Wednesday, October 31, 2012

Nelida I. Velasco was Sentenced to More Than Three Years in Prison for Stealing Identities Used in Tax Scheme


Source- http://www.fbi.gov/cleveland/press-releases/2012/chardon-woman-sentenced-to-more-than-three-years-in-prison-for-stealing-identities-used-in-tax-scheme

A Chardon woman who stole the identifiable health information of at least 35 individuals from her work place and then provided this information to people who used the information to file the fraudulent tax returns was sentenced to more than three years in prison today, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

Nelida I. Velasco, 38, was sentenced to 39 months in federal prison and ordered to pay $47,004 in restitution.

Co-defendant David T. Tufts, also of Chardon, was previously sentenced to four years in prison.

Both pleaded guilty earlier this year to charges including conspiracy to file false tax returns, making false claims, misuse of Social Security account numbers, and aggravated identity theft, according to court records.

From in or about March 2009 to in or about September 2010, Tufts and Velasco, along with other co-conspirators, conspired to file, and did file, at least 35 false 2008 and 2009 federal income tax returns in the names of 35 separate individuals, resulting in a total of at least $155,000 in false claims being filed with the IRS, according to court documents.

Tufts and Velasco provided the names, Social Security account numbers, and other personal identifiers to a co-conspirator, who then used that information to create false Form W-2s and fraudulent tax returns, which were then filed electronically with the IRS, according to court records.

Many of the names, Social Security account numbers, and personal identifiers that Tufts, Velasco, and their co-conspirators used to create these fraudulent tax returns were stolen by Velasco from her then-employer, a medical billing company, according to court records.

Velasco stole the identifiable health information of at least 35 individuals from her work place and then provided this information to Tufts and her other co-conspirators, who then used these personal identifiers of real people to prepare and file the fraudulent tax returns, according to court records.



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Tuesday, October 30, 2012

Edna Ledoux Jamieson Admitted to Filing a False Tax Return


Source- http://www.fbi.gov/richmond/press-releases/2012/moneta-woman-sentenced-on-tax-charge

LYNCHBURG, VA—A former employee of Genesis Mansions who pled guilty in May to tax charges related to money she earned through her participation in a mortgage fraud scheme was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.

Edna Ledoux Jamieson, 44, of Moneta, Virginia, previously waived her right to be indicted and plead guilty to one count of filing a false tax return for fiscal year 2007. This morning, Jamieson was sentenced to one-year of probation, a $100 special assessment, and 80 hours of community service. She was also ordered to pay back taxes.

Jamieson, who was a former employee of Genesis Mansions and a licensed realtor, admitted to receiving a $20,000 good faith payment for serving as a straw purchaser for a home in Moneta. The defendant also admitted to earning approximately $300 per week as an employee of Genesis Mansions. The defendant admitted to filing her fiscal year 2007 tax returns without including the $40,033 she earned from Genesis Mansions.



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Monday, October 29, 2012

Michael and Linda Mastro Indicted for Bankruptcy Fraud and Money Laundering


Source- http://www.fbi.gov/seattle/press-releases/2012/michael-and-linda-mastro-indicted-for-bankruptcy-fraud-and-money-laundering

SEATTLE—A federal grand jury in Seattle today retuned a 43-count indictment charging MICHAEL MASTRO, 87, and his wife LINDA MASTRO, 62, with a variety of bankruptcy fraud crimes and multiple counts of money laundering, announced First Assistant United States Attorney Annette L. Hayes. The couple was arrested yesterday in France on a warrant based on a criminal complaint. The indictment now replaces that charging document as the Justice Department Office of International Affairs works to have the MASTROs returned to the United States to face these criminal charges.

“Those who flaunt the law and ignore our legal process will be held to account,” said First Assistant United States Attorney Annette L. Hayes. “Thanks to the unrelenting efforts of law enforcement both here and abroad, the Mastros have been arrested and will face the charges that the grand jury returned in their indictment today.”

The indictment describes a series of frauds, false statements, and acts of money laundering allegedly committed by the MASTROS. In particular it details how, in the course of their marriage, the MASTROs acquired assets ranging from expensive diamond rings to valuable art and furnishings to a $15 million home in Medina, Washington. The indictment states that between August 2008 and May 2009, as the real estate market plummeted, the MASTROs sought to protect their assets from creditors. In October 2008, the couple set up an offshore trust in Belize and a series of limited liability corporations that were “owned” by the offshore trust. The couple transferred assets such as the diamond rings, and their Rolls Royce automobile and Medina home to the limited liability companies owned by the off shore trust.

When the MASTROS were forced into bankruptcy in 2009, they failed to disclose to the bankruptcy court a bank account associated with the limited liability corporations. Between July 2009, and July 2010, the couple used more than $761,000 from this hidden account for payments on an American Express credit card; car loans for a 2006 Range Rover, a 2007 Bentley Continental, and a 2008 Rolls Royce Phantom Coupe; household expenses; legal expenses; department stores purchases; and a bulk gold coin purchase. The 16 counts of money laundering describe the movement of funds to and from the MASTROs’ hidden bank account that they utilized as part of the bankruptcy fraud.

