WASHINGTON – Donald Turner (aka Donald Wood), formerly of Littleton, Colo., was found guilty of conspiring to defraud the United States by a federal jury in the U.S. District Court for the Western District of Pennsylvania in Erie, Pa., the Justice Department and Internal Revenue Service (IRS) announced today. The Honorable Maurice B. Cohill, Senior District Judge, presided over the case.
According to testimony and evidence presented at trial, Turner promoted and sold memberships in First American Research (FAR) and a book entitled, “Tax Free! How the Super Rich Do It.” In 1991, Turner sold the program to Daniel Leveto, a Meadville, Pa., veterinarian. As part of the program, Leveto utilized various methods to conceal his income from the IRS as directed by Turner. One of these methods included the purported sale of Leveto’s veterinary business to an alleged offshore entity called Center Company. Leveto actually retained dominion and control over the veterinary business. The object of the conspiracy was to conceal and prevent the IRS from discovering and identifying income received by the Levetos and assets held by them. In June of 2005, a jury convicted Leveto of all counts, and he was subsequently sentenced to 46 months in prison.
Turner faces a maximum punishment of up to five years in prison and a $250,000 fine. Judge Cohill scheduled sentencing for Jan. 18, 2012.
Monday, September 19, 2011
Donald Turner (aka Donald Wood), Convicted in Pennsylvania of Conspiring to Defraud The Internal Revenue Service
Sunday, September 18, 2011
Melissa Edwands Sentenced to Prison for Aiding in Preparation of False Tax Returns
WASHINGTON - Melissa Edwards was sentenced by U.S. District Court Judge Brian A. Jackson to 30 months in prison based on her plea of guilty to one count of wilfully aiding and assisting in the preparation and filing of a false income tax return, the Justice Department and Internal Revenue Service (IRS) announced today. The court also ordered Edwards to serve a one-year term of supervised release following her prison term and to pay restitution to the IRS in the amount of $56,040. The case arises out of a March 31, 2010, indictment filed in the Middle District of Louisiana.
According to her plea agreement, Edwards, who worked at Jasmine and Melissa’s Tax Service in Baton Rouge, La., prepared fraudulent tax returns for 20 clients that reported falsely inflated telephone excise tax refund (TETR) credits in the total amount of $126,856. The TETR credit was a one-time credit available to taxpayers for the 2006 year. The sentencing court found that the tax loss, including all relevant conduct, was between $400,000, but less than $1 million.
John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice Tax Division, commended the IRS special agents who investigated this case and Tax Division Trial Attorneys Kevin C. Lombardi and Matthew J. Mueller and Assistant U.S. Attorney Rene Salomon of the Middle District of Louisiana, who prosecuted the case.
Saturday, September 17, 2011
Texas Federal Court Bars Ronald Fontenot and Anthony Burrell from Promoting Alleged Tax Scam Involving Fictitious Methane at Landfills
WASHINGTON - A federal court in Beaumont, Texas, has permanently barred two men from promoting an alleged tax fraud scheme involving bogus tax credits for the production of methane gas from landfills, the Justice Department announced today. Ronald Fontenot and Anthony Burrell consented to the civil injunction order against them without admitting wrongdoing. The order was signed by Judge Marcia A. Crone of the U.S. District Court for the Eastern District of Texas.
According to the government complaint, which was originally filed in Florida, the scheme involved bogus federal income tax credits available to producers of fuel from non-conventional sources. The government suit alleges that George Calvert and Gregory Guido of Florida, both previously enjoined and criminally convicted as a result of their involvement, concocted the scheme and promoted it through tax preparers like Fontenot and Burrell, who acted as sub-promoters to individual customers. The 32 defendants named in the civil injunction lawsuit allegedly helped customers claim more than $30 million in tax credits for the production and sale of fuel from landfill gas facilities that either did not exist or belonged to others. According to the complaint, Fontenot, of Lake Charles, La., and Burrell, of Livingston, Tex., are allegedly responsible for preparing federal income tax returns for customers that claimed at least $2.6 million in false tax credits.
Fontenot and Burrell are the 29th and 30th of the 32 defendants to be enjoined. The case against the two remaining defendants is pending. The order also requires Fontenot and Burrell to produce to the government a list identifying all customers for whom they prepared tax returns claiming the fuel credits between Jan. 1, 2003, and July 1, 2009.
Friday, September 16, 2011
Becky M. McCord Sentenced for Tax and Bankruptcy Fraud
GAINESVILLE, GA—BECKY M. MCCORD, 62, of Dawsonville, Georgia, was sentenced to federal prison today by Senior United States District Judge William C. O’Kelley for tax evasion and bankruptcy fraud.
United States Attorney Sally Quillian Yates said, “Public officials who are caught lying, stealing, and abusing their position of trust will end up in jail. This defendant stole from the people of Dawson County to enrich herself. She will now spend two years in federal prison.”
