Wednesday, February 29, 2012

Former Director of Waterbury Boys and Girls Club Robert Generali, Pleads Guilty to Embezzlement, Fraud, and Tax Charges


Source-  http://www.fbi.gov/newhaven/press-releases/2012/former-director-of-waterbury-boys-and-girls-club-pleads-guilty-to-embezzlement-fraud-and-tax-charges 

David B. Fein, United States Attorney for the District of Connecticut, announced that ROBERT GENERALI, 52, of Waterbury, pleaded guilty today before United States District Judge Vanessa L. Bryant in Hartford to one count of theft from a program receiving federal funds, one count of wire fraud, and one count of subscribing a false tax return. GENERALI is the former executive director of the Boys and Girls Club of Greater Waterbury.

According to court documents and statements made in court, in his role as executive director of the Boys and Girls Club of Greater Waterbury, GENERALI had primary, day-to-day responsibilities for managing the club’s finances. From January 2007 through May 2011, GENERALI embezzled from the club by using the club’s funds to pay for unauthorized, personal expenses. As part of the scheme, GENERALI used the club’s funds to pay for personal expenses he charged to a credit card that he established in the club’s name. Also, in 2007, GENERALI established an unauthorized “off-the-books” bank account, funded with approximately $30,000 in club funds. Beginning in 2010, GENERALI drew upon those funds to pay for personal expenses. As part of the scheme, GENERALI authorized the issuance of checks to “phantom” employees, which checks were drawn from the club’s funds and that GENERALI then negotiated for his own unauthorized use.

As part of his plea, GENERALI admitted to stealing in excess of $10,000 from the club in every year from 2007 through 2010. According to statements made in court, the government estimates that, as a result of GENERALI’s theft, the club has suffered more than $470,000 in losses. GENERALI also filed federal tax returns that failed to account for the embezzled income for the 2007 through 2010 tax years. In pleading guilty to one count of subscribing a false tax return, GENERALI admitted that, in April 2009, he filed an individual income tax return on which his adjusted gross income for the year 2008 failed to include embezzled income, as well as gambling winnings from a Super Bowl betting pool. As a result of his filing of false tax returns over a four-year period, GENERALI defrauded the United States Treasury of more than $100,000.

Judge Bryant has scheduled sentencing for May 15, 2012, at which time GENERALI faces a maximum term of imprisonment of 33 years.

GENERALI has been released on a $100,000 bond since his arrest on September 13, 2011.

The Boys and Girls Club of Greater Waterbury has received federal grant monies under the American Recovery and Reinvestment Act of 2009 and a grant awarded by the Department of Justice, Office of Justice Programs.




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Tuesday, February 28, 2012

Stacey Lynne Gross Sentenced to Prison on Fraud and Tax Charges After Embezzling More Than $500,000 from Her Former Employer


Source-  http://www.fbi.gov/omaha/press-releases/2012/adel-woman-sentenced-to-prison-on-fraud-and-tax-charges-after-embezzling-more-than-500-000-from-her-former-employer 

DES MOINES, IA—Stacey Lynne Gross, age 38, of Adel, Iowa, was sentenced today by United States District Court Judge Ronald E. Longstaff to a sentence of imprisonment of 20 months on federal mail and tax fraud charges, announced United States Attorney Nicholas A. Klinefeldt. Gross was also ordered to pay $518,364.38 in restitution, and ordered to remain on three years of supervised release after her release from prison.

Gross was the office manager for Data Business Equipment, Inc., in Des Moines between late 2007 and early 2011. Her job responsibilities included writing checks from the company account to pay for business expenses. Beginning in early 2008, Gross wrote more than 190 unauthorized checks totaling more than $518,364.38 from the company account for her own personal benefit. She wrote checks to her credit card company, mortgage lender, and to pay for furniture, jewelry, and other personal expenses. Gross admitted to using the United States mails to send some of the fraudulent checks to her creditors and to failing to report the illegal income on her tax returns.

To conceal her embezzlement, Gross made false entries in the company’s books. She would enter the name of a real Data Business Equipment vendor as the “payee” on the company’s general ledgers for checks she had actually written to pay personal debts. Her fraud was discovered in early 2011, and Gross pled guilty to the charges in November 2011.




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Monday, February 27, 2012

Jamal Hadieh, also known as Jason Hacen Sentenced to Prison for Bribing District of Columbia Tax Official, Who Was Working with Authorities


Source-  http://www.fbi.gov/washingtondc/press-releases/2012/virginia-businessman-sentenced-to-prison-for-bribing-district-of-columbia-tax-official-who-was-working-with-authorities 

WASHINGTON—Jamal Hadieh, also known as Jason Hacen, was sentenced today to five months in prison, to be followed by five months of home confinement, in connection with his payment of a bribe to a District of Columbia tax auditor. Unbeknownst to Hadieh, the tax auditor was cooperating with law enforcement at the time of the bribe.

The sentencing, which took place 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, and Natwar M. Gandhi, Chief Financial Officer for the District of Columbia.

Hadieh, 51, of Chantilly, Virginia, pled guilty in December 2011 to one count of bribery of a public official. He was sentenced by the Honorable Richard W. Roberts. Upon completion of his sentence, Hadieh will be placed on one year of supervised release.

