Onuoha “Iggy” Nwokoro and John T. Hoang Charged with Preparing False Income Tax Returns

Source- http://www.justice.gov/opa/pr/2011/April/11-tax-479.html

WASHINGTON – Two former Washington, D.C., tax preparers have been indicted on tax charges, the Justice Department and Internal Revenue Service (IRS) announced today. Onuoha “Iggy” Nwokoro, a former D.C. tax return preparer, made his initial appearance in federal district court on tax charges. On April 12, 2011, a grand jury returned a sealed indictment charging Nwokoro with 18 counts of aiding and assisting in the preparation of false income tax returns. The indictment was unsealed on April 13, 2011, following Nwokoro’s arrest in Washington, D.C. A trial date has not been scheduled.

According to the indictment, from prior to January 2005 through April 2007, Nwokoro operated BBC Tax Services, also known as BBC Tax and Medical Billing Services, a tax preparation business in Washington, D.C. For tax years 2004, 2005 and 2006, Nwokoro prepared and electronically filed tax returns for his clients that included fictitious business income and expenses for what purported to be a computer systems business. The indictment alleges that 15 of the returns collectively report more than $1.2 million in fraudulent business losses.

According to the indictment, Nwokoro’s own 2004, 2005 and 2006, personal tax returns were also false in that they under-reported his income. If convicted, Nwokoro faces a maximum sentence of 54 years in prison and a maximum fine of $250,000.

The case was investigated by IRS-Criminal Investigation and is being prosecuted by Department of Justice Tax Division Trial Attorneys Jorge Almonte and Jeffrey B. Bender. The case is CR-11-104.

In a related matter, the Justice Department and IRS announced that John T. Hoang, a former D.C. tax return preparer, made his initial appearance today in D.C. federal district court on tax charges. On April 12, 2011, a grand jury returned a sealed indictment charging Hoang with six counts of aiding and assisting in the preparation of false income tax returns. The indictment was unsealed on today, following Hoang’s arrest in Maryland. A trial date has not been scheduled.

According to the indictment, from prior to January 2005 through at least April 2005, Hoang operated “John T. Hoang CPA,” a tax preparation business in Washington. For tax year 2004, Hoang prepared and electronically filed for his clients tax returns that included fictitious business income and expenses for what purported to be a technology licensing business. The indictment alleges that six returns collectively report more than $400,000 in fraudulent business losses.

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Janet Jaensch Pleads Guilty to Failure to File Federal Income Tax Return

Source- http://www.justice.gov/tax/txdv11474.htm

WASHINGTON - Janet Jaensch, a federal employee, pleaded guilty in U.S. District Court in Alexandria, Va., to one count of failure to file a 2008 federal income tax return, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to court documents, between 2001 and 2011, Jaensch was employed by the federal government and was married to Richard Jaensch. Between 2001 and 2008, Janet Jaensch did not timely file U.S. Individual Income Tax Returns, Form 1040, with the IRS, despite the fact that she was required to do so. Specifically, in 2008, Jaensch admitted that she received $152,725 in gross income, yet she did not timely file a federal income tax return nor did she timely pay any income tax to the IRS. She further admitted that between 2002 and 2009, she failed to timely pay approximately $226,685 in taxes to the IRS.

In addition, according to the statement of facts, Jaensch admitted that beginning in 2002, and continuing each year through approximately 2009, at the direction of her husband, she presented a letter to her payroll department directing her employer to stop withholding federal income taxes from her salary. Jaensch further admitted that between 2002 and 2009, at her husband’s direction, she willfully committed the following acts: sending a document to the IRS claiming that she was not a person required to file federal income tax returns; recording in Fairfax County, Va., a “Declaration of Independence by Public Notice” claiming that she was “not a party to the Constitution of the united States of America”; sending correspondence to the IRS claiming they could not instruct her employer to withhold taxes from her paycheck; and sending certified letters to the Defense Finance and Accounting Service (DFAS) and IRS advising that she is not a taxpayer.

The defendant faces a maximum potential sentence of one year in prison. Sentencing has been scheduled for Aug. 16, 2011.

Janet Jaensch’s husband, Richard Jaensch, was indicted in March 2011 by an Alexandria federal grand jury with one count of corruptly endeavoring to impede the IRS, one count of filing a false claim for a refund and four counts of failing to file a tax return for 2004 through 2007. His trial is scheduled for July 20, 2011.

