WASHINGTON - Thanh Viet Jeremy Cao of Rancho Santa Margarita, Calif., pleaded guilty today in Las Vegas before Judge Kent J. Dawson to six counts of filing false liens against employees and officers of the federal government, the Justice Department, the Internal Revenue Service (IRS) and the Office of the Treasury Inspector General for Tax Administration (TIGTA) announced.
According to the plea agreement, Cao was a named defendant in a civil fraud action brought by the Securities and Exchange Commission (SEC) related to an investment scheme; he was also identified as the owner of an asset seized by the U.S. Secret Service related to this fraud. Cao was additionally under investigation by the U.S. Attorney’s Office for the Southern District of California and the U.S. Secret Service for criminal offenses arising from the investment scheme, and also was under investigation by the IRS-Criminal Investigation Division for tax returns he prepared for himself and others that claimed large refunds based upon fictitious tax withholdings.
In response to these proceedings and investigations, Cao filed 22 false liens in the public records of the state of Nevada and Clark County, Nev., against SEC attorneys, U.S. District Court Judges, U.S. District Court Magistrate Judges, the U.S. Attorney for the Southern District of California, Assistant U.S. Attorneys, U.S. Secret Service special agents and special agents of the IRS. Each lien alleged that the lien victims were “debtors” of Cao for hundreds of millions of dollars. According to the plea agreement, Cao admitted that all 22 liens were false and agreed that the liens should be expunged from the public record.
Sentencing is scheduled for Sept. 21, 2011 in Las Vegas.
Thursday, June 9, 2011
Thanh Viet Jeremy Cao Pleads Guilty to Filing False Liens Against Federal Employees
Wednesday, June 8, 2011
Brandon C. Davis Pleads Guilty to Selling More Than $1 Million in Counterfeit Tax Preparation Software
WASHINGTON – A Cincinnati man pleaded guilty yesterday to selling more than $1 million worth of counterfeit financial and tax preparation software through an Internet auction site, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Carter Stewart for the Southern District of Ohio; Tracey E. Warren, Acting Special Agent in Charge for the Internal Revenue Service-Criminal Investigation (IRS-CI); Dugan T. Wong, Assistant Inspector in Charge for the U.S. Postal Inspection Service; and J. Mark Batts, Acting Special Agent in Charge for the FBI’s Cincinnati Division.
Brandon C. Davis, 31, pleaded guilty before U.S. District Judge Herman J. Weber in the Southern District of Ohio to one count of mail fraud , one count of copyright infringement and two counts of filing a false income tax return.
According to court documents, Davis purchased by downloading or on a CD, Quicken and Turbo Tax software manufactured by Intuit Inc., with accompanying labels and packaging that were protected by copyright. Davis copied the original software multiple times to CDs, without permission, and created counterfeit packaging and labeling for the CDs. According to court documents, Davis sold the counterfeit Intuit software on eBay, received payment and then mailed the counterfeit software to the purchaser via the U.S. Postal Service. Within the packaging, Davis sometimes included a false disclaimer claiming that he was merely acting as a broker for another seller. Davis also falsely represented on the online eBay auctions that he was selling original Intuit software, but instead he sold counterfeit Intuit software, usually at prices below manufacturer’s suggested retail price.
Davis failed to report the income from the counterfeit software sales when he filed his income tax returns for 2008 and 2009.
At sentencing, Davis faces maximum penalties of 20 years in prison for the mail fraud charge, five years in prison for the copyright infringement charge and up to three years in prison for each tax charge. Davis agreed to a money judgment and tax lien of $80,074 and to pay restitution in an amount to be determined by the court. He also agreed to forfeit all computer items used to manufacture and distribute the fake software, a 2006 Hummer and $192,117 that was seized from his bank accounts. Sentencing is scheduled for Sept. 22, 2011.
Tuesday, June 7, 2011
Federal Court Bars Philadelphia Tax Firm and Owner from Preparing Federal Tax Returns
WASHINGTON – A federal court has barred a Philadelphia tax preparation firm and its owner from preparing federal tax returns for others, the Justice Department announced today. Friday James, who according to the government complaint is from Landsdowne, Pa., and his business agreed to the permanent injunction order without admitting the allegations against them.
