Thursday, May 31, 2012

Sung Soo Shin Pleads Guilty to Filing False Corporate Tax Return


Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-689.html 

Sung Soo Shin, of Staten Island, N.Y., president of Mission Design and Management Inc. (MDMI), pleaded guilty in the Eastern District of New York to filing a false corporate income tax return, for the fiscal year 2009, before U.S. District Court Judge Nicholas G. Garaufis, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to the information and other documents filed in court, Sung Soo Shin caused MDMI to file false corporate tax returns understating its gross receipts by about $1.77 million for fiscal year 2007, $1.61 million for fiscal year 2008, and $2.35 million for fiscal year 2009. In total, Shin caused a tax loss of approximately $1,945,153.

Shin’s sentencing is set for Sept. 21, 2012. Shin faces a potential maximum sentence of three years in prison, restitution of more than $1 million and a fine of up to $250,000.




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Wednesday, May 30, 2012

Monty Ervin and Patricia Ervin Were Sentenced to Ten Years in Federal Prison for Tax Fraud


Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-683.html 

Monty Ervin and Patricia Ervin, owners of Southern Realty in Dothan, Ala., were sentenced today to federal prison for conspiring to defraud the United States and tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. After a two-week trial that began Oct. 25, 2011, a federal jury in Montgomery, Ala., convicted the Ervins of one count of conspiracy and three counts of tax evasion. The jury also convicted Patricia Ervin of one count of structuring transactions to avoid bank reporting requirements. Monty Ervin was sentenced to 120 months in prison; Patricia Ervin was sentenced to five years of probation, with the condition that she spend 40 consecutive weekends in jail. In sentencing the Ervins, the court found that Monty Ervin was the leader and organizer of the conspiracy and exercised control over Patricia Ervin.

Based on the evidence introduced at trial, the Ervins amassed hundreds of investment properties over the last decade, receiving more than $9 million in rental income. Despite receiving this income, the couple paid no federal income taxes. When confronted by the IRS in 2006, the Ervins proclaimed that they were not United States citizens, and as “sovereigns,” did not consider themselves subject to federal or state law.

The evidence established that Monty Ervin and Patricia Ervin also filed numerous documents in probate court renouncing their U.S. citizenship. In one such filing, Monty Ervin declared himself the “governor” of Alabama in its “original jurisdiction.” The Ervins had a license plate on their vehicle which law enforcement witnesses testified at trial was associated with a “sovereign citizens” organization.

The Ervins owned and managed Southern Realty, a property management company in Dothan. As the evidence showed at trial, the couple concealed their assets from the IRS by placing investment properties into the names of nominees – “trusts” and “trustees.” The “trustees” named on property deeds testified that they were not involved in the sale or purchase of the properties and that the Ervins “stamped” their signatures onto official property records. Patricia Ervin also structured deposits into Southern Realty’s bank account in an effort to evade federal currency reporting requirements.

In addition to hundreds of real estate investment properties, the evidence also showed that the Ervins had amassed beachfront condominium units in their own names including a $1.3 million unit they paid for in cash and, when investigated by the IRS, transferred those properties into the names of bogus “trusts” and “trustees.” Additionally, the government introduced into evidence $350,000 of gold coins said to have been buried in their yard.

The Ervins were indicted by a federal grand jury in Montgomery in February 2011. In March, Monty Ervin was arrested by a U.S. Marshal’s Service Fugitive Task Force in Naples, Fla., with a notebook containing the latitudinal and longitudinal coordinates of an island off the coast of Honduras.

Tuesday, May 29, 2012

Lavel Schwartz Pleads Guilty to Money Laundering Conspiracy


Source-  http://www.fbi.gov/newark/press-releases/2012/brooklyn-rabbi-pleads-guilty-to-money-laundering-conspiracy 

TRENTON, NJ—A rabbi based in Brooklyn, New York has pleaded guilty to conspiring to launder $200,000 to $400,000 in funds that he believed were the proceeds of unlawful activities, United States Attorney Paul J. Fishman announced.

Lavel Schwartz, 60, pleaded guilty Thursday, May 24 before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding information charging him with money laundering conspiracy. Judge Pisano continued Schwartz’s release on bail pending sentencing, which is scheduled for October 22, 2012.

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

Schwartz admitted that beginning in May 2008, he and his brother, Rabbi Mordchai Fish, met with Solomon Dwek, an individual he now knows was a cooperating witness with the United States. For a fee of approximately 10 percent, Fish and Schwartz agreed to launder and conceal Dwek’s funds through a series of purported charities, also known as “gemachs,” which Fish controlled or to which he had access. Schwartz admitted that prior to laundering Dwek’s funds, Dwek informed him that the funds he sought to launder were the proceeds of Dwek’s purported illegal businesses, which included the trafficking in counterfeit goods.

In order to conceal and disguise the nature and source of Dwek’s funds, Rabbi Fish directed Dwek to make the checks payable to several gemachs, which were purportedly dedicated to providing charitable donations to needy individuals. These included Boyoner Gemilas Chesed, Beth Pinchas, CNE, and Levovous. Once he received the checks from Dwek, Fish provided them to one of his co-conspirators, who deposited them into bank accounts held in the names of the purported charities. Fish would then arrange to make cash available through an underground money transfer network, and other individuals, including David S. Golhirsh, Naftoly Weber, Avrohom Y. Polack, Binyamin Spira, Yoely Gertner, and others, would provide Fish and Dwek with the cash.

