Gary Linn Packer Sentenced To Prison For 30 Months For Tax Evasion

Source- http://www.justice.gov/usao/can/news/2012/2012_03_06_packer.sentenced.press.html 

SAN JOSE, Calif. – Gary Linn Packer was sentenced yesterday to 30 months in prison, followed by three years of supervised release for tax evasion, United States Attorney Melinda Haag and Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Marcus Williams announced. The court also ordered Packer to pay restitution in the amount of $1,808,079.

Packer pleaded guilty on Nov. 28, 2011, to one count of tax evasion, in violation of Title 26, United States Code, Section 7201. According to the plea agreement, between, 1994 and 2001, Packer was employed by Network Appliance, Inc. (NA) in Sunnyvale, Calif. He received a portion of his income in NA stock options. In 2000, Packer liquidated his NA stock, which resulted in a taxable gain of $8,844,949. He did not file a tax return for the 2000 tax year and did not pay the IRS the $1,795,740 of income taxes owed. In order to evade the payment of the income taxes, Packer concealed his assets from the IRS by placing them in nominee names, including several trusts, and used false identification numbers.

According to court documents, on Aug. 2, 2000, Packer purchased a home in Morgan Hill, Calif., for $1,205,000 with stock sale proceeds. He took title to this property in the name of The Little Bear Home Trust, which he purchased from We the People Trusts. Packer did not register The Little Bear Home Trust with the IRS and did not obtain a taxpayer identification number for this trust. Also in 2000, Packer purchased another trust from We the People Trust and named it The Good Life Investment Trust (GLIT). He transferred approximately $655,000 from his Lehman Brothers brokerage account to the GLIT account at Bank of America. To conceal stock sale proceeds from the IRS, Packer transferred approximately $6 million to the GLIT account at Citibank/Bear Stearns. Continuing his attempts to conceal stock proceeds he transferred approximately $2.2 million from the GLIT account at Citibank/Bear Stearns to another GLIT account at Emmett Larkin Co., Inc. Court documents further show that, from the GLIT, Packer paid personal expenses in cash, including purchasing an Audi TT, a BMW X-5 and a Volkswagen Cabriolet. He also paid cash for a condo in Nashville, Tenn., which was placed in a nominee’s name. In October 2006, Packer sold his residence in Morgan Hill. From the proceeds, he wire transferred $760,258.34 to the GLIT and wire transferred $579,950 into an escrow account for the purchase of a home located in Lodi, Calif., which was placed in a nominee’s name. Packer lived in that house until March, 2010. From the sale proceeds of the Morgan Hill residence, he also wire transferred $25,000 to a nominee.

Packer, 51, currently of Cheyenne, Wyo., was charged on March 4, 2010, with two counts of tax evasion. He pleaded guilty to one count. Packer has been in custody since his arrest in Wyoming on Feb. 2, 2011.

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Federal Court in Illinois Shuts Down Nationwide “Employee Benefit Plan” Tax Scheme

Source-  http://www.justice.gov/opa/pr/2012/March/12-tax-290.html 

A federal court has permanently barred Tracy L. Sunderlage, Linda Sunderlage and four companies from operating an alleged scheme to help high-income individuals attempt to avoid income taxes by funneling money through purported employee benefit plans, the Justice Department announced today. Judge John W. Darrah of the U.S. District Court for the Northern District of Illinois entered the permanent injunction orders, to which the defendants consented, against the Sunderlages, SRG International Ltd., of Nevis, West Indies, and three Illinois companies - SRG International U.S. LLC, Maven U.S. LLC and Randall Administration LLC.

According to the government complaint , the defendants claimed to promote and operate plans that provide insurance benefits to participating companies’ employees, when in fact the scheme is simply a mechanism for the companies’ owners to receive purportedly tax-free or tax-deferred income for their personal use. Tracy Sunderlage and the two SRG International companies allegedly marketed the scheme to high-income professionals who own small, closely held companies. In the most recent version of the alleged scheme, each participant’s company made supposedly tax deductible payments to a purported benefit plan operated by Maven U.S. and Randall Administration. The company’s contributions were then allegedly transferred to an account within a company based in the Caribbean island of Anguilla, in which they were allegedly invested until the owner terminated from the program and received the assets for his or her personal use. The complaint alleged that many participants owned these accounts through offshore trusts, which Tracy Sunderlage and SRG International Ltd. often helped to establish. The complaint alleged that participants from across the country have transferred at least $239 million as part of the scheme and that total contributions may exceed $300 million.

