PITTSBURGH—Alfredo Sararo, III, a resident of Naples, Fla., has been indicted by a federal grand jury in Pittsburgh on seven counts of wire fraud and four counts of filing false income tax returns, United States Attorney David J. Hickton announced today.
The 11-count superseding indictment named, Sararo, 41, as the sole defendant.
According to the indictment presented to the court, Sararo participated in a fraud scheme designed to solicit investors to purchase Florida real estate, and to lenders to lend money for the purchase of Florida real estate based on a series of misrepresentations. The indictment further alleges that Sararo directed that an individual falsely notarize deeds; that Sararo directed that another individual call an investor and falsely claim that he represented individuals interested in purchasing the investor’s properties; that Sararo made several misrepresentations to an investor; and that Sararo requested that another individual signed a backdated document falsely representing that the individual was interested in purchasing one of the investor’s properties. The indictment further alleges that Sararo participated in a scheme to defraud a lender by assisting in the submission of a loan application that falsely represented the application’s financial condition.
The indictment also alleges that Sararo filed false federal income tax returns and false federal amended income tax returns for the calender years 2004 and 2005 in that he failed to accurately report his income.
The law provides for a maximum total sentence of 152 years in prison, a fine of $2,750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Tuesday, August 23, 2011
Alfredo Sararo, III, has Been Indicted by a Federal Grand Jury in Pittsburgh on Seven Counts of Wire Fraud and Four Counts of Filing False Income Tax Returns
Saturday, August 20, 2011
David Chui Pleads Guilty for Failing to Pay Employment Taxes
WASHINGTON – David Chui, a resident of Queens, N.Y., pleaded guilty to failing to pay employment taxes in connection with his former ownership of a garment assembly business, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the plea agreement and criminal information, from at least 2005 through 2008, Chui owned and operated New Shanghai Fashions, a garment assembler in Manhattan. Between the fourth quarter of 2005 and continuing through at least the third quarter of 2008, Chui did not collect, truthfully account for, and pay over employment taxes of nearly $220,000 from his employees’ wages. In addition, the plea agreement requires Chui to pay restitution to the IRS in the amount of $439,918.61, which encompasses both the employment taxes that he failed to withhold from his employees and his obligation, as an employer, to pay over a matching portion of those employment taxes.
Friday, August 19, 2011
Scott Robertson Pleads Guilty in Utah to Tax Charge
WASHINGTON - Scott Robertson pleaded guilty before U.S. Magistrate Judge Brooke C. Wells in Salt Lake City to one count of making and subscribing a false tax return for 2003, the Department of Justice and the Internal Revenue Service (IRS) announced today.
According to the plea agreement, beginning in at least 2000 and continuing until at least 2007, Scott Robertson was the chief executive officer and co-owner of Infinia Healthcare LLC, which owned several long-term care facilities in Utah, Arizona, Kansas and Minnesota. During this same time period, Robertson had ownership interest in a number of other entities affiliated with Infinia Healthcare, including Robertson Properties-Two and Maryland Capital LLC.
According to the plea agreement, between 2003 and 2005, Robertson earned substantial income from Infinia Healthcare through unofficial, non-salary payments. Robertson filtered some of these payments through Maryland Capital LLC to his personal bank accounts and failed to accurately report this additional income to the IRS. He further admitted that he filed a false U.S. Individual Income Tax Return, Form 1040, for tax year 2003 with the IRS, knowing that the return substantially understated the total income he earned from Infinia Healthcare and its affiliates and substantially understated the tax due and owing for 2003. According to the plea agreement, Robertson agreed that the tax loss is more than $200,000 but less than $400,000.
Robertson faces a maximum sentence of three years in prison and a fine of $250,000.
Wednesday, August 17, 2011
The United States has Filed a Lawsuit Against Des Moines, Advanced Underground Construction LLC and its principal, William David Ward II, Alleged “Pyramiding” of Employment Taxes
WASHINGTON - - The United States has filed a lawsuit in an Iowa federal court against a Des Moines, Iowa, metro area company, Advanced Underground Construction LLC and its principal, William David Ward II, the Justice Department announced today. The civil injunction suit asks the court to stop the defendants’ alleged repeated failures to pay to the U.S. employment taxes that are withheld from employees’ wages.
