Source- http://www.justice.gov/tax/txdv11040.htm
WASHINGTON - Nicholas J. Faranso of Farmington Hills, Mich., pleaded guilty today before U.S. District Court Judge John Corbett O'Meara in the Eastern District of Michigan to one count of conspiracy to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. For his role in the conspiracy, Faranso faces a maximum sentence of five years in prison. The court set sentencing for July 14, 2011.
According to court documents, Faranso owned 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 the club owner 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.
Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan, and John A. DiCicco, Acting Assistant Attorney General for the Department of Justice, Tax Division, commended the IRS special agents who investigated this matter and Tax Division Trial Attorneys Kenneth C. Vert and Tiwana L. Wright, who prosecuted the case.
Wednesday, January 12, 2011
Detroit Strip Club Owner Nicholas J. Faranso, Pleads Guilty to Using Computer Software Program to Delete Club's Sales in Order to Cheat on Taxes
Tuesday, January 11, 2011
Homer Lee Richardson Sentenced 30 Months in Prison for Tax Crimes
Source- http://www.justice.gov/opa/pr/2011/January/11-tax-031.html
WASHINGTON - Homer Lee Richardson of Loveland, Ohio, was sentenced today for corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue Code, aiding and assisting in the preparation of a false income tax return on the behalf of another individual, and filing his own false individual income tax returns for the years 1998, 1999 and 2000, the Justice Department announced. Richardson, a former promoter of sham trust systems, had previously pleaded guilty.
U.S. District Court Senior Judge for the Southern District of Ohio Sandra S. Beckwith sentenced Richardson to 30 months in prison and one year of supervised release. The court also ordered Richardson to pay a $60,000 fine and $61,212 in restitution.
According to the indictment, Richardson marketed and promoted sham trusts for an organization known as Aegis. The trusts had no economic substance or business purpose and falsely gave the appearance that Aegis members relinquished control over their assets. Taxpayers who used these trusts filed false federal individual income tax returns understating their income.
In addition, Richardson attempted to obstruct Internal Revenue Service (IRS) audits of his own and at least one other individual’s income taxes. Finally, Richardson filed his own false tax returns which falsely understated his income.
Thomas Robert Turner Indicted for Filing False Income Tax Returns
Source- http://www.justice.gov/opa/pr/2011/January/11-tax-026.html
WASHINGTON - A federal grand jury in Greenbelt, Md., today indicted Thomas Robert Turner, a resident of Prince George’s County, Md., for corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws between 2004 and January 2009, the Justice Department and Internal Revenue Service (IRS) announced. Turner is also charged with filing two false amended individual income tax returns with the IRS for 2004 and 2005.
According to the indictment, Turner worked as a bus driver for D & B Tours Inc., a tour bus company. He, along with at least two other people, caused false corporate income tax returns for 2001, 2002 and 2003 to be filed with the IRS. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Turner also filed false individual tax returns for 2002 through 2005, which reported fictitious businesses and claimed more than $70,000 in false refunds based on fraudulently inflated federal fuel tax credits.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Monday, January 10, 2011
Former Haven Health Care Bookkeeper Serena Sylvia, Pleads Guilty to Fraud and Tax Charges
Source- http://newhaven.fbi.gov/dojpressrel/pressrel11/nh011011.htm
David B. Fein, United States Attorney for the District of Connecticut, today announced that SERENA SYLVIA, 42, of Fargo Road, Waterford, waived her right to indictment and pled guilty on Friday, January 7, before United States Magistrate Judge Donna F. Martinez in Hartford to one count of health care fraud and one count of filing a false income tax return.
According to court documents and statements made in court, SYLVIA was employed as a regional accounts receivable manager for Haven Health Care Management, LLC. From 2005 to 2008, SYLVIA embezzled funds from nursing home resident trust fund accounts. The nursing homes affected by SYLVIA’s embezzlement include Haven Health Center of Jewett City, Haven Health Center of Norwich, Haven Health Center of Waterford, and Haven Health Center of Soundview in West Haven. As part of her plea, SYLVIA admitted taking more than $53,000 from the trust fund accounts, and admitted that she did not pay income tax on the money she stole.
SYLVIA is scheduled to be sentenced by Chief United States District Judge Alvin W. Thompson on March 28, 2011, at which time SYLVIA faces a maximum term of imprisonment of 10 years and a fine of up to $250,000 on the health care fraud count, and a maximum term of imprisonment of three years and a fine of up to $100,000 on the false tax return count.
This matter stems from a larger investigation into fraud at Haven Healthcare, a chain of nursing homes formerly headquartered in Middletown, Connecticut. That investigation has resulted in convictions of Raymond Termini, the former CEO of Haven Healthcare; Fred Dalicandro, the former director of Cash management of Haven Healthcare, and Kimberly Boccacio, the former administrator of Haven Health Center of Jewett City.
Owner and Operator of Massachusetts Computer Parts Company Michael A. Daly, Sentenced to 48 Months After Conviction for Wire Fraud and Money Laundering
Source- http://sanfrancisco.fbi.gov/dojpressrel/pressrel11/sf011011.htm
SAN JOSE, CA—The president of Data Resource Group, a company based in Salisbury, Mass., was sentenced today to 48 months in prison for defrauding Cisco Systems of computer networking equipment and engaging in money laundering by selling the fraudulently obtained equipment to other Cisco hardware resellers, U.S. Attorney Melinda Haag announced. Michael A. Daly was also ordered to pay restitution in the amount of $1 million to Cisco and serve a term of three years of supervised release after completion of his custodial sentence.
According to court documents, from approximately June 2003 to February 2007, Daly, 56, of Danvers, Mass., engaged in a scheme to defraud Cisco. To help carry out his scheme, Daily created fictitious personal and company names, obtained e-mail accounts related to those names, and used the fictitious names to rent private mailboxes around the United States. Daly then used the fictitious names to contact Cisco and falsely claim that parts supposedly covered by contracts under Cisco’s SMARTnet warranty program were failed or defective and needed to be replaced.
According to a previously filed indictment, Daly carried out the fraud more than 1300 times and used private mailboxes in 39 states. On each occasion, he obtained equipment with a list price ranging from $995 to $25,000, resulting in a total loss of approximately $15,455,695.
Under the SMARTnet program, Cisco provides customers with technical support, including advance hardware replacement. Advance hardware replacement allows customers to obtain replacement equipment from Cisco immediately, without having first to return the broken part.
Court documents further show that Daly also engaged in money laundering by selling the fraudulently obtained “replacement” parts to Cisco equipment resellers around the country. On a number of occasions, Daly received tens of thousands of dollars from Cisco resellers for fraudulently obtained parts. Daly generally did not return any parts to Cisco and, when he did, he returned parts not covered by SMARTnet and worth little or nothing.