Rabbi Schwartz admitted that he would assist Rabbi Fish and Dwek with counting the cash that had been retrieved from a coconspirator and admitted to encouraging Dwek to engage in more transactions, believing that the proceeds stemmed from a counterfeit bag business and that Rabbi Fish was retaining a 10 percent fee.

Schwartz admitted that, despite knowing the illicit nature of the funds, he engaged in approximately 10 money laundering transactions with Dwek. As part of these transactions, Fish helped convert between $200,000 and $400,000 in checks into a similar amount of cash, minus the 10 percent fee that Rabbi Fish extracted from the transactions.

Today’s guilty plea stems from a two-track undercover FBI investigation into public corruption and international money laundering which resulted in charges against 44 individuals via criminal complaints on July 23, 2009. At that time, Schwartz was charged in three separate criminal complaints, all of which likewise charged his brother, Rabbi Mordchai Fish. Rabbi Fish pled guilty to conspiring to commit money laundering and is currently scheduled to be sentenced on June 18, 2012. Weber, Polack, and Spira each pleaded guilty in November 2010 to operating illegal money transmitting businesses, admitting that they transferred thousands of dollars in cash to Fish and Dwek. The charges against Gertner and Goldhirsh remain pending.

The charge to which Schwartz pleaded guilty is punishable by a maximum term of 10 years in prison and a $250,000 fine. Schwartz also agreed to forfeit approximately $90,000 by the date of sentencing which represents the 10 percent fee which Rabbi Fish charged Dwek for conducting the money laundering transactions. Rabbis Fish and Schwartz are jointly liable for this amount.

In determining an actual sentence, Judge Pisano will consult the advisory U.S. Sentencing Guidelines, which recommend sentencing ranges that take into account the severity and characteristics of the offenses, the defendant’s criminal history, if any, and other factors. The judge, however, has discretion and is not bound by those guidelines in determining a sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all of that time.




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Monday, May 28, 2012

Peter Vincent Capra Indicted for Obstruction, Wire Fraud, Mail Fraud, and Money Laundering


Source-  http://www.fbi.gov/denver/press-releases/2012/littleton-man-indicted-for-obstruction-wire-fraud-mail-fraud-and-money-laundering 

DENVER—Peter Vincent Capra, age 55, of Littleton, Colorado, was indicted by a federal grand jury in Denver on May 23, 2012 on additional charges of wire fraud, mail fraud, and money laundering, the U.S. Attorney’s Office, IRS-Criminal Investigation, the Federal Bureau of Investigation, and United States Postal Inspection Service announced. Capra is scheduled to appear in U.S. District Court on May 29, 2012 at 10:00 a.m. to respond to the charges. Capra was charged in a previous indictment with obstruction of justice.

According to the information contained in the Indictment, Capra was the president of Golden Design Group Inc. (GDG), which built and sold houses in the Denver metropolitan area. Capra was also the registered agent for Distinctive Mortgages LLC, which used GDG office space and provided mortgages for some of the purchasers of GDG houses.

As part of the fraud, Capra caused the creation of Cambridge Real Estate Consulting LLC (Cambridge) and Chateau Real Estate Investments LLC (Chateau). Although publicly filed paperwork suggested that these were independent entities, Capra or his associate, a person with the initials R.P., directed all activities of Cambridge and Chateau and controlled their bank accounts.

Between January 1, 2005 and July 31, 2008, Capra executed and attempted to execute a scheme to defraud mortgage lenders through the use of applications for residential mortgage loans and related documents associated with real estate purchases in the Denver Metro area. As part of the scheme, Capra would structure transactions involving homes built and sold by GDG to allow buyers to receive substantial amounts of the lenders’ money at the time of closing without the lenders’ knowledge.

Capra was able to facilitate his scheme by causing first and second mortgage applications related to the real estate purchases be submitted with false and fraudulent representations about the purchasers income, liabilities, and intent to occupy the properties as their primary residences. Many of the purchasers bought multiple properties at or near the same time in an attempt to prevent lenders from discovering the extent of the buyer’s real estate liabilities.

At the closing or soon thereafter, Capra would cause funds to be distributed to the buyers in ways that prevented the lenders from knowing the funds were actually going to the buyers. The methods included the disbursement of funds to LLCs, causing buyers to sign false warranty waivers, making payments to the buyers through Cambridge, Chateau, or other sham entities, and having GDG issue checks directly to the buyers, which were not reflected on the HUD-1 closing statements. The disbursements to buyers were usually in amounts between $85,000 and $130,000.

The indictment also includes an asset forfeiture allegation, which states that upon conviction of the offenses mentioned in the indictment, the defendant shall forfeit to the United States all property involved in or traceable to property involved in such offense(s), including but not limited to a money judgment.

“Investigating and prosecuting mortgage fraud is one of the highest priorities of this U.S. Attorney’s Office as well as the Department of Justice as a whole,” said U.S. Attorney John Walsh. “We are taking action at all levels of mortgage fraud, from those committing the fraud all the way to those who packaged and profited from the fraud.”