The government complaint alleges that between the third quarter of 2004 and the present date, the defendants repeatedly failed to make required employment tax deposits to the United States for nine quarters, instead using taxes withheld from employees’ wages as working capital, a practice sometimes referred to as “pyramiding.” The government’s complaint further alleges that the defendants’ misconduct has resulted in a balance due to the government of more than $370,000.
According to the complaint, the defendants have made minimal payments of their tax debts, and government attempts to induce voluntary compliance have failed. The complaint seeks an injunction requiring the defendants to timely deposit and pay withheld employment taxes, and to timely file all employment tax returns.
Tuesday, August 16, 2011
A Federal Court has Permanently Barred LaShawn Littrice and Her South Holland, Ill., Business From Preparing Federal Tax Returns for Others
WASHINGTON - A federal court has permanently barred a woman and her suburban Chicago business from preparing federal tax returns for others, the Justice Department announced today. In the civil injunction order, issued by Judge William J. Hibbler of the U.S. District Court for the Northern District of Illinois, the court found that LaShawn Littrice and her South Holland, Ill., business, Diamond Accounting & Financial Services, falsified and manufactured expenses and deductions, and made false claims for the earned income tax credit on their customers’ tax returns. The court also found that Littrice filed returns using another return preparer’s identification number without that preparer’s knowledge.
According to the court order, an Internal Revenue Service (IRS) examination of 718 tax returns prepared by Littrice and Diamond Accounting found tax deficiencies on all but 20 of those returns. In papers filed with the court, the government estimated tax losses of nearly $12 million from the defendants’ misconduct.
The court also noted that in June 2010, Littrice was convicted of 14 counts of willfully aiding or assisting in preparing and presenting false and fraudulent tax returns and was sentenced to 42 months in prison.
Monday, August 15, 2011
Joseph M. Tages Indicted for Engaging in Alleged Health Care Fraud Scheme and Federal Income Tax Fraud
CHICAGO—An Aurora physician was indicted for allegedly engaging in federal tax and health care fraud in connection with operating a medical clinic he owned, federal law enforcement officials announced today. The defendant, Joseph M. Tages, was charged in a 12-count indictment returned yesterday by a federal grand jury. Tages allegedly diverted more than $750,000 in cash receipts from his medical practice and failed to report the income on both corporate and individual federal income tax returns for the years 2004-06, thus avoiding payment of more than $260,000 in taxes he owed on that income. He also allegedly defrauded various health insurance providers, including labor union health and welfare funds, by submitting reimbursement claims falsely stating that he regularly saw patients for follow-up office visits on Mondays, two days after performing such outpatient procedures as removing genital warts.
Tages, 65, of Plainfield, will be arraigned at a later date in U.S. District Court in Chicago. Tages owns West Suburban Medical and Surgical Associates S.C., and operates the Aurora Health center (AHC) on Weston Avenue in Aurora. He was charged with six counts of filing false corporate and individual income tax returns, two counts of mail fraud, and four counts of making false statements involving a health care benefit program. The indictment also seeks forfeiture of at least $10,000.
The charges were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, together with Robert D. Grant, Special Agent in Charge of the Chicago Office of Federal Bureau of Investigation; Alvin Patton, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and James Vanderberg, Special Agent in Charge of the U.S. Department of Labor Office of Inspector General in Chicago.
The tax charges allege that Tages diverted a total of $765,593 in cash receipts from AHC and under-reported the business’s income on its corporate tax returns for 2004-06. As a result, AHC failed to pay approximately $267,956 in corporate taxes owed to the IRS. At the same time, he allegedly failed to report the diverted cash on his personal income tax returns by a total of $766,772 during those three years. As he result, he failed to pay approximately $282,787 in personal taxes owed to the IRS.