The injunction orders bar the defendants from operating or promoting any purported “welfare benefit plans.” The court also ordered the defendants to provide the government with a list of their customers and to send copies of the injunction orders to their customers.

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L. Brian Whitfield, Marsha Whitfield and Edwin Todd are Charged with Conspiracy, Fraud, and Tax Charges

Source-  http://www.fbi.gov/memphis/press-releases/2012/former-executives-at-sommett-group-llc-charged-with-conspiracy-fraud-and-tax-charges 

L. Brian Whitfield, 46, formerly of Franklin, Tennessee; Marsha Whitfield, 39, of Franklin, Tennessee; and D. Edwin Todd, 68, of Franklin, Tennessee, were charged yesterday by a federal grand jury for their roles in a multi-million-dollar fraud perpetrated by the Sommet Group, LLC, a payroll-processing company and former sponsor of the Nashville arena once known as the Sommet Center.

The indictments were announced today during a morning press conference by U.S. Attorney Jerry E. Martin, joined by Aaron T. Ford, special agent in charge (SAC), FBI-Memphis Division, and Christopher A. Henry, SAC, IRS-Criminal Investigation-Nashville Field Office.

Brian and Marsha Whitfield both face one count of conspiracy, three counts of wire fraud, three counts of theft from an employee pension benefit plan, and four counts of money laundering. In addition to those charges, Brian Whitfield alone faces four counts of filing a false tax return. Ed Todd faces a single count of criminal conspiracy. The different offenses carry varying maximum penalties from three years of imprisonment (for filing false return), five years (for conspiracy and for theft from a pension benefit plan), 10 years (for money laundering), and 20 years (for wire fraud).

“This case represents just the latest example of this U.S. Attorney’s Office and the Department of Justice’s ongoing commitment to prosecuting white-collar crime,” said United States Attorney Jerry E. Martin. “Sommet was a prominent Middle Tennessee business that had millions of dollars of client funds under its control. But instead of safeguarding that money and meeting their legal obligations to their clients and the IRS, these defendants diverted it to their own business and personal use. Citizens and businesses in the Middle District of Tennessee can be assured that this office, along with our many valued law enforcement partners, stand committed to rooting out and prosecuting such frauds. Would-be fraudsters can be assured that they will face stiff consequences for their crimes.”

According to the 24-page indictment, Sommet purported to be a payroll-processing company. For a fee, business clients provided Sommet their gross payroll and Sommet would allocate and distribute the funds in the appropriate amounts to state and federal taxing authorities, a health-insurance plan, 401(k) plans, and client employees’ paychecks. The indictment alleges that, instead of distributing those client funds in appropriate amounts at appropriate times, the defendants diverted those funds to the Whitfields’ personal use, including, among other things, the purchase of a houseboat and various home renovations and to prop up several start-up businesses affiliated with Sommet (referred to in the indictment as the “Sommet Business Units”). As a result, client employees’ 401(k) funds were not fully deposited into their 401(k) accounts, their medical and prescription drug claims were not fully paid by health insurance, and their gross wages were not fully reported to the IRS.

The indictment alleges that the defendants made various misrepresentations to clients, the IRS, and others regarding taxes, health insurance, and 401(k) plans.

“Fraud by well-known or high-profile companies get the biggest headlines, but it is important to remember how devastating fraud of this kind can be to the hard-working victims, who simply want justice,” said Aaron T. Ford, special agent in charge of the Memphis Division of the Federal Bureau of Investigation. “Today’s indictments underscore that the FBI, working with our law enforcement partners, will pursue fraudsters in whatever form and that we will use all the investigative techniques in our arsenal to find you, stop you, and bring you to justice.”