“This indictment sends a strong message that the FBI will aggressively pursue those individuals who illegally defraud mortgage lenders for their own personal gain,” said FBI Denver Special Agent in Charge James Yacone. “The FBI will continue to investigate real estate and mortgage industry professionals who have ignored their fiduciary responsibilities and commit fraud.”

“The charges filed in this case illustrate the commitment of postal inspectors to vigorously pursue individuals who utilize the U.S. mail as part of these complex fraud schemes,” said Adam Behnen, Inspector in Charge, U.S. Postal Inspection Service, Denver Division. “With today’s challenging economy, it is critical we make every effort to protect our financial institutions and consumers by ensuring the integrity of the U.S. mail. We are very appreciative of the working relationship between our agency, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation, as it was instrumental in bringing this case forward.”

“Mortgage fraud, like many financial crimes, adds to the underground economy, 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 Sean P. Sowards, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.

Capra faces one count of obstruction of justice, 14 counts of wire fraud, two counts of mail fraud, and 10 counts of money laundering. If convicted, the defendant faces 10 years’ imprisonment and up to a $250,000 fine for obstruction of justice; not more than 20 years’ imprisonment and up to a $250,000 fine for each count of wire fraud and mail fraud; and not more than 10 years’ imprisonment and up to a $500,000 fine for each count of money laundering.




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Sunday, May 27, 2012

Cook County Commissioner William Beavers Indicted on Federal Tax Charges for Allegedly Failing to Pay Taxes on Campaign Funds and County Expense Account Used for Personal Purposes


Source-  http://www.fbi.gov/chicago/press-releases/2012/cook-county-commissioner-william-beavers-indicted-on-federal-tax-charges-for-allegedly-failing-to-pay-taxes-on-campaign-funds-and-county-expense-account-used-for-personal-purposes 

CHICAGO—Cook County Commissioner William Beavers was indicted today on federal tax charges for allegedly obstructing the Internal Revenue Service and failing to report, and pay taxes on, all of his income. Beavers allegedly concealed his under-reporting of income and underpayment of taxes on thousands of dollars that he converted to personal use from his campaign accounts—including more than $68,000 in personal gain on one occasion that was not reported—as well as from his county discretionary spending account. Between 2006 and 2008, Beavers allegedly paid himself more than $225,000 from three separate campaign accounts and used at least a portion of those funds for personal purposes, including gambling. In 2006, he used more than $68,000 from a campaign account to boost his city pension, and between 2006 and 2008, he used his $1,200 monthly county contingency account for personal purposes without reporting any of these funds as income on his federal tax returns, the indictment alleges.

Beavers, 77, of Chicago, was charged with one count of corruptly endeavoring to obstruct and impede the IRS and three counts of filing false federal income tax returns in a four-count indictment that was returned today by a federal grand jury, 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.

Beavers, who was elected to the Cook County Board of Commissioners, representing the 4th District, in November 2006 and began serving as a commissioner a month later, will be ordered to appear for arraignment on a date to be determined in U.S. District Court. Previously, Beavers served as the 7th Ward alderman on Chicago’s City Council from 1983 until November 2006, when he was elected to the commissioner’s post.

“If politicians choose to use their campaign funds for personal use then they, like all the citizens they serve, share the obligation to honestly report their income and pay the correct amount of taxes,” Mr. Fitzgerald said. “The indictment alleges that over a course of three years, Commissioner Beavers repeatedly used his campaign accounts for personal use and then thwarted the Internal Revenue Service by causing his campaign committees to create false records to cover it up.”

Mr. Patton of the IRS said, “When public officials raise money for political campaigns and use those funds for personal expenses, they must report it as income and pay taxes. A system of government, like ours, which depends on its citizens’ voluntarily compliance with tax laws, is undermined when elected officials shirk their tax responsibilities.”

According to the indictment, Beavers had sole authority over three campaign committees that supported his political activities—Citizens for Beavers, Friends of William Beavers, also known as Friends for William Beavers, and 7th Ward Democratic Organization. As part of the corrupt endeavor to obstruct the IRS, Beavers allegedly converted campaign funds for his own personal use, provided false information to his campaign treasurers regarding the use of these funds, and understated his income and the taxes he owed in his individual income tax returns for 2006, 2007 and 2008.

During those three years, Beavers caused his campaign committees to issue checks payable to himself and to third parties on his behalf, and he allegedly used at least part of the proceeds for personal expenses, including an unspecified amount for gambling. The checks included approximately 100 payable to Beavers personally, totaling about $96,000 in 2006, $69,300 in 2007, and $61,000 in 2008, for a total of approximately $226,300.

As part of the corrupt endeavor, the indictment alleges that Beavers concealed his personal use of campaign funds by maintaining and causing campaign workers to maintain records that falsely reflected the uses of campaign checks payable to Beavers, including records used to prepare semi-annual Illinois campaign finance reports known as D-2s. Beavers caused campaign workers to falsely record, on check stubs and other records, that certain campaign checks written to him and used for personal purposes were instead used for campaign expenses, the charges allege.

In some instances, Beavers allegedly attempted to conceal his use of campaign funds for personal use by telling campaign workers that checks payable to and cashed by him were for paying campaign-related expenses, even though those expenses were not incurred by the campaign committees until months after Beavers had converted the funds. In other instances, Beavers withheld from his campaign staff any explanation of certain checks payable to him, or he caused workers to falsely record that certain checks were “void” or unused even though he had cashed them.