Between 2006 and 2009, Tages allegedly defrauded various health insurance providers by falsely claiming reimbursement totaling at least $10,000 for services that he did not provide. According to the indictment, between 2001 and 2009, Tages diagnosed genital condyloma on numerous male patients at his affiliated Latino Institute of Surgery, and generally performed wart removal procedures on Saturdays. That same day, he allegedly falsely noted in some patients’ files that he had already seen the patient in his office on the upcoming Monday. Subsequently, Tages submitted insurance claims falsely stating that patients were seen in his office when they were not, the indictment alleges.
Between 2006 and 2009, the indictment alleges that Tages diagnosed gastro esophogeal reflux disease, also known as GERD or acid reflux, in numerous patients and caused others to perform an esophagogastroduodenoscopy, or EGD, procedure on Saturdays in which a bendable tube with a camera is inserted through a patient’s mouth to examine the esophagus, stomach and small intestine. Again, that same Saturday he allegedly falsely noted in some patients’ files that he had already seen the patient in his office on the upcoming Monday. Tages then submitted insurance claims falsely stating that patients were seen in his office when they were not, the charges allege. The government is being represented by Assistant U.S. Attorney Kaarina Salovaara.
The charges in the indictment carry the following maximum penalties on each count: mail fraud—20 years and a $250,000 fine; making false statements involving health care programs—five years in prison and a $250,000 fine; and filing false corporate and individual income tax returns—three years in prison and a $250,000 fine, and restitution is mandatory. In addition, defendants convicted of tax offenses face mandatory costs of prosecution and remain civilly liable to the government for any and all back taxes, as well as a civil fraud penalty of 75 percent of the underpayment plus interest. If convicted, however, the court must determine a reasonable sentence to impose under the advisory United States Sentencing Guidelines.
Sunday, August 14, 2011
David A. Smith Sentenced on Fraud and Money Laundering Charges
ORLANDO, FL—U.S. Attorney Robert E. O’Neill announces that U.S. District Judge Mary S. Scriven today sentenced David A. Smith (42, a Jamaican citizen) who was living in the Turks and Caicos Islands to 30 years in federal prison for wire fraud, conspiracy to commit money laundering, and money laundering offenses. Smith was also ordered to pay $55 million in restitution.
Smith pleaded guilty on March 29, 2011, to all 23 counts of an information that had been filed by the U.S. Attorney’s Office.
Prior to serving his sentence in U.S. federal prison, Smith must be returned to the Turks and Caicos Islands to serve a six-and one-half-year sentence that was ordered in September 2010 for fraud and conspiracy convictions. Judge Scriven ordered that Smith’s federal sentence run concurrently with his sentence in the Turks and Caicos Islands. The United States expects to seek Smith’s extradition back to the United States to finish serving his federal sentence, after he completes his time in the Turks and Caicos Islands.
According to court documents, for more than three years, Smith executed a scheme to defraud more than 6,000 investors located in the Middle District of Florida and elsewhere out of more than $220 million. Smith led investors to believe that he was investing their money in foreign currency trading and earning, on average, 10 percent per month, when in fact he was not trading their funds. Foreign currency trading is a highly volatile and risky investment vehicle that is regulated in the United States by the Commodity Futures Commission and the National Futures Association.
Friday, August 12, 2011
Thomas W. Richardson Admits to Theft of Government Property and Aggravated IdentityTheft
WASHINGTON – Thomas W. Richardson of Mansfield, Texas, pleaded guilty to one count of theft of government property and one count of aggravated identity theft before the Honorable Jane J. Boyle in Dallas, the Department of Justice and Internal Revenue Service (IRS) announced today.