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Federal Court Permanently Bars Arthur Piner Grider III From Operating Businesses Because of Unpaid Payroll Taxes

Source- http://www.justice.gov/tax/txdv11471.htm

DALLAS - A federal court in Dallas has barred Arthur Piner Grider III from operating businesses under any name, the Justice Department announced today. The final judgment and permanent injunction order, to which Grider agreed, finds him liable for more than $100 million in unpaid federal employment taxes, unemployment taxes and related penalties associated with numerous business entities, including Asgard Avionics Corp. of Florida, Talent Force Services LLC and NAG Financial LLC.

The court’s order also makes final a preliminary injunction entered against Grider in November 2010 that prohibited Grider and his employee leasing companies from, among other things, transferring funds to themselves or others before paying their current federal employment tax liabilities. The government’s complaint alleged that Grider and his business entities had a long history of “pyramiding” employment taxes.

According to the court’s orders, Grider and his wife agreed to allow the government to sell their Houston residence as a partial payment of his tax debts. The court also appointed a receiver to locate, preserve and distribute to creditors the assets of Grider’s businesses, including 69 company bank accounts and 14 antique automobiles manufactured between 1929 and 1970. The court also ordered the receiver to sell Grider’s interest in Pacific Aerospace Resources & Technologies LLC of Victorville, Calif., and to apply the sale proceeds to his tax debts.

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Michael V. Collins Sentenced to 50 Months in Prison for Tax Evasion, Failure to File Income Tax Returns, and Election Fraud

Source- http://springfield.fbi.gov/dojpressrel/pressrel11/si041311.htm

Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that on April 13, 2011, Michael V. Collins, 49, who resides in Swansea, Illinois, was sentenced to a total of 50 months in prison, followed by three years supervised release. Collins previously was found guilty, following a six-day trial, of tax evasion for 2003, tax evasion for 2004, tax evasion for 2005, failure to file federal income tax return for 2003, failure to file federal income tax return for 2004, failure to file federal income tax return for 2005, election fraud for the March 2006 election, and election fraud for the February 2008 election. As conditions of supervised release, Collins was ordered to pay restitution to the Internal Revenue Service in the amount of $342,375.14. Collins is also prohibited from serving in public office, or from holding an elected public office, while on supervised release.

Evidence submitted at trial established that Collins committed tax evasion and attempted to conceal his income by commingling business and personal assets; by failing to provide his correct Social Security number; by operating a business under an invalid Employer’s Identification Number; through the submission of false certified payrolls which falsely reflected that his employees’ federal income tax withholdings and FICA taxes were withheld and paid in; through the receipt and expenditure of cash, without record keeping; and through the failure to maintain accurate books and records. Evidence was submitted that Collins had not filed a federal tax return in 13 years at the time he became aware of the federal investigation. Further evidence was submitted that Collins had not paid Illinois state income taxes for 22 years.

Further evidence submitted at trial established that Collins knowingly and willfully give false information as to his address for the purpose of establishing his eligibility to vote in a voting district in East St. Louis in that he falsely represented that he lived at 22 Loisel in the City of East St. Louis when, in fact, he resided at 4382 Red Field Drive, Swansea, Illinois, and during that same period of time he was elected to be a precinct committeeman in East St. Louis when he was living in Swansea, Illinois. Evidence was submitted that Collins had family members sign petitions for him to get on the ballot to be precinct committeeman by falsely representing their address.

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Eddye Lovely Charged With Filing False Income Tax Returns

Source- http://www.justice.gov/tax/txdv11468.htm

WASHINGTON - Eddye Lovely was indicted by a federal grand jury in Houston with 14 counts of aiding and assisting in the preparation of false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.

According to the indictment, Lovely owned and operated a Houston tax return preparation business called “The Tax Master.” For tax years 2004 through 2006, Lovely prepared materially false tax returns for seven clients. These tax returns included fabricated Schedule C losses for businesses that the taxpayers did not own or operate. They also included falsified or inflated Schedule A deductions for charitable contributions, non-reimbursed employee expenses, job search costs and/or uniform expenses.

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, Lovely faces a sentence of up to three years in jail and a maximum fine of $250,000 for each count of conviction.

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Louis Leitch Sentenced to Prison in Scheme to Launder $20 Million in Proceeds of Stolen Merchandise

Source- http://www.fbi.gov/baltimore/press-releases/2011/pawn-shop-owner-sentenced-to-prison-in-scheme-to-launder-20-million-in-proceeds-in-stolen-merchandise

BALTIMORE—U.S. District Judge Benson E. Legg sentenced Louis Leitch, Sr., age 62, of Baltimore, today to 33 months in prison followed by three years of supervised release for conspiring to commit money laundering and attempting to evade taxes.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; 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; Baltimore Police Commissioner Frederick H. Bealefeld III; and Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation.