Daly was charged by indictment on May 9, 2007, with multiple counts of wire fraud and money laundering. On April 9, 2009, pursuant to a plea agreement, Daly pled guilty to wire fraud and money laundering and admitted to the forfeiture allegations contained in the Indictment. Today’s sentence was handed down by United States District Court Judge Ronald M. Whyte.
Saturday, January 8, 2011
Rontrail Jamar Williams Sentenced to 96 Months for Wire Fraud
Source- http://www.justice.gov/usao/vae/Pressreleases/01-JanuaryPDFArchive/11/20110107williamsnr.html
ALEXANDRIA, Va. – Rontrail Jamar Williams, 35, of Clinton, Md., was sentenced today to 96 months in prison, followed by three years of supervised release, for his role in a long running wire fraud scheme. Williams was also ordered to forfeit and pay restitution in the amount of $639,598.97.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Andrew Adelmann, Acting Special Agent in Charge of the United States Secret Service’s Washington Field Office, made the announcement after sentencing by United States District Judge Gerald Bruce Lee. Williams pled guilty to a criminal information on Oct. 6, 2010.
According to court documents, Williams produced counterfeit checks and counterfeit drivers’ licenses. He used the counterfeit checks to purchase goods at retail stores in the Eastern District of Virginia and elsewhere, and then converted the goods into cash. Williams also coached others on how to commit similar crimes and supplied them with the means to do so. The scheme lasted from October 2004 through August 2010, and involved conduct in nine states and the District of Columbia.
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Friday, January 7, 2011
Roy W. Bradford was Sentenced to 16 Months in Prison for Filing False Federal Tax Return
Source- http://www.justice.gov/opa/pr/2011/January/11-tax-019.html
WASHINGTON – Roy W. Bradford was sentenced today in federal district court in Dayton, Ohio, for willfully filing a false federal income tax return for 2004, the Justice Department and Internal Revenue Service (IRS) announced. U.S. Judge Thomas M. Rose sentenced Bradford to 16 months in prison and ordered him to pay $379,852 in restitution to the IRS.
On Sep. 22, 2010, Bradford pleaded guilty to willfully filing a false tax return for 2004. According to court documents, Bradford owned and operated Bradford Builders out of his residence in Ludlow Falls, Ohio. Bradford Builders built wooden frames for residential construction.
For the 2003 and 2004 tax years, Bradford filed false Forms 1099 that deliberately inflated the amounts that he paid to his independent contractor crew chiefs. Bradford then used these false amounts from the Forms 1099 to inflate the deductions for labor costs on his 2003 and 2004 individual income tax returns. Bradford also improperly deducted as business expenses many of the costs incurred in constructing his personal residence. Bradford also understated his business income by not reporting money he received for work performed for certain clients.
In addition to falsifying his own tax information, Bradford used false tax ID numbers on the Forms 1099 that he issued to workers who did contract work for him. He also provided false information to an IRS agent during the course of an audit and to another IRS agent conducting the criminal investigation. Bradford admitted that he caused a tax loss of $379,852.
“Tax violations have been erroneously referred to as victimless crimes, but it's the honest law abiding citizen who is harmed when someone tries to manipulate our nation's tax system." said Victor S. O. Song, Chief, IRS Criminal Investigation Division. "Wrongdoers will be held accountable for such actions, and today's sentencing is a costly reminder."
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Thursday, January 6, 2011
Mortgage Broker Douglas Skibicki, Pleads Guilty to Mail Fraud in Scheme to Defraud Lenders, Family, and Others of Over $1.4 Million
Source- http://baltimore.fbi.gov/dojpressrel/pressrel11/ba010611.htm
BALTIMORE—Douglas Skibicki, age 41, of Bethesda, Maryland, pled guilty today to two counts of mail fraud in connection with a mortgage fraud scheme in which he defrauded lenders, family and others.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Chief William J. McMahon of the Howard County Police Department; Special Agent in Charge Richard A. McFeely; Special Agent in Charge Barbara Golden of the United States Secret Service - Baltimore Field Office; and Special Agent in Charge Ken Taylor, Jr. of the Housing and Urban Development Office of Inspector General - Office of Investigations.
According to Skibicki’s plea agreement, he was a mortgage originator and/or broker for a company which operated in Laurel, Maryland. Skibicki admitted that from April 2006 through August 2009, with the assistance of an appraiser and others, he participated in a scheme to defraud lenders, family members and others through a series of real estate transactions.
For example, in May 2007, G.C., who owned a construction company, was facing financial difficulties. G.C. contacted Douglas Skibicki to discuss whether he could help him. Skibicki had previously assisted G.C. in refinancing G.C.’s residence. Skibicki agreed to purchase a 50 percent interest in property G.C. owned at 7609 Bay Street in Pasadena, for $121,000, but told G.C. that Skibicki’s 50 percent interest in 7609 Bay Street would be put in the name of Family Member 3.
In May 2007, G.C. owned 7609 Bay Street free and clear, but there was only a garage with an attached room, as well as an unusable outhouse, built on 7609 Bay Street. There was no running water and no operable bathroom on the property.
On May 9, 2007, the appraiser working with Skibicki completed a fraudulent appraisal of 7609 Bay Street, including that there was a two-bedroom, one-bathroom existing home on the property with a “modern” kitchen and an enclosed porch and pier. The appraiser also included photographs of the front and rear of the home supposedly located at 7609 Bay Street. Those photographs were of a home that was never located at 7609 Bay Street.
In May 2007, Skibicki submitted a fraudulent loan application to National City Bank for a mortgage on 7609 Bay Street in the name of Family Member 3, which contained false statements as to Family Member 3's income and current residence. Family Member 3 did not sign the loan application and neither Family Member 3 nor G.C. signed the settlement documents that were provided to the mortgage company, showing that a settlement for the Bay Street property occurred on May 15, 2007. Based on the false information submitted by Skibicki, National City provided a mortgage on 7609 Bay Street in the amount of $260,971 in the name of Family Member 3. Skibicki received $249,997.18 in the name of Family Member 3 after taxes and closing costs were deducted. Skibicki told the title company handling the settlement to wire $121,000 to a bank account held in the name of G.C.’s construction company, to pay for the 50 percent interest in 7609 Bay Street that Skibicki had purchased in the name of Family Member 3. Skibicki subsequently allowed the mortgage on 7609 Bay Street to go into default, leading to foreclosure proceedings.
In addition, according to the plea agreement, Skibicki and Family Member 1 owned property at 5870 Deer Ridge Lane in Elkridge. On June 2, 2006, Skibicki submitted a loan application for $350,000 to refinance 5870 Deer Ridge Lane. To facilitate the loan application, the appraiser working with Skibicki prepared a fraudulent appraisal indicating that there was a 2,040 square foot home on the property and included a description of the home and photographs purporting to be of the front and back of the home. In fact, there was no home on the property, which was a vacant lot.