Richardson admitted that within a two day period from April 15, 2006, to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 IRS Forms 1040, U.S. Individual Income Tax Returns, according to the written statement filed by Richardson. Each federal income tax return claimed a refund of between $215,801 and $473,832. Richardson admitted that the refunds claimed by all 29 tax returns totaled $7,922,657. Richardson further admitted that each tax return was filed claiming the married filing jointly election and listed two taxpayers, husband and wife. In each case the Social Security numbers reported on the tax returns were assigned to individuals and in most cases, the names on the tax returns matched the names of the individuals to whom the Social Security numbers were assigned. Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns. All of the returns directed that the IRS pay the money to one of Richardson’s bank accounts. According to Richardson’s statement, the IRS paid out seven refunds for a total $1,865,401 between May 12, 2006 and May 19, 2006. All but $31,149 was recouped by the IRS.
Sentencing has been set for Dec. 1, 2011, and Richardson remains free on bail pending sentencing. Richardson faces a sentence of up to 12 years in prison, and a fine of $250,000.
Thursday, August 11, 2011
Harris Dempsey “Butch” Ballow Sentenced to Statutory Maximum Prison Term for Money Laundering Conviction
HOUSTON—Convicted money launderer Harris Dempsey “Butch” Ballow, 68, formerly of Galveston County, Texas, was sentenced today by U.S. District Judge David Hittner to 10 years in federal prison without parole and ordered to pay more than $10 million in restitution to his victims, United States Attorney José Angel Moreno announced today along with FBI Special Agent in Charge Stephen L. Morris and acting United States Marshal Elizabeth Saenz.
Indicted in 2003 for fraud and money laundering which centered on misrepresentations made in connection with the purchase and sale of stock, Ballow pleaded guilty before Judge Hittner to money laundering in November 2003 and faced a maximum of 10 years’ imprisonment. At the time, Ballow, who had been in custody without bond for approximately a year, agreed to cooperate with a Securities and Exchange Commission (SEC) investigation and was released on a $100,000 bond pending sentencing on Dec. 16, 2004. However, Ballow fled the country. A warrant for Ballow’s arrest was issued the following day, Dec. 17, 2004.
After more than six years on the run, Ballow was arrested by Mexican authorities on July 13, 2010, in Nuevo Vallarta, Mexico, on a provisional warrant requested by the Southern District of Texas. Ballow was extradited by Mexico to the United States on April 8, 2011.
Judge Hittner sentenced Ballow this morning to the maximum statutory prison term for the offense of conviction and further ordered him to pay restitution to the victims of his fraudulent stock scheme in the amount of $10,483,769.81. Ballow has been in custody without bond since his extradition from Mexico and will remain in custody to serve his sentence.
Ballow is also charged with conspiracy to commit wire fraud, wire fraud and failure to appear for his sentencing pending in a separate indictment returned by a Houston grand jury in 2010 (cause number 4:10-494-S). Those charges are pending and Ballow is presumed innocent of these charges unless and until convicted through due process of law.
Wednesday, August 10, 2011
Eric Bernard Caldwell Sentenced to 30 Months in Prison for Role in Tax Fraud Conspiracy
WASHINGTON – Eric Bernard Caldwell, a resident of Montgomery County, Ala., was sentenced today to 30 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced. Judge William Albritton of the Middle District of Alabama also ordered Caldwell to pay $386,100.41 in restitution to the IRS.
According to court documents, Caldwell was part of a conspiracy to file false federal tax returns using stolen identities. Caldwell would provide identity information to co-conspirator Ora Mae Adamson, who would file the returns, in exchange for a cut of the illicit refunds generated by the false tax returns.
During the period in which Caldwell was a member of the conspiracy, the group defrauded the United States of approximately $380,000. Two other members of the conspiracy have already been sentenced. Adamson was sentenced to 46 months in prison on March 10, 2011, while another co-conspirator, Jeffrey Leon Ceaser, was sentenced to 36 months in prison on March 2, 2011. In all, the conspiracy defrauded the United States of more than $600,000.
Tuesday, August 9, 2011
Marc Zicaro Sentenced on Tax Charges
Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today the sentencing of a Liverpool man on tax charges.