According to a statement of offense agreed to by the government and Hadieh, Hadieh was the president of Quantum Services, Inc., which had an office in McLean, Virginia. Quantum provided building maintenance services for commercial buildings and hotels to include marble restoration, commercial kitchen cleaning, and overall janitorial services. For the years 2006 through 2009, Quantum did not pay all of the taxes that the District of Columbia Office of Tax and Revenue (OTR) determined Quantum owed the District of Columbia.

A tax auditor for OTR met with Hadieh on October 27, 2009, to conduct a tax audit of Quantum. The tax auditor could not complete the audit because Hadieh did not have all of the necessary documents, and so the tax auditor and Hadieh agreed to meet again once the documents were available. At the conclusion of the meeting, Hadieh attempted to give the tax auditor an envelope containing money, which the tax auditor refused to accept. After leaving Quantum, the tax auditor reported the incident to his supervisor, and law enforcement was notified. The tax auditor agreed to cooperate with law enforcement.

Hadieh and the tax auditor met on November 17, 2009, at Quantum’s office to complete the audit. During this meeting, Hadieh offered to give the tax auditor $7,000 in order to “wrap this up, close the books, and move forward.” The tax auditor estimated that Hadieh’s tax debt might be $100,000. Hadieh offered to give the tax auditor $10,000 that day if the tax auditor would limit the tax debt to $60,000. Hadieh and the tax auditor agreed to meet again so that Hadieh could give money to the tax auditor. On November 20, 2009, Hadieh met with the tax auditor in the parking lot of a restaurant in Northeast Washington, where Hadieh gave the tax auditor an envelope containing $10,000 in United States currency.




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Sunday, February 26, 2012

Eric Logiudice Sentenced to 18 Months in Prison for Tax Evasion, Making False Statements


Source-  http://www.fbi.gov/newark/press-releases/2012/manalapan-man-sentenced-to-18-months-in-prison-for-tax-evasion-making-false-statements 

TRENTON, NJ—A Manalpan, N.J., man who admitted evading his personal taxes and sending false documents to the Department of Housing and Urban Development (HUD) in order to receive federal funding to which he was not entitled was sentenced today to 18 months in prison, U.S. Attorney Paul J. Fishman announced.

Eric Logiudice, 42, previously pleaded guilty to an Information charging him with one count of tax evasion and one count of making false statements. The false statements were made in documents submitted to obtain community redevelopment funds. The defendant entered his guilty plea before U.S. District Judge Joel A. Pisano, who imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

Logiudice admitted he evaded paying $115,711 in personal income taxes for 2006. From 2005 through 2008, he evaded $199,847 in personal income taxes by submitting false and fraudulent tax returns that failed to disclose $607,161 in income. This unreported income included at least approximately $150,000 stolen and embezzled from his former employer, NJS Metropolitan Architectural Woodworking Inc. in Union, N.J.

While working at NJS, Logiudice became aware that an individual was submitting an application to the City of Orange Township Department of Planning and Development to receive Essex County HUD’s Community Economic Revitalization Program funds for a renovation project on Lincoln Avenue. After he became the general contractor for the project, Logiudice caused another NJS employee to create fraudulent, certified weekly payroll reports for five employees who never worked on the project and then submitted them to City of Orange officials, obtaining $52,872.50 in community redevelopment funds from HUD.

In addition to the prison term, Judge Pisano sentenced Logiudice to three years of supervised release. As part of his guilty plea, Logiudice agreed to pay restitution of $199,847 to the IRS for all losses resulting from his submission of fraudulent tax returns for 2005 through 2008; $52,872.50 to HUD for his submission of fraudulent payroll records; and at least $150,000 to NJS Metropolitan Architectural Woodworking Inc.




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Saturday, February 25, 2012

Angela Palmer and Her Husband Warren Palmer Pled Guilty to Tax Crimes


Source-  http://www.justice.gov/tax/2012/txdv12239.htm 

WASHINGTON – Angela Palmer and her husband, Warren Palmer, both of Knoxville, Tenn., each pleaded guilty today to two counts of willful failure to file tax returns, the Justice Department and Internal Revenue Service (IRS) announced.

According to documents filed as part of their guilty pleas, during tax year 2005, Angela Palmer earned income as a mortgage broker and in tax years 2005 and 2006, she also earned income teaching music lessons. Warren Palmer earned income, during tax years 2004 and 2006, doing construction and other jobs. Additionally, during the years in question, the Palmers maintained funds in an offshore bank account in the name of The Liahona LLC, an entity of which they were the sole members and managers. Due to the income they received during the prosecution years, the Palmers were required to file tax returns, however, they failed to do so.

In accordance with their plea agreements, Angela Palmer has agreed to pay restitution in the amount of $58,646.85, and Warren Palmer has agreed to pay restitution in the amount of $70,887.45, to the IRS.

Sentencing is scheduled for June 14, 2012. The Palmers each face a maximum potential sentence of up to one year in jail and a maximum fine of $100,000 for each of the counts to which they pleaded guilty.

The cases were investigated by the IRS - Criminal Investigation and prosecuted by Trial Attorney Tracy Gostyla of the Justice Department’s Tax Division.