According to his plea agreement, from 2007 to March 2010, Leitch conspired with others to launder the proceeds of the sale of mass quantities of stolen over-the-counter medications, health and beauty aid products, gift cards, DVDs, tools, and other merchandise. Shoplifters, also known as “boosters,” stole products from Target, Safeway, Wal-Mart, Kohl’s and other retailers in Maryland and other states. Pawn shops bought large amounts of stolen items from the boosters. Louis Leitch, Sr. and others were owners of E-Z Money Pawn Shop and 2Brothers Liquidators, Inc. Leitch and others would receive stolen products at E-Z Money. The stolen items were “cleaned,” meaning that the security labels and retail tags from the stolen product were removed. Sometimes a heat gun and lighter fluid would be used to peel away the plastic security labels. In addition, Leitch worked with co-defendants to purchase and transport stolen material. Leitch knew that many of his co-defendants and others participated in the scheme. Some of the defendants also used on-line auctions sites, such as eBay and Amazon.com, to sell the stolen products far below normal retail value. The stolen products were then delivered to unsuspecting customers via the United States mail. The defendants received payment by interstate wire transfers using PayPal accounts and through various financial institutions in Maryland.

On March 25, 2010, agents from the U.S. Postal Inspection Service, Baltimore County

Police Department and the Federal Bureau of Investigation executed search warrants at E-Z Money and the other pawn shops in this case. Agents recovered well over $1 million in stolen merchandise, approximately $1 million in bank accounts and over $140,000 in cash, and 44 firearms. Although the entire conspiracy involved approximately $20 million in stolen merchandise, $2.5 million in stolen product was reasonably foreseeable to Leitch.

Thirteen defendants have pleaded guilty to the money laundering conspiracy to date.

In addition, Leitch failed to file income tax returns for tax years 2005 and 2006, although he received substantial income through his pawn shop and other business. During 2005 through 2006, Leitch withdrew from his bank accounts more than $2.5 million of his gross income, with each withdrawal being less than $10,000. During 2007, Leitch made cash deposits of more than $200,000 of his gross income into bank accounts, with each deposit being less than $10,000. By making deposits and withdrawals in amounts less than $10,000, Leitch was able to avoid bank reporting requirements and conceal from the Internal Revenue Service substantial income on which he knowingly failed to pay taxes. The amount of unpaid taxes as a result of this conduct is $401,600.

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Peter Jerald Frommer Sentenced to Nine Years in Federal Prison for Bilking Victims Out of $8 Million

Source- http://losangeles.fbi.gov/dojpressrel/pressrel11/la041111.htm

LOS ANGELES—The promoter of a bogus investment scheme that promised quick returns through the resale of office equipment was sentenced today to 108 months in federal prison for orchestrating a Ponzi scheme that caused victims across the United States to lose more than $8 million.

Peter Jerald Frommer, 35, of Santa Barbara, was sentenced by United States District Judge George H. Wu. In addition to the prison term, Judge Wu ordered Frommer to pay $8.1 million in restitution.

Frommer pleaded guilty in November to wire fraud, money laundering, and three counts of failing to file federal income tax returns for the tax years 2004 through 2006.

Frommer operated a bogus investment scheme under the names “Cap Exchange” and “Cap X,” companies that he falsely claimed traded in surplus property of defunct companies. Frommer told numerous victims throughout the United States that he used commercial auction websites to purchase large lots of equipment for resale at higher prices.

>From early 2004 through August 2006, Frommer solicited more than $13 million from more than five dozen victims by promising “guaranteed” returns of up to 15 percent in as little as six weeks. Frommer obtained money from 64 investors throughout the United States. Frommer claimed that he would use victims’ money to buy the distressed assets for Cap X, and then would share profits from the subsequent sales. Instead, Frommer used the victims’ money to make Ponzi payments and to maintain a lavish personal lifestyle, which included a $20 million Malibu mansion, parties that featured celebrity performers, and luxurious personal travel and automobiles.

Additionally, Frommer convinced many investors to put money into other bogus ventures that he pitched, including a wireless Internet company, a high-end automobile parts venture, real estate deals, and other investments beyond Cap-X.

In a series of filings made in relation to today’s sentencing hearing, prosecutors focused on the impact Frommer had on his victims. “Plainly put, Frommer’s greed led to pain, distress, and a terrible disruption of the lives of his victims,” according to one of the government’s briefs.

In one of the filings, prosecutors quoted extensively from a series of letters sent by victims who urged Judge Wu to impose a stiff sentence. Those comments included:

“The effects of Peter Frommer’s crimes have been devastating for me. The only event in my lifetime that was worse was the death of my child.”

“He is the West Coast version of Bernie Madoff.”