Marc Zicaro, 38, had pled guilty on March 15, 2011 to being an accessory after the fact of the making of a false income tax return. The charge relates to Zicaro’s involvement in a fraud perpetrated by Donald Geiss, Jr. from 2001 through 2007. Geiss was employed as the director of health and safety at Intertek, located in Cortland, New York. Geiss submitted vouchers to Intertek for payment on behalf of others who were identified as a medical doctor and certified industrial hygienists. In the case of Marc Zicaro, he was represented to be a medical doctor in the vouchers submitted to Intertek by Geiss. These vouchers sought payment for work that was never done. In fact, Zicaro is not a medical doctor. When Geiss obtained the checks in payment of the fraudulent vouchers, he forged the endorsements and converted most of the proceeds to his own use.
During 2005, Geiss received Intertek checks payable to Marc Zicaro, M.D., in the total amount of $152,000. Geiss endorsed these checks and kept the proceeds. Geiss did not report this income on his 2005 tax return. In July 2007, Marc Zicaro received a notice from the IRS concerning the fact that Intertek had reported a payment of $152,000 to Zicaro that did not appear on Zicaro’s 2005 tax return. In August 2007, after consulting with Geiss, Zicaro responded to the IRS in a signed written statement. The statement was false in that Zicaro stated that he notified Intertek that he did not receive the $152,000 payment in 2005, when in fact Zicaro did not so notify Intertek. The statement was also false in that Zicaro stated Intertek issued a corrected 1099 which Zicaro enclosed in the correspondence to the IRS. This was false also in that Intertek did not issue the “corrected” 1099, and in fact Intertek knew nothing about it. Through this conduct, Zicaro assisted Geiss by hindering and preventing the IRS from the detection of Geiss’ criminal conduct in the fact that Geiss’ 2005 income tax return was false and fraudulent.
Monday, August 8, 2011
Justice Department Has Filed a Lawsuit Seeking to Stop Lakeisha Pearson From Preparing Federal Tax Returns for Others
WASHINGTON – The United States has filed a lawsuit seeking to stop Lakeisha Pearson from preparing federal tax returns for others, the Justice Department announced today. The government’s civil injunction complaint alleges that Pearson of Birmingham, Ala., operated under the trade names “LGS Tax Service,” “PositiveEndeavors LLC” and “AGA Tax Service,” and improperly claimed the earned income tax credit (EITC) on her customers’ tax returns to generate false or overstated tax refunds. Pearson also allegedly failed to comply with legal requirements for determining her customers’ eligibility for the EITC and the amount of their EITC claims.
The EITC is a refundable federal income tax credit for low-to-moderate-income working individuals and families. When the credit exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify for the credit, taxpayers must have earned income from employment, self-employment or another source and meet certain other requirements.
According to the complaint, Pearson prepared almost 2,000 tax returns for tax years 2008 through 2011, more than 92 percent of which claimed the EITC. Pearson allegedly prepared returns fraudulently reporting income or improperly claiming individuals as a “qualifying child” in order to inflate or generate false EITC claims for her customers. According to the complaint, the Internal Revenue Service (IRS) estimates that the harm to the government from Pearson’s misconduct could be as high as $8.3 million.
Sunday, August 7, 2011
Nicholas J. Faranso Sentenced To One Year in Prison for Using Computer Program To Delete Clubs Sales To Cheat On Taxes
WASHINGTON - Nicholas J. Faranso of Farmington Hills, Mich., was sentenced today by U.S. District Court Judge John Corbett O’Meara in the Eastern District of Michigan to one year and one day in prison for conspiring to defraud the United States, the Department of Justice and the Internal Revenue Service (IRS) announced. Faranso pleaded guilty on Jan. 12, 2011.
According to court documents, Faranso was the owner of two strip clubs: BT’s in Dearborn, Mich., and Tycoon’s in Detroit. From 2001 through 2004, both establishments used a computerized point of sales system which produced guest checks and electronically tracked and recorded sales. Court documents reveal that, in 2001, Faranso purchased a computer software program called Journal Sales Remover from Theodore Kramer, a self-employed computer software salesman. This computer software program was specifically designed to remove a portion of the actual sales from the computerized point of sales systems. The program would make it appear that Faranso’s clubs received less income than they actually did.