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Friday, February 24, 2012

Yooho Weon, a/k/a “Peter”, Sentenced to Over Two Years in Prison for Evading Taxes on Over $18 Million in Proceeds from Sale of Merchandise


Source-  http://www.fbi.gov/baltimore/press-releases/2012/pawn-shop-owner-sentenced-to-over-two-years-in-prison-for-evading-taxes-on-over-18-million-in-proceeds-from-sale-of-merchandise 

BALTIMORE—U.S. District Judge Benson E. Legg sentenced Yooho Weon, a/k/a “Peter,” age 40, of Centreville, Virginia, late yesterday to 30 months in prison, followed by three years of supervised release, for attempting to evade taxes owed on more than $18.4 million of income earned for the tax years 2004 through 2008. Judge Legg also ordered that Weon pay restitution of $2.4 million to the IRS.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue Service-Criminal Investigation; 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; and Chief Mark Magaw of the Prince George’s County Police Department.

“The evidence shows that Yooho “Peter” Weon generated millions of dollars in profits while evading taxes on his lucrative income,” said U.S. Attorney Rod J. Rosenstein. “The scheme was uncovered after federal investigators discovered evidence that Mr. Weon’s business bought and sold millions of dollars worth of stolen merchandise.”

“No matter what the source, all income is taxable,” said IRS Criminal Investigation Acting Special Agent in Charge Eric Hylton. “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, Weon owns Parkway Pawn Shop, Inc. and Earth 1 Computer, Inc., doing business as Bargains 101/Parkway Pawn Shop, located at 5664 Annapolis Road in Bladensburg, Maryland. Weon sold items in his pawnshop, online through his website and eBay/PayPal, and at flea markets. IRS-CI learned in 2009 that Weon failed to file federal corporate income tax returns for 2003 through 2008. Records of eBay/PayPal sales revealed that between May 31, 2000 and August 27, 2009, Weon received approximately $6,531,334.47 from online sales. This money was wired into Weon’s bank accounts. Other bank records from Weon’s companies show total gross sales from the businesses of $18,418,796.84 from 2004 to 2008, none of which was reported to the IRS.




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Wednesday, February 22, 2012

Ricky Walter Denton Sentenced for Bank Robbery That Led Authorities to Tax Fraud Case


Source-  http://www.fbi.gov/birmingham/press-releases/2012/tuscumbia-man-sentenced-for-bank-robbery-that-led-authorities-to-tax-fraud-case 

BIRMINGHAM—A federal judge today sentenced RICKY WALTER DENTON to 21 years and four months in prison for a 2009 armed bank robbery, less than a month after another federal judge sentenced the Tuscumbia man to nearly six years in prison for a federal tax fraud conspiracy in which he took identifying information of fellow prison inmates and used it to file false tax returns, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Patrick J. Maley and Colbert County Sheriff Ronnie May.

Police first discovered evidence of the tax fraud while investigating the 2009 robbery of First Southern Bank in Colbert County. A federal jury convicted Denton, 47, of the armed robbery in July. Denton pleaded guilty in August to conspiracy to defraud the Internal Revenue Service, mail fraud and conspiracy to commit mail fraud. U.S. District Judge Inge P. Johnson sentenced him in January to 70 months in prison on the fraud charges.

Today, U.S. District Judge Sharon Lovelace Blackburn sentenced Denton for the armed bank robbery. She ordered that the robbery sentence be served concurrently with the tax fraud sentence. She also ordered Denton to pay $7,458 in restitution to First Southern Bank.

“Denton is an unrepentant career criminal,” Vance said. “He has an extensive criminal history, committing crimes both inside and outside of prison, and he has shown no remorse for the fear he caused bank employees by threatening them with a gun, including the teller who he tried to take hostage. This man does not need to be on the streets,” she said.

“I want to thank the Colbert County Sheriff’s Office for helping bring this violent criminal to justice,” Maley said. “The citizens of northwest Alabama can rest easier knowing Mr. Denton will be behind bars for the next 21 years.”

Denton walked into First Southern Bank in Ford City on Dec. 17, 2009, armed with a gun and concealing his face with a ski mask, according to trial testimony. He held bank employees at gunpoint and ordered them to put money in his backpack. He then demanded a teller’s car and attempted to take the teller hostage. The bank manager prevented Denton from taking the teller hostage, but Denton took the car and left the bank in it.




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Tuesday, February 21, 2012

Sandra Johnson to Serve 20 Months in Prison and Pay Nearly $840,000 for Embezzlement and Filing a False Tax Return


Source-  http://www.fbi.gov/oklahomacity/press-releases/2012/lawton-woman-to-serve-20-months-in-prison-and-pay-nearly-840-000-for-embezzlement-and-filing-a-false-tax-return 

OKLAHOMA CITY—SANDRA JOHNSON, of Snyder, Oklahoma, was sentenced by United States District Judge Timothy D. DeGiusti to serve 20 months in prison for embezzling from a health care benefit program and signing a false personal income tax return, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

From May of 2006 until the spring of 2009, Ms. Johnson worked as the office manager for a pediatrician in Lawton. Her duties included depositing checks from insurance companies that were intended to pay for medical services. At her plea hearing, Johnson admitted she cashed many of these insurance checks during 2007 and 2008 at the drive-through at Liberty National Bank in Lawton and used the cash for personal purposes. Ms. Johnson also admitted that she failed to report the cash from these diverted insurance checks as income on her 2008 personal federal income tax return.