The indictment alleges that on Nov. 14, 2006, Beavers caused a check for $68,763.07 to be paid from Citizens for Beavers to the Municipal Employees’ Annuity and Benefit Fund of Chicago, a pension plan for certain City of Chicago employees including Aldermen, to increase his monthly pension from $2,890 to $6,541. The check allegedly was for personal use and should have been, but was not, reported as income on his 2006 income tax return.

Beginning in December 2006 when he began serving as a county commissioner, through November 2008, Beavers received $1,200 a month from Cook County in the form of a Commissioner Contingency Account (CCA) check for discretionary use. Any personal use of these funds was reportable as income, according to the indictment. Beavers allegedly used the total of $28,800 for personal purposes without reporting any of the funds as income on tax returns.

The three counts of filing false tax returns allege that Beavers failed to include unspecified gross income from his campaign committees and county account when he reported the following amounts of total income and taxable income on his federal returns for 2006-2008:

$208,561 total income and $98,453 taxable income for 2006;
$487,568 total and $204,228 taxable for 2007; and
$300,408 total and $171,507 taxable for 2008.

Each count of the indictment carries a maximum penalty of three 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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Saturday, May 26, 2012

Marsha Elmore Sentenced to More Than 15 Years in Prison for Identity Theft and Tax Fraud Scheme


Source-  http://www.justice.gov/tax/2012/txdv12094.htm 

WASHINGTON – Marsha Elmore of Wetumpka, Ala., the owner of a tax preparation business called Community Tax, was sentenced today to 184 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced. Elmore used her business to run a scheme to steal tax refunds by filing false tax returns with stolen identities. She had been indicted by a federal grand jury on Aug. 31, 2011, and pleaded guilty on Nov. 15, 2011, to one count each of filing false claims, wire fraud and aggravated identity theft. Elmore had previously been sentenced to 60 months in prison for a violation of supervised release, which was based on the conduct for which Elmore was sentenced today. Today’s sentence of 184 months is to run consecutively to her previous sentence of 60 months.

According to court documents, Elmore’s fraudulent activity ran from at least 2009 until July 2011, when she was arrested by the IRS on a criminal complaint. She unlawfully obtained the names, Social Security numbers and dates of birth of various individuals and used them to file false tax returns through Community Tax. Those tax returns claimed refunds that were directed to bank accounts and debit cards that Elmore controlled. Elmore also filed false tax returns using online filing websites. All together, Community Tax and Elmore were linked to almost 1,400 tax returns during this time period.

In her plea agreement, Elmore admitted that she personally filed many of the returns, a number of which were false. In sentencing Elmore, the court found that the intended tax loss was just over $2.5 million.

“This case is an example of how criminals use innocent people’s identities for their own financial gain. To steal these victims’ identities and use them to file false tax returns not only makes the U.S. tax payer a victim, but also victimizes the unsuspecting person whose identity has been stolen. We will continue to do everything possible under the law to protect these unsuspecting victims from these criminals,” stated George L. Beck, U.S. Attorney for the Middle District of Alabama.

“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 Alabama 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.”

U.S. District Judge Mark Fuller also ordered Elmore to pay $1,157,241 in restitution.




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Friday, May 25, 2012

Donald R. Megginson Pleads Guilty to Corruptly Endeavoring to Impede the Internal Revenue Service


Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-652.html 

Donald R. Megginson, a former resident of Alexandria, Va., pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced today. Sentencing is scheduled for Aug. 22, 2012.

According to the plea agreement and statement of facts, Megginson formed D & B Tours Inc. at the suggestion of his longtime friend, Robert Turner. D & B Tours was a tour bus company. Megginson was in charge of the company’s paperwork and finances and Turner drove the tour bus, “Blue Ice.” Megginson, along with Turner and at least one other person, participated in a scheme to file false corporate income tax returns for 2001, 2002 and 2003 for D & B Tours with the IRS in order to get money from the government to which they were not entitled. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Megginson received $70,000 as his share of the fraudulent refunds and he distributed the remaining monies to Turner and the other individual.

According to the court documents, Megginson also admitted that he failed to timely file tax returns in 1999 through 2006, despite receiving various notices from the IRS. When Megginson ultimately filed his 1999 through 2006 tax returns, he did not include payment for any taxes due, despite his owing substantial income tax for each of those years. Megginson also omitted from his 2004 tax return his share of the fraudulent proceeds that he had received from his role in the scheme to obtain false tax refunds. Megginson further admitted that, in October 2007, he filed an Offer in Compromise (OIC) with the IRS seeking to settle his individual income tax liability. Megginson admitted that he falsely stated that he had insufficient assets and income to pay his $60,000 tax liability and falsely omitted from the OIC a bank account he had with $600,000 in readily available funds from which he could pay his tax liability.