In August 2007, with 5870 Deer Ridge Lane still a vacant lot, Skibicki decided to refinance that property again, this time in his name only. On August 18, 2007, the appraiser working with Skibicki completed another fraudulent appraisal of 5870 Deer Ridge Lane stating that there was a 3,297 square foot, five bedroom home on the property that had, among other things, a stone patio, an enclosed and covered porch, and a balcony. Again, the appraiser included photographs purportedly of the front and rear of the home located at 5870 Deer Ridge Lane, but these were photos of a home that was never located there. In October 2007, Skibicki submitted a loan application to Washington Mutual Bank, FA, seeking to refinance 5870 Deer Ridge Lane for $517,500. The loan application indicated that title to the property would be held just by Skibicki, even though Family Member 1 had not given permission to take his name off the title to the property. The loan application also falsely stated that the purpose of the refinancing was a cash-out home improvement and contained false statements as to Skibicki’s employment and income, and that he planned to use 5870 Deer Ridge Lane as his primary residence. Skibicki submitted fraudulent documents in support of the loan application, including fraudulent W-2s for tax years 2005 and 2006. Based on the materially false information that Skibicki provided, on October 23, 2007, Washington Mutual provided a loan in the amount of $517,500. Skibicki allowed the mortgage on 5870 Deer Ridge Lane to go into default, leading to foreclosure proceedings.
Skibicki admitted that he made and caused to be made misrepresentations to other lenders in order to obtain mortgages on additional properties.
As part of his plea agreement, Skibicki has agreed to forfeit all money, property and assets, acquired as a result of, or used to facilitate the fraud scheme, and has agreed to the entry of a $1.4 million forfeiture money judgment.
Skibicki faces a maximum sentence of 20 years in prison and a fine of $250,000 or twice the gross loss or gain of the offense, if greater than $250,000, on each count of mail fraud. U.S. District Judge Catherine C. Blake has scheduled sentencing for April 22, 2011 at 9:15 a.m.
U.S. Attorney Rod J. Rosenstein recognized Howard County State’s Attorney Dario Broccolino and Chief J. Thomas Manger of the Montgomery County Police Department, and their offices, for their assistance in this investigation and prosecution.
In a related action, Mark Kaufman, Commissioner of the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation previously issued a Summary Order to Cease and Desist against Skibicki, prohibiting him from engaging in any further credit services business activities and/or foreclosure consultant activities with Maryland residents.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Marsha Parenteau of Dublin, has been sentenced for conspiring to commit money laundering
Source- http://www.justice.gov/tax/txdv11016.htm
WASHINGTON - Marsha Parenteau of Dublin, Ohio, has been sentenced for conspiring to commit money laundering, the Justice Department and Internal Revenue Service (IRS) announced. U.S. District Court Judge Michael H. Watson on Wednesday sentenced Parenteau to serve 33 months in prison. In addition to the prison term, Judge Watson ordered Parenteau to serve a three year term of supervised release after her prison term, and to pay restitution.
The court also ordered Parenteau to forfeit to the U.S. government a vacant lot in the Wedgewood golf community in Dublin, which was purchased with some of the illegally obtained funds. The court furthered ordered the government to seize Parenteau's personal belongings maintained at two storage garages and the home of a friend, and sell the belongings at auction to pay towards the restitution judgment.
Pamela McCarty of Columbus, Ohio, one of Marsha Parenteau's co-conspirators, was sentenced today for conspiring to commit tax fraud, money laundering and bank fraud. U.S. District Court Judge Michael H. Watson sentenced McCarty to 24 months in prison.
According to court testimony and documents, Marsha Parenteau was the wife of convicted Columbus-area home builder, Thomas Parenteau. Marsha Parenteau conspired with her husband, his accountant Dennis Sartain, McCarty and others to launder unlawful proceeds generated from nearly $19 million in fraudulently obtained loans against a personal residence.
Marsha Parenteau was called as a witness by her husband at his trial in July 2010, in which Thomas Parenteau was convicted of conspiracy to commit tax fraud, money laundering, bank fraud, obstruction of justice and other felony charges. The sentencing for Mr. Parenteau is not yet scheduled.
According to court testimony and documents, McCarty was a real estate agent, whom witnesses during court proceedings described as Thomas Parenteau's mistress. McCarty previously pleaded guilty to conspiring with other individuals at Your Home Source, real estate brokerage company, to defraud the United States by impairing and impeding the IRS by falsely understating amounts paid to workers. McCarty also admitted conspiring with Thomas Parenteau, Marsha Parenteau, Sartain and others to launder unlawful proceeds generated from more than $6 million in fraudulently obtained loans against a personal residence. McCarty further admitted to conspiring with Sartain and others to commit bank fraud by helping a Your Home Source employee fraudulently obtain a mortgage to buy a home from McCarty, which she held in trust for Thomas Parenteau, at an inflated price with an undisclosed kickback.
McCarty participated pro-actively with the government in the investigation of the Parenteaus and Sartain by wearing a recording device and taping conversations with her co-conspirators.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department's Tax Division, commended the IRS Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Richard Rolwing and Sean O'Connell, who prosecuted the case.
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Wednesday, January 5, 2011
Betty Washington and Wendy Delbridge, Separately Plead Guilty for Roles in Tax Fraud Conspiracy
Source- http://www.justice.gov/tax/txdv11011.htm
MONTGOMERY, Ala. - Betty Washington, a resident of Montgomery County, Ala., pleaded guilty to one count of conspiring to defraud the United States, the Justice Department Justice and the Internal Revenue Service (IRS) announced today.
According to charging documents, between October 2009 and September 2010 Washington conspired with others to fraudulently obtain tax refunds by using stolen identities to file false income tax returns. Washington opened up an account at a local bank to receive tax refunds from the scheme and deposited 16 different refunds, issued in the name of 16 different individuals, into the account. When the bank closed the account because of the suspicious nature of the deposits, she opened new accounts at a credit union in her name and in the name of Central Alabama Financial Services.
Over the course of several months, more than 300 false refunds totaling more than $1.4 million were deposited into these accounts. To disburse these proceeds, Washington wrote checks, withdrew cash and obtained official checks payable to various co-conspirators and associates. She retained a portion of the proceeds for herself.
Sentencing has not yet been scheduled. Washington faces a maximum of 10 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense.
In a separate case, Wendy Delbridge, also a resident of Montgomery County, Ala., pleaded guilty to one count of conspiring to defraud the United States. Both women admitted to working for members of a tax fraud and identity theft conspiracy indicted last month in Montgomery.