“Today, Ms. McCord not only has to face the consequences of failing to report all of her income on her federal tax return,” said IRS Criminal Investigation Special Agent in Charge, Reginael D. McDaniel. “She must also accept the consequences of betraying the trust of the people she served in Dawson County.”
Brian D. Lamkin, Special Agent in Charge, FBI Atlanta, said, “The FBI remains committed to investigate and hold accountable those who betray the public trust placed in them and their position. This case is an example of a public employee who blatantly stole from her employer—the taxpayers.”
MCCORD was sentenced to two years in prison to be followed by three years of supervised release, ordered to pay a $10,000 fine, and pay $51,611 in restitution to the IRS for back taxes. MCCORD pleaded guilty to the charges on June 17, 2011.
According to United States Attorney Yates, the charges, and other information presented in court: McCORD served as the Clerk of Court for the Superior Court of Dawson County, Georgia, from 1993 to February 2010. Between 2006 and 2009, McCORD wrote and signed checks payable to herself from the Dawson County Superior Court’s bank account to which she was not entitled. The total amount of these checks approximated $134,000. McCORD subsequently cashed those checks at various banks in Dawsonville and used the funds for personal expenses such as a car loan and mortgage payments.
McCORD did not report on her 2009 federal tax return the funds she withdrew from the Dawson County Superior Court’s bank account for personal use, nor did she report additional legitimate income that she received from the collection of passport fees. McCORD also failed to report this income on a bankruptcy petition that she filed jointly with her spouse in December 2007, and amended several times through June 2009.
Gary Shapoff Pleads Guilty to Money Laundering and Tax Fraud
ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that Gary Shapoff, 61, of Pittsford, New York, pleaded guilty before U.S. District Judge Charles J. Siragusa, to money laundering and tax fraud statutes. Money laundering carries a maximum penalty of 10 years in prison, a fine of up to $5,000,000, or both. Tax fraud carries a maximum penalty of three years, a fine of $100,000, or both.
Assistant U.S. Attorney Bradley E. Tyler, who handled the case, stated that between January 2004 and July 2008, the defendant participated in a scheme to defraud investors who had invested approximately $2.5 million in international currency trading investments through the company Atwood & James S.A. During the course of the scheme, Shapoff used the mail and wire communications to facilitate the execution of the fraud. He also used illegally obtained investor proceeds to promote the scheme, in violation of the federal money laundering provisions, and did not report the gains that he made from the fraud on his individual tax returns.
“This marks the third case in the last two days in which investors turned over their hard earned money to someone they trusted,” said U.S. Attorney Hochul. “I urge the public to be cautious, do your homework, know exactly who it is that you are giving your money to and do not be afraid to ask questions.”
Wednesday, September 14, 2011
Maurice Goulet Sentenced for Obstructing and Impeding the Internal Revenue Service
WASHINGTON – Maurice Goulet was sentenced today in Charlotte, N.C., by U.S. District Court Judge Robert J. Conrad Jr. to six months in prison for his conviction for corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, the Justice Department and Internal Revenue Service (IRS), announced today. Goulet pleaded guilty on Feb. 7, 2011.
According to court documents, between at least June 1, 1999 and 2001, Goulet was involved with several cigarette businesses, including, Birdtown Enterprises, Consumer Direct Buyers Network LLC and Greenwood Ventures LLC. Beginning in or about 1999, he obtained and used a series of bogus entities to conduct the cigarette business and to divert and conceal his income and assets from the IRS. Between 1999 and 2001, none of these entities filed tax returns with the IRS.
Goulet further admitted that he took a variety of steps to further conceal his income and assets from the IRS for the purpose of obstructing and impeding the due administration of the Internal Revenue laws, including that he used these nominee entities to purchase assets, including two motor homes and a vehicle in nominee names and entities; he used false Employer Identification Numbers (EIN) on bank accounts; he caused a false lien to be placed on at least one asset; and he made false statements to a special agent with the IRS. Goulet also admitted that prior to 2005, the last personal income tax return, IRS Form 1040, that he filed with the IRS was in 1996.
Tuesday, September 13, 2011
Valerie Byrd and Isaac Dailey Plead Guilty for Role in Tax Fraud Conspiracy
WASHINGTON – Valerie Byrd and Isaac Dailey, both residents of Montgomery County, Ala., each pleaded guilty to one count of conspiring to defraud the United States, the Department of Justice and the Internal Revenue Service (IRS) announced today.
According to court documents, between February 2011 and April 2011, Byrd conspired with others to fraudulently obtain tax refunds. The conspiracy involved using stolen identities to file false income tax returns claiming refunds. Byrd opened up four bank accounts to receive tax refunds from the scheme. Thirty different refunds, issued in the name of 30 different individuals, were deposited into the bank accounts. To disburse these proceeds, Byrd would transfer the funds to her co-conspirators or withdraw cash. Byrd retained a portion of the proceeds for herself.