“This type of manipulation and deception by educated and skilled professionals who know better will not be tolerated,” stated Christopher A. Henry, special agent in charge, IRS Criminal Investigation-Nashville Field Office. “The defendants’ repeated and protracted deception over a two-year period resulted in a substantial loss of funds and is insulting and harmful to the honest, hard-working citizens. This is not a victimless crime. Employment tax evasion results in the loss of tax revenue to the United States government and the potential loss of future Social Security, Medicare, or retirement benefits as well as health-care coverage for employees.”

“Theft of employee benefit assets jeopardizes the benefits of workers. This case reaffirms the Labor Department’s commitment to protect workers’ benefits by identifying criminal activity wherever and whenever it occurs,” said Isabel Colon, regional director of the Employee Benefits Security Administration’s (EBSA) Atlanta Regional Office.

Regarding taxes, according to the indictment, the defendants misrepresented to clients that Sommet would report their gross wages on Sommet’s own employer quarterly federal tax return (IRS Form 941). Contrary to that representation, between Fourth Quarter 2008 and First Quarter 2010, Sommet paid approximately $83 million in gross wages to employees of Sommet, the Sommet business units, and certain Sommet clients known as Professional Employer Organizations (PEOs). During that same time period, however, Sommet only reported to the IRS approximately $4 million in gross wages for those same entities. The defendants also misrepresented that they would remit to the IRS the clients’ federal taxes in appropriate amounts. Sommet, however, only remitted approximately $1.23 million of the clients’ approximately $20 million tax liability.

In addition, the indictment alleges that Brian Whitfield filed four false federal tax returns for Sommet and the Sommet Business Units, in which returns only reported $2.4 million in gross wages instead of the $6.2 million in gross wages it had paid to employees.

Regarding health insurance, the indictment alleges that Sommet offered a health insurance plan to clients but failed to adequately fund that health insurance plan with clients’ premiums. Because Sommet failed to fund the plan, two third-party administrators (companies that process health insurance claims) terminated their relationship with Sommet. The defendants attempted to conceal this and other problems related to health insurance by providing clients with false excuses and misleading information. By June 2010, Sommet had outstanding unpaid health insurance claims of approximately $3.8 million.

Regarding 401(k) funds, the indictment alleges that Sommet offered clients a 401(k) plan. Instead of directing employees’ designated retirement funds to that plan, the defendants diverted it to Sommet’s business or their personal use. Approximately $44,000 of employer and employee contributions were never forwarded to the 401(k) plan.

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Tracy McInchak Goes to Jail for Embezzlement and Tax Fraud

Source-  http://www.fbi.gov/detroit/press-releases/2012/dearborn-office-manager-goes-to-jail-for-embezzlement-and-tax-fraud 

Tracy McInchak, 40, of Dearborn, Michigan, was sentenced to 15 months’ imprisonment and three years of supervised release for 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.

In addition, United States District Judge Robert H. Cleland ordered Mclnchak to pay a special assessment of $200 and restitution to the Internal Revenue Service of $62,706 and Comerica Bank of $440,614.

In July of 2011, Mclnchak pled guilty to one count of embezzlement and one count of filing a false tax return. According to court documents, from August 2004 until March 2010, McInchak was employed as an office manager at WY-Campbell, an investment bank in Detroit. During that time, she 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.

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Thomas J. O’Leary Pleads Guilty to Federal Election Fraud and Tax Evasion

Source-  http://www.fbi.gov/newark/press-releases/2012/former-executive-director-of-south-amboy-housing-authority-pleads-guilty-to-federal-election-fraud-and-tax-evasion 

NEWARK—Thomas J. O’Leary, the former executive director of the South Amboy Housing Authority, admitted his role in a scheme to funnel illegal campaign contributions to the Democratic primary election campaign of Joseph Vas for U.S. Congress in 2006, as well as one count of evading taxes, U.S. Attorney Paul J. Fishman announced.