The court had preliminarily enjoined the defendants earlier this year after finding that James “negligently or willfully understated tax liability on many of the federal income tax returns he prepared for his clients.” In a memorandum accompanying that injunction order, the court identified James’s business as Frika Tax Services in Philadelphia. At that time the court found that James had claimed the first-time-homebuyer tax credit for customers who did not qualify for it and claimed deductions for business and miscellaneous expenses that were “erroneous, unrealistic or unreasonable.”
In the permanent injunction order, the court required James to provide the government with a list of names and identifying information for all persons for whom he prepared federal tax returns or refund claims for tax years 2008 through 2010.
Monday, June 6, 2011
Federal Court Bars Gregory Boone from Promoting Alleged “Form 1099-OID” Tax Fraud Scheme
WASHINGTON – A federal court in Ft. Meyers, Fla., has barred Gregory Boone of Riverview, Fla., from promoting an alleged tax fraud scheme, the Justice Department announced today. Boone consented to the civil injunction order without admitting the allegations against him.
The government complaint alleged that Boone, who allegedly uses the business names Provident Holdings International LLC and PHI LLC, promoted an abusive tax scheme in which he filed false Internal Revenue Service (IRS) Forms1099-OID to assist his customers in submitting federal income tax returns containing false claims for tax refunds. The complaint further alleged that Boone filed nearly 5,000 false tax forms and that the IRS issued at least eight erroneous refunds totaling $1.2 million. The court’s order bars Boone from preparing tax forms for others and requires him to provide his customers with a copy of the injunction order.
Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s “Dirty Dozen” tax scams for 2011. The Justice Department recently announced the filing of criminal charges against a resident of Lauderhill, Fla., in connection with her alleged participation in a fraudulent tax refund scheme involving false Forms 1099-OID.
Saturday, June 4, 2011
Roosevelt Hairston Jr. Charged with Mail Fraud, Money Laundering, and Tax Fraud for Embezzling $1.7 Million
PHILADELPHIA—Roosevelt Hairston Jr. was charged in a three-count information1 with mail fraud, money laundering, and filing a false tax return for his embezzlement of $1.7 million from the Children’s Hospital of Philadelphia, United States Attorney Zane David Memeger announced. Hairston was employed in various senior positions at CHOP, including most recently as general counsel and executive vice president. The information alleges that, between 1999 and February 14, 2011, Hairston used dozens of false invoices he created for shell companies to steal from CHOP. Hairston was able to steal for so long because he occupied a position of trust at the hospital and because he engaged in extensive efforts to conceal and prolong the scheme. For example, when CHOP accounting personnel questioned some of the bogus invoices Hairston submitted, Hairston stole the identity of a long-time friend and created bogus e-mail addresses in the name of his friend. Hairston then sent e-mail messages to CHOP personnel to make it appear that the invoices were real.
Hairston used the funds he stole from CHOP to live a lavish lifestyle, purchasing luxury items like real estate, a luxury yacht with a captain to maintain the yacht, high-end automobiles, and many other luxury items.
Friday, June 3, 2011
Saul Kassin Sentenced for Illegally Moving Cash Related to International Charity
TRENTON, NJ—The chief rabbi of Congregation Sharee Zion in Brooklyn, N.Y., was sentenced today to two years of probation for operating an illegal money remitting business, after admitting he accepted bank checks in exchange for checks in lesser amounts from a charity he operated and controlled, U.S. Attorney Paul J. Fishman announced.
Saul Kassin, 89, of Brooklyn, N.Y., and Deal, N.J., previously pleaded guilty before U.S. District Judge Joel A. Pisano to an information charging him with operating the illegal business in conjunction with the bank account of the Magen Israel Society charitable organization, which transmitted money to individuals and organizations in the United States and Israel. Judge Pisano also imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Kassin admitted that from June 2007 through December 2008, he operated an unlicensed money transmitting business, transferring thousands of dollars in checks to Solomon Dwek—an individual he later learned was a cooperating witness. Kassin admitted that he accepted bank checks made payable to Magen Israel Society and issued checks from the account to other organizations in exchange. He also admitted that he charged a 10 percent commission for this money transmitting service, and knew that the checks he issued from Magen Israel Society account would not be used for charitable purposes.