“I am sorry to admit my family was victimized by Peter Frommer. A close relative of ours introduced us when my family and I were in California seeking cancer treatment for our youngest son. In a moment of weakness, when we were struggling with the cost of his cancer treatment, we were duped and convinced ourselves, our adult children, and a sister that this was a smart and safe investment. We made a terrible mistake.”

“My son values his education and was very intent on attending a prestigious California university. Unfortunately, he has not been able to attend that college because of the change in financial circumstances caused by Peter Frommer’s actions. What value do you put on the quashing of a teen’s dreams?”

Judge Wu ordered Frommer to begin serving his sentence on May 31.

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Corey Bishop Sentenced for Trafficking Counterfeit Nike Shoes, Filing False Tax Return, and Mail Fraud

Source- http://www.fbi.gov/birmingham/press-releases/2011/birmingham-man-sentenced-for-trafficking-counterfeit-nike-shoes-filing-false-tax-return-and-mail-fraud

BIRMINGHAM—A federal judge Wednesday sentenced a Birmingham man to 18 months in prison for a scheme involving trafficking of counterfeit Nike shoes, tax fraud, and mail fraud, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Reginael D. McDaniel, FBI Special Agent in Charge Patrick Maley, and U.S. Postal Inspector/Domicile Coordinator Frank Dyer.

U.S. District Judge Abdul K. Kallon sentenced COREY BISHOP, 35, on one count of trafficking counterfeit goods, one count of filing a false tax return, and one count of mail fraud. Bishop pleaded guilty to the charges Sept. 13, 2010.

“The United States believes the sentence imposed is just and deserved in light of the crimes committed by Mr. Bishop. He profited illegally off the success of an internationally known company, and he failed to report that income to the IRS,” Vance said.

“Individuals thinking about participating in illegal schemes, including failing to report all forms of income, should stop in their tracks and simply look at the consequences of taking the next step,” McDaniel said. “Those consequences can include going to prison, being branded a convicted felon for the rest of their lives, and paying back all the taxes owed, plus steep penalties and interest.”

“The sale of counterfeit goods undermines our economy and hurts legitimate businesses,” Maley said. “U.S. consumers spending their hard-earned dollars deserve the full value of a genuine product. If you think you got a ‘steal’ on that designer purse or watch, look again. It may be you who were ripped off. I want to extend my thanks to the Birmingham and Montevallo Police Departments, the Shelby County Sheriff’s Department and our federal partners for their efforts in bringing this case forward,” Maley said.

According to court documents, in 2007, 2008, and 2009, Bishop ordered multiple shipments of Nike footwear, which he knew to be counterfeit, from a business in China and had them shipped to the United States to sell in two of his retail stores, Fresh2Def Urbanwear, located in Birmingham and Montevallo.

Bishop’s sale of counterfeit goods generated a large taxable income, which he failed to report on his 2007 and 2008 individual income tax returns, according to court documents. Bishop was sentenced for filing a false tax return for the calendar year 2008, on which he reported his business gross receipts to be $22,262. The true amount of his gross receipts was $293,549. The tax loss was determined to be $75,961.

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Lauren Young, Mickie Davis and Benjamin Johnson Agree to Plead Guilty to Tax and Fraud Charges

Source- http://www.fbi.gov/birmingham/press-releases/2011/employees-of-state-consortium-and-non-profit-institute-agree-to-plead-guilty-to-tax-and-fraud-charges-4

BIRMINGHAM—One employee of a state business development consortium and two employees of a non-profit institute associated with the consortium have entered into plea agreements with the federal government on income tax and fraud charges, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Pat Maley and IRS Criminal Investigation Special Agent in Charge Reginael D. McDaniel.

LAUREN YOUNG, 33, head of marketing for the Alabama Small Business Development Consortium, has agreed to plead guilty to charges of wire fraud and filing false tax returns.

MICKIE DAVIS, 49, bookkeeper for the Alabama Small Business Institute of Commerce, has agreed to plead guilty to charges of conspiracy, wire fraud and filing false tax returns.

BENJAMIN JOHNSON, 35, executive director of the Small Business Institute, has agreed to plead guilty to charges of conspiracy and filing false tax returns.

Federal prosecutors brought charges against Young, Davis and Johnson, all of Gadsden, by informations either filed or unsealed today, along with the plea agreements.

The Alabama Small Business Development Consortium is composed of universities in the state, each with its own small business development center, as well as a procurement technical center and an international trade center. The consortium’s purposes are to enhance economic growth, to provide management and technical assistance to small businesses, and to develop Alabama’s workforce.

A federal grand jury indictment was unsealed last week charging the state director of the Alabama Small Business Development Consortium, Maurice William Campbell Jr., with fraud, money laundering and conspiracy. The indictment charges Campbell with using his position as the consortium’s director to obtain more than $7 million from the State of Alabama.