Faranso directed Kramer to put the Journal Sales Remover program onto his businesses’ computer systems in order to help Faranso cheat on the businesses’ taxes. From about 2001 to about 2004, at Faranso’s request, Kramer made periodic visits to Faranso’s clubs to run the Journal Sales Remover program to remove a substantial amount of the actual sales from the computerized sales systems. Faranso then provided the reduced sales figures to his accountant. As a result, Faranso falsified the clubs’ tax returns by understating their gross receipts by more than $500,000. Kramer previously pleaded guilty to one count of conspiracy on Nov. 17, 2010.
In addition to the prison term, Faranso was sentenced to two years of supervised release and ordered to pay $6,000 in restitution.
Saturday, August 6, 2011
Yumeitrius Manuel and Margaret Kirksey Charged with Conspiracy, Identity Theft, Filing False Tax Returns and Lying to Federal Agents
WASHINGTON – Yumeitrius Manuel and Margaret Kirksey, both of Montgomery, Ala., were indicted by a federal grand jury today on charges of conspiracy, identity theft, wire fraud, false claims and lying to federal agents, the Justice Department and Internal Revenue Service (IRS) announced.
According to the indictment, Manuel and Kirksey each owned and ran separate tax return preparation businesses in Montgomery, which operated out of the same physical location. The indictment alleges that Manuel and Kirksey agreed to fraudulently inflate tax refunds by placing false information on their clients’ tax returns. The indictment further alleges that they filed tax returns in the names and Social Security numbers of individuals who did not know about, and did not authorize, the filing of tax returns on their behalf.
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, Manuel and Kirksey each face a maximum of 10 years in prison for the conspiracy charge, a maximum of five years in prison for each false claims charge, a maximum of 20 years in prison for each wire fraud charge and a minimum of two years in prison for each aggravated identity theft count. Additionally, Manuel faces a maximum of five years in prison for lying to a federal agent. Kirksey faces a maximum fine of $2 million for all counts charged in the indictment and Manuel faces a maximum fine of $2.225 million for all counts charged in the indictment.
Friday, August 5, 2011
German A. Posada Pleads Guilty to Tax Fraud and Bankruptcy Fraud Charges
WASHINGTON - German A. Posada of Las Vegas pleaded guilty before U.S. District Judge Philip M. Pro to charges of filing a false 2004 individual income tax return and making a false statement in a bankruptcy proceeding, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents and statements made in court, Posada admitted to filing a false individual income tax return, Form 1040, for 2004 that under-reported the income from his business as a real estate agent in the Las Vegas area. Between 2003 and 2005, Posada earned commission income from International Realty and another realtor. He asked that International Realty issue some of his commission checks in the name of his then-girlfriend, and deposited those checks into a bank account in her name. Posada also admitted under-reporting his business income on his 2003 Form 1040 and failing to file a timely 2005 Form 1040, despite knowing of his legal duty to report the approximately $557,212 in income that he received in 2005.
According to court documents and statements made in court, in 2005, Posada filed for bankruptcy in the U.S. Bankruptcy Court for the District of Nevada. In his May, 13, 2005, bankruptcy petition, and again in his Aug. 2, 2005, amended petition, he made false statements, including that: he had no current income; he had received no income during the two years immediately preceding 2005; and 17 creditors held unsecured non-priority claims totaling $466,885 against him. Then, on Sept. 2, 2005, at a meeting of creditors, Posada falsely testified under oath before the bankruptcy trustee that he had received “one or two” and “probably two” commissions since May 13, 2005, when in fact he knew that he had received at least 19 commission checks totaling $130,575 during that time period.
As part of his plea agreement, Posada agreed to pay restitution to the IRS in the amount of $212,016, and to pay restitution to any victims of the bankruptcy fraud, in an amount to be determined by the court at sentencing.