Johnson was charged on March 21, 2011, and pled guilty on May 2, 2011.

At the sentencing hearing today, Judge DeGiusti ordered that Johnson pay restitution in the amount of $839,559.48, which includes $616,229.48 to the pediatrician, $25,000 to an insurance company, and $198,330.00 to the IRS. In addition, Johnson was ordered to serve three years of supervised release and perform 104 hours of community service following her release from prison.




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Monday, February 20, 2012

Patricia Ann King Pleads Guilty To Tax Fraud And To A Mortgage Fraud Scheme In Two Separate Cases



FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced that Patricia Ann King, 57, of Bakersfield, pleaded guilty today to aiding and assisting the preparation of a false tax document and to three counts of mail fraud for her role in a mortgage fraud scheme.

According to her plea agreement in the tax fraud case, King willfully aided, assisted, and counseled a taxpayer in the preparation and presentation to the Internal Revenue Service of a false and fraudulent individual income tax return (Form 1040) for the year 2005. The tax return falsely claimed Schedule A and Schedule C expenses that King knew were not valid.

The tax case is the product of an extensive investigation by the IRS-Criminal Investigation. Assistant U.S. Attorney Mark E. Cullers is prosecuting that case.

According to the plea agreement in the mortgage fraud case, from approximately October 2005 to July 2006, King assisted other defendants in carrying out a scheme to defraud mortgage lenders, including WMC Mortgage Corp. and SunTrust Mortgage Inc. by submitting false documentation in support of loan applications prepared by the co-defendants. During this time period, King was a tax return preparer and owned The Tax Kings, a tax return business in Bakersfield. King prepared and provided to her co-defendants false and misleading verification letters that purported to verify loan applicants’ self-employment history and income, among other information. King received compensation payments from the co-defendants for providing the verification letters. King knew that the verification letters were to be submitted by the co-defendants to lenders in support of applications for loans for the purchase or refinance of properties and that the lenders would rely on the letters to approve the loans. King admitted that her actions caused lenders to incur losses of approximately $530,000.

As an example, in November 2005, King provided a false verification letter in support of applications by one of the co-defendants to WMC Mortgage to refinance a property in Bakersfield. In the letter, King falsely verified that she had prepared the co-defendant’s taxes for the previous five years, that the co-defendant had received self-employment income for the previous five years from “business operations,” and that such purported income supported the co-defendant’s living and personal expenditures. King also falsely claimed to be a CPA. Additionally, when WMC Mortgage subsequently contacted King in a prefunding audit, King verified the letter that she had submitted. WMC Mortgage ultimately funded loans for approximately $232,000 and $58,000 by wire transfer for the refinancing of the property. The property subsequently went into foreclosure when the co-defendant failed to make payments.
The mortgage fraud case is the product of a joint investigation by the IRS-Criminal Investigation and the Federal Bureau of Investigation, working with a Mortgage Fraud Task Force based in Fresno. The U.S. Attorney’s Office and the FBI created the Mortgage Fraud Task Force, which is composed of federal and local law enforcement, to further the prosecution of mortgage fraud cases arising out of the southern half of the Central Valley. Assistant U.S. Attorneys Kirk E. Sherriff and Henry Z. Carbajal III are prosecuting the mortgage fraud case.

King is scheduled to be sentenced by United States District Judge Anthony W. Ishii in both cases on April 23, 2012. The maximum statutory penalty for aiding and assisting the preparation of a false tax document is three years in prison, a $250,000 fine, and up to five years of supervised release. The maximum statutory penalty for each of the three counts of mail fraud is 20 years in prison, a $250,000 fine, and up to three years of supervised release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

In the mortgage fraud case, the remaining four co-defendants have pleaded not guilty. The charges as to those defendants are only allegations, and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt. Their next appearance in court will be on March 26, 2012 before U.S. Magistrate Judge Dennis L. Beck.




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Saturday, February 18, 2012

Andrew Isaac Chance Sentenced to 65 Months in Prison for Filing False Claims for Tax Refunds and for Filing a False Retaliatory Lien


Source-  http://www.justice.gov/opa/pr/2012/February/12-tax-225.html 

Andrew Isaac Chance of Clinton, Md., was sentenced Wednesday to 65 months in prison for filing false claims for tax refunds and for filing a false retaliatory lien against a federal prosecutor. The sentencing was announced today by the Justice Department, Internal Revenue Service Criminal Investigation (IRS-CI) and Treasury Inspector General for Tax Administration (TIGTA).

Chance was convicted by a federal jury in Greenbelt, Md., on Nov. 18, 2011. At the time the defendant filed the false retaliatory lien and false claims for tax refunds, he was on federal supervised release for a 2007 tax conviction.

According to evidence presented at trial, Chance was convicted and sentenced to 27 months in prison in 2007, for filing a false claim for an income tax refund for the tax year 2005. Shortly after he was released from prison for that crime, he filed a UCC Financing Statement with the Maryland Department of Assessments and Taxation, falsely claiming that the federal prosecutor, who prosecuted the 2007 case, owed him $1.313 billion. The evidence showed that Chance filed a similar lien against a Maryland state prosecutor for her role in prosecuting him for crimes relating to his attempts to cash the fraudulently obtained U.S. Treasury check for the 2005 tax return. According to the evidence, when arrested in December 2010, Chance admitted to a federal agent that he had filed the liens because the prosecutors had “done him wrong.”