The defendant was originally charged by criminal complaint on July 23, 2009, as part of a takedown of 44 individuals for alleged public corruption and international money laundering offenses. The complaint alleges that Dwek was originally referred to Kassin by Rabbi Edmond Nahum, 57, of Deal, who informed Dwek that Kassin would be able to move large amounts of money. Initially, Nahum accepted checks from Dwek made payable to Magen Israel Society, which Nahum passed on to Kassin. Kassin would then issue checks from Magen Israel Society, minus commission, which Nahum would provide to Dwek. After several such transactions, Kassin met directly with Dwek on a number of occasions to exchange checks in larger amounts. On each occasion, Dwek told Kassin the checks were either proceeds of a counterfeit handbag business or a way to hide assets from Dwek’s bankruptcy court proceedings.
As part of the sentence imposed, Judge Pisano ordered Kassin to forfeit $367,500 and pay an additional fine of $36,750.
Thursday, June 2, 2011
Laura Barel and Philip Butcher Charged for Involvement in Multi-Million Dollar Fraudulent Tax Refund Scheme
WASHINGTON – Laura Barel of Lauderhill, Fla., has been charged with one count of filing a false claim and two counts of aiding and abetting the filing of a false claim, the Justice Department and Internal Revenue Service (IRS) announced today. The federal complaint against Barel was unsealed on May 24. In a related case, a federal grand jury returned an indictment on May 25, 2011, charging Philip Butcher, formerly of Rogers, Ark., with two counts of filing false claims.
The complaint against Barel alleges that she recruited clients on behalf of co-conspirator #1 and two entities -- PMDD Services and Forever Grace. According to the complaint, co-conspirator #1 has prepared at least 275 fraudulent individual tax returns for clients around the United States during 2008 and 2009. These returns collectively requested more than $120 million in fraudulent refunds. Some of these refunds were paid by the IRS, others were not. The complaint alleges that the IRS has paid out more than $4.7 million as a result of the scheme.
The complaint states that co-conspirator #1 held herself out to be a professional tax preparer and collected information from clients pertaining to all of their debt obligations such as credit card debt, car loans, mortgage obligations and lines of credit. Co-conspirator #1 took the amounts of the outstanding debts and created fraudulent tax documents which she titled “Form 1099-OID Original Issue Discount.” She would create fraudulent Forms OID purporting to convert taxpayers’ debts into interest income purportedly withheld by the lender. The taxpayers reported the withheld income as interest income on their Form 1040. As a result, the taxpayers were owed astronomical refunds because the entire amount of the OID “income” was reported as withheld taxes – not just a portion to cover the taxes owed, as is common with a taxpayer’s Form W-2. In other words, this OID scheme fraudulently inflated the taxpayer’s income and withheld income to create a fraudulent and enormous refund purportedly due to the taxpayer.
The complaint alleges that co-conspirator #1 and PMDD Services required that their clients pay 10 percent of any refund received from the IRS back to PMDD Services. According to the complaint, Barel then received 1.5 percent of the total refund, which was deposited into a bank account controlled by her. The complaint also alleges that Barel filed her own fraudulent OID tax return requesting a refund of $662,906.
Phillip Butcher, a client of PMDD Services and a former resident of Rogers, Ark., was indicted by a grand jury in Fort Smith, Ark., for filing a 2008 individual income tax return which sought a fraudulent tax refund of $672,781. According to the indictment, PMDD Services prepared the tax return and filed false Forms 1099-OID with the IRS on Butcher’s behalf. The indictment further alleges that Butcher paid more than $67,000 to PMDD Services shortly after receiving his refund. The indictment also alleges that after Butcher received the fraudulent $672,781 refund he requested on his first tax return, he filed an amended 2008 individual income tax return claiming an additional fraudulent refund of $1,456,696.
Wednesday, June 1, 2011
Craig Shaber Indicted on Conspiracy and Tax Evasion Charges
WASHINGTON - A San Diego attorney was sentenced by U.S. District Judge John A. Houston to 10 months in prison for evading taxes on at least $3 million in unreported income from 2000 to 2002, the Department of Justice and Internal Revenue Service (IRS) announced today. Judge Houston also ordered Craig Shaber, the attorney, to pay $555,000 in restitution to the IRS and to serve three years of supervised release. Shaber was indicted on conspiracy and tax evasion charges on Aug. 14, 2009, and subsequently pleaded guilty to tax evasion on Oct. 21, 2010.