It charges Campbell, 59, of Rainbow City, with conspiracy to defraud the state and the Alabama Small Business Institute of Commerce, a private non-profit institute he incorporated, and with making financial transactions intended to conceal the proceeds of the fraud.

The Institute of Commerce received nearly all of its funding from the state through grants, contracts and appropriations in the education budget. From 2005 through 2010, the private, non-profit institute received more than $7.3 million in public funds intended to provide services including education and training to Alabama workers.

Campbell hired Young in 2006 as marketing director for the Alabama Small Business Development Consortium. In October 2006, she received a business check card for the consortium and, over more than three years, used it to make about $195,000 in illegitimate expenditures for herself or others, according to her plea agreement. She made efforts to conceal that she was improperly spending Institute funds, according to the plea agreement.

Young also received thousands of dollars in state funds for reimbursement of travel expenses that Young had paid with Institute funds, according to her plea agreement.

Young acknowledges that she under-reported her income on tax returns for 2008 and 2009.

Davis acknowledges in her plea agreement that, as bookkeeper of the institute, she “received hundreds of thousands of dollars in cash, services, clothing, lodging, meals, and other items for personal benefit, financed by the Institute and its state funding. Moreover, she knowingly and willfully assisted others in using institute funds for their personal benefit, including the incorporator” of the institute, Campbell.

In July and August 2005, Davis opened bank accounts for the institute and knew it received its funding from the state, according to plea agreement. That same year, she began writing checks, at Campbell’s request, from the institute to women he referred to as the Little Sisters, the plea agreement says. From 2006 to 2010, Davis used and witnessed others using business check cards on the institute’s accounts for personal expenses, including jewelry, clothing, event tickets and meals, according to her plea agreement. She acknowledges that in 2008, she financed a trip to the Bahamas using institute funds.

Davis under-reported her income on tax returns for 2007, 2008 and 2009, according to the plea agreement.

Johnson was hired as executive director of the institute in September 2006. He acknowledges in his plea agreement that he knew less than 20 percent of the state money coming to the institute was being awarded in grants to member schools. Johnson acknowledges that he used institute funds for personal expenses, including trips, clothing, and car maintenance, and that he was aware other institute officials were spending the state funds for personal expenses.

In August 2008, Johnson created Johnson Marketing Group, which he and Campbell used to obtain money from the institute, according to Johnson’s plea agreement.

Johnson acknowledges that he under-reported his income on tax returns for 2008 and 2009.

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Mark D. Leitner Indicted Filing False Liens for Billions of Dollars Against Federal Law Enforcement

Source- http://www.justice.gov/tax/txdv11432.htm

WASHINGTON - Mark D. Leitner has been indicted by a grand jury in the Northern District of Florida for filing false liens against federal law enforcement, corruptly endeavoring to impede and impair the Internal Revenue Service (IRS), and public disclosure of another’s Social Security number in the commission of illegal activity, the Justice Department announced today.

According to the indictment, Leitner was previously a defendant in a criminal trial, United States v. Hirmer, et. al., in the Northern District of Florida in March 2010. A jury in Pensacola, Fla., found him guilty of conspiracy to defraud the IRS after a month-long jury trial.

According to the indictment, during the jury trial and after the jury returned the guilty verdict, Leitner caused false maritime liens to be publicly filed against the property of prosecutors, investigators and court personnel involved in the criminal trial. The liens falsely claimed that Leitner was owed $48.489 billion from each individual. On five of the seven false liens, Leitner publicly disclosed individuals’ correct Social Security numbers; this information was publicly available in each state where the liens were filed. Leitner also filed and mailed numerous harassing and frivolous documents to the court and personnel involved in this case.

An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. Each count of filing false liens carries a penalty of up to 10 years in prison and a $250,000 fine. Each count of Social Security fraud carries a maximum penalty of up to five years in prison and a $250,000 fine. The corruptly obstructing the IRS charge carries a maximum penalty of up to three years in prison and a $250,000 fine.

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Justice Department ask Court to Allow IRS to Seek HSBC INDIA Bank Account Records

Source- http://www.justice.gov/tax/txdv11439.htm

WASHINGTON - The United States is seeking an order from a federal court in San Francisco authorizing the Internal Revenue Service (IRS) to request information from HSBC Bank USA, N.A. about U.S. residents who may be using accounts at The Hong Kong and Shanghai Banking Corporation in India (HSBC India) to evade federal income taxes, the Justice Department announced today.