The evidence at trial established that a year after filing the false lien, Chance filed three false claims for tax refunds for tax years 2007, 2008 and 2009, seeking a total of $900,000. These three false tax returns were almost identical to the 2005 return for which he was previously convicted. On the 2005 tax return, Chance claimed he was the Andrew Chance Trust. On the 2007-2009 returns, he claimed he was the Andrew I Chance Trust.

On each return in the current case, Chance claimed $300,000 in refunds based on completely false income and withholding amounts. The government introduced evidence that, despite having claimed withholdings on the false returns, Chance had no withholdings and, in fact, had demanded that the Washington, D.C., Metropolitan Area Transit Authority, from which he retired as a station manager in 1999, not withhold taxes from his retirement pay.




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Friday, February 17, 2012

Federal Court Bars Maria Teresita Viray from Preparing Federal Tax Returns


Source-  http://www.justice.gov/opa/pr/2012/February/12-tax-229.html 

A federal court has permanently barred Maria Teresita Viray from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Viray consented, was signed by Judge George Wu of the U.S. District Court for the Central District of California.

According to the government complaint in the case, Viray, of Reseda, Los Angeles County, Calif., operates businesses called TVDM Tax Services, MTV Tax Services and New Horizon Tax Services, and has prepared thousands of federal tax returns since 2008. The complaint alleges that Viray reported bogus deductions for charitable contributions and business expenses on her customers’ tax returns and that she fabricated documents to provide to the Internal Revenue Service (IRS) to substantiate the false claims she made on the returns. The complaint states that Viray told one customer that she had a special printer that allowed her to change the dates and amounts on charitable contribution receipts.

According to the complaint, Viray’s tax return preparation resulted in an estimated loss of over $45 million in tax revenue to the United States from 2008 to 2010, in addition to IRS resources devoted to recovering erroneous refunds and collecting unpaid taxes and penalties from her customers. The injunction order requires Viray to provide the government with a list of all persons for whom she prepared federal tax returns for tax years 2007 through 2010.




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Thursday, February 16, 2012

Stanley Wardle with Filing False Claims for Tax Refunds


Source-  http://www.justice.gov/opa/pr/2012/February/12-tax-223.html 
Stanley Wardle of Spanish Fork, Utah, was indicted Wednesday by a federal grand jury in Salt Lake City with nine counts of filing false claims for income tax refunds, the Justice Department and Internal Revenue Service (IRS) announced today. According to the indictment, Wardle prepared one such false claim on his own behalf, through an individual income tax return for 2008, and prepared eight other such false claims on behalf of others. In total Wardle sought false federal income tax refunds of $875,218.

If convicted, Wardle faces a maximum of five years in prison and a maximum $250,000 fine for each count.

An indictment is only an allegation of criminal conduct and is not evidence of guilt. A person is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.




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Wednesday, February 15, 2012

Roanne Eye Convicted for Interfering with the IRS and Filing False Tax Returns


Source-  http://www.justice.gov/opa/pr/2012/February/12-tax-196.html 

Roanne Eye , 57, of Plantation, Fla., was found guilty of tax charges late Thursday after a four-day jury trial, the Justice Department and Internal Revenue Service (IRS) announced. Eye was convicted interference with the administration of Internal Revenue laws and of filing false individual income tax returns.

According to evidence presented at trial, Eye attempted to obstruct and interfere with the administration of the laws and regulations of the IRS by telling her employer not to comply with IRS notices and by submitting IRS forms falsely claiming she was exempt from income tax withholding. Eye failed to file timely income tax returns for tax years 1996 and 1999 -2005, even after she received notices that her taxes were due. In March 2006, Eye filed tax returns for 1996 and 1999 - 2005, all claiming refunds to which she was not entitled. She subsequently filed a fraudulent return for tax year 2006. In total, Eye falsely claimed more than $1 million in fraudulent refunds.

In addition to filing the fraudulent income tax returns, Eye flooded IRS offices throughout the United States and Puerto Rico with frivolous letters challenging the authority of the IRS to collect taxes from her.

Sentencing has been scheduled for April 26, 2012, before U.S. District Judge James I. Cohn. At sentencing, Eye faces a statutory maximum prison sentence of up to three years in prison on the interference charge and up to five years in prison on the false claims charge.




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Tuesday, February 14, 2012

Gary Rogers Arrested on Identity Theft and Tax Fraud Charges


Source-  http://www.justice.gov/opa/pr/2012/February/12-tax-212.html 

Gary Rogers, of East Meadow, N.Y., was arrested today after being charged with identity theft and tax fraud after filing more than 200 false tax returns with the Internal Revenue Service (IRS), the Justice Department and IRS announced.

Rogers was named in a federal criminal complaint that alleged he used stolen identification information to make false claims against the U.S. government by filing false tax returns to obtain fraudulent refunds. According to the affidavit in support of the criminal complaint filed in U.S. District Court in Brooklyn, Rogers filed approximately 200 federal income tax returns from 2004 through 2010 using the identification information of others. The complaint alleges that Rogers sought approximately $4,393,356 in fraudulent refunds over the six year period.

“The Justice Department will remain vigilant in protecting Americans’ identities and tax dollars from thieves,” said Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division. “Those who steal identities and use them to commit tax refund fraud will be punished to the full extent of the law.”