O’Leary, 50, of South Amboy, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to charges of conspiracy to defraud the Federal Election Commission arising from his participation in a scheme to funnel thousands of dollars through straw contributors to Vas’ campaign, and to one count of tax evasion.

According to the indictment and information to which O’Leary pleaded guilty and statements made in court:

O’Leary admitted he participated in a scheme with co-defendant Francis X. Gartland, an insurance broker based in Towson, Maryland, to use “straw” or “conduit” contributors to make contributions to the 2005-2006 Vas congressional campaign for the 13th Congressional District. Gartland, through his various companies, was the insurance broker of record for the City of Perth Amboy and the Perth Amboy Board of Education. Gartland received thousands of dollars in commissions for those representations and split a portion of the commissions with O’Leary. The purpose of the straw contributions to Vas, then the mayor of Perth Amboy and a New Jersey State assemblyman, was to ensure that Gartland maintained the lucrative insurance brokerage representations with the City of Perth Amboy and the Perth Amboy Board of Education.

O’Leary acknowledged that he recruited five straw contributors to contribute $2,000 each to Vas’ federal campaign committee. He reimbursed the straw contributors by cash or check with funds provided by Gartland. Straw contributions are prohibited by the Federal Election Campaign Act. O’Leary also admitted that for tax year 2006, he evaded the assessment of thousands of dollars of federal income tax by concealing income and other benefits that he received from Gartland.

The conspiracy charge to which O’Leary pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine. The tax evasion charge carries a maximum statutory penalty of five years in prison and a $100,000 fine, with an alternative fine of $250,000. Sentencing is scheduled for June 8, 2012.

Vas and Melvin Ramos, Vas’ former mayoral aide and the treasurer of Vas’ campaign, were convicted on October 8, 2010, following a jury trial, of charges of mail fraud, fraud, and misapplication of funds, false statements, and federal election crimes. Vas and Ramos were sentenced to 78 and 37 months in prison, respectively, by U.S. District Judge Susan D. Wigenton on April 12, 2011. In addition to the prison terms, Judge Wigenton sentenced Vas and Ramos to three years of supervised release and ordered them to pay $90,000 in restitution to Perth Amboy. Vas was also ordered to pay a $73,200 fine.

The federal election crime charges pertaining to Gartland involving O’Leary are pending before Judge Wolfson. In December 2010, Gartland also was charged in a 27-count superseding indictment along with Michael J. Ritacco, the former superintendent of the Toms River Regional School District, with charges relating to bribery and tax fraud. The superseding indictment charged Gartland and Ritacco with scheming with others, including co-conspirators Frank Cotroneo and Frank D’Alonzo, to pass a stream of cash payments and other benefits totaling between $1,000,000 and $2,000,000 from Gartland to Ritacco in exchange for Ritacco’s official action and influence in matters relating to the Toms River Regional School District’s insurance business. The superseding indictment also contains two counts charging separate conspiracies to defraud the IRS, and seven counts of making and subscribing false federal personal income tax returns—for tax years 2004 to 2006 for Ritacco and 2004 to 2007 for Gartland. Cotroneo and D’Alonzo both pleaded guilty in federal court to bribery and tax charges related to this scheme on October 18, 2010 and await sentencing. The case against Gartland and Ritacco is scheduled to begin trial on April 9, 2012 before U.S. District Judge Joel A. Pisano.

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Sherwood Schaub, also known as “Andy Sherwood, Admits Decade-Long Tax Evasion Scheme

Source- http://www.justice.gov/usao/ct/Press2012/20120229.html

David B. Fein, United States Attorney for the District of Connecticut, today announced that SHERWOOD SCHAUB, also known as “Andy Sherwood,” 70, of New Canaan, waived his right to indictment and pleaded guilty yesterday, February 28, before United States District Judge Janet Bond Arterton in New Haven to two counts of tax evasion.