The individual bankruptcy fraud counts in the indictment detail false statements, oaths and declarations made by MICHAEL or LINDA MASTRO. The indictment describes the concealment of assets such as a wine collection, Steinway piano, and Chihuly glass artwork which the MASTROs stored in Palm Desert, California, without informing the bankruptcy trustee. The indictment further describes how LINDA MASTRO and MICHAEL MASTRO lied about the purchase and whereabouts of a 15.93 carat diamond ring, in an effort to claim it was LINDA MASTRO’s separate property from before their marriage. The indictment charges that LINDA MASTRO lied and said she had left both the 15.93 carat ring and a 27.80 carat ring with a person “outside the United States,” when in fact she had possession of the rings.



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Sunday, October 28, 2012

Andre Craig Pleads Guilty In Fraudulent W-2 Tax Scheme


Source- http://www.justice.gov/usao/ils/News/2012/Oct/10292012_Craig%20Press%20Release.html

Andre Craig, age 32, of St. Louis, Missouri pled guilty today to the offense of Filing a False Federal Income Tax Return, which carries a maximum possible penalty of up to three years in prison. Sentencing is scheduled for February 15, 2013.

The Indictment charged a total of eight individuals. Andre Craig admitted to participating as a part of a scheme that prepared and provided false Forms W-2 to friends and relatives for the purpose of enabling them to file false federal income tax returns and receive false federal tax refunds. The W-2's were falsified in representing that certain individuals were employees of Masters Touch Cleaning Services, Inc., a Missouri corporation. The W-2's also falsely represented wages paid, falsely represented federal income taxes withheld, falsely represented Social Security taxes withheld, and falsely represented Medicare taxes withheld.



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Saturday, October 27, 2012

Seven Charged With Tax Fraud Scheme


Source- http://www.justice.gov/usao/pam/news/2012/Trauger_10_26_2012.htm

The United States Attorney’s Office for the Middle District of Pennsylvania, announced that charges were filed late Thursday against seven individuals involved in a tax fraud scheme.

According to United States Attorney Peter J. Smith, Russell Trauger, age 63, and Harold Trauger, age 66, both of Factoryville, Pennsylvania; Donald Murley, age 60, Laura LaPorta Chapman, age 45, of Palm, Pennsylvania; and Bryan Cavage, age 32, of Harker Heights, Texas, are each charged in one count Informations with filing with the Internal Revenue Service fraudulent income tax returns claiming false refunds. The scheme involved reporting exorbitant interest income and requesting exorbitant refunds on their individual income tax returns.

If convicted of the offense, they each face a maximum penalty of five years of imprisonment and a fine of $250,000.

Additionally, Laurie Cavage, age 41, of Factoryville, Pennsylvania, and Tara Trauger-Walsh, age 34, of Dalton, Pennsylvania, are charged with willfully mailing documents to the IRS claiming fraudulent refunds. If convicted of the offense, each faces a maximum penalty of one year of imprisonment and a fine of $100,000.



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Friday, October 26, 2012

Vernon Harrison was Indicted for Involvement With Stolen Identity Refund Fraud Conspiracy


Source- http://www.justice.gov/tax/2012/txdv121287.htm

WASHINGTON – On Oct. 16, 2012, Vernon Harrison, of Montgomery, Ala., was indicted by a federal grand jury on charges of conspiring to file false claims, mail fraud, aggravated identity theft and embezzlement from the mail, the Justice Department, the Internal Revenue Service (IRS), and the U.S. Postal Service, Office of the Inspector General (OIG), announced today after the indictment was unsealed.

According to the indictment, Harrison was a U.S. Postal Service mail carrier who was part of a stolen identity refund fraud conspiracy. Members of the conspiracy filed false tax returns using stolen identities from various locations including the Northern District of Alabama. The fraudulent tax refunds were directed to debit cards that were mailed to addresses on Harrison’s postal route in Montgomery, Ala. Harrison retrieved the debit cards from the mail and, for a fee, provided them to a co-conspirator.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Harrison faces up to 10 years in prison for the conspiracy count, 20 years for each mail fraud count, 5 years for each mail embezzlement count and a mandatory 2-year sentence for the aggravated identity theft counts. He is also subject to fines, forfeiture, and mandatory restitution if convicted.



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Thursday, October 25, 2012

William R. Herder Pleads Guilty to Tax Obstruction and Currency Structuring


Source- http://www.justice.gov/opa/pr/2012/October/12-tax-1293.html

William R. Herder of Bellville, Ohio, pleaded guilty yesterday to corruptly endeavoring to obstruct the administration of the tax laws and currency structuring, Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, U.S. Attorney for the Northern District of Ohio Stephen M. Dettelbach and Special Agent in Charge, Internal Revenue Service (IRS) - Criminal Investigation, Cincinnati Field Office, Darryl K. Williams announced. Herder was previously indicted in June of this year.

According to documents filed in the case, Herder, an independent insurance salesman for Aflac Inc., failed to file timely and accurate income tax returns for the years 2000-2009 despite earning substantial insurance commissions and receiving warnings and notices from the IRS. Herder filed returns for the years 2010 and 2011 on which he reported that he owed taxes to the government, but failed to pay the almost $50,000 in taxes that he owed for those years.