According to the indictment, plea agreement and other documents filed in U.S. District Court in San Diego, between 1999 and 2002, Shaber and Steven Wright, a San Diego accountant, fraudulently acquired control of numerous public shell companies by, among other things, installing nominee officers and directors and submitting false registration statements and reports to the U.S. Securities and Exchange Commission (SEC) and the National Association of Security Dealers (NASD). Shaber and Wright earned millions of dollars from the sale of the public shell companies and deposited the proceeds into bank accounts in the names of Bonaventure Capital Ltd., International Solutions and one of Shaber’s client trust accounts. In 2002, Shaber and Wright received $260,000 in cash from the sale of one of the companies. In 2003, the SEC filed a complaint related to Shaber’s and Wright’s conduct selling the public shell companies.
Shaber then evaded taxes on the millions of dollars earned from the sale of the public shell companies. He withdrew the proceeds from the bank accounts for his own personal benefit in such a way that it concealed the fact that he received income from the stock scheme. Shaber disbursed these funds to various bank accounts in the names of nominee entities that he controlled and used accounts in the names of nominee entities to pay for personal expenses to help conceal his receipt of the income. Some of the nominee entities held title to various assets, which also helped conceal Shaber’s receipt of taxable income and his control over some of these assets.
The department said that Shaber also filed false individual federal income tax returns from 2000 to 2002 that failed to report income earned from the shell company scheme. Shaber and Wright also caused the filing of false corporate federal income tax returns that helped disguise their receipt of taxable income. According to the indictment, Shaber used the proceeds from the shell company scheme to purchase numerous luxury items, including his personal residence in Coronado, Calif., a McDonnell Douglas helicopter, a World War II-era Tigercat airplane, a Plymouth Prowler, a Porsche 996 Turbo and artwork.
Wright was sentenced on March 21, 2011, before U.S. District Judge Marilyn L. Huff in San Diego to three months in prison, three months community confinement and three years of supervised release. Wright also was ordered to pay a $2,000 fine and $378,000 in restitution for evading more than $380,000 in taxes from 2000 to 2002. Wright previously pleaded guilty on Aug. 14, 2009, and cooperated with the government in the prosecution of Shaber.
Tuesday, May 31, 2011
Karl Herrington Arrested and Charged With Obstructing the IRS in Form 1099-OID Schemes
WASHINGTON - Karl Herrington of Parma, Mich., was arrested today on charges of two counts of corruptly endeavoring to obstruct the administration of the internal revenue laws, and five counts of filing false tax forms with the Internal Revenue Service (IRS), the Department of Justice, the Treasury Inspector General for Tax Administration (TIGTA) and the IRS announced. The indictment was returned on May 12, 2011, and was unsealed today in U.S. District Court in Detroit.
According to the indictment, Herrington submitted false forms to the IRS to intimidate and harass state and local government officials and employees. These included Forms 1099-OID falsely reporting that Herrington paid original issue discount, which is taxable as interest, to law enforcement personnel and judges involved in a criminal case against him in Jackson County. In that case, Herrington was charged with being an accessory after the fact for harboring his wife, who was wanted for outstanding arrest warrants.
The indictment also alleges that Herrington sent false Forms 1099-OID to federal attorneys prosecuting a criminal tax case against his wife in the Northern District of Ohio in order to interfere with that case. Among the false tax forms Herrington is accused of filing was an individual income tax return for himself falsely reporting federal tax withheld of over $8 million.
If convicted, Herrington faces a maximum potential sentence of 21 years in prison and a maximum fine of $1.5 million. An indictment is merely an allegation, and Herrington is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
Monday, May 30, 2011
John A. Ortiz Admits Structuring More Than $943,000 in Cash Transactions
David B. Fein, United States Attorney for the District of Connecticut, announced that JOHN A. ORTIZ, 54, of Stratford, pleaded guilty today before United States District Judge Janet C. Hall in Bridgeport to one count of illegally structuring cash transactions.