According to court documents and statements made in court, SCHAUB has owned and operated an executive search business and other businesses that have used a variety of names, including Goodrich & Sherwood Company, Goodrich & Sherwood Associates, Inc., Whittenwood Associates, Inc.,Whittenwood International, Inc., GSA International, Inc., Stanton Chase of New York, and G&S Holding Limited Partnership. From approximately 1994 through 2006, SCHAUB’s business entities repeatedly failed to pay federal taxes that had been withheld from employees’ paychecks. During these years, the Internal Revenue Service assessed SCHAUB with penalties for failing to pay these withholding taxes, but SCHAUB failed to pay these penalties, as well. As part of the scheme, SCHAUB willfully attempted to avoid paying taxes by causing his business entities to operate under various names, and by causing his income to be paid in his wife’s name rather than his own in the form of checks and wire transfers to her bank account.

Through this scheme, SCHAUB evaded the payment of $1,314,146.86 in taxes, interest and penalties.

In addition, in 2005, SCHAUB received taxable income in the form of checks deposited into his wife’s bank account in the amount of $164,100. SCHAUB failed to pay taxes on this income, and also failed to file an income tax return for the 2005 tax year.

Judge Arterton has scheduled sentencing for May 22, 2012, at which time SCHAUB faces a maximum term of imprisonment of five years and a fine of up to $100,000 on each count. As part of his plea agreement, SCHAUB has agreed to cooperate with the IRS and to pay all back taxes, penalties and interest.

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Diane L. Baugh Convicted Of Tax Evasion For Failing To Report Income Received From Internet Sales Of Stolen Scrapbooking Merchandise

Source-  http://www.justice.gov/usao/wie/news/2012/pr20120217_Appleton_Tax_Evasion.html 

United States Attorney James L. Santelle announced today that on February 13, 2012, Diane L. Baugh (age: 56) of Appleton, Wisconsin, was convicted of three counts of tax evasion based on her failure to report over $300,000 she received by selling stolen scrapbooking merchandise using eBay and direct email. Baugh will be sentenced by United States District Judge William Griesbach in Green Bay on May 21, 2012. She faces a maximum of 15 years in prison and $300,000 in fines.

The investigation determined that between January 2005 and April 2010, Baugh received over $605,000 by selling scrapbooking merchandise, and that she willfully failed to report any of that income to the Internal Revenue Service.

Baugh received the scrapbooking merchandise from Virginia M. Akers (age: 67) of Indiana who had shoplifted it from Hobby Lobby department stores in several states and shipped it to Baugh in Appleton. Baugh advertised the merchandise on eBay and also used direct email marketing with foreign and domestic customers that she had cultivated on eBay over the years. Baugh’s on-line customers paid her for the merchandise and shipping costs using PayPal. Baugh then used PayPal and money wire services to pay Akers for her share.

From the gross receipts of over $605,000, Baugh paid Akers over $257,000. After paying over $46,000 in shipping costs, Baugh’s net income was approximately $301,561.

On January 23, 2012, Virginia Akers was sentenced to 60 months in federal prison for conspiracy to commit mail and wire fraud relative to the stolen scrapbooking merchandise. The court also ordered Akers to pay over $2.2 million in restitution to Hobby Lobby based on Baugh selling the stolen merchandise at approximately 25% of its retail value.

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Roshunda Smith and Linda Fay Townsend are Sentenced To Prison For Filing Fraudulent Income Tax Returns

Source-  http://www.justice.gov/usao/wie/news/2012/pr20120301_Fraudulent_Tax_Returns.html 

United States Attorney James L. Santelle, for the Eastern District of Wisconsin announced that two Milwaukee women have been sentenced to federal prison for their involvement in a scheme to submit numerous fraudulent income tax refund claims.

Roshunda Smith (age: 31) and Linda Fay Townsend (age: 46), both of Milwaukee, previously pleaded guilty to participating in a conspiracy that involved the submission of more than 170 fraudulent income tax returns seeking more than $1.5 million in federal income tax refunds.

The returns reflected false employment, income, dependents, tax withholdings, and estimated tax payment information. In addition, many of the returns also falsely claimed that the taxpayer was eligible for the First Time Home Buyer Credit. As a result of the scheme, the IRS paid out $450,000 in fraudulent income tax refunds.