According to the plea agreement and indictment filed in this case, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2004, Herder formed two entities in Nevada—one for the purpose of hiding his automobiles and another for the purpose of hiding his insurance business. Herder also began converting his insurance commission checks to cash and paying his expenses in cash to prevent the IRS from collecting his taxes from his bank account.

The plea agreement and indictment filed in this case also stated that Herder submitted numerous obstructive letters and documents to the IRS, Aflac, and his credit union 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. In 2005, Herder attempted to pay his taxes with a fake financial instrument called an “International Bill of Exchange.”



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Wednesday, October 24, 2012

Kenneth Jerome Blackmon Jr., was Indicted for Stolen Identity Refund Fraud


Source- http://www.justice.gov/opa/pr/2012/October/12-tax-1283.html

A federal grand jury in Montgomery, Ala., returned an indictment charging Kenneth Jerome Blackmon Jr., with aggravated identity theft, wire fraud, access device fraud and misuse of a Social Security number, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to the indictment, from January 2011 through November 2011, Blackmon participated in a scheme to file false tax returns using stolen identities. As alleged, he possessed lists of names, Social Security numbers and dates of birth as well as prepaid debit cards, all for the purpose of obtaining fraudulent tax refunds from the IRS.

An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Blackmon faces a maximum potential sentence of 20 years in prison for each of the two wire fraud counts, 10 years for the access device fraud count, 5 years for the misuse of a Social Security number count, and a mandatory 2-year sentence for the aggravated identity theft counts. He is also subject to fines and mandatory restitution if convicted.



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Tuesday, October 23, 2012

Jacqueline Slaton Sentenced to Prison for Using Stolen Identities to Obtain Tax Refunds


Source- http://www.justice.gov/opa/pr/2012/October/12-tax-1278.html

Jacqueline Slaton was sentenced to 70 months in prison and order to pay restitution of over $100,000 for her involvement in stolen identity refund fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to court documents, in 2012, Slaton was in the midst of filing false tax returns using stolen identities when IRS special agents executed a search warrant and ended her operation. At the time, Slaton had access to hundreds of stolen identities.

According to the plea agreement, between December 2011 and March 2012, Slaton filed at least 102 fraudulent federal income tax returns using stolen identities. She also filed 102 fraudulent Alabama state tax returns. The total federal and state tax refunds requested was $154,904. Slaton had the tax refunds directed to prepaid debit cards and had the cards mailed to various addresses on a U.S. carrier’s route. A postal employee agreed to collect the prepaid debit cards for a fee.

“The Justice Department remains committed to investigating and prosecuting tax fraud perpetrated by identity thieves,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “The lengthy prison sentences handed down by this court, in this and other cases, show that criminals will pay a high price for committing stolen identity refund fraud.”

“Be assured that IRS has made an unwavering commitment to the pursuit of identity theft,” stated Richard Weber, Chief, IRS Criminal Investigation. “Identity theft is not a victimless crime. Identity theft is a contemptible crime that victimizes honest taxpayers and causes immense hardship. IRS Criminal Investigation works in concert with our partners at the U.S. Attorney’s Office and together we will hold those who engage in similar conduct accountable.”



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Monday, October 22, 2012

Veronica Temple and Yolanda Moses Both Pleaded Guilty in Million Dollar Stolen Identity Refund Fraud Scheme


Source- http://www.justice.gov/tax/2012/txdv121260.htm

WASHINGTON – Several family members, all residents of Montgomery, Ala., pleaded guilty in the Middle District of Alabama to their involvement in a million dollar stolen identity refund fraud scheme, the Department of Justice and the Internal Revenue Service (IRS) announced today.

Veronica Temple and Yolanda Moses both pleaded guilty to one count of conspiracy to defraud the United States, one count of theft of public funds and one count of aggravated identity theft. Barbara Murry pleaded guilty to one count of conspiracy to defraud the United States and one count of aggravated identity theft. Douglas Murry pleaded guilty to one count of conspiracy to defraud the United States and one count of aggravated identity theft. Lee Moses and Jeffrey Temple both pleaded guilty to one count of filing a false tax return. Veronica Temple and Yolanda Moses are scheduled to be sentenced on Feb. 6, 2012. Sentencing dates for the other defendants have not been scheduled.

“The Tax Division is committed to prosecuting those who steal the personal identities of American taxpayers to commit tax refund fraud,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “We continue to work closely with the IRS to protect the public from these criminals.”

“Honest and law abiding citizens are frustrated by those who use deceit and fraud to line their pockets with other people’s money as well as skirt their own tax obligations,” said Richard Weber, Chief, IRS-Criminal Investigation. “The U.S. government and the people of the United States will not tolerate the misuse of our nation’s tax system to facilitate identity theft. IRS-Criminal Investigation will use every means available to investigate and bring to justice those who engage in the illegal use of other taxpayer’s information.”

On April 25, 2012, Barbara Murry, Douglas Murry, Yolanda Moses, Lee Moses, Veronica Temple, Jeffrey Temple and others were charged in a 33-count indictment by a federal grand jury on a variety of counts stemming from a stolen identity refund fraud scheme. According to court documents, all of the defendants are family members. Barbara Murry owned and operated B & B Weaving Shop, located in Montgomery. B& B Weaving Shop was located in the same building as B & B Tax Service. Barbara Murry’s daughter, Yolanda Moses, owned and operated B & B Tax Service.