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Thursday, May 24, 2012

Tyrone Devon Thompson, Aritha Currie, Julius Thompson, Tronda Thompson and Shonda Sneed were Indicted for Conspiring to Defraud the United States


Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-669.html 

Tyrone Devon Thompson, Aritha Currie, Julius Thompson, Tronda Thompson and Shonda Sneed were charged in an indictment by a federal grand jury in the Middle District of Georgia on a variety of counts stemming from a tax fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today. The 22-count indictment charges all five with conspiring to defraud the United States and filing false claims against the United States. The indictment, which was returned on May 11, 2012, was unsealed following the defendants’ arrests.

According to the indictment, all of the defendants conspired together to file false federal income tax returns that sought fraudulent refunds. The defendants directed the IRS to directly deposit the false refunds into the bank accounts of the defendants. The bank accounts received at least $280,000 in false tax refunds.

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, all the defendants face a maximum potential sentence of five years in prison for the conspiracy charge and three years for each false claim count. All the defendants are also subject to fines and mandatory restitution if convicted.




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Wednesday, May 23, 2012

Jonathon Felix Convicted of Filing False Returns


Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-660.html 

Jonathon Felix, formerly of Villanova, Pa., was found guilty by a federal jury of willfully signing and filing false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge for the Eastern District of Pennsylvania Petrese Tucker presided over the trial in Philadelphia.

According to testimony and evidence presented to the jury at trial, Felix operated a corporation called United Professional Plans Inc. (UPPI), located in Philadelphia, which he co-owned with his father until he passed away in 2000. The evidence showed that while operating UPPI, Felix removed significant funds from the company in various ways from 1999 through 2002, causing the failure of UPPI. Felix deposited these business funds into his personal accounts or used them for personal expenditures. Felix willfully signed and filed false individual income tax returns for those years that substantially under-reported his income and did not include the funds he appropriated from UPPI. Felix’s criminal conduct caused a tax loss to the IRS of about $390,000.

Felix faces a maximum potential sentence of 12 years in prison and a $1 million fine. Judge Tucker scheduled sentencing for Aug. 23, 2012.




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Tuesday, May 22, 2012

Ohio Insurance Salesman William A. Herder Guilty of Tax Charges


Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-657.html 

A jury convicted William A. Herder of Richland County, Ohio, yesterday on federal tax charges, the Justice Department and Internal Revenue Service (IRS) announced. Trial began on May 11, 2012, before U.S. District Judge Sara Lioi, sitting in Akron, Ohio. Herder was charged with corruptly endeavoring to impair and impede the due administration of the Internal Revenue laws, tax evasion and five counts of failure to file tax returns. He was convicted of all counts.

According to the evidence at trial, Herder sold insurance for Aflac Inc, a nationwide supplemental insurance provider, from an office in Mansfield, Ohio. Herder had not filed a timely or valid tax return in more than a decade. For the 2000 tax year, Herder filed a tax return on which he falsely claimed that he had not earned any income. Subsequently, Herder failed to file any tax returns for the 2001-2009 tax years, despite earning income and receiving numerous warnings and notices from the IRS. The evidence at trial showed that, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2003, Herder transferred title to his house to a bogus foundation he established in Utah called the “Mentor Foundation.” Herder also cashed out an Individual Retirement Account and a life insurance policy, converted large amounts of cash to silver coins, and paid expenses with cash and money orders, all in an effort to prevent the IRS from collecting his unpaid taxes.

In addition to failing to file valid tax returns and hiding his assets from the IRS, trial evidence showed Herder submitted numerous obstructive letters and documents to the IRS and the insurance companies he represented in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. The evidence at trial showed that Herder obtained some of these materials from Joseph Flickinger, who was previously convicted and sentenced for a tax fraud conspiracy and later enjoined from preparing tax returns for others.




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Monday, May 21, 2012

Pete Gutierrez and Jeanette Gutierrez Allegedly Prepare Returns Claiming False Deductions and Tax Credits


Source-  http://www.justice.gov/tax/2012/txdv12637.htm 

WASHINGTON – The United States has sued Pete Gutierrez and Jeanette Gutierrez, who do business as Fast Cash Refund Express and Fast Cash Refund Express Electronic Services, seeking to bar them and their companies from preparing any federal tax returns for others, the Justice Department announced today. In addition to the Gutierrezes, the civil injunction suit also named FCRE Inc., and Fast Cash Refund Express Electronic Tax Service LLC, as defendants.

According to the government complaint, the Gutierrezes, a married couple from San Antonio, use their companies to prepare federal tax returns for customers who claim false and exaggerated personal deductions, business deductions and education and energy tax credits in order to understate the customers’ tax liabilities unlawfully.

According to the complaint, of the tax returns prepared by the Gutierrezes through their companies for 2008 through 2010 that the Internal Revenue Service has audited, over 96 percent resulted in the customers owing additional taxes. The complaint alleges that the understatements of tax on these returns exceeded $2 million.




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Sunday, May 20, 2012

Crystal Sayles Pleads Guilty in Two Separate Stolen Identity Refund Fraud Schemes


Source-  http://www.justice.gov/tax/2012/txdv12640.htm 

Crystal Sayles, of Montgomery County, Ala., pleaded guilty today to one count each of filing false claims, access device fraud, and aggravated identity theft. She also agreed to the forfeiture of a Mercedes Benz as part of her plea agreement. Sayles was indicted on 36 different counts on Jan. 19, 2012. According to her plea agreement, between January 2010 and July 2011, Sayles and others were involved with the filing of at least 482 fraudulent tax returns using stolen identities. These returns sought at least $2,181,879 in tax refunds. All of the returns had been filed through a tax preparation business called Simmons Financial, which Sayles opened in the name of another individual in order to conceal her own involvement. The indictment alleged that the refunds were often directed to prepaid debit cards and in the plea agreement, Sayles admitted to using a debit card loaded with a fraudulently obtained refund to receive cash.