Federal law requires all financial institutions to file a Currency Transaction Report (CTR) for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000. Structuring involves the repeated depositing or withdrawal of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law.
According to court documents and statements made in court, ORTIZ maintained a money market savings account at a credit union, and also had a personal line of credit at a bank. Between May 2006 and October 2009, ORTIZ made more than 70 large cash deposits into his savings account and more than 30 large cash payments to his personal line of credit account. The vast majority of the cash transactions were in the amount of $9000, and none exceeded $10,000. In total, ORTIZ structured approximately $943,000 in cash deposits and line of credit payments.
ORTIZ used the deposited funds to purchase, or to obtain credit in order to purchase, properties in Connecticut and Florida. ORTIZ also used more than $270,000 of the structured funds to settle a business dispute with his former partner.
ORTIZ owns and operates towing and auto repair businesses in Bridgeport and Stratford.
Judge Hall has scheduled sentencing for August 25, 2011, at which time ORTIZ faces a maximum term of imprisonment of 10 years and a fine of up to $500,000. ORTIZ also has agreed to forfeit approximately $388,540 to the government.
Sunday, May 29, 2011
Christopher T. Carr Admits Defrauding Citizens Bank
The United States Attorney for the District of Connecticut announced that CHRISTOPHER T. CARR, 55, of Westport, pleaded guilty today before Senior United States District Judge Alfred V. Covello in Hartford to one count of bank fraud stemming from a scheme to defraud Citizens Bank of millions of dollars.
According to court documents and statements made in court, CARR was the president of F&S Oil Company Inc. (“F&S Oil”), which was in the business of providing heating oil to residential and commercial customers in the Waterbury area. As primarily a seasonal business with fluctuating cash flow, with growing cash deposits when prepaid contracts were purchased by customers and declining cash flow as inventory was purchased and delivered, F&S Oil needed access to a banking line of credit to conduct its business on an ongoing basis. As a result, F&S Oil had a banking relationship with Citizens Bank, which included three outstanding lines of credit or loans secured by the assets, inventory, and receivables of F&S Oil. Citizens Bank would routinely extend funds to F&S Oil under the existing line of credit based, in part, on information provided by F&S Oil in periodic submissions of borrowing base certificates to Citizens Bank. The borrowing base certificates would itemize F&S Oil’s total gross accounts receivable and would include a listing of the aging of the receivables and a total fuel inventory.
In 2007, F&S Oil sought to construct a local biodiesel plant that, once completed, was projected to be able to produce heating oil with significantly better operating margins than that provided by simply purchasing heating oil from third parties. F&S Oil funded the construction primarily through its line of credit with Citizens Bank, as well as monies obtained by the prepayment of oil contracts by residential and commercial customers. During 2007 and early 2008, the biodiesel project ran into unanticipated construction and permitting problems that delayed its completion and significantly increased the cost of construction.
In pleading guilty today, CARR admitted that, as the biodiesel plant’s construction costs mounted, he defrauded Citizens Bank into further extending monies under the line of credit by repeatedly falsifying the borrowing base certificates provided to Citizens Bank by overstating F&S Oil’s accounts receivable and inventory. As a result, the government contends that CARR caused losses of between $2.5 million and $7 million to the bank.
Saturday, May 28, 2011
Federal Court Bars Shelia Young, Deane Young and Kennith Defoor From Preparing Federal Tax Returns
WASHINGTON - A federal court has barred a family of tax preparers in Overgaard, Ariz., from preparing federal tax returns for others, the Justice Department announced today. The court’s preliminary injunction order against Shelia Young, Deane Young and Kennith Defoor will remain in effect while a related criminal case against the defendants proceeds in court.
The government complaint in the civil injunction case alleged that the Youngs and Defoor promoted fraudulent tax schemes through their companies, Accurate Consulting LLC, and D4 Accounting, Consulting, Tax Services Inc. According to the complaint, these schemes included manipulating the amount of income and federal tax withholdings claimed on their customers’ tax returns, resulting in bogus claims for tax refunds. The complaint further states that, since 2001, the Youngs and Defoor prepared at least 337 federal tax returns requesting fraudulent tax refunds, often in amounts exceeding $100,000.