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Sunday, October 21, 2012

George P. Hranowskyj Sentenced to 168 Months for Elaborate Bank and Tax Fraud


Source- http://www.fbi.gov/norfolk/press-releases/2012/hampton-roads-businessman-sentenced-to-168-months-for-elaborate-bank-and-tax-fraud

NORFOLK, VA—George P. Hranowskyj, 47, of Chesapeake, Virginia, was sentenced today to 168 months in prison for carrying out elaborate and sophisticated fraud schemes that contributed to the failure of the Bank of the Commonwealth and defrauded investors and the government of millions of dollars.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Juan C. Molina, Acting Special Agent in Charge of the FBI’s Norfolk Field Office; Rick A. Raven, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C. Field Office; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG), made the announcement after sentencing by United States District Judge Raymond A Jackson.

“Mr. Hranowskyj’s agreement to perform personal and professional favors for bank insiders in exchange for unfettered access to millions of dollars in credit exposes the ugly underbelly of how certain insiders treated the Bank of the Commonwealth as their personal piggy bank,” said U.S. Attorney MacBride. “His sentence of 14 years in prison sends a strong and unequivocal message that white collar criminals will be held accountable for the often devastating impact of their crimes on our communities.”

“Today’s sentence marks another chapter in bringing to justice those individuals who were responsible for the wanton fraud that so pervaded the financial dealings of the Bank of the Commonwealth,” said FBI Acting SAC Molina. “I want to thank the agents, prosecutors, and supporting staff for their unwavering commitment to reveal these wide-ranging criminal misdeeds; they have served the public, and in particular the Hampton Roads community, well.”

“Hranowskyj treated this bank like he owned it, calling himself ‘Big Daddy’ to bank employees, overdrawing his accounts by $600,000, and demanding that the bank ‘lower his rates ASAP’ and cash his employees’ paychecks even though his account was in the red,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “If the bank did not do what he wanted, he threatened to stop participating in a vast fraud where he helped senior bank executives extend-out bad loans, pretending that they were current on the bank’s books, and bid up bank-owned property at auction using the bank’s own money. Hranowskyj and his partner, Eric Menden, leveraged such control over the bank due to this scheme that bank employees called it the ‘Bank of Eric and George.’ The $40 million fraud scheme perpetrated by these partners in crime contributed to the failure of the bank, a failure that left the entire Tidewater area without an important source of lending. SIGTARP and our law enforcement partners will bring to justice all those responsible for all fraud that drove Bank of the Commonwealth into the ground.”

“Today’s sentencing is fitting punishment for one of the principal perpetrators of the complex fraud scheme contributing to the failure of the Bank of the Commonwealth and related losses to the Deposit Insurance Fund,” said FDIC Inspector General Rymer. “The American people can be assured that the Federal Deposit Insurance Corporation Office of Inspector General will continue to partner with law enforcement colleagues in efforts to ensure the safety and soundness of our nation’s banks and the viability of the insurance fund.”

Hranowskyj pled guilty on July 12, 2012, to conspiracy to commit wire fraud and conspiracy to commit bank fraud.

According to court records, from January 2008 through August 2011, Hranowskyj and his business partner, Eric H. Menden, 53, of Chesapeake, Virginia, performed favors for insiders at the Bank of Commonwealth in exchange for preferential lending treatment and assisted insiders in concealing the extent of the bank’s non-performing assets by purchasing bank-owned property.

At the time the bank failed on September 23, 2011, Hranowskyj and his business partner were the bank’s largest lending relationship—together, the partners guaranteed approximately $41 million in loans. Almost all of these loans were on an interest-only basis, and the two men were regularly permitted to overdraw their accounts. According to court records, Hranowskyj obtained loans simply by sending an e-mail to a bank insider asking for money to purchase a Hummer or beach-front property. The close relationship between Hranowskyj, Menden, and bank insiders caused employees at the bank to sometimes refer to the Bank of the Commonwealth as “the Bank of Eric and George.”

Court records indicate that in November 2008, the bank sent to the Federal Reserve an application requesting approximately $28 million from the Troubled Asset Relief Program (TARP). Based on its regulator’s concerns about the health of the bank, the Federal Reserve later requested that the bank withdraw its TARP application, which the bank did.

In July 2010, the bank entered into an agreement with the Federal Reserve and other regulators that specifically prohibited the bank from extending, renewing, or restructuring any loans to specific troubled borrowers, which included Hranowskyj and his business partner.

In addition to the fraudulent conduct involving the Bank of the Commonwealth, Hranowskyj was sentenced for a separate scheme aimed at illegally profiting from historic rehabilitation tax credits. In this scheme, Hranowskyj and Menden systematically falsified invoices for large construction projects and used them to apply for federal and state historic tax credits. They had no personal use for the tax credits, but they instead sold them to investors in need of reducing their own tax liability.

In total, corporate investors paid Hranowskyj and his business partner approximately $8.7 million for illegitimate tax credits. As a result, the United States of America suffered a loss of approximately $6.2 million, and the Commonwealth of Virginia suffered a loss of approximately $6.3 million.