In a separate case, Chiquanta Davis and Terrence Davis, both of Elmore County, Ala., each pleaded guilty to crimes related to another stolen identity refund fraud scheme. On May 11, 2012, Terrence Davis pleaded guilty to one count of theft of public funds, while on May 14, 2012, Chiquanta Davis pleaded guilty to one count each of conspiracy to defraud the government with respect to claims, theft of public funds, and aggravated identity theft. Chiquanta Davis also agreed to the forfeiture of a Cadillac Escalade as part of her plea agreement. Both had been charged in a superseding indictment filed on Jan. 19, 2012.

According to her plea agreement, Chiquanta Davis had been involved in stolen identity refund fraud since at least December 2009. In January 2010, she opened a bank account that received numerous fraudulently obtained tax refunds. A total of $1,458,600 in refunds were directed to this account in 2010, although many were intercepted and stopped by the IRS. Then in 2011, Chiquanta Davis assisted with the filing of numerous false tax returns using stolen identities. Between January and June of 2011, 192 false returns requesting $769,223 in refunds were filed from her home. These refunds were directed to various bank accounts, including her own account. According to his plea agreement, Terrence Davis’s bank accounts received over $100,000 in false tax refunds and he used a portion of the stolen proceeds for his own use.




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Saturday, May 19, 2012

Crystal Ann Poole Indicted in San Francisco for Tax Evasion and Bank Fraud


Source-  http://www.justice.gov/tax/2012/txdv12641.htm 

WASHINGTON – A federal grand jury in San Francisco has returned an indictment charging Crystal Ann Poole with evading income taxes for over eight years and for defrauding a federally insured bank in Mississippi, the Justice Department and Internal Revenue Service (IRS) announced today.

The indictment alleges that Poole had failed to file income tax returns and failed to pay income taxes since 1998, despite earning, in later years, as much as $200,000 each year. She allegedly evaded collection of her taxes by using a false Social Security number and by keeping her employers from withholding income taxes from her wages.

The indictment further alleges that, in January 2006, Poole defrauded the Community Bank of Mississippi in order to borrow $335,000 to buy a home in Florence, Miss. In order to get the loan, she allegedly provided the bank with a false Social Security number that masked several disqualifying financial circumstances to include a recently filed bankruptcy, one pending lawsuit, and numerous unpaid debts.

An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Poole faces a maximum potential sentence of 51 years in prison and a maximum fine of over $2 million.




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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
www.irsrewards.com

Friday, May 18, 2012

Loretta Fergerson and her sister Tracey Fergerson Were Sent to Prison for Their Roles in Stolen Identity Refund Fraud


Source-  http://www.justice.gov/tax/2012/txdv12631.htm 

WASHINGTON – Loretta Fergerson and her sister, Tracey Fergerson, both of Montgomery, Ala., were each sentenced to 115 months prison for their involvement in a conspiracy to file claims for false income tax refunds using stolen identities, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Judge Mark Fuller ordered the Fergerson sisters to pay $504,305 in restitution to the IRS.

According to court documents, Loretta Fergerson owned and operated a tax return preparation business called Fast Tax Cash in Montgomery. From 2005 through 2008, Loretta and Tracey Fergerson filed tax returns using stolen identities in order to claim fraudulent tax refunds. Additionally, Loretta Fergerson and her employees filed tax returns for Fast Tax Cash customers that contained false information in order to obtain higher refunds for customers. Loretta Fergerson also created false driver’s licenses and false Social Security cards to be placed in customer files for returns that were prepared using stolen identities.

Court records established that Tracey Fergerson participated in the scheme by gathering stolen personal information and also by cashing refund checks for tax returns that were filed using the stolen personal information. Tracey Fergerson also recruited customers for Fast Tax Cash and coached them to provide false information in order to fraudulently increase their tax refund amounts. She further admitted that she improperly obtained personal information, including names and social security numbers, and used that personal information to have false tax returns prepared at Fast Tax Cash.

“The stolen identity refund fraud crimes committed by these defendants are an affront to honest, hard-working taxpayers,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “The lengthy prison sentences handed down recently by this court, in this and other cases, show the high price that will be paid by identity thieves.”




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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
www.irsrewards.com

Thursday, May 17, 2012

Danita C. Doleman Pleads Guilty to Filing a False Tax Return


Source-  http://www.fbi.gov/washingtondc/press-releases/2012/head-of-non-profit-youth-organization-pleads-guilty-to-filing-a-false-tax-return 

WASHINGTON—Danita C. Doleman, 46, the president of a non-profit organization, pled guilty today to a charge of filing a false tax return stemming from her participation in a scheme involving former District of Columbia Council member Harry L. Thomas, Jr.

The guilty plea was announced by U.S. Attorney Ronald C. Machen, Jr.; James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office; and Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).