Smith, who was the organizer of the scheme, was sentenced to 46 months in prison and ordered to pay restitution to the IRS totaling $450,000. Townsend, who had more limited involvement in the scheme, was sentenced to two years in prison and ordered to pay $70,000 in restitution.

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Kelley Lee Steiner Pleads Guilty to $540,000 Embezzlement, Tax Fraud

Source-  http://www.fbi.gov/kansascity/press-releases/2012/former-bank-employee-pleads-guilty-to-540-000-embezzlement-tax-fraud 

JEFFERSON CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced that a former employee of Jefferson Bank in Jefferson City, Mo., pleaded guilty in federal court today to embezzling more than $540,000 from the bank and another employer and to tax fraud.

Kelley Lee Steiner, 52, of Jefferson City, waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the charges contained in a federal information.

Steiner was employed by Jefferson Bank as vice president and secretary to the board of directors from June 14, 1999 to Nov. 12, 2008. Steiner served as personal executive assistant to former bank president Harold W. Westhues. By pleading guilty today, Steiner admitted that she embezzled a total of $487,199 from both the bank and from Westhues’ personal checking account. Steiner also admitted that she embezzled $54,000 while employed at Modern Business Systems. By failing to report the embezzled funds as income on her federal tax returns from 2005 to 2008, Steiner caused tax harm to the United Sates in the amount of $106,192.

Steiner had been given authority to write checks on Westhues’ personal account and sign his name to those checks in order to pay his personal expenses. During an audit of Westhues’ personal checking account, the bank discovered that Steiner had, without authority, diverted funds totaling approximately $378,000 for her personal benefit, which included writing checks to herself and paying her personal credit card bills and her children’s college expenses.

Steiner also prepared paperwork for the bank to reimburse Westhues for work-related expenses incurred by him which were typically charged to his credit card. Investigation determined that Steiner had diverted approximately $19,070 in valid reimbursement funds from Westhues, and used them to pay on her personal credit cards. Steiner also submitted false documentation to the bank for work-related expenses purportedly incurred by Westhues, which were then reimbursed by the bank, including the re-submission of valid credit card statements which had already been previously reimbursed by the bank. It was discovered that an additional $29,947 had been diverted by Steiner to pay on her personal credit card accounts.

Steiner was responsible for paying the board of directors for participating in board meetings, audit meetings, and other special bank meetings. Board members were paid $400 in cash for each meeting they attended. During a review of board fees paid by the bank in 2008, a bank officer identified approximately $60,400 in cash embezzled by Steiner that had purportedly been paid as board fees.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The sentencing, which took place in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Ronald C. Machen Jr., James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, and Natwar M. Gandhi, Chief Financial Officer for the District of Columbia.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue Service-Criminal Investigation; Postal Inspector in Charge Daniel S. Cortez of the U.S. Postal Inspection Service-Washington Division; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Chief Mark Magaw of the Prince George’s County Police Department.

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

“No matter what the source, all income is taxable,” said IRS Criminal Investigation Acting Special Agent in Charge Eric Hylton. “The prosecution of individuals who willfully take from others, what is not theirs, will get the full attention of the IRS Criminal Investigation Division.”

According to his plea agreement, Weon owns Parkway Pawn Shop, Inc. and Earth 1 Computer, Inc., doing business as Bargains 101/Parkway Pawn Shop, located at 5664 Annapolis Road in Bladensburg, Maryland. Weon sold items in his pawnshop, online through his website and eBay/PayPal, and at flea markets. IRS-CI learned in 2009 that Weon failed to file federal corporate income tax returns for 2003 through 2008. Records of eBay/PayPal sales revealed that between May 31, 2000 and August 27, 2009, Weon received approximately $6,531,334.47 from online sales. This money was wired into Weon’s bank accounts. Other bank records from Weon’s companies show total gross sales from the businesses of $18,418,796.84 from 2004 to 2008, none of which was reported to the IRS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source- http://www.justice.gov/usao/cae/news/docs/2012/02-13-12KingGuiltyPlea.html

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

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

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

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

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

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

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

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