Menden pled guilty for his role in these fraud schemes on April 12, 2012, and was sentenced on September 26, 2012, to 138 months in prison.

This ongoing investigation is being conducted by the FBI’s Norfolk Field Office, IRS-CI, SIGTARP, and the FDIC-OIG, with cooperation from the Virginia Department of Historic Resources and U.S. Department of the Interior National Park Service. Assistant United States Attorneys Melissa E. O’Boyle, Katherine Lee Martin, and Uzo Asonye are prosecuting the case on behalf of the United States.

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



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Saturday, October 20, 2012

Jeffery Augustus Bernard was Sentenced to Time Served for Fraud and Money Laundering


Source- http://www.fbi.gov/pittsburgh/press-releases/2012/elk-county-humane-society-financial-advisor-indicted-on-fraud-and-money-laundering-charges

PITTSBURGH—An individual found in Farmington, Pennsylvania, has been sentenced in federal court to time served (approximately 12 months) on his conviction of mail fraud and money laundering, United States Attorney David J. Hickton announced today.

Senior United States District Judge Maurice B. Cohill imposed the sentence on Jeffery Augustus Bernard, 23, formerly from Jamaica.

According to information presented to the court, Jeffery Augustus Bernard, Junior Winston Powell, Michaelee Fitz-Andy Jamieson, Sylvester Howard Williams, and Christopher Brown were involved in laundering the proceeds of an advanced fee scheme whereby persons are deceived into believing that they have won the lottery.



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Friday, October 19, 2012

Gary Alcock was Sentenced to Prison for Tax Evasion and Conspiracy to Obstruct and Impede The IRS


Source- http://www.justice.gov/tax/2012/txdv121254.htm

WASHINGTON – A federal judge in Boston sentenced Gary Alcock today to 14 months in prison for tax evasion, for conspiring to defraud the United States, and for willfully failing to file tax returns, the Justice Department and Internal Revenue Service (IRS) announced. U.S. District Judge F. Dennis Saylor also ordered Gary Alcock to pay restitution in the amount of $515,518. Alcock pleaded guilty to the charges on Dec. 9, 2011, and provided substantial assistance to the government in prosecuting the case against the remaining defendants, which Judge Saylor cited, among other factors, as a basis for a reduced sentence.

Alcock, a resident of Westborough, Mass., testified at a trial of three defendants which resulted in guilty verdicts rendered by a federal jury on April 2, 2012. The jury convicted Charles Adams of Norwood, Mass., as well as Catherine Floyd and William Scott Dion, both of Sanbornville, N.H., for conspiracies to defraud the United States through the promotion and use of multiple tax fraud schemes. The jury convicted all three of conspiracy to defraud the IRS by promoting an “under the table” payroll scheme doing business as Contract America. Dion and Floyd were also convicted for conspiracy to defraud the IRS through the use of an “underground warehouse banking” scheme designed to conceal subscriber income and assets from the IRS.

Gary Alcock was a subscriber to the services of Dion, Floyd and Adams. According to the information presented in court, Alcock owned and operated a trash hauling business called G&K Trucking, as well as a landscaping business called Bark, Mulch and Loam in Shrewsbury, Mass. Between 2001 and 2004, Alcock employed the banking and nominee services of Dion and Floyd to set up a nominee company called “Alex Management” to divert and hide business receipts, to help his businesses fraudulently “disappear” on paper, and, thus, to evade IRS assessments and IRS collection activity. Alcock further used the services of Contract America, run by Adams, Dion and Floyd, in order to pay his employees “under the table” without withholding and paying over Social Security, Medicare and income taxes.

Judge Saylor previously sentenced Dion to seven years in prison, Floyd to five years in prison, and Adams to four years in prison for promoting these schemes.

In August 2009, Alcock, along with Dion, Floyd, Adams and three other individuals, were indicted for the promotion and use of these schemes. On Dec. 9, 2011, prior to trial, Gail and Myron Thorick of West Warwick, R.I., pleaded guilty to conspiring to defraud the United States by helping operate the “warehouse banking” scheme, and for filing false tax returns. On Jan. 24, 2012, Kenneth Scott Alcock, Gary Alcock’s brother, pleaded guilty to conspiracy relating to the payroll scheme and to one count of tax evasion. The Thoricks and Kenneth Scott Alcock await sentencing in November.



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Thursday, October 18, 2012

Elsayed Kazem “Tom” Safiedine and Mary Fawaz were Sentenced to Prison for Tax Fraud


Source- http://www.justice.gov/tax/2012/txdv121255.htm

WASHINGTON – U.S. District Judge Patrick J. Duggan sentenced Elsayed Kazem “Tom” Safiedine to 21 months in prison and Mary Fawaz to 12 months and one day in prison for tax fraud, the Justice Department and the Internal Revenue Service (IRS) announced today. Safiedine and Fawaz were convicted by a Detroit jury of conspiring to defraud the United States by impeding and impairing the lawful functions of the IRS.