The three family members allegedly prepared frivolous tax returns that cumulatively claimed more than $24 million in fraudulent refunds and resulted in the Internal Revenue Service (IRS) issuing approximately $2.3 million in erroneous refunds. The complaint alleged that the Youngs and Defoor asserted fraudulent “zero income” and “commercial redemption” tax schemes and regularly submitted false IRS forms on behalf of their customers that reported both fictitious interest income and tax withholdings.
Friday, May 27, 2011
Charles Alexander Davis Indicted for Filing False Tax Returns and Obstructing the IRS
WASHINGTON – Charles Alexander Davis formerly of Mooresville, N.C., was indicted by a federal grand jury in Charlotte, N.C., on 10 counts of willfully filing materially false tax returns and one count of obstructing and impeding the Internal Revenue Service (IRS), the Department of Justice and the IRS announced. The indictment was returned on May 19, 2011, and was unsealed today in U.S. District Court for the Western District of North Carolina.
According to the indictment, Davis’s employer, an international airline carrier, withheld little or no federal income tax from Davis’s wages for years 1997 through 2005 because Davis previously had falsely represented that he was exempt from income tax withholding. The department said, in April 2006, Davis filed five fraudulent amended income tax returns for 1996 through 2000, falsely claiming that he earned little or no adjusted gross income in each of those years.
Davis had his initial appearance on May 20, 2011, in Puerto Rico, where he was apprehended.
If convicted, Davis faces a maximum potential sentence of 33 years in prison and a maximum fine of $2.75 million. An indictment is merely an allegation, and Davis is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
Thursday, May 26, 2011
Federal Court Bars Martha A. Jones From Preparing Federal Tax Returns
Source- http://www.justice.gov/tax/txdv11679.htm
WASHINGTON - A federal court has permanently barred Martha A. Jones of Chicago from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Jones consented without admitting the allegations against her, was signed by U.S. District Court Judge Gary Feinerman for the Northern District of Illinois.
The government complaint in the case alleged that Jones included fabricated charitable contributions, employee business expenses and other deductions on tax returns that she prepared since 2005. The complaint alleged, for tax years 2005 through 2008, the Internal Revenue Service (IRS) examined 56 of the returns that Jones prepared and found inaccuracies in all of them. According to the complaint, the tax losses to the United States from Jones’s misconduct could exceed $1 million.
The complaint also alleged that Jones failed to sign her customers’ returns as the paid preparer, even after being advised by the IRS that she was legally required to sign them. The court order requires Jones to provide the government with a list identifying all persons for whom she prepared federal tax returns for tax years 2005 through 2009.
Wednesday, May 25, 2011
Company Bookkeeper Stacia Woodman, Sentenced for Embezzlement and Tax Fraud
BIRMINGHAM—A federal judge today sentenced a Leeds woman to three years and five months in prison on charges related to her embezzling more than $400,000 from her employer, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Patrick Maley, IRS Criminal Investigation Special Agent in Charge Reginael D. McDaniel, and Postal Inspector Frank Dyer.
U.S. District Judge L. Scott Coogler sentenced STACIA WOODMAN, 36, on five counts of mail fraud and three counts of tax fraud. Woodman pleaded guilty to the charges in February. Judge Coogler ordered her to serve three years’ supervised release following completion of her prison term.
From 2000 to 2009, while Woodman worked as a bookkeeper for J. Loper and Company, a Birmingham landscaping business, she engaged in a scheme to pay some of her personal expenses using her employer’s funds. Woodman concealed her fraud by arranging for company checks to appear on the company’s books and records as if they were issued for legitimate business expenses. Woodman concealed from the company’s owner and manager bank overdraft fees and notices to avoid alerting her employer that funds were being misappropriated. Over the course of her scheme, Woodman stole about $427,488.
In addition to the theft from her employer, Woodman failed to report on her personal income tax returns for 2006, 2007 and 2008 the income she received as a result of her fraud. The tax loss totaled $60,232 for the three years of under-reported income.
“Woodman was a trusted employee who abused her position of trust to personally benefit herself, and she criminally avoided her income tax obligations,” Vance said. “The nature of Woodman’s conduct was especially egregious because her conduct involved writing dozens of company checks for her own personal expenses and then using her knowledge of the company’s bookkeeping system to avoid detection by the company’s managers and owner.”