According to charging documents, between February 2010 and June 2010 Delbridge conspired with others to fraudulently obtain tax refunds by using stolen identities to file false income tax returns. Delbridge opened up an account at a local bank to receive tax refunds from the scheme. When the bank closed the account because it was receiving tax refunds that were not in Delbridge's name, she opened a new account at a credit union. The two accounts received over $50,000 in false tax refunds, which Delbridge withdrew in cash and provided to a co-conspirator. In return, Delbridge was paid a portion of the fraudulently obtained proceeds.
Sentencing has not yet been scheduled. Delbridge faces a maximum of ten years in prison, three years of supervised release, restitution and a maximum fine of $250,000
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Wednesday, December 29, 2010
Qiang “Michael” Bi Sentenced for Selling More Than 35,000 Illegally Copied Videogames Over the Internet
Source- http://cincinnati.fbi.gov/dojpressrel/pressrel10/ci122910.htm
COLUMBUS—Qiang “Michael” Bi, 36, of Powell was sentenced in United States District Court here to 30 months incarceration for selling more than 35,000 illegally copied computer games over the Internet between 2005 and 2009. He will also be required to make restitution to the companies who created the games. The amount of restitution is yet to be determined.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Division (FBI), and Dugan T. Wong, Assistant Inspector in Charge, U.S. Postal Inspection Service, announced the sentence handed down today by U.S. District Judge Algenon L. Marbley.
Bi pleaded guilty on July 28, 2010 to one count of mail fraud, one count of copyright infringement, and one count of aggravated identity theft. Bi was sentenced to six months each for the mail fraud and copyright infringement crimes. Those sentences will run concurrently. He will serve an additional 24 months for the aggravated identity theft.
Judge Marbley also sentenced Bi to two years of supervised release following his prison time. Twelve months of the supervised release will be spent in home confinement. He was also sentenced to serve 416 months of community service.
According to a statement of facts read during Bi’s plea hearing, agents executed a search warrant at Bi’s house and found multiple CD duplicators and more than 1,000 printed counterfeit CDs. Some of the CDs were still in the duplicator. During their investigation, agents learned that Bi would buy a single copy of a game, illegally duplicate it and sell the copies on eBay.com and Amazon.com. He also set up a website for customers to download the games they bought. Bi accepted payment through eBay and PayPal accounts in his name and in others’ names.
Bi sold more than 35,000 copies of counterfeit software games between 2005 and December 2009. The games were original works of more than 60 different software companies. The estimated total retail value of the games is about $700,000. He sold each counterfeit game for around $9.95.
Bi agreed to forfeit $367,669 in cash which represents the proceeds of the crimes. He also agreed to forfeit his interests in his house, a car, and all computer and electronic equipment used to illegally copy and sell the games.
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Friday, December 24, 2010
Phillip Ernest Narum Faces 17-Count Indictment on Tax and Fraud Charges
Source- http://phoenix.fbi.gov/dojpressrel/pressrel10/px122310.htm
TUCSON, AZ—A federal grand jury in Tucson has returned a 17-count indictment against Phillip Ernest Narum, 46, of Marana, Arizona. The indictment, returned December 8, 2010, charges Narum with an elaborate scheme to defraud his employer, Young & Sons Contracting, Inc. of Tucson.
The indictment alleges that from February 2005 to June 2008, Narum knowingly and intentionally devised a scheme and used deception to defraud $623,277 from Young & Sons. Narum worked for the company as its operations manager.
Narum is charged with diverting funds from Young & Sons to his personal use by negotiating approximately $218,873 in Young & Sons checks payable to him at banks for cash or cashier's checks. He then used the proceeds to pay personal debt and purchase personal assets. Narum also deposited Young & Sons checks totaling approximately $671,499 into three personal and business accounts to pay personal debt and purchase personal assets.
Narum further used Young & Sons business checks and money transfers from the company's bank account for personal expenses unrelated to Young & Sons business, converting approximately $78,417 of Young & Sons money to his personal benefit. He also charged approximately $93,000 of his personal expenses to a Young & Sons business credit card.
Before he was terminated by Young & Sons, Narum attempted to conceal the amount of money in the fraud by depositing approximately $140,310 into a Young & Sons account. He noted in the business’ cash journal that the payments were from him when in reality; approximately $83,855 of those deposits came from Young & Sons owned assets.
In total, Narum received $1,061,789 when he was only entitled to approximately $381,057 in compensation from Young & Sons for his employment. Narum paid back $56,455 to Young & Sons before he was terminated, thus defrauding Young & Sons of approximately $623,277.
Narum is also charged with tax fraud because on his 2005 Individual Income Tax Return, he failed to report $171,351 of gross receipts. On his 2006 Individual Income Tax Return, he failed to report $59,100 of gross receipts. Narum also willfully failed to file a timely 2007 Individual Income Tax Return despite receiving gross receipts of $531,659.
Narum will appear before a United States Magistrate Judge in Tucson for his initial appearance and setting of bail conditions in January 2011.
The federal indictment charges Narum with violating Title 18 of the United States Code, Section 1343; Title 26 of the United States Code, Sections 7206(1) and 7203, Filing False Income Tax Returns and Willful Failure to File an Income Tax Return.
A conviction for wire fraud carries a maximum penalty of 20 years, a $1,000,000 fine or both; a conviction for filing a false income tax return carries a maximum penalty of 3 years, a $250,000 fine or both; and a conviction for willful failure to file an income tax return carries a maximum penalty of one years, a $100,000 fine or both.
An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.
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Thursday, December 23, 2010
The United States has sued a Chicago tax return preparer Martha A. Jones, to bar her from preparing federal tax returns for others
Source- http://www.justice.gov/opa/pr/2010/December/10-tax-1473.html
WASHINGTON – The United States has sued a Chicago tax return preparer to bar her from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction suit filed in the Northern District of Illinois alleges that Martha A. Jones claims bogus tax deductions on her customers’ federal income tax returns. Jones allegedly includes deductions for fabricated charitable contributions, employee business expenses and other items. According to the government complaint, the Internal Revenue Service examined 56 of the returns that Jones prepared for tax years between 2005 and 2008 and found that all of them contained inaccuracies. The complaint also alleges that Jones fails to sign her customers’ returns and has continued to do so even after being advised that she is legally required to sign the tax returns that she prepares.
The complaint estimates that the tax losses to the United States from Jones’s misconduct could exceed $1 million.
In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website.
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Andrew Park, an owner and executive of Asian Village Detroit, Inc. ("Asian Village"), Pleads Guilty to Felony Tax Evasion
Source- http://detroit.fbi.gov/dojpressrel/pressrel10/de122210.htm
Andrew Park, 46, of Ann Arbor, Michigan, an owner and executive of Asian Village Detroit, Inc. ("Asian Village"), Pangborn Technovations, Inc. ("PTI"), and the Security Communication Alert Network ("SCAN"), pleaded guilty yesterday to attempting to evade the payment of more than $300,000 in taxes to the Internal Revenue Service "(IRS"), United States Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Erick Martinez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation; FBI Special Agent in Charge Andrew Arena; and Special Agent in Charge Giovanni Tiano, Department of Homeland Security, Office of Inspector General.