Sentencing has been set for Dec. 5, 2011, and Posada remains free on bail pending sentencing, where he faces a maximum sentence of three years in prison on the tax charge and five years in prison on the bankruptcy fraud charge.
Thursday, August 4, 2011
Robert E. Greeley Pleads Guilty to Filing False Federal Income Tax Return
WASHINGTON - Robert E. Greeley, a resident of San Francisco, pleaded guilty today to charges of filing a false federal income tax return, the Justice Department and Internal Revenue Service (IRS) announced. Greeley appeared before U.S. District Court Judge Charles R. Breyer in San Francisco and accepted responsibility for concealing more than $13 million in two bank accounts he had with UBS in Switzerland. On June 14, 2011, Greeley was charged with one count of filing a false federal individual income tax return for the 2008 tax year. Judge Breyer scheduled sentencing for Nov. 9, 2011.
According to the plea agreement, Greeley admitted that in 2002 and 2004, with the assistance of UBS banker Renzo Gadola, he opened two bank accounts at UBS in Switzerland in the names of Meyrin Investors and Exchange Preferred Limited, both Cayman Islands nominee entities. Greeley admitted that he was the beneficial owner of Meyrin Investors and Exchange Preferred Limited, and that he directed the financial transactions concerning these bank accounts.
According to the plea agreement, Greeley admitted that between 2002 and 2008, the Meyrin Investors bank account’s highest total net asset balance was $2,855,894 and the Exchange Preferred Limited bank account’s highest total net asset balance was $12,616,881. Greeley further admitted that between 2003 and 2008, he earned more than $734,000 in interest income in the two UBS Switzerland bank accounts and that none of the interest income was reported on any tax return that he filed with the IRS.
According to the plea agreement, U.S. citizens who have a financial interest in, or signature or other authority over, a financial account or accounts in a foreign country with assets in excess of $10,000 at any time during a particular calendar year are required to file with the U.S. Department of Treasury a Report of Foreign Bank and Financial Accounts on Form TD F 90-22.1 (FBAR). Greeley admitted that between 2002 and 2008, he failed to file FBARs with the Department of Treasury and did not otherwise disclose to the IRS his interest in and control over the UBS accounts. Greeley further admitted that between 2002 and 2008 he willfully failed to disclose on his tax returns that he had an interest in, or signature or other authority over, a financial account in a foreign country.
According to the plea agreement, Greeley also admitted that on or about April 15, 2009, he filed a false U.S. Individual Income Tax Return, Form 1040, for the 2008 tax year, which he signed under the penalties of perjury. Greeley admitted that he willfully failed to report both his financial interest in and signature authority over the two bank accounts at UBS Switzerland and interest income of more than $146,000 that he earned from these two UBS Switzerland bank accounts on his 2008 tax return.
In addition to pleading guilty, as set forth in the plea agreement, Greeley agreed to pay a civil FBAR penalty of more than $6.8 million for his failure to file FBARs as required by law.
Wednesday, August 3, 2011
Former UBS Banker Martin Lack, Charged with Helping U.S. Taxpayers Use Secret Swiss Bank Accounts to Evade U.S. Taxes
WASHINGTON – Martin Lack, a former UBS AG banker who is currently an independent asset manager, has been charged with conspiracy to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment, Lack, a citizen and resident of Switzerland, founded his own investment management firm, Lack & Partner Asset Management AG in Zurich in 2002. According to the indictment, Lack assisted U.S. customers to open and maintain secret bank accounts at a Swiss cantonal bank headquartered in Basel, Switzerland, with the assistance of a private banker at the bank. The indictment alleges that Lack traveled to the U.S. to conduct banking for U.S. customers with undeclared accounts and conducted currency transactions in the U.S. in violation of federal banking and currency reporting laws.
According to the indictment, Lack encouraged his customers not to participate in the IRS voluntary disclosure program and he offered to provide his customers with falsified bank documents to conceal the source of the funds in their undeclared bank accounts. The indictment further alleges that Lack gave a U.S. customer with an undeclared bank account a cell phone and instructed the customer to only contact him using the cell phone and not to use a U.S. land line.