According to evidence at trial, Safiedine was an officer and member of multiple business entities that operated and leased gasoline stations in the Detroit area. Fawaz was an officer of JSC Corporation, a business operated by Safiendine, and also served as a bookkeeper and office manager for several of Safiedine’s businesses. The evidence established that from 1998 through 2001, Safiedine and Fawaz arranged for third parties to negotiate checks from Sunoco Incorporated made payable to JSC Corporation. The checks from Sunoco, which totaled $845,000, were not properly reported to the accountant for JSC Corporation and as a result, were not included as income on JSC’s corporate tax returns filed with the IRS.

Further evidence presented revealed that Safiedine and Fawaz participated in the sale of a gasoline station owned by one of Safiedine’s businesses, MTK & KLC Partnership, during which Safiedine and Fawaz advised the accountant for MTK & KLC that the gas station sold for $175,000 less than its actual sale price, thus resulting in an understatement of income on the MTK & KLC partnership income tax return.



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Wednesday, October 17, 2012

William A. Herder Was Sentenced to 37 Months in Prison for Tax Evasion


Source- http://www.justice.gov/tax/2012/txdv121247.htm

WASHINGTON – A federal judge today sentenced William A. Herder of Richland County, Ohio, to 37 months in prison for tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced. U.S. District Judge Sara Lioi also ordered Herder to pay restitution to the IRS. On May 21, 2012, an Akron, Ohio, jury convicted Herder on all counts of an indictment that charged Herder with one count of tax evasion, one count of corruptly endeavoring to obstruct the administration of the Internal Revenue laws and five counts of willful failure to file tax returns.

According to the evidence at trial, Herder sold insurance for Aflac Inc., a nationwide supplemental insurance provider, from an office in Mansfield, Ohio. Despite earning substantial income from insurance sales and receiving warning notices and letters from the IRS about his obligations under the tax laws, Herder failed to file timely and valid tax returns for the years 2000-2009. For the year 2000, 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.

The trial evidence also established that in addition to failing to file tax returns and pay taxes, Herder attempted to conceal his assets from the IRS. 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 personal and business expenses with cash and money orders, all in an effort to prevent the IRS from collecting his unpaid taxes.

According to trial evidence, Herder submitted numerous obstructive letters and documents to the IRS 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. Herder sent similar letters to the companies for whom he sold insurance and to his credit union, all designed to prevent these companies from complying with IRS levies. Herder obtained these obstructive materials from several sources, including 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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Tuesday, October 16, 2012

Steven R. Hinz Pleads Guilty in Ohio Federal Court to Tax and Mortgage Fraud Conspiracies


Source- http://www.justice.gov/opa/pr/2012/October/12-tax-1237.html

Steven R. Hinz pleaded guilty today to tax fraud and mortgage fraud charges in Cleveland federal court, the Justice Department and Internal Revenue Service (IRS) announced. Hinz’s guilty pleas followed recent guilty pleas of three other defendants – Heather L. English, Patricia A. Polk and William E. Phillips III – who were charged in indictment in December 2011 on a tax conspiracy and various false return charges. The case is assigned to U.S. District Judge Patricia A. Gaughan, who scheduled the sentencing for January 2013.

Hinz pleaded guilty to one count of conspiracy to defraud the United States, one count of making a false 2008 income tax return, fifteen counts of aiding and assisting the preparation of false income tax returns and one count of conspiracy to commit bank fraud involving a mortgage fraud scheme. On Oct. 11, 2012, co-defendant Polk also pleaded guilty to the tax fraud conspiracy and the bank fraud conspiracy. On Oct. 4, 2012, co-defendant English pleaded guilty to tax fraud conspiracy and one count of aiding and assisting the preparation and presentation of Hinz’s false 2008 tax return. Also on Oct. 4, 2012, co-defendant Phillips pleaded guilty to the tax fraud conspiracy. Hinz was arrested in Miami in January 2012 and Polk was arrested in Sarasota, Fla., in February 2012. Phillips was arrested in Los Angeles in June 2012, after being deported from the Philippines upon request of the U.S. government. Hinz and Polk were also charged with the bank fraud conspiracy in supplemental information that was filed with the district court yesterday.

According to the indictment and documents submitted to the court, Hinz promoted a scheme to defraud the United States by filing false federal income tax returns claiming large tax refunds using the so-called Original Issue Discount (OID) process. The OID process involved the preparation of fictitious IRS Forms 1099-OID, falsely reporting that financial institutions, creditors and other entities had withheld large amounts of federal income tax on behalf of the defendants and other taxpayers, with respect to fictitious income. Hinz and English recruited potential clients by promoting the OID scheme to investors and employees of Hinz’s real estate business in Youngstown, Ohio. English prepared or directed the preparation of the 1099-OID forms and prepared and electronically filed the tax returns. Based on these fictitious withholdings, at least 17 false income tax returns for the year 2008 were filed with the IRS, claiming false refunds totaling over $3 million dollars. Under the scheme, taxpayers recruited by Hinz were to pay 20 percent of their refunds to Hinz and English, split equally between the two.

According to the supplemental information and other documents filed with the court, from approximately December 2006 through May 2009, Hinz conducted his real estate business in part through a scheme to defraud two federally-insured banks, Wells Fargo Bank and Huntington National Bank, which provided mortgage loans to the investors. The scheme was carried out through the filing of false mechanic’s liens for work not actually done and the providing of undisclosed down payment assistance to the investors. The scheme was designed to induce the banks to make mortgage loans based on false representations concerning the true price and value of the properties, the sources of down payments, and the disposition of loan proceeds. According to court documents, Polk began conspiring with Hinz to conduct the scheme beginning approximately April 2008.