The government filed a petition with the court to allow the IRS to serve what is known as a “John Doe” summons on the bank. The IRS uses a John Doe summons to obtain information about possible tax fraud by people whose identities are unknown. If approved, the John Doe summons would direct HSBC USA to produce records identifying U.S. taxpayers with accounts at HSBC India, many of whom are believed by the government to have hidden their accounts from the IRS.

According to documents filed with the government’s petition, on Jan. 26, 2011, a grand jury in Newark, N.J., indicted Vaibhav Dahake of Somerset, N.J., charging him with conspiracy to defraud the United States by using undeclared accounts in the British Virgin Islands and at HSBC India to evade his income taxes. According to those documents, employees of HSBC Holdings plc and its affiliates operating in the United States assured Dahake that accounts maintained in India would not be reported to the IRS.

The government alleges that, according to HSBC’s website, in 2002 HSBC India opened a “representative office” at an HSBC USA office in New York City to enable “Non-Resident Indians” (NRIs) living in the United States to open accounts in India. In 2007, HSBC India allegedly opened a second representative office at an HSBC USA office in Fremont, Calif., purportedly “to make banking transactions more convenient for the NRI community based in California.” Although HSBC India closed those offices in June 2010, the government alleges that NRI clients may still access their accounts at HSBC India from the United States. According to the petition documents, NRI clients have told IRS investigators that NRI representatives in the United States assured the clients that they could invest in accounts at HSBC India without paying U.S. income tax on interest earned on the accounts and that HSBC would not report the income earned on the HSBC India accounts to the IRS.

“The Department of Justice is committed to ensuring that all U.S. taxpayers meet their obligations to declare and pay taxes on foreign bank accounts,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division. “The ability to hide accounts in foreign countries is rapidly dwindling. We will continue working hand-in-hand with the IRS to enforce the tax laws against those who are using offshore accounts – wherever they are located – to evade taxes.

“The IRS continues to focus its attention on international tax evasion,” said IRS Commissioner Douglas Shulman. “This summons request is focused on obtaining more information to help us determine if additional actions are needed. As I’ve said all along, our international efforts are not about just one country or one bank – it’s about our wider effort to ensure compliance with the nation’s tax laws.”

Federal law requires U.S. taxpayers to pay federal income taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. A willful failure to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation.

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Donna Paul and Her Husband William Paul Charged with Four Counts of Tax Evasion

Source- http://www.justice.gov/tax/txdv11433.htm

WASHINGTON - Donna Paul and her husband, William Paul, formerly of Montgomery, Ala., were indicted by a federal grand jury and charged with four counts of tax evasion for the tax years 2004 through 2007, the Justice Department and Internal Revenue Service (IRS) announced today.

John A. DiCicco, Principal Deputy Assistant Attorney General for the Tax Division, and Leura G. Canary, U.S. Attorney for the Middle District of Alabama, made the announcement.

According to the indictment, Donna Paul is a board-certified physician with a specialty in rheumatology. She and her husband operated several non-profit organizations that provided medical services. The Pauls attempted to evade the assessment of Donna Paul’s income by falsely characterizing her income as loans, by making false statements to IRS employees, and by deliberately causing the non-profit organizations to not file tax returns. Donna Paul did not file a U.S. Individual Income Tax Return, IRS Form 1040, between 2003 and 2007 and William Paul has not filed an IRS Form 1040 since the 1980s.

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, the Pauls both face a maximum of 20 years in prison and a maximum fine of $1 million.

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Verizon Communications Pays United States $93.5 Million to Resolve False Claims Act Allegations

Source- http://www.justice.gov/opa/pr/2011/April/11-civ-428.html

WASHINGTON - Verizon Communications Inc. has paid the United States $93,525,410.96 in order to resolve allegations that the company overcharged the General Services Administration (GSA) on invoices dealing with government-wide voice and data telecommunications services contracts, the Justice Department announced today.

Verizon subsidiary MCI Communications Services Inc. dba Verizon Business Services is alleged to have invoiced GSA for a variety of federal, state and local taxes and surcharges in violation of the contracts or applicable regulations in connection with the FTS2001 and FTS2001 Bridge contracts. The department’s joint investigation with GSA’s Office of the Inspector General (OIG) found that Verizon and MCI submitted false claims under the contracts for the reimbursement of property taxes, common carrier recovery charges and unallowable surcharges, charges that are not directly reimbursable under the FTS2001 contracts.

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Edward T. Fodrey Pleads Guilty to Kickback Scheme and Failure to File Tax Return

Source- http://richmond.fbi.gov/dojpressrel/pressrel11/ri040411.htm

WASHINGTON—A Virginia contractor pleaded guilty to participating in a scheme to steer contracts to him for repair, maintenance and renovation work at healthcare and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced today.