The indictment further alleges that Lack feared that he would be arrested by U.S. law enforcement following the investigation of UBS AG, so, in November 2010, he sent his associate, Renzo Gadola, to meet with a client at a Miami hotel to persuade that client not to disclose to the U.S. that the client owned and controlled a bank account at a regional bank headquartered in Basel. The undeclared bank account allegedly was funded when the client provided Lack with approximately $445,000 in cash during two meetings in New Orleans in 2007. According to the indictment, at the Nov. 6, 2010, meeting in Miami, Gadola encouraged the customer not to disclose the undeclared cantonal bank account to U.S. authorities, telling the customer that there was a “99.9 percent chance the client had nothing to worry about because the “likelihood . . .that they will somehow. . . find out about the account is practically zero percent.” Lack also allegedly encouraged this client not to disclose the undeclared bank account at the cantonal bank to the U.S. authorities and offered to provide the client with falsified bank documents to make the funds in the account appear as though they were the proceeds of a loan. On Dec. 22, 2010, Gadola pleaded guilty to conspiring to defraud the United States. He is scheduled to be sentenced before District Judge James King of the Southern District of Florida on Nov. 18, 2011.
Tuesday, August 2, 2011
Federal Court in Los Angeles Bars Benjamin Aparicio from Preparing Federal Tax Returns for Others
WASHINGTON – A federal court in Los Angeles has permanently barred Benjamin Aparicio from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Aparicio consented, was signed by Judge R. Gary Klausner of the U.S. District Court for the Central District of California.
According to the government complaint, Aparicio, a resident of Fillmore, Calif., who conducted business as BA Income Services in Santa Paula, Calif., engaged in a pattern of claiming false and inflated tax deductions for his customers. The government also alleged that Aparicio advised his customers to form limited liability companies that had no business purpose and subsequently prepared tax returns that used the sham business entities to deduct his customers’ personal expenses. According to the complaint, a sample of 53 returns prepared by Aparicio for tax years 2002 through 2005 and audited by the Internal Revenue Service (IRS) resulted in understated tax liabilities of more than $400,000.
According to the complaint, on October 25, 2010, Aparicio pleaded guilty to three counts of a 17-count federal indictment charging him with, among other things, aiding and assisting in the preparation of false income tax returns. The complaint states that on April 18, 2011, Aparicio was sentenced to 18 months in prison, three years of supervised release and restitution in the amount of $357,100.
Monday, August 1, 2011
Tracy McInchak Pleads Guilty to Embezzlement and Making a False Statement on a Federal Tax Return
Tracy McInchak, 39, of Dearborn, Michigan, pleaded guilty today to an indictment charging her with embezzlement and making a false statement on a federal tax return, U.S. Attorney Barbara L. McQuade announced today.
U.S. Attorney McQuade was joined in the announcement by U.S. Federal Bureau of Investigation Special Agent in Charge Andrew Arena and IRS Criminal Investigation Special Agent in Charge Erick Martinez.
According to court documents, form August 2004 until March 2010, McInchak, an office manager at WY-Campbell, an investment bank in Detroit, Michigan, embezzled approximately $462,000 by writing corporate checks to herself and to credit card companies to pay personal expenses. Over the six-year period, checks were created for up to $6,000, several times a month. She also knowingly failed to report over $224,000 of her embezzled monies on her 2009 federal income tax return.
“No matter what the source, all income is taxable,” said IRS Criminal Investigation Special Agent in Charge Erick Martinez. “The prosecution of individuals who willfully take from others, what is not theirs, will get the full attention of the IRS Criminal Investigation Division.”
Embezzlement carries the maximum penalty of 30 years’ imprisonment and a fine of $1 million. Making a false statement on a federal tax return carries the maximum penalty of three years’ imprisonment and a fine of $100,000.
McInchak is scheduled to be sentenced in Detroit on December 6, 2011, at 2:00 pm, before United States District Court Judge Robert H. Cleland.