Doleman, of Washington, D.C., pled guilty in the U.S. District Court for the District of Columbia to a criminal information. The tax charge carries a maximum penalty of three years in prison, as well as a possible fine and an order to make restitution. No sentencing date was set. Under federal sentencing guidelines, the parties have agreed that the applicable range would be a maximum of six months of incarceration and a fine of up to $5,000. As part of the plea agreement, Doleman agreed to cooperate in any criminal investigation or prosecution.

According to a statement of offense signed by Doleman as well as the government, Doleman was the president of Youth Technology Institute (Youth Tech), one of the non-profits used by Thomas in a scheme in which he used more than $350,000 in taxpayers’ money for his own personal benefit. Among other things, she and Youth Tech helped channel more than $100,000 in taxpayers’ money to Thomas and a political organization to pay for an inaugural ball.

Thomas, who earlier pled guilty to theft and tax charges, was sentenced May 3, 2012 to 38 months in prison. As part of his plea agreement, he resigned from office in January 2012 and agreed to make restitution. Two others, leaders of another non-profit, have pled guilty in the case.

“Today’s guilty plea is one more step in our efforts to hold accountable those who collaborated with Harry Thomas, Jr. to divert tax dollars to his own pockets and his pet projects,” said U.S. Attorney Machen. “Danita Doleman was the head of a non-profit that helped Harry Thomas, Jr. funnel more than $100,000 that was intended for children towards paying expenses for an adult social event. I greatly appreciate the outstanding efforts of the agents and prosecutors who continue to work so hard on this matter.”

“Ms. Doleman knowingly participated in this public corruption scheme by allowing the misuse of taxpayer money for personal benefit,” said Assistant Director in Charge McJunkin. “Her guilty plea today demonstrates that those who commit corruption, as well as those who allow it, will be held accountable for their actions.”

“IRS-Criminal Investigation is working vigorously to stop the misuse and abuse of non-profits in promoting or concealing federal crimes,” said IRS Special Agent in Charge Hylton. “The message is clear that those who engage in this type of activity will face stiff criminal penalties.”

According to the statement of offense, Doleman helped Thomas and a political organization use D.C. tax money to recoup their expenses for the 51st State Inaugural Ball, an event at the John A. Wilson Building that took place on January 20, 2009. When Thomas announced plans for the event in December 2008, he stated that he would seek private donations to cover the difference between the event’s cost and admission revenues. Doleman and Youth Tech had no role in planning the event, and she was not even aware that it was taking place.

After the event, Thomas and the political organization had insufficient funds to cover the costs, and he turned to Doleman. Thomas told Doleman that Youth Tech had an opportunity to obtain a grant through a non-profit public-private partnership that provided resources and developed programs to benefit children and youth in the District of Columbia. Thomas said that Youth Tech would get the money, according to the statement of offense, and could keep a portion of it, but that Youth Tech would pass along most of the grant to the political organization.

On or about February 4, 2009, a staff member under Thomas’s supervision submitted false paperwork to the public-private partnership seeking a $110,000 grant to fund a youth-centered inaugural event associated with Youth Tech. In fact, the money was to pay the debts from the 51st State Inaugural Ball. Doleman also signed a grant agreement even though she knew that Youth Tech had played no role in the inaugural event and that it already had occurred.

The public-private partnership issued a $110,000 check to Youth Tech on February 5, 2009. At Thomas’s direction, Doleman wired $104,500 of the grant funds to the political organization. She spent the remaining $5,550 on matters not related to the inaugural ball.

In addition, the statement of offense details Doleman’s involvement with Thomas regarding a sports camp conducted by Youth Tech for District of Columbia youth in the summer of 2009.

Youth Tech submitted a budget request form to the public-private partnership. The form showed a total budget of $39,086, including $13,000 designated for Doleman as salary.

After the program was complete, Doleman sought an additional $5,000 in salary, and she contacted Thomas’ office for help in securing more money from the public-private partnership. On August 8, 2009, at the direction of Thomas and the staff member under his supervision, the public-private partnership issued a $10,000 check to Youth Tech. Doleman then wrote a $5,000 check to an organization controlled by Thomas—as he directed—and she kept the remaining $5,000 as personal income.

The tax charge involves returns filed by Doleman for calendar 2009. Doleman failed to disclose $20,000 in personal income from Youth Tech that year.




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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
www.irsrewards.com

Wednesday, May 16, 2012

Local Restaurant Chain Owners Charged with Cheating the IRS of Millions of Dollars


Source-  http://www.fbi.gov/philadelphia/press-releases/2012/local-restaurant-chain-owners-charged-with-cheating-the-irs-of-millions-of-dollars 

PHILADELPHIA—Robert Mattei, Leo McGlynn, Brian Welsh, Joseph Donnelly, and Elena Ruiz—the owners and managers of the Nifty Fifty’s restaurant chain—were charged today by information in a tax evasion conspiracy that cheated the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. The case was announced by United States Attorney Zane David Memeger, IRS Acting Special Agent in Charge Akeia Connor with the Criminal Investigation Division, and FBI Special Agent in Charge George C. Venizelos. The defendants—Mattei, 73, of Del Ray Beach, Florida; McGlynn, 52, of Swarthmore, Pennsylvania; Welsh, 48, of Springfield, Pennsylvania; Donnelly, 49, of Springfield, Pennsylvania; and Ruiz, 46, of Drexel Hill, Pennsylvania—are charged with conspiracy to commit tax evasion and tax evasion for allegedly constructing a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain. The information alleges that the defendants not only evaded paying the taxes they owed, but that they filed income tax returns claiming they were due refunds based on the erroneous reporting of their incomes. Mattei, McGlynn, Donnelly, and Welsh are also charged with bank fraud; and McGlynn and Donnelly are also charged with aggravated structuring of financial transactions.