During a hearing this afternoon before United States District Judge Patrick J. Duggan, Park admitted that he had attempted to evade the payment of taxes on $898,000 in income that he earned in connection with Asian Village, SCAN, and PTI during the years 2005 through 2007. Park acknowledged that he lied in documents submitted to the IRS, and he disguised income that he received as loans from Asian Village, SCAN, or PTI. Park was charged by way of a criminal Information on Friday, December 17, 2010. Based on his guilty plea and conviction for felony tax evasion, Park is facing a maximum of five years in prison and a fine of up to $100,000.
United States Attorney McQuade said, "Andrew Park sought to avoid paying taxes on more than $890,000 in income that he earned, legally and illegally, through his ownership of Asian Village, SCAN, and Pangborn Technovations, in connection with work these businesses had with the City of Detroit."
The case was investigated by special agents of the IRS, the FBI, and the Department of Homeland Security, Office of Inspector General. It is being prosecuted by Assistant United States Attorneys Robert Cares and David A. Gardey.
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Wednesday, December 22, 2010
Yooho Weon The Owner of Maryland Pawn Shop, Pleads Guilty to Evading Taxes on Over $18.4 Million in Income
Source- http://baltimore.fbi.gov/dojpressrel/pressrel10/ba122110a.htm
BALTIMORE—Yooho Weon, age 39, of Centreville, Virginia, pled guilty today to attempting to evade income taxes for tax years 2004 through 2008, during which time Weon had income of more than $18.4 million.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation; Acting Postal Inspector in Charge Keith Fixel 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 Interim Chief Mark Magaw of the Prince George’s County Police Department.
"Prosecuting individuals who intentionally conceal income is a vital element in maintaining public confidence in our tax system," stated Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington, D.C. Field Office. "Willfully filing a false tax return is the same as stealing and there are serious consequences."
According to Weon’s plea agreement, in 2009, the Internal Revenue Service Criminal Investigation (IRS-CI) received information that Yooho Weon, also known as “Peter,” was failing to report income to the IRS. Weon is the owner of Parkway Pawn Shop, Inc. and Earth 1 Computer, Inc. DBA Bargains 101 / Parkway Pawn Shop, located at 5664 Annapolis Road in Bladensburg. IRS records show that Weon has not filed any U.S. Corporate Income Tax Returns for 2003, 2004, 2005, 2006, 2007, and 2008. As part of his business, Weon purchased items in his pawnshop and generated gross income from online sales through his website, eBay, flea markets, cash sales from his store and credit card sales. eBay / PayPal records revealed that Weon and his business have been selling merchandise online and received approximately $6,531,334.47 between May 31, 2000 and August 27, 2009. 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 2004-2008, none of which was reported to the IRS.
The total tax loss owed to the IRS is approximately $2,400,000.
Weon faces a maximum sentence of five years in prison and a $250,000 fine for each of five counts of attempting to evade income taxes. U.S. District Judge Benson E. Legg has scheduled sentencing for March 25, 2011 at 11:30 a.m.
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Former UBS Banker Renzo Gadola, Pleads Guilty to Helping American Client Conceal Assets Offshore
Source- http://www.justice.gov/tax/txdv101474.htm
WASHINGTON - Renzo Gadola, 44, has pleaded guilty to conspiring to defraud the United States, the Justice Department announced today. Gadola, a former UBS banker, was arrested in Miami after meeting with a client at a Miami hotel and attempting to persuade that client to not disclose to the United States that the client owned and controlled a bank account at Basler Kantonalbank, a regional bank headquartered in Basel, Switzerland. Gadola is scheduled to be sentenced on March 10, 2011, by U.S. District Judge James L. King. He faces a maximum of five years in prison.
According to court documents, Gadola, a citizen and resident of Switzerland, was a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). From approximately 1995 through August of 2008, Gadola was employed as a private banker by UBS AG, Switzerland’s largest bank. In February 2009, Gadola began working in Switzerland as an independent investment advisor, doing business under the name RG Investment Partner AG.
According to court documents, Gadola worked closely with a fellow former UBS banker who was not registered with the SEC and who had indicated that he was afraid of traveling to the United States for fear of being arrested because of his cross-border banking activities. Hence, the two arranged that Gadola would travel to the United States and meet with the clients to discuss their investments in undeclared accounts.
According to court documents, on Nov. 6, 2010, Gadola met with a client in a Miami hotel. The meeting was recorded. This client owned and controlled an undeclared account at Basler Kantonalbank. The undeclared account was funded when the client provided Gadola’s partner, the former UBS banker, with approximately $445,000 in cash. The client gave the cash to Gadola’s partner during two meetings at a hotel in New Orleans.
According to court documents, during the Nov. 6, 2010, meeting, Gadola attempted to persuade the client to not disclose the Basler Kantonalbank account to United States authorities. Gadola told the client that there was a “99.9 %” chance the client had nothing to worry about because the “likelihood . . .that they will somehow. . . find out about the account is practically zero percent.” Further, Gadola told the client that there was no “paper trail” associated with the undeclared account.
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Tuesday, December 21, 2010
Guadalupe Valencia Pleads Guilty to Federal Fraud Charges in Nearly $7 Million Investment Scheme
Source- http://losangeles.fbi.gov/dojpressrel/pressrel10/la122010a.htm
LOS ANGELES—A West Covina woman pleaded guilty today to six federal fraud charges, admitting that she ran a Ponzi scheme that bilked more than 150 victims out of approximately $6.9 million.
Guadalupe Valencia, 46, pled guilty to two counts of mail fraud, two counts of wire fraud and two counts of tax fraud. Valencia pleaded guilty before United States District Judge S. James Otero, who remanded Valencia into custody after she pled guilty.
Valencia ran her scheme out of the Downey offices of companies she called Real Estate & Loan Consultants and R.E. Equity Group, Inc. Beginning in 2001 and continuing through 2009, Valencia promoted two types of investment pools, with one purportedly funding loans to purchase real estate, and a second purporting to fund short-term loans to businesses. According to her plea agreement, Valencia promised high rates of interest in both investment vehicles—from 8 percent to 20 percent in as little as 45 days. Valencia admitted that she falsely told investors that their investments were fully secured, backed by deeds of trust on valuable real estate, as well as promissory notes that equaled “money-back guarantees.”
By pleading guilty, Valencia admitted that the investments she promoted did not generate any profits and that she used newer investor funds to pay original investors. Further, Valencia admitted that she had provided victims with worthless promissory notes that she had created.