“Individuals thinking about participating in fraudulent schemes, including failing to report all forms of income, should stop in their tracks and simply look at the consequences of taking the next step,” McDaniel said. “Those consequences may include going to prison, being branded a convicted felon for the rest of their lives, and paying back all the taxes owed, plus steep penalties and interest.”
Judge Coogler ordered Woodman to pay $427,488 in restitution to her employer and determined that the Internal Revenue Service was entitled to $60,232 for the unpaid taxes.
Tuesday, May 24, 2011
Sharon Thurman Sentenced for Identity Theft and Filing False Tax Returns
WASHINGTON – A resident of Elmore, Ala., was sentenced to 60 months in prison for stealing identities and using them to file false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.
On Feb. 22, 2011, after a four-day trial, a jury in Montgomery, Ala., convicted Sharon Thurman of 14 counts of making false claims, two counts of theft of government money and two counts of aggravated identity theft. According to the indictment and evidence introduced during trial, Thurman owned and operated Sharon’s Tax Service in Elmore. Between January and April 2008, Thurman filed 14 fraudulent tax returns in which she unlawfully attempted to obtain tax refunds intended for individuals whose identities she stole.
At trial, 14 victims of identity theft testified that they did not file, and did not request Thurman to file the tax returns she filed in their names and Social Security numbers. Two victims in whose name she received payment from the IRS testified that they never received any money from Thurman. All 14 victims testified that, to the best of their knowledge, they had never met Thurman and had never been to Sharon’s Tax Service.
Monday, May 23, 2011
Imelda Sanchez Arrested for Loan Fraud and Identity Theft in Schemes Involving Fraudulent Tax Returns
LOS ANGELES—A Nipomo woman was arrested yesterday and arraigned late Monday afternoon on charges of orchestrating a tax scheme involving stolen identities, as well as a loan fraud scheme in which she allegedly submitted false income tax returns that overstated her income in an effort to obtain a $1.6 million loan.
Imelda Sanchez, 39, was arrested at her place of business Monday morning by special agents with IRS - Criminal Investigation and the FBI. Appearing yesterday afternoon in United States District Court in Los Angeles, Sanchez pleaded not guilty to charges contained in an 18-count indictment returned last week by a federal grand jury.
The indictment charges Sanchez with eight counts of making false claims to the Internal Revenue Service, three counts of aggravated identity theft, five counts of making false statements on loan applications, and two counts of making false statements to the FBI.
In the indictment filed last Wednesday, Sanchez is accused of preparing false and fraudulent tax returns in the names of several taxpayers in order to fraudulently obtain tax refunds from the IRS. The indictment alleges that Sanchez stole the identities of several people, using their names and Social Security numbers without their authorization.
Sanchez is further charged with making false statements to Santa Lucia Bank by submitting false personal and corporate income tax returns in applications for a $1.6 million loan.
Sanchez is also charged with having lied to the Federal Bureau of Investigation on two separate occasions in 2007 when asked about her role in creating false tax documents and employment verifications in collaboration with various loan officers.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of all 18 counts in the indictment, Sanchez would face a statutory maximum sentence of 206 years in federal prison, as well as up to $7.5 million in fines.
Saturday, May 21, 2011
Federal Court Bars Daniel D. Weddington, James R. Earl and James R. Earl From Promoting Oil-and-Gas Tax Fraud Scheme
WASHINGTON - A federal court has permanently barred two men from promoting an alleged tax fraud scheme involving interests in purported oil and gas wells, the Justice Department announced today. Judge James L. Graham of the U.S. District Court for the Southern District of Ohio entered the permanent injunction orders against Daniel D. Weddington of Newark, Ohio, and James R. Earl of Heath, Ohio. Both men were preliminarily enjoined in 2008. A third defendant, Jeffrey L. Gaumer of Newark, N.J., was permanently enjoined in 2008. All three men agreed to the permanent injunctions without admitting to the government’s allegations against them in the amended complaint.
Weddington recently pleaded guilty in federal court to two counts of aiding and assisting the filing of false income tax returns and one count of obstructing the administration of the internal revenue laws in connection with his role in the oil-and-gas well scheme.