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Saturday, October 13, 2012

Billy Joe Hunt and Gaines R. Newell Jr. were Sentenced for Kickback Conspiracy and Tax Crimes Related to Iraq Reconstruction Efforts


Source- http://www.justice.gov/opa/pr/2012/October/12-crm-1220.html

WASHINGTON – Two former employees of The Parsons Company, an international engineering and construction firm, were sentenced in federal court in the Northern District of Alabama for their participation in a kickback conspiracy in Iraq and related tax crimes, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Northern District of Alabama Joyce White Vance.

Billy Joe Hunt, 57, was sentenced today by U.S. District Judge Abdul Kallon in federal court in Huntsville, Ala., to 15 months in prison, three years of supervised release, $66,212 in restitution to the Internal Revenue Service (IRS) and forfeiture of $236,472. Gaines R. Newell Jr., 53, was sentenced yesterday by U.S. District Judge Virginia Hopkins in federal court in Birmingham, Ala., to 27 months in prison, three years of supervised release, $1,102,115 in restitution ($861,027 to the U.S. Army Corps of Engineers and $241,088 to the IRS) and forfeiture of $861,027.

On May 8, 2012, Hunt pleaded guilty to one count of conspiracy to commit mail and wire fraud and pay kickbacks, and one count of subscribing a false tax return. On April 10, 2012, Newell pleaded guilty to one count of conspiracy to commit mail and wire fraud and to pay kickbacks, and one count of subscribing a false tax return.

According to court documents, Newell and Hunt were employed by Parsons in Iraq as program manager and deputy program manager, respectively, under a contract that Parsons held to support the Coalition Munitions Clearance Program operated by the U.S. Army Corps of Engineers in Huntsville. The Coalition Munitions Program sought to preclude insurgents and other unfriendly groups from getting munitions that had been stockpiled, abandoned or seized, and using them against Coalition forces or the Iraqi public. In their plea proceedings, Newell and Hunt admitted taking over $1 million in kickbacks from subcontractors from 2005 to 2007, in return for arranging to award contracts on the munitions clearance program to subcontractors. Newell and Hunt also admitted filing false federal income tax returns by not disclosing kickback income.

On May 21, 2012, Hunt and Newell’s co-conspirator Ahmed Sarchil Kazzaz, 45, pleaded guilty for his role in the scheme. Kazzaz and his business, Leadstay Company, were indicted in the Northern District of Alabama in September 2011 for paying over $947,000 in kickbacks to Newell and Hunt. According to the plea agreement, between March 2006 and June 2007, Kazzaz agreed to pay kickbacks to Newell and Hunt totaling 13 percent of the amounts paid by Parsons, and thus obtained over $23 million in subcontracts providing materials and equipment to Parsons. After Kazzaz’s arrest in Los Angeles on Dec. 2, 2011, this case was transferred to the Central District of California, where Kazzaz pleaded guilty. His sentencing is set for Oct. 29, 2012 before U.S. District Judge R. Gary Klausner in the Central District of California.


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Friday, October 12, 2012

Brendan McGrath aka Benny McGrath was Sentenced To Prison For Filing False Tax Return


Source- http://www.justice.gov/usao/can/news/2012/2012_10_05_mcgrath.sentenced.press.html

SAN FRANCISCO - Brendan McGrath aka Benny McGrath, of San Francisco, was sentenced yesterday to four months in prison and a $10,000 fine, United States Attorney Melinda Haag announced.

McGrath pleaded guilty on June 4, 2012, to filing a false federal income tax return for the 2006 tax year. According to the plea agreement, McGrath admitted to owning and operating a business, McGrath Construction, Benny McGrath Construction, and Kelly Construction, located in San Francisco, during 2006 and 2007, through which he provided general contracting services throughout the San Francisco Bay area.

Under the plea agreement, McGrath admitted he received $272,900 in gross receipts from his construction business during 2006, that he did not provide his income tax return preparer with accurate and complete information to prepare his 2006 tax return and that he knew his tax return was false when he signed and filed it with the Internal Revenue Service because it did not report his construction business or the gross receipts he derived from that business.

McGrath, 32, of San Francisco, was indicted by a federal Grand Jury on March 17, 2011. McGrath was charged with two counts of failure to file federal income tax returns for the 2004 and 2005 tax years in violation of 26 U.S.C. §7203 and two counts of filing a false federal income tax return for 2006 and 2007 in violation of 26 U.S.C. §7206(1).



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Thursday, October 11, 2012

Barbara Perry was Indicted In Tax Refund Scheme, Identity Theft and Bank Fraud



SACRAMENTO, Calif. — A federal grand jury returned a 30-count indictment today charging Barbara Perry, 45, of Vallejo, with false claims on tax returns, identity theft, and bank fraud, United States Attorney Benjamin B. Wagner announced.

According to the indictment, Perry submitted tax returns in the names of 18 individuals in order to collect tax refunds. She also used closed bank accounts to fraudulently obtain money from a bank.