Edward T. Fodrey, a resident of Norfolk, Va., pleaded guilty in U.S. District Court in Norfolk to conspiring with other individuals to steer contracts for repair, maintenance and renovation at MFA healthcare and nursing home facilities. According to the two-count felony charge filed on March 30, 2011, from about May 2006 until at least December 2006, Fodrey conspired with an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities in North Carolina and Virginia. That MFA employee steered contracts to Fodrey in return for kickbacks.

According to the court document, the MFA employee created fictitious competitor bids that were higher than the quotes submitted by Fodrey and other co-conspirator venders, to create the appearance of competition. The MFA employee directed subordinates to solicit quotes only from Fodrey or other conspiring vendors. The MFA employee specified the amount Fodrey should quote to MFA as well as the amount of the kickback on each of the contracts. Fodrey paid more than $200,000 in kickbacks to the MFA employee and received contracts totaling more than $750,000. The court document states that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. Fodrey was also charged with failing to file a tax return for 2006, which is the year in which Fodrey received payment on the MFA contracts. According to the plea agreement, Fodrey has agreed to cooperate with the department’s ongoing investigation.

Fodrey is charged with conspiracy to commit mail fraud for the kickback scheme, which carries a maximum penalty of 20 years in prison and a $250,000 criminal fine. Fodrey is also charged with failure to file an income tax return, which carries a maximum penalty of one year in prison and a $100,000 criminal fine. The maximum fines for each of these charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximums.

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Thomas J. Ernst Arraigned on Charges of Tax Evasion and Impeding the IRS

Source- http://www.justice.gov/tax/txdv11413.htm

WASHINGTON – Thomas J. Ernst, formerly a resident of McLean and Arlington, Va., was arraigned today in the Eastern District of Virginia. Ernst was indicted March 10, 2011, for one count of corruptly endeavoring to impede the Internal Revenue Service (IRS), three counts of tax evasion for 2004, 2005 and 2006, and two counts of failing to file corporate tax returns in 2004 and 2005, the Justice Department and IRS announced today. Ernst appeared today before the Honorable U.S. District Court Judge Claude M. Hilton.

According to the indictment, Ernst was the president and chief executive officer of Medicure Plus Inc., a health insurance benefits administration company. From 2000 through 2006, Medicure operated as a third party administrator of the Postmasters’ Benefits Plan (PBP), the health benefits carrier for the National League of Postmasters (NLP). Medicure and NLP entered into a 10 year guaranty agreement under which Medicure managed PBP’s operations; NLP paid Medicure $166,000 each month plus a $33,000 administrative fee.

According to the indictment, between 2001 and 2007, Ernst corruptly endeavored to obstruct and impede the due administration of the IRS by causing Medicure to make payments from its corporate bank account for numerous personal expenses, including: a summer rental house; more than $1.5 million in payments to himself, his wife, sister-in-law and children; his son’s Georgetown University college education; and various property purchases and rentals. None of these payments were included on any personal income tax return as income to Ernst. Additionally, Ernst used nominee bank accounts, purchased and leased assets in the names of his children and sister-in-law and created fictitious documents to conceal his income and ownership of assets from the IRS.

Ernst did not file U.S. Individual Income Tax Returns, Forms 1040 with the IRS for 2001 through 2006 and is charged with evading his taxes in 2004, 2005 and 2006. Further, Ernst failed to cause Medicure to ever file a corporate income tax return, Form 1120, and he is charged with failing to file a Medicure corporate income tax return in 2004 and 2005.

An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendant faces a maximum potential sentence of 20 years in prison. The trial date has been scheduled for Aug. 2, 2011, before Judge Hilton.

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Ricky Walter Denton Charged with 2009 Bank Robbery also Charged with Joann Smith Choat in Tax Fraud Scheme

Source- http://www.fbi.gov/birmingham/press-releases/2011/tuscumbia-man-charged-with-2009-bank-robbery-also-charged-with-tuscumbia-woman-in-tax-fraud-scheme

BIRMINGHAM—A federal indictment unsealed today charges a Tuscumbia man with a 2009 armed robbery of a Colbert County bank, and a separate indictment returned today charges him and a Tuscumbia woman in a federal tax fraud conspiracy, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Reginael D. McDaniel, FBI Special Agent in Charge Patrick Maley, and Colbert County Sheriff Ronnie May.

The grand jury indictment filed today in U.S. District Court charges RICKY WALTER DENTON, 46, and JOANN SMITH CHOAT, 55, with conspiring to obtain $148,685 in false federal income tax refunds through a three-year scheme that involved taking other people’s Social Security numbers and birth dates and filing false returns.