The amended complaint in the civil injunction case alleged that Weddington, Earl and Gaumer marketed a scheme to claim tax deductions for fictitious well-drilling costs to more than 200 customers across the country. Customers allegedly paid for their purported investments using sham notes that were supposedly paid off by fictitious gas royalty payments from fictitious wells. The amended complaint also alleged that the defendants used a shell corporation, Aurora Capital Group Inc., to issue sham letters of credit to customers in an attempt to make the customers’ sham notes appear legitimate, so as to deceive the Internal Revenue Service (IRS).
The amended complaint also asserted that Weddington is a public accountant, that Gaumer is a certified public accountant in the same accounting firm, and that they prepared tax returns for the majority of the scheme’s participants. According to the amended complaint, the IRS estimated that the scam caused tax revenue losses of $5.7 million to $6.9 million from 2001 to 2004.
Friday, May 20, 2011
Dr. Mark E. Hopkins And His Wife Sharon June Hopkins Sentenced of Federal Tax Evasion Conviction
ALBUQUERQUE, N.M. - An emergency room doctor and his wife were sentenced yesterday for tax evasion, announced Deputy Assistant Attorney General for Criminal Matters for the Justice Department’s Tax Division Ronald A. Cimino and U.S. Attorney for the District of New Mexico Kenneth J. Gonzales. Dr. Mark E. Hopkins, 60, was sentenced to 120 months in prison to be followed by three years of supervised release, and Sharon June Hopkins, 60, was sentenced to 97 months in prison to be followed by three years of supervised release.
The Hopkins’ jointly were ordered to pay $1,744.222.26 in restitution to the Internal Revenue Service (IRS). Upon their release, the couple will be required to make $2,000 monthly payments to the IRS and to cooperate with the IRS in paying their taxes, past and present. Finally, the Hopkins’ were ordered to pay $965.84 for the cost of a video deposition taken during the course of the prosecution.
On Sept. 29, 2010, a federal jury sitting in Albuquerque, N.M., convicted the Hopkins’ of seven counts of tax evasion and one count of conspiracy. At the time, Mark Hopkins was an emergency room doctor at the Carlsbad Medical Center, and Sharon Hopkins was the owner of My Favorite New Mexico Foods LLC, a business that manufactured and sold traditional New Mexico foods throughout the United States. Before moving to Carlsbad in 2001, the couple resided in Roswell, N.M.
According to the allegations in the indictment and the evidence presented at trial, the Hopkins’ had not filed accurate personal tax returns since tax year 1997. They filed a “zero” tax return for tax year 1996, which reported no wages and requested a refund of all withholding. From Jan. 1, 1996, through Dec. 31, 2007, Dr. Hopkins earned more than $3 million in income from his work as an emergency room doctor and paid only $21.25 in federal income taxes on this income. At sentencing, the court determined the tax loss to be $2,171,018.57 for 1996 to 2007. The Hopkins’ also failed to file or pay state income tax to the New Mexico Department of Taxation and Revenue during this time period.
At trial, the Hopkins’ claimed that Dr. Hopkins’ income from his employer was not taxable because it was simply an “exchange” of labor for time. The evidence at trial showed that the couple used a number of “tax defier” schemes such as directing Dr. Hopkins’ income to a purported religious entity, named Shalom Enterprises. However, the Hopkins’ paid a number of personal expenses such as their mortgage, credit cards and a timeshare in Mexico, out of the Shalom Enterprises bank account. The couple also titled bank accounts and their home in the names of “pure trusts.”
As shown at trial, Dr. Hopkins previously was pictured on the front page of the April 16, 2007, Carlsbad Current Argus, standing outside the post office the previous day protesting the payment of federal income taxes.
“Sentences like the one returned today, send a loud and clear message that those who use illegal tax schemes will be fully punished for their actions,” said Deputy Assistant Attorney General for Criminal Matters Cimino.
“No matter how much Dr. and Mrs. Hopkins disagreed with our tax system, they were still required to obey the law,” said U.S. Attorney Gonzales. “The sentences imposed on the Hopkins are appropriate given the type of manipulation and deception in which these two educated and skilled professionals engaged to evade paying taxes.”