According to the information, the defendants have evaded paying taxes since the restaurant was established in 1986 by, among other things, paying employees a portion of their wages with unreported cash in order to evade payroll taxes; paying suppliers with unreported cash; and having false tax returns prepared that under-reported income and falsely inflated expenses and deductions. Just between the years 2006 and 2010, it is alleged the defendants deliberately failed to properly account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes.

“Owning your own business is part of the American dream. But with that dream comes responsibilities, including paying your fair share of federal taxes,” said Memeger. “It is alleged that these defendants conspired to disregard their responsibilities, to the tune of over $15 million, so they could enrich themselves at the expense of all the hardworking Americans who follow the rules and pay their taxes.”

It is further alleged that in the course of their conspiracy, defendants Mattei, McGlynn, Donnelly, and Welsh committed bank fraud by submitting to the bank bogus income tax returns in order to secure several business loans; and that defendants McGlynn and Donnelly structured numerous cash deposits of undeclared income into a bank account in an effort to avoid federal reporting requirements.

“The charges announced today are the result of a lengthy and complex financial investigation involving Nifty Fifty’s restaurants,” said Acting Special Agent in Charge of IRS-Criminal Investigation Akeia Conner. “These charges summarize a scheme in which millions of dollars in income were skimmed from a successful business in order to evade paying taxes on the income. IRS-Criminal Investigation is committed to investigating these types of tax fraud schemes in order to build faith in our nation’s tax system and to ensure that everyone is paying their fair share. It is important to remember that tax evasion is not a victimless crime and the honest taxpayers suffer when others cheat the government.”

If convicted, Mattei and Welsh face a maximum sentence of 40 years of imprisonment, five years of supervised release, a fine of up to $1.5 million, full restitution to the IRS, and a $300 special assessment. If convicted, McGlynn and Donnelly face a maximum sentence of 50 years of imprisonment, five years of supervised release, a fine of up to $2 million, full restitution to the IRS, and a $400 special assessment. If convicted, Ruiz faces a maximum sentence of 10 years of imprisonment, three years of supervised release, a fine of up to $500,000, full restitution to the IRS, and a $200 special assessment.




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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
www.irsrewards.com

Tuesday, May 15, 2012

Roberto Olivares Charged In Scheme To Defraud Taxpayers Of Their Full IRS Refunds



FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced that Roberto Olivares, 34, and Rojelio Martin, 30, both of Tulare, have been arraigned and pleaded not guilty to charges brought by a federal grand jury. On April 19, 2012, Olivares and Martin were charged with 79 counts of wire fraud resulting from their scheme to defraud clients of tax refunds.

According to the indictment, from January to May 2008, Olivares and Martin defrauded clients of Olivares’s businesses: Success Auto Insurance and Success Income Tax Services. Olivares and Martin prepared tax returns for their clients that showed a lower tax refund then they were entitled to receive. The defendants gave the incorrect return to the client, but filed the correct return that gave the taxpayers a higher refund amount. The defendants then took the difference between what was shown to their clients and the actual refunds amounts and used it for their personal benefit.

Olivares was arrested Tuesday, May 8, 2012, and was arraigned the same day. He is being held in custody pending the posting of a $20,000 cash and property bond. Martin was arraigned today and was temporarily detained by United States Magistrate Judge Dennis L. Beck pending a detention hearing on Wednesday, May 16, 2012 at 1:30 p.m.




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Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting
www.irsrewards.com

Monday, May 14, 2012

Thomas K. Frye and Kathy M. Frye Plead Guilty to Tax Fraud Conspiracy


Source-  http://www.justice.gov/tax/2012/txdv12625.htm 

WASHINGTON – Thomas K. Frye and Kathy M. Frye, husband and wife, and residents of Andalusia, Ala., pleaded guilty to conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to court documents, beginning in 1999, the Fryes conspired to defraud the United States by submitting IRS forms to their employers that falsely claimed they were exempt from federal income taxes. When the IRS attempted to collect back taxes owed by the Fryes, Thomas Frye submitted false financial instruments to the IRS in purported payment of his and his wife’s tax liability. In one such instrument, Mr. Frye represented to the IRS that the false instrument had a value of $100 billion. Court records also established that, as part of the conspiracy, the Fryes filed false federal income tax returns for the years 2000 through 2007 that substantially understated their incomes.

Sentencing has not yet been scheduled. The Fryes face a potential maximum of five years in prison, three years of supervised release, an order of restitution and a maximum fine of $250,000, or twice the loss caused by the offense.

Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division thanked the Special Agents of IRS - Criminal Investigation who investigated the case, Tax Division Trial Attorneys Charles M. Edgar, Jr. and Michael C. Boteler, who are prosecuting the case, and United States Attorney George L. Beck, Jr. and his entire office for their assistance with the prosecution.