The indictment, returned earlier this month and unsealed today, charges Denton with robbing the First Southern Bank in Colbert County in December 2009 and with brandishing a handgun during the crime. Denton assaulted and “put in jeopardy the life of another person” by using a handgun, according to the indictment.

“Law enforcement agencies are to be commended for their cooperative work in these cases, which closed the trail on someone who threatened another person’s life to steal from a bank, and who stole the identities of people around him so that he and his co-conspirator could steal money from taxpayers,” Vance said.

“At the IRS, protecting taxpayer money is a matter we take very seriously. An integral part of the IRS mission involves detecting and stopping fraudulent tax refund claims,” McDaniel said. “Thanks to the resolve of our law enforcement partners, we were able to accomplish our mission.”

The conspiracy count in today’s tax fraud indictment charges that, from January 2007 to May 2010, Denton obtained the identifying information of others, used that information to create false tax forms, and mailed those forms to Post Office boxes in Tuscumbia that Choat had opened at his request.

Choat submitted the false tax forms to the IRS, and when she received refunds on them, deposited the $148,685 in U.S. Treasury checks into her personal credit union account, according to the indictment.

The indictment also charges Denton with five counts of making false claims against the government for creating and causing false tax returns to be submitted. It charges Denton with five counts of aggravated identity fraud for using the Social Security number of another person to commit mail fraud and conspiracy to commit mail fraud.

The indictment charges Denton and Choat with five counts of mail fraud for fraudulently causing the U.S. Treasury to mail refund checks, and with one count of conspiracy to commit mail fraud against the Treasury Department.

Denton could face a maximum sentence of 20 years in prison and a $250,000 fine on the conspiracy and fraud charges, and a mandatory two-year sentence for aggravated identity theft, which must be served consecutive to any sentence on the mail fraud and conspiracy to commit mail fraud charges. On the robbery charge, Denton could face a maximum sentence of 25 years in prison and a $250,000 fine. The separate charge for brandishing a weapon during the robbery carries a maximum seven-year sentence that must be served consecutive to any robbery sentence.

Choat could face a maximum sentence of 20 years in prison and a $250,000 fine on the conspiracy and fraud charges.

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Richard E. Brown Indicted for Wire Fraud, Mail Fraud, and Making a False Tax Return

Source- http://indianapolis.fbi.gov/dojpressrel/pressrel11/ip033111.htm

INDIANAPOLIS—Joseph H. Hogsett, United States Attorney, announced that Richard E. Brown, 53, of Mt. Vernon, Ind., was charged by a federal grand jury sitting in Evansville, Wednesday, March 30, 2011, with multiple counts of wire fraud, mail fraud, and making a false tax return. Following a return of indictment, federal agents arrested Brown. The indictment is the result of a lengthy investigation by special agents of the Internal Revenue Service, Criminal Investigation Division, and the Federal Bureau of Investigation.

The indictment alleges that Brown, while serving as office manager and bookkeeper of an Evansville family business, used credit cards from that business to pay his own personal expenses without authorization. Allegedly, Brown also used checks of his former employer to pay the expenses of his church where he had also served as bookkeeper. Following these thefts, Brown filed false federal income tax returns which omitted the embezzled funds. As a result, the government lost thousands of dollars in taxes due by Brown. The loss to the family business is alleged to be over $100,000.

According to Assistant U.S. Attorney James M. Warden, who is prosecuting the case for the government, Brown faces a maximum of 20 years in prison and a $250,000 fine on each fraud count, and three years in prison and a $250,000 fine on each tax count. Brown was released following an initial hearing held in Evansville this morning before Judge Young. A jury trial is scheduled for May 31, 2011.

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Loretta and Tracey Fergerson Indicted for Tax Fraud and Identity Theft

Source- http://www.justice.gov/tax/txdv11397.htm

MONTGOMERY, Ala. - Loretta and Tracey Fergerson 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 Justice Department and the Internal Revenue Service (IRS) announced today. The sisters were charged in a 22-count indictment that was returned on March 23, 2011, and unsealed Tuesday.

The Fergerson sisters were charged with conspiring to defraud the United States, filing false claims, wire fraud and aggravated identity theft. According to the indictment, Loretta Fergerson operated Fast Tax Cash, a tax return preparation business in Montgomery, Ala., from January 2005 to February 2008. The defendants’ conspiracy spanned over one year and involved using stolen identities to file tax returns claiming fraudulent refunds.

The indictment alleges that Tracey Fergerson unlawfully obtained the names and Social Security numbers of individuals. Loretta Fergerson would then electronically file false tax returns using the names and Social Security numbers Tracey provided. Loretta was then able to apply for and obtain refund anticipation loans from banks based on the false tax returns.

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Loretta and Tracey Fergerson each face a maximum of 129 years in prison.

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