In addition to the mail and wire fraud charges, Valencia pled guilty to two counts of subscribing to false tax returns for the tax years 2007 and 2008. In her plea agreement, Valencia admitted that she filed the returns with the Internal Revenue Service knowing that they were false. Specifically, for the 2007 tax year, Valencia failed to report more than $280,000 to the IRS. For the 2008 tax year, Valencia failed to report more than $470,000 on the tax return that she filed.
Judge Otero is scheduled to sentence Valencia on May 23, 2011. At that time, the defendant faces a statutory maximum sentence of 86 years in federal prison and fines totaling $1.5 million.
The investigation of Valencia was conducted by IRS - Criminal Investigation and the Federal Bureau of Investigation.
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Monday, December 20, 2010
Russell Adam Cole, Abby Rae Cole and Robert Paul Bossany, Sentenced for Conspiracy to Commit Mail Fraud, Wire Fraud and Defrauding Best Buy
Source- http://minneapolis.fbi.gov/dojpressrel/pressrel10/mp122010.htm
A Deerfield, Illinois couple and a 39-year-old man, who previously lived in Prior Lake, were sentenced earlier today in federal court in Minneapolis in connection with a scheme to defraud Richfield-based Best Buy Co., Inc., by over-billing the company for computer parts. United States District Court Chief Judge Michael J. Davis sentenced Russell Adam Cole, age 50, to 180 months in prison on one count of conspiracy to commit mail fraud and wire fraud, 12 counts of mail fraud, five counts of wire fraud, four counts of tax evasion, one count of conspiracy to commit money laundering, and one count of conspiracy to defraud the U.S. Abby Rae Cole, age 53, was sentenced to three years of probation on one count of conspiracy to commit mail fraud and wire fraud, one count of conspiracy to defraud the United States, and four counts of tax evasion. Judge Davis also sentenced Robert Paul Bossany, now of Chetek, Wisconsin, to 90 months in prison on one count of conspiracy to commit honest services mail fraud and one count of money laundering for his role in defrauding Best Buy.
The couple was originally indicted on July 20, 2009, and convicted by a jury on June 3, 2010, following a 17-day trial. Bossany was charged on December 15, 2008, and pleaded guilty on January 29, 2009.
Following today's sentencings, Shawn S. Tiller, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service ("USPIS"), which covers the Twin Cities, said, "The sentences handed down today should send a message to would-be criminals who are considering using the U.S. mail to perpetrate their fraudulent schemes. The U.S. mail is still one of the most trusted means of communication in this country, and the U.S. Postal Inspection Service will continue to uphold that public trust."
Best Buy offers repair services on products, including personal computers. Beginning in the early 2000s, it devised an automated, online, reverse auction system, called the Parts Procurement Network ("PPN"), in an effort to obtain computer repair parts quickly and at the lowest possible prices. Through the PPN, vendors received access to a "needs" file, which listed the computer parts Best Buy wanted. Those vendors submitted bids on the parts they wished to supply, quoting both availability and price. After each bidding period, Best Buy determined which vendors had won the orders. Those vendors then had to invoice Best Buy, through a third party, at the prices quoted in their bids.
Because of the PPN, Best Buy became the primary customer of Chip Factory, Inc., a computer parts distribution company owned and operated by the Coles. In fact, from June of 2003 through August of 2007, Best Buy accounted for the vast majority of Chip Factory sales. Trial evidence proved, however, that in an attempt to win orders to supply parts to Best Buy, the Coles routinely caused Chip Factory to quote fraudulently low prices in its PPN bids. After winning bids, the Coles also regularly caused Chip Factory to invoice Best Buy, through the assigned third party, at prices in excess of those quoted during the bidding process. As a result, the Coles caused Chip Factory to invoice Best Buy for $41 million more than Chip Factory actually had bid through the PPN program.
In addition, trial evidence showed that Chip Factory often shipped Best Buy used, damaged, or defective parts instead of new ones, as they pledged to do through the PPN program. And when Best Buy returned damaged, defective, or unneeded parts, Chip Factory failed to provide proper credit.
In his plea agreement, Bossany, an employee of Best Buy during the course of the scheme, agreed that he had conspired with the Coles to defraud Best Buy. While employed at Best Buy, Bossany was responsible for managing the purchase of computer parts from outside vendors that participated in the PPN program. In that capacity, he was Best Buy's primary contact with Chip Factory. He provided the Coles with internal Best Buy information, including communication concerning the PPN as well as other vendors. Bossany also hid Chip Factory's pricing practices and deflected issues and suppressed concerns raised about Chip Factory at Best Buy.
Chief Judge Davis concluded that there was no question but that Bossany lied during his testimony in the Coles' trial. As a result, he increased Bossany's sentence based on obstruction of justice and denied Bossany a reduction for acceptance of responsibility, despite Bossany having pled guilty. Bossany did receive somewhat of a reduced sentence, however, based on his assistance to the government in wearing a wire and recording approximately 19 conversations with Russell Cole, conversations which the government played during trial.
In return for assisting in furthering the scheme, Bossany received and accepted bribes from the Coles, including large amounts of cash, checks, and property, including gift cards, a Harley- Davidson motorcycle, and an all-terrain vehicle. In addition, the Coles sent Bossany magazines, compact discs, and DVDs in which cash, checks, and gift cards were hidden. To conceal the scheme, those items were sent to Bossany's home address rather than his office. And, on a number of occasions, Chip Factory employees assisted the Coles in preparing the packages for Bossany.
In addition to defrauding Best Buy, the Coles also evaded federal taxes for 2004 through 2007 and deprived the Internal Revenue Service ("IRS") of its function to collect taxes. They did so by understating the company's gross receipts in a number of ways. For instance, they resold to their suppliers the computer parts that Best Buy had returned. Then, they instructed the suppliers to make payments for the parts to Russell Cole personally instead of to Chip Factory. Upon receipt of the payments, the Coles deposited the checks into an account separate from the company. Between 2004 and 2007, for example, one Chip Factory vendor made checks out to Russell Cole personally that totaled more than $900,000. The Coles omitted that income as well as similar income from their corporate and individual tax returns.
Furthermore, Russell Cole misrepresented on individual and Chip Factory tax returns the sales and profit from an eBay business he ran. Through that business, he sold computer parts, including parts purchased by Chip Factory specifically for Best Buy. After the parts were sold via the Internet, he directed Chip Factory employees to send other products to Best Buy service centers, including parts that were used, damaged, or defective. From 2005 to 2007, Russell Cole understated his net income from the Internet business by more than $1.8 million.
In addition to understating Chip Factory gross receipts in general over a four-year period, the Coles understated the company's gross receipts by more than $3 million for 2006 alone. To accomplish that, the Coles represented to their outside accountant that the value of parts returned by Best Buy during the year had not been noted in the company's books. However, those returns had indeed been recorded. Nonetheless, in late 2007, the Coles filed amended federal individual and corporate returns for 2006, citing the false information. The Coles were motivated to lower their tax liability at that time because Best Buy had recently discovered the bidding fraud and had terminated its relationship with Chip Factory.