“The IRS is aggressively pursuing those who steal others’ identities in order to file false returns,” said Steven Miller, IRS Deputy Commissioner for Services and Enforcement. “Our cooperative work with the U.S. Attorney’s Office and the Tax Division will help protect taxpayers in New York from being victimized by identity theft. The IRS is taking additional steps this tax season to further prevent, detect and resolve identity theft cases as soon as possible.”

A criminal complaint is merely an allegation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted on these charges, Rogers faces a two year mandatory minimum sentence for aggravated identity theft, a potential maximum sentence of five years in prison for each count of filing a false claim against the United States and mail fraud.




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Monday, February 13, 2012

Sandra Iris Klaus Pleads Guilty in Scheme to Embezzle Over $313,000 from Her Employer and to Filing False Tax Returns


Source-  http://www.fbi.gov/baltimore/press-releases/2012/hampstead-woman-pleads-guilty-in-scheme-to-embezzle-over-313-000-from-her-employer-and-to-filing-false-tax-returns 

BALTIMORE—Sandra Iris Klaus, age 46, of Hampstead, Maryland, pleaded guilty today to mail fraud, aggravated identity theft, and filing a false tax return in connection with a scheme to steal $313,000 from her employer.

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; and Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue Service-Criminal Investigation, Washington, D.C. Field Office.

“The role of IRS-Criminal Investigation becomes even more important in embezzlement and fraud cases like this one due to the complex financial transactions that can take time to unravel,” said Acting Special Agent in Charge Eric Hylton. “Federal tax laws are normally violated in these cases and as we often see, the victims are not only the taxpayers, but also the individuals and entities who suffer the financial harm.”

According to Klaus’ plea agreement, from March 2005 to March 2011 Klaus was employed by a roofing and sheet metal company located in Westminster, Maryland as an administrative assistant and bookkeeper. Klaus was responsible for preparing and submitting the employee weekly payroll and issuing checks to pay vendors. From January 2007 to March 23, 2011, Klaus caused payroll checks to be issued to a fictitious employee, which Klaus then endorsed and cashed. Between January, 2007 and March, 2011, Klaus cashed 206 weekly paychecks that she fraudulently caused to be prepared, for a total loss to her employer of $110,110.87.

Klaus admitted that she also diverted company funds to pay her personal credit card bills, and used a rubber stamp with the name of an authorized company signatory printed on it to sign company checks for her personal benefit. Klaus also inserted her name as payee on checks that were signed by an authorized person and given to Klaus to make payments for the business. Finally, Klaus used the company credit cards to make unauthorized purchases for her personal use and benefit. Using these schemes, from 2008 through March, 2011, Klaus fraudulently caused the company to make $203,114.69 in payments on her behalf.

In an effort to conceal the scheme, Klaus made entries into the company’s accounting software system to disguise checks she sent from the company’s bank account to pay her credit card bills as payments to legitimate vendors. Klaus also secretly set up a connection from her personal home computer to the company computer server so that she could make fraudulent entries into the company’s accounting system from home.

Further, on September 10, 2009, Klaus submitted a letter on the company letterhead in support of an application for a mortgage to purchase a home located in Hampstead, Maryland. Klaus made several false statements in this letter, including that she was guaranteed a minimum annual bonus of $10,000 each year. Klaus signed the letter as the president of the company for whom she worked, without his knowledge or permission. Based on the information submitted by Klaus, including the fraudulent letter of support, Klaus obtained a mortgage loan of $266,055.49.

Finally, Klaus admitted that she filed false tax returns for tax years 2007 through 2010, substantially underreporting her income in those tax years because she did not include any of the funds stolen from her employer. The total tax loss resulting from the Klaus’ illegal conduct is $111,780.

As part of her plea agreement, Klaus is required to pay restitution of at least $313,225.56, which she stole from her employer and $111,780 to the IRS.




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Sunday, February 12, 2012

Former New York State Senator Nicholas A. Spano Pleads Guilty in White Plains Federal Court to Filing Fraudulent Tax Returns


Source-  http://www.fbi.gov/newyork/press-releases/2012/former-new-york-state-senator-nicholas-a.-spano-pleads-guilty-in-white-plains-federal-court-to-filing-fraudulent-tax-returns 

Preet Bharara, the United States Attorney for the Southern District of New York, Victor W. Lessoff, the Acting Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CID”), and Janice K. Fedarcyk, the Assistant Director in Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), announced that former New York State Senator NICHOLAS A. SPANO pled guilty today in White Plains federal court to obstructing the ability of the IRS to assess and collect U.S. income taxes by filing fraudulent tax returns.

Manhattan U.S. Attorney Preet Bharara stated: “Former Senator Nicholas Spano is the latest in a regrettably long line of lawmakers turned lawbreakers. When elected officials put padding their pockets above the law, they tarnish our government and undermine people’s faith in their public servants. We will not tolerate this conduct and will continue to aggressively prosecute those who engage in it.”

IRS Acting Special Agent in Charge Victor W. Lessoff stated: “Public officials, whether elected or appointed, hold positions of trust in the eyes of the public. That trust is broken when these officials commit crimes. Public officials do not get free passes to ignore the tax laws and they will still be held accountable after they leave office. IRS-CI works to ensure that everyone pays their fair share. “

FBI Assistant Director in Charge Janice K. Fedarcyk stated: “We hope that our elected representatives hold themselves to a higher standard. At a minimum, the people of New York have the right to expect that lawmakers will not be lawbreakers.”