This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation and the United States Secret Service. Assistant United States Attorney Michael D. Anderson is prosecuting the case.

Perry faces a maximum statutory penalty for false claims of five years in prison and a $250,000 fine. The maximum penalty for identity theft is 15 years in prison and a $250,000 fine, and the maximum penalty for bank fraud is 30 years in prison and a $1 million fine. 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.



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Wednesday, October 10, 2012

Taneshia Stephenson Pleads Guilty To Filing Tax Returns Using Stolen Identities


Source- http://www.justice.gov/usao/can/news/2012/2012_10_05_stephenson.guiltyplea.press.html

SAN FRANCISCO, Calif. – Taneshia Stephenson pleaded guilty yesterday to conspiracy to file false claims United States Attorney Melinda Haag and Internal Revenue Service Criminal Investigation (IRS-CI) Special Agent in Charge Marcus Williams announced.

According to her plea agreement, beginning in July 2008, Stephenson helped other individuals obtain fraudulent tax refunds from the Internal Revenue Service based on false tax returns that were filed using stolen identities. Each of the tax returns that she assisted in filing were transmitted electronically, claimed no dependents, and listed Social Security payments as the only source of income. The false tax returns asked for a refund of all of the tax reported as withheld. As part of the scheme, the individuals Stephenson conspired with asked the IRS to directly deposit the fraudulent refund into a bank account that she could access. In 2008, Stephenson allowed her bank account to be used by co-conspirators for that purpose.

On February 28, 2012, Stephenson, 24, of Pittsburg, Calif., was charged with conspiracy to file false claims and three counts of filing a false claim. She pleaded guilty to conspiracy to file a false claim. Sentencing is scheduled for December 12, 2012.

The maximum statutory penalty for conspiracy to file false claims in violation of Title 18, U.S.C. § 286, is 10 years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.



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Tuesday, October 9, 2012

Hausmann-Alain Banet was Charged For Fraud And Money Laundering


Source- http://www.justice.gov/usao/can/news/2012/2012_10_03_banet.charged.press.html

SAN FRANCISCO - A federal grand jury in San Francisco indicted Hausmann-Alain Banet (a/k/a Anzoumana Ousmann Gbane, a/k/a Gbane Anzoumana a/k/a Ousmann Gbane, a/k/a Ousmann Gbane Anzounan Banet, a/k/a Ousmann-Alain Gbane) of San Francisco, on Oct. 2, 2012, with multiple counts of wire fraud, mail fraud, and money laundering, United States Attorney Melinda Haag announced.

According to the Indictment, which was under seal until this morning, Banet, 49, the Chief Executive Officer and President of Lion Capital Management, LLC, in San Francisco, allegedly defrauded a client of approximately $544,000 by falsely claiming that he invested her money in a hedge fund, the Lion Absolute Value Fund, L.P. The Indictment alleges that Banet never invested the money received from the victim; that he created false account statements that he sent to the victim in which he stated that her investment accounts had sustained training gains, when in fact no such gains existed; and that he spent money received from the victim on personal and business expenses unrelated to the victim’s investment. In addition, the Indictment alleges that when the victim requested the return of her investment, Banet failed to return the full amount of her investment.

Banet was arrested this morning at his residence in San Francisco. He made his initial appearance this morning in federal court in San Francisco before the Honorable Joseph C. Spero. Today, following a bail hearing, Judge Spero ordered him remanded to the custody of the United States Marshal until Oct. 9, 2012, when a further bail hearing will be held.

The maximum statutory penalty for each count of wire fraud and mail fraud, in violation of 18 U.S.C. § 1343 and 1341, respectively, is 20 years imprisonment and a fine of $250,000 or twice the amount of the fraud. The maximum statutory penalty for each count of money laundering, in violation of 18 U.S.C. § 1957, is 10 years imprisonment and a fine of twice the amount of the fraud. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.



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Monday, October 8, 2012

Mizanur Rahman was Charged with Filing False Tax Returns


Source- http://www.fbi.gov/washingtondc/press-releases/2012/leesburg-telecommunications-consultant-charged-with-filing-false-tax-returns

WASHINGTON—Mizanur Rahman, of Leesburg, Virginia, was indicted by a federal grand jury today on charges of filing false tax returns with the Internal Revenue Service (IRS) in 2005 and 2006.

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; Kathryn Keneally, Assistant Attorney General for the Tax Division; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Rick A. Raven, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C. Field Office; and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the indictment was returned.

According to the indictment, Rahman worked as a consultant for an “International Corporation” that contracted for and managed projects in Bangladesh. Rahman, through E-ssn High Tech and Environment Ltd. (“E-ssn”), contracted with the International Corporation to provide consulting services to the International Corporation to assist in obtaining telecommunications contracts in Bangladesh. Between November 2004 and September 2006, the International Corporation paid Rahman approximately $1.7 million. Rahman allegedly deposited his consulting fee into a bank account in Hong Kong under the name of Jupiter International, a company that Rahman owned. The indictment further alleges that for tax years 2005 and 2006, Rahman willfully filed false individual income tax returns with the IRS that substantially underreported his total income.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty. Rahman faces a maximum potential sentence of six years in prison, if convicted.



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