The Coles also overstated on Chip Factory tax returns the cost of goods it sold. To that end, they directed company employees to inflate the cost of parts purchased from suppliers and enter false purchase orders into the company's books and records. Abby Cole personally participated in inflating the cost of Chip Factory purchases. Moreover, the Coles paid for a large amount of personal expenses, including credit card debt and a number of luxury purchases, such as highend jewelry and month-long stays at the Bellagio hotel in Las Vegas, with Chip Factory funds. They then classified those expenditures as business expenses on the company's tax returns.
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Friday, December 17, 2010
Former IRS Agent Roger Anthony Coombs Sentenced for Soliciting and Agreeing to Receive a Bribe
Source- http://minneapolis.fbi.gov/dojpressrel/pressrel10/mp121610.htm
Earlier today in federal court in St. Paul, a tax revenue agent with the Internal Revenue Service ("IRS") was sentenced for soliciting and receiving a $9,700 bribe. United States District Court Judge Paul A. Magnuson sentenced Roger Anthony Coombs, age 41, of Circle Pines, to 33 months in federal prison on one count of soliciting and agreeing to receive a bribe. In imposing the sentence, Judge Magnuson put all federal workers on notice: "I want everyone who draws a federal paycheck to know that if they solicit a bribe, they are going to jail."
Coombs was indicted on June 21, 2010, and pleaded guilty on August 19, 2010. In his plea agreement, he admitted that on May 8, 2010, he solicited a $9,700 bribe from the owners of a small Minnesota business. In exchange for the money, Coombs agreed to report a lower federal tax obligation than was actually owed by the business. Coombs also admitted receiving payments toward the bribe on May 19 and June 2, 2010.
Following today's sentencing, Ralph Boelter, Special Agent in Charge of the FBI's Minneapolis field office, said, "Rooting out public corruption is one the FBI's highest priorities. Corruption committed by government employees or public officials will not be tolerated and will be vigorously investigated. Public corruption erodes public confidence and undermines the strength of our democracy. Like many of our investigations, this case started with a tip from a concerned citizen. We are always grateful for those who come forward to report corruption." The FBI led the investigation in this case.
A law enforcement affidavit filed in the case states that Coombs, who began working for the IRS in June of 2009, routinely audited individuals and entities to determine if accurate reports of tax liabilities had been submitted by them to the federal government. On May 6, 2010, Coombs met with the two owners of a small Minnesota company for that purpose. The meeting was held at the office of the company's accountant, but while the accountant was out of the room, Coombs suggested that he and the owners meet elsewhere, unaccompanied by the accountant. As a result, another meeting was scheduled for May 8.
Because of his concerns about Coombs, one of the business owners secretly recorded the May 8 meeting, during which Coombs reported that the business owed the IRS approximately $60,000. He went on to say, however, he could make the situation more "manageable." He explained he could alter aspects of the audit so the IRS would accept $11,000 if the business owners paid him $9,700 personally in return. A subsequent meeting was then scheduled for May19, at which Coombs was to receive partial payment toward the bribe.
Prior to that meeting, the business owners reported Coombs's actions to authorities. Therefore, on May 19, investigators were present to see Coombs accept $3,000 in payment toward the bribe. After receiving the money, Coombs informed the business owner he had taken care of things at the IRS. The two men then arranged yet another meeting, scheduled for June 2, for payment of the balance of the bribe. On June 2, 2010, after Coombs received the final payment of $6,700, he was arrested without incident.
In addition to the FBI, this case was investigated by the U.S. Treasury Inspector General- Tax Administration. It was prosecuted by Assistant U.S. Attorneys Tracy L. Perzel and Joe Dixon.
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Thursday, December 16, 2010
Andrew Isaac Chance of Clinton was arrested on a four-count indictment charging him with filing a fraudulent multi-billion dollar lien against a government employee and filing false tax returns seeking $900,000 in false refunds
Source- http://www.justice.gov/tax/txdv101450.htm
WASHINGTON - Andrew Isaac Chance of Clinton, Md., was arrested on a four-count indictment charging him with filing a fraudulent multi-billion dollar lien against a government employee and filing false tax returns seeking $900,000 in false refunds, the Justice Department and the Internal Revenue Service (IRS) announced today. The indictment was returned on Dec. 13, 2010, by a federal grand jury sitting in Greenbelt, Md. No trial date has been set.
According to the indictment, Chance filed a false lien in the amount of $1.313 billion against the property of the Assistant U.S. Attorney who had prosecuted him for filing a false claim for a tax refund in 2007. The indictment also alleges that Chance filed three false income tax returns for estates and trusts for Andrew I. Chance Trust, for tax years 2007, 2008 and 2009. Each of these tax returns claimed a tax refund in the amount of $300,000.
In October 2007, Chance was convicted for filing a tax return for "ANDREW CHANCE TRUST" that claimed a tax refund in the amount of $306,753. On Oct. 15, 2007, Chance was sentenced to 27 months in prison. He was released from prison on June 12, 2009, and is currently on supervised release.
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, Chance faces a maximum of 25 years in prison and a maximum fine of $1 million dollars.
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Alchico Grant, Veronica Dale, Laquanta Grant, Isaac Dailey and Leroy Howard, Indicted in Alabama for roles in Tax Fraud and Identity Theft ring
Source- http://www.justice.gov/tax/txdv101451.htm
MONTGOMERY, Ala. - Five people were indicted by a federal grand jury in the Middle District of Alabama on a variety of charges stemming from an identity theft and tax fraud conspiracy, the Department of Justice and the Internal Revenue Service (IRS) announced today. Alchico Grant, Veronica Dale, Laquanta Grant, Isaac Dailey and Leroy Howard, were charged in a 39-count indictment that was returned on Dec. 14, 2010, and unsealed today.
All five defendants were charged with conspiring to defraud the United States by filing false claims. Dale was also charged with 24 counts of filing false tax returns, two counts of theft of government funds and two counts of aggravated identity theft. Additionally, Alchico Grant was charged with four counts of theft of government funds; Dailey was charged with three counts of theft of government funds; and Howard was charged with two counts of theft of government funds.