According to the information and statements made during today’s proceeding:

Background

NICHOLAS SPANO served as a New York State Senator for the 35th district, representing most of Westchester County, from 1987 until 2006. In that capacity, SPANO was responsible for voting on and approving the operating budget for New York State, a portion of which included funding for the Office of General Services (“OGS”).

In 1993, a White Plains-based insurance company began paying SPANO a $1,500 monthly fee to act as an outside consultant. In 1996, after the insurance company was awarded a lucrative contract by OGS to become the broker of record for New York State, the payments increased to $5,000 per month. The payments were subsequently increased to $6,000 per month in 1999 and $8,333.33 (or $100,000 per year) in 2002. The payments stopped in 2008 when the insurance company ceased to be OGS’s broker of record.

The payments from the insurance company were paid through various corporate entities controlled by SPANO, including ONAPS, Inc. which later changed its name to HVM Corp. ONAPS had no employees or offices and was used almost exclusively to receive money paid to SPANO by the insurance company.

Spano’s Concealment of Income

From 2000 through 2008, SPANO engaged in a scheme to impede and impair the due administration of the Internal Revenue Laws by filing false federal income tax returns that falsely characterized income he received from the insurance company and other sources to unlawfully reduce his tax burden.

During the relevant time period, SPANO wrote checks that totaled more than $180,000 from HVM to a real estate holding company he owned, 221 Ridge Ave. Corp, which owned a two-family rental property in Yonkers, New York. The checks were for non-existent rental expenses. SPANO falsely advised his tax return preparer that HVM conducted business at 221 Ridge Avenue, had an office at that location, and paid rent to the holding company. As a result, HVM deducted more than $180,000 in false and fraudulent rental expenses on its tax returns.

In 2004, SPANO also failed to report to the IRS a $45,000 commission he received from the sale of a building to a White Plains real estate developer, and between 2005 and 2006, failed to report cash rental payments he received from residential real estate tenants.




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Saturday, February 11, 2012

Cheryl A. McNamee Pleads Guilty to Filing False Tax Return


Source-   http://www.fbi.gov/milwaukee/press-releases/2012/sun-prairie-woman-pleads-guilty-to-filing-false-tax-return  

MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Cheryl A. McNamee, 47, Sun Prairie, Wis., pled guilty today before U.S. District Judge Barbara B. Crabb to willfully filing a 2009 tax return in which she falsely omitted $94,867 of income.

During the plea hearing, McNamee admitted that she had written 56 unauthorized checks to herself—totaling $94,867—from her employer, Hexagon Title, Sun Prairie. McNamee also agreed that her total unreported income between 2002 and 2009 was $595,473.

In her plea agreement, McNamee agreed to pay restitution of $469,413 to the owners of Hexagon Title and an additional $126,060 to First American Title Company.

McNamee will be sentenced before Judge Crabb at 1:00 p.m. on April 18, 2012. She faces a maximum penalty of three years in federal prison.




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Friday, February 10, 2012

U.S. Court Bars Paul E. Foster Jr. and Sheree McDade in Alabama from Preparing Federal Tax Returns


Source-  http://www.justice.gov/opa/pr/2012/February/12-tax-177.html 

A federal court has permanently barred Paul E. Foster Jr. and Sheree McDade, both of Montgomery, Ala., from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Foster and McDade agreed without admitting the government’s allegations, was signed by Chief Judge W. Keith Watkins of the U.S. District Court for the Middle District of Alabama.

The government complaint alleged that Foster and McDade, through businesses called Miami Tax, Paul’s Tax Service and Advance Taxes Inc., prepared tax returns for customers that reported phony business expenses for fictitious businesses, inflated earned income and falsely claimed dependents in order to increase refunds based on the earned income tax credit. The complaint also alleged that at least 48 returns that Foster and McDade prepared for the 2008 tax year contained false claims for the first-time homebuyer tax credit. According to the complaint, Foster and McDade’s misconduct has thus far resulted in $1 million of lost tax revenue, plus resources spent by the Internal Revenue Service (IRS) to assess and collect unpaid taxes from the customers.

The court ordered Foster and McDade to send a copy of the injunction order to all customers for whom they prepared a federal tax return for tax years 2006 and later. The court also ordered the pair to provide the government with a list of those customers.




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Thursday, February 9, 2012

Florida Jury Holds Tax Preparer Liable for $135,000 in Penalties for False Tax Returns


Source-  http://www.justice.gov/opa/pr/2012/February/12-tax-179.html 

An eight-member jury has unanimously found that a former Jackson Hewitt tax preparer, Frances Carlson of Bradenton, Fla., prepared 27 federal tax returns that she knew would understate her customers’ tax liabilities, the Justice Department announced today. The verdict followed an eight-day trial in Tampa, Fla., before Judge Susan Bucklew of the U.S. District Court for the Middle District of Florida.

The jury answered 36 separate questions in favor of the government in reaching the verdict. As a consequence, based on evidence presented at the trial, Carlson is liable for penalties totaling $135,000, plus interest.

