Jersey

Source- http://www.fbi.gov/newark/press-releases/2011/commodity-pool-operator-admits-to-fraud-schemes-and-tax-evasion-in-new-jersey

TRENTON, NJ—A commodity pool operator and day trader based in Hackensack, N.J., admitted today to directing two schemes to defraud individual investors and a financial institution of approximately $2 million and to evading more than $150,000 in tax payments, U.S. Attorney for the District of New Jersey Paul J. Fishman announced.

Victor E. Cilli, 46, pleaded guilty to an information charging him with one count of securities fraud, one count of conspiracy to commit bank fraud, and one count of tax evasion. Cilli entered his guilty plea before U.S. District Judge Garrett E. Brown in Trenton, N.J., federal court.

According to documents filed in this case and statements made during Cilli’s guilty plea proceeding:

Beginning in August 2006, Cilli was the sole owner and president of Progressive Investment Funds LLC (PIF), a commodity pool operator (CPO) engaged in an investment trust that solicited funds for the purpose of trading commodity futures. PIF was registered with the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and was the CPO of Progressive Managed Futures Fund LP (PMFF), a commodity pool operated for the purpose of trading commodity futures. Cilli had sole trading authority over PMFF, which remained open until approximately February 2009.

Beginning as early as January 2007 and through September 2007, Cilli engaged in a Ponzi scheme to defraud at least four commodity pool participants of approximately $506,000. Though Cilli returned some funds to the investors, the payments were not from actual trading profits but from funds of existing pool participants. Cilli made false and misleading statements to the pool participants claiming he had made money for them when, in fact, most of his trading resulted in losses. Of the $506,000 invested, Cilli traded approximately $263,000, losing approximately $200,168. Cilli never disclosed to the pool participants that he had traded less than half of their money or that most of his trading had resulted in significant losses.

Cilli also misappropriated thousands of dollars in pool funds for personal expenses—including hair salon visits, skin care treatments, payments on his Harley Davidson motorcycle, and other personal entertainment, meals, and travel expenses.

In an unrelated scheme, from 2002 through September 2006, Cilli and approximately 16 others conspired to defraud KeyBank, a financial institution based in Cleveland of more than $1.5 million in student loans by falsely representing to KeyBank that they would use the funds to attend Tab Express International Inc., a pilot and flight crew training school in DeLand, Fla., and use the proceeds of student loans for educational expenses at Tab.

Based upon prior agreements between Cilli and his co-conspirators, they never intended to enroll at Tab, nor repay principal or interest on the student loans to KeyBank. After KeyBank disbursed the loan proceeds to the school, approximately $600,000 of the loan proceeds were deposited into bank accounts solely owned and operated by Cilli. Cilli then made kickback payments totaling approximately $130,000 to his co-conspirators for signing up for the loans. Tab retained approximately $900,000 of the total loan proceeds. KeyBank was never repaid any of the principal or accrued interest on the loans.

To conceal his fraudulent conduct, Cilli maintained bank accounts in the names of Northeast Flight Training Inc., which was not a flight training school, and United Charities of America Inc., which was not a charitable organization. Both accounts were maintained by Cilli solely to perpetuate his frauds and fund his personal expenditures.

Finally, for calendar years 2003 and 2004, Cilli intentionally failed to provide the Internal Revenue Service (IRS) with any information regarding the proceeds that he received in connection with his conspiracy to commit bank fraud, in the aggregate amount of approximately $547,705, resulting in a tax loss to the United States of approximately $158,674.

The securities fraud charge carries a maximum potential penalty of 20 years in prison and a $5 million fine; the conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine; and the tax evasion charge carries a maximum potential penalty of five years in prison and a $100,000 fine. Sentencing is currently scheduled for Jan. 11, 2012.

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John E. Rogers Barred From Promoting Tax Shelters Generating $370 Million in Sham Deductions

Source- http://www.justice.gov/tax/txdv111312.htm

WASHINGTON – A federal court has permanently barred John E. Rogers and two of his companies, Sugarloaf Fund LLC and Jetstream Business Limited, from promoting tax shelters that allegedly use distressed Brazilian debt to lower customers’ reported income improperly, the Justice Department and Internal Revenue Service (IRS) announced today. Judge Samuel Der-Yeghiayan of the U.S. District Court for the Northern District of Illinois signed the civil injunction order, to which Rogers consented without admitting the allegations against him.

According to the government complaint, Rogers, a Chicago tax lawyer and former partner at Seyfarth Shaw LLP, designed and promoted three similar scams – the Distressed Asset Debt (DAD), Distressed Asset Trust (DAT) and 743(f) tax shelters – that used hundreds of millions of dollars of low-value, “distressed” debt owed to Brazilian retail companies. In all three of the schemes, according to the injunction suit, Rogers falsely told U.S. customers that the distressed Brazilian debt was highly valuable, that the Brazilian retail companies were real “partners” in Sugarloaf, that hundreds of entities Rogers formed and used in the transactions were genuine companies, and that the customers – after paying Rogers – could claim huge purported losses from the Brazilian debt. The losses were allegedly used to offset the customers’ unrelated U.S. income, with the resulting tax savings far exceeding what the customers had paid Rogers.

In fact, the complaint alleges, the debt was virtually worthless when it was purchased; the retail companies were never genuine partners but simply sold Sugarloaf the distressed debt for pennies on the dollar; the hundreds of companies that Rogers formed and controlled were sham entities that performed no business functions; and the supposed tax losses never existed.

The suit alleged that Rogers’s DAD and DAT schemes generated more than $370 million in improper tax deductions. The IRS listed the DAT and similar tax shelters as tax avoidance transactions in 2008, which required all material advisors of such schemes to disclose their activities to the IRS, obtain IRS reportable-transaction numbers for those transactions, and furnish the reportable-transaction numbers to their customers. Customers would then know they were participating in a reportable transaction and that the reportable-transaction number had to be disclosed on their next-filed tax return. Under federal tax law, customers who fail to include a reportable-transaction number with their returns as required are subject to substantial monetary penalties. Under the injunction order, Rogers, whom the complaint alleges failed to comply with the listed-transaction requirements, must now mail copies of the injunction order to all persons who engaged in any of the three transactions described in the complaint during or after 2003.

“The Justice Department is committed to exposing and shutting down fraudulent tax shelters and their promoters, and injunctions are an important tool in that effort,” said D. Patrick Mullarkey, Acting Deputy Assistant Attorney General for Civil Trial Matters at the Justice Department’s Tax Division. “At the same time,” Mullarkey noted, “taxpayers should be keenly aware that if the tax benefits from a transaction seem too good to be true, they almost always are.”

“Today’s injunction sends the clear message that the IRS aggressively pursues those who allegedly invent new ways to cheat the tax system,” said IRS Deputy Commissioner Steve Miller. “Using sham offshore losses to eliminate income and evade taxes is exactly the type of abusive scheme that we’re committed to combat.”

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