According to the indictment, the defendants were involved in a conspiracy which spanned almost two years and involved using stolen identities to file tax returns claiming millions of dollars in fraudulent refunds. The indictment alleges that Dale filed false tax returns using others' names and Social Security numbers and deposited the fraudulent refunds into bank accounts that she and her co-conspirators controlled. Dale, Alchico Grant and Laquanta Grant recruited people to set up bank accounts to be used to deposit the tax refunds. Howard and Dailey were two of those who agreed to have their bank accounts used for receiving the fraudulently-obtained refunds. In addition, Alchico Grant attempted to persuade several witnesses to give false information to law enforcement about the scheme. In all, the conspirators defrauded the United States of more than $2 million over the course of the conspiracy.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Dale faces a maximum of 154 years in prison, Alchico Grant faces a maximum of 50 years in prison, Dailey faces a maximum of 40 years in prison, Howard faces a maximum of 30 years in prison and Laquanta Grant faces a maximum of 10 years in prison.
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Wednesday, December 15, 2010
Justice Department Sues to David Miner from Promoting Alleged Tax Fraud Schemes
WASHINGTON - The United States has sued an Orlando, Fla., man seeking to bar him from promoting two alleged tax-fraud schemes, the Justice Department announced today.
According to the government complaint in the civil injunction case in U.S. District Court for the Middle District of Florida, David Miner promotes a "decoder" scheme through a website. The government alleges that Miner falsely claims to be able to "decode" and "fix" Internal Revenue Service (IRS) records of his customers' tax accounts so as to block the IRS from collecting the customers' taxes. The complaint states that Miner charges each customer $1,800 for this purported service and claims to have helped more than 2,000 customers stop paying taxes.
The lawsuit also alleges that Miner promotes a "pure trust" abusive tax scheme at another website. According to the complaint, Miner charges customers $2,000 to establish "pure trusts" to evade paying federal income taxes, conceal their assets, and interfere with IRS collection efforts. The government alleges that Miner falsely advises his customers that assets purportedly contributed to the trusts may not be seized by personal creditors, including the IRS.
In the past decade, the Justice Department's Tax Division has obtained injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
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Tuesday, December 14, 2010
Federal Court Has Permanently Barred Maritza Villanueva from preparing Federal Income Tax Returns for others
WASHINGTON - A federal court has permanently barred Maritza Villanueva of Irving, Texas, from preparing federal income tax returns for others, the Justice Department announced today. The permanent injunction order, to which Villanueva consented, was entered by Judge Jane J. Boyle of the U.S. District Court for the Northern District of Texas.
The government complaint in the case alleged that Villanueva works for Action E-File Services in Irving, and claims false tax credits and deductions for her customers, including false earned income tax credits. According to the complaint, the Internal Revenue Service estimated that Villanueva's customers underpaid their taxes, or received tax credits to which they were not entitled, in an amount exceeding $3 million.
The court also ordered Villanueva to give government attorneys any lists she possessed identifying individuals for whom she prepared any tax-related documents since Jan. 1, 2007.
Since 2001, the Justice Department's Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
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Thursday, December 9, 2010
Bonnie Helt was Sentenced to 18 Months in Prison for Conspiring to Commit Mortgage Fraud and Obstruction of Justice
Source- http://www.justice.gov/tax/txdv101414.htm
WASHINGTON - Bonnie Helt of Columbus, Ohio, was sentenced to 18 months in prison by U.S. District Court Judge Michael H. Watson in Columbus for conspiring to commit mortgage fraud and obstruction of justice, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court testimony and documents, Helt was the real estate agent for convicted Columbus-area home builder, Thomas Parenteau. Helt conspired with Parenteau to commit bank and wire fraud schemes through which the pair defrauded banks and financial institutions of more than $7 million by falsely inflating the purchase prices of the homes that Parenteau built and sold in exchange for the payment of large undisclosed or disguised kickbacks to the buyers after their purchases. After learning of the IRS investigation into their schemes, Parenteau, Helt and others engaged in a scheme to obstruct justice by destroying documents and lying to federal and local investigators. A jury convicted Parenteau for his role in these crimes in July of this year after a two-month trial. Helt pleaded guilty to these crimes in January of this year.
In addition to the prison term, Judge Watson ordered Helt to serve a five-year term of supervised release after her term of imprisonment, and to pay restitution to the victim financial institutions in an amount to be determined by the court within 90 days. Finally, the court ordered Helt to forfeit to the United States government $124,544, which represented the amount of commissions she earned on the fraudulent real estate deals in which she participated.
Helt's co-conspirators, Marsha K. Parenteau and Pamela A. McCarty, are scheduled to be sentenced for their respective roles in these schemes on January 5, 2011. The sentencing for Mr. Parenteau is not yet scheduled.
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Thursday, December 2, 2010
Ora Mae Adamson Pleads Guilty To Tax Fraud and Identity Theft
Source- http://www.justice.gov/tax/txdv101377.htm
MONTGOMERY, Ala. – Ora Mae Adamson, a resident of Montgomery County, Ala., pleaded guilty to one count of conspiring to defraud the United States and one count of identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Adamson pleaded guilty before federal Magistrate Judge Charles S. Coody in the U.S. District Court in Montgomery.
According to charging documents, between March 2009 and September 2009, Adamson conspired with others to defraud the United States by fraudulently obtaining the names and social security numbers of individuals, and filing false tax returns in these individuals’ names without authorization. The tax returns falsely claimed first-time homebuyer’s and fuel tax credits. As a result of Adamson’s scheme, the IRS disbursed a total of 158 false refunds. Adamson caused these refunds to be deposited into bank accounts she and her co-conspirators controlled. In all, the conspiracy defrauded the United States of $621,738.
Sentencing has not yet been scheduled. Adamson faces a maximum of 25 years in prison, three years of supervised release, restitution and a maximum fine of $500,000 or twice the loss resulting from her offenses.
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Pharmacist Thomas K. Frye and his wife Kathy M. Frye Indicted on Tax Fraud Charges
Source- http://www.justice.gov/tax/txdv101380.htm
MONTGOMERY, Ala. - A husband and wife were indicted by a federal grand jury for conspiring to defraud the United States, tax evasion, and filing a false claim for tax refund, the Justice Department and the Internal Revenue Service (IRS) announced today. The indictment against Thomas K. Frye and Kathy M. Frye, residents of Andalusia, Ala., was returned on Nov. 17, 2010, and unsealed yesterday. The grand jury also charged Thomas Frye with passing fictitious financial instruments.
According to the indictment, beginning in 1999 the Fryes conspired to defraud the United States by submitting IRS forms to their employers that falsely claimed they were exempt from federal income tax. The Fryes also filed false federal income tax returns that understated their income. In late 2008, the Fryes filed a false refund claim with the IRS in the amount of $317,990. When the IRS attempted to collect the back taxes owed by the Fryes, Thomas Frye submitted false financial instruments to the IRS to purportedly pay their taxes. Mr. Frye represented to the IRS that one of the false instruments had a value of $100 billion.
An indictment merely alleges that crimes have been committed, and the Fryes are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Thomas Frye faces a maximum prison sentence of 105 years and Kathy Frye faces a maximum prison sentence of 30 years.
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