According to evidence presented at the trial, Carlson worked at JH Accounting, a Sarasota, Fla., accounting firm controlled by Daniel Prewett. The evidence showed that Carlson also worked as a tax preparer for a Sarasota franchise of Jackson Hewitt Tax Service Inc. that Prewett controlled. According to trial evidence, Prewett was previously convicted by a federal jury on charges related to cocaine distribution and money laundering and was sentenced to 18 years in prison in 2008.

In 2009, a federal court in Tampa permanently barred Prewett and Carlson from preparing federal tax returns for others.




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Wednesday, February 8, 2012

Anthony Buttitta and his father, Dominic Buttitta Charged with Concealing More Than $4 Million of Income from the IRS


Source-  http://www.fbi.gov/chicago/press-releases/2012/operators-of-elgin-adult-entertainment-club-and-alleged-internet-gambling-business-charged-with-concealing-more-than-4-million-of-income-from-the-irs 

CHICAGO—The operators of an adult entertainment club in Elgin were charged today with conspiracy to impede the Internal Revenue Service in the collection of federal taxes, as well as separately operating an illegal Internet gambling business, in connection with allegedly diverting more than $4 million in unreported income to themselves from the two businesses. The defendants, Anthony Buttitta and his father, Dominic Buttitta, were charged in a two-count criminal information filed in U.S. District Court, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Alvin Patton, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

Anthony Buttitta, 42, of St. Charles, and Dominic Buttitta, 69, of South Barrington, were each charged with one count of conspiracy to defraud the United States by obstructing the IRS in the collection of taxes and one count of operating an illegal gambling business. They will be ordered to appear for arraignment at a later date in U.S. District Court. The Buttittas operate Blackjacks Gentlemen’s Club in Elgin through Elgin Entertainment Enterprises, Inc., which manages Blackjacks. Between 2005 and 2009, they also ran an Internet gambling business, including the websites Skybook.com, Largejoe.com, and Theredhotel.com.

According to the charges, both Buttittas filed false federal corporate tax returns for calendar years 2002 through 2009, and false federal individual income tax returns for calendar years 2002 through 2008 that substantially under-reported the total income they received from the operation of Blackjacks and the gambling business. They allegedly concealed the diverted funds from their tax preparers and the IRS and used the unreported income to acquire personal property and to pay personal expenses.

The charges allege that the defendants received approximately $3,704,959 from “house” fees they collected from women for each shift they worked as dancers at Blackjacks. Anthony Buttitta directed club employees to maintain logs of the house fee collections, and both defendants later destroyed and caused the destruction of the log sheets, the charges allege. They also placed agents of their Internet gambling business on the payroll of another company to provide the employees with the appearance of a legitimate source of income and benefits. In return, the charges allege that they solicited and received kickbacks in the form of cash from the agents and concealed the payments from their tax preparers, bookkeepers and the IRS.

The defendants allegedly received approximately $1 million in gross wagers from the gambling business between 2005 and 2009, and made approximately $400,000 in net profits. The charges seek forfeiture of $400,000 as illegal proceeds.

At various times between 2005 and 2008, the defendants allegedly obtained unreported income from individuals as payment of losing wagers in the form of direct payments toward the purchase of a $2.9 million condominium in Las Vegas and a condominium in Costa Rica, as well as personal credit card payments. In 2005 and 2006, Anthony Buttitta used approximately $400,000 in cash to pay for building and acquiring his home in St. Charles, according to the charges.

Each count carries a maximum penalty of five years in prison and a $250,000 fine, and restitution is mandatory. In addition, defendants convicted of tax offenses must pay the costs of prosecution and remain liable for any and all back taxes, as well as a civil fraud penalty of 75 percent of the underpayment plus interest. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.




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Tuesday, February 7, 2012

Edward T. Fodrey Sentenced to 37 Months in Prison for Kickback Scheme and Failure to File Tax Return


Source-  http://www.fbi.gov/richmond/press-releases/2012/norfolk-contractor-sentenced-to-37-months-in-prison-for-kickback-scheme-and-failure-to-file-tax-return 

WASHINGTON—A Virginia contractor was sentenced today to serve 37 months in prison for participating in a scheme to steer contracts to him for repair, maintenance, and renovation work at health care and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced.

Edward T. Fodrey, a resident of Norfolk, Va., was sentenced in U.S. District Court in Norfolk by Judge Mark S. Davis and was ordered to pay $326,799 in restitution. Fodrey pleaded guilty on April 4, 2011, to one count of conspiracy to commit mail fraud in connection with his participation in a kickback scheme and one count of failing to file a tax return.

According to the charge filed on March 30, 2011, from about May 2006 until at least December 2006, Fodrey conspired with an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities in North Carolina and Virginia. The MFA employee steered contracts to Fodrey in return for kickbacks by creating fictitious competitor bids that were higher than the quotes submitted by Fodrey and other co-conspirator venders in order to create the appearance of competition. The MFA employee directed subordinates to solicit quotes only from Fodrey or other conspiring vendors and specified the amount Fodrey should quote to MFA as well as the amount of the kickback on each of the contracts.

Fodrey paid more than $160,000 in kickbacks to the MFA employee and received contracts and subcontracts totaling more than $750,000. The court document states that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. Fodrey was also charged with failing to file a tax return for 2006, which is the year in which Fodrey received payment on the MFA contracts.




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