Isaac Dailey was previously indicted by a federal grand jury sitting in Montgomery, Ala., on Dec. 14, 2010, on a variety of charges stemming from a large-scale tax fraud and identity theft conspiracy based in Montgomery. According to court documents, the conspirators used stolen identities to file millions of dollars in false tax returns claiming fraudulent refunds over a two-year period in 2009 and 2010. Between January of 2009 and May of 2010, Dailey was responsible for funneling tens of thousands of dollars in false tax refunds to his co-conspirators. Dailey permitted his co-conspirators to deposit fraudulent tax refunds into his bank account. Dailey would withdraw the money, provide the funds to various co-conspirators and retain a portion of each of these transactions.
Sentencing has not yet been scheduled for either Byrd or Dailey. Both face 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.
Monday, September 12, 2011
Gwenn Wycoff and Frank Ozak Permanently Barred by Federal Court From Forming Trusts for Taxpayers
http://www.justice.gov/tax/txdv111161.htm
WASHINGTON - A federal court in California has permanently barred Gwenn Wycoff and Frank Ozak from forming trusts for others, the Justice Department announced today. The civil injunction order, to which Wycoff and Ozak consented without admitting the allegations against them, was signed by Judge Jacqueline H. Nguyen of the U.S. District Court for the Central District of California.
The government complaint alleged that Wycoff and Ozak, both of Los Angeles, promoted a trust scheme through personal appearances, a website, and a two-volume publication called The Art of Passing the Buck. The defendants allegedly promised their customers that forming so-called “common-law trusts” was a way to “own nothing” but “control everything,” which the defendants allegedly said could help their customers avoid paying taxes. But the court previously determined, in preliminarily enjoining the defendants in March 2011, that such trusts are shams. The complaint alleged that the total tax deficiencies of the four customers mentioned in the preliminary injunction order was more than $1.1 million.
The injunction order also requires Wycoff and Ozak to remove from unsold copies of The Art of Passing the Buck the printed advertisements for their trust-creation business. The order also obligates them to inform all past and future purchasers of that publication that they should not rely on its content in determining a trust’s income tax liability, but should instead seek appropriate professional assistance.
Sunday, September 11, 2011
Detective Inuka Rhaheed and Tax Preparer Wilens Bertrand Sentenced for Tax Fraud
WASHINGTON - The owner of First Premium Financial Services and a former employee were sentenced today to federal prison for conspiring to defraud the United States in connection with fraudulent tax returns they prepared for clients. Inuka Rhaheed, a former detective with the Fort Pierce, Fla., Police Department, was sentenced to 78 months in prison. Wilens Bertrand, a tax preparer at First Premium, was sentenced to 41 months in prison.
Today’s sentences were announced by Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Departments Tax Division; and Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI).
On June 11, 2011, Rhaheed and Bertrand were convicted after a four-day trial. According to evidence introduced at trial, Inuka and his wife Jacqueline Rhaheed owned and worked at First Premium Financial Services, a tax preparation business with offices in Fort Pierce and Vero Beach, Fla. Bertrand worked at the Fort Pierce office of First Premium Financial Services as a tax preparer.
According to the testimony of some of First Premium’s clients, the defendants placed false deductions on client tax returns without the clients’ knowledge or consent. In addition, evidence revealed that First Premium prepared and filed approximately 5,500 tax returns for the 2006-2008 tax years and that approximately 98 percent of those returns made a claim for a tax refund. The resulting total tax loss to the United States, based on expert testimony at trial, was at least $500,000.
According to evidence presented during the trial, clients paid a minimum fee of $300 for tax preparation services at First Premium. Clients included many law enforcement officers, who went to First Premium because they knew Inuka Rhaheed was a former law enforcement officer and trusted him and his business to prepare their taxes. In addition, other clients testified that they went to First Premium because they had heard through word of mouth that First Premium allowed deductions that other tax preparation services would not consider.
In addition to the prison term, the court sentenced Inuka Rhaheed to pay $727,729 in restitution and Bertrand to pay $539,954 in restitution and to serve three years of supervised release.
Jacqueline Rhaheed pleaded guilty to one count of conspiring to defraud the United States on June 2, 2011. Jacqueline Rhaheed is scheduled to be sentenced on Nov. 7, 2011.
Saturday, September 10, 2011
Murphy Hubbard Sentenced to 42 Months in Prison for Mail Fraud and Tax Evasion
WASHINGTON - Murphy Hubbard, a Springfield, Mo., CPA, was sentenced on Sept. 7, 2011, to 42 months in prison for his mail fraud and tax evasion convictions, the Justice Department and Internal Revenue Service (IRS) announced today. Sentence was imposed by District Court Judge Ortrie D. Smith in the Western District of Missouri and follows a plea of guilty to two counts of mail fraud and one count of tax evasion previously entered by the defendant. Hubbard was remanded into custody immediately following the sentencing.
According to court documents, Hubbard owned and operated an accounting and tax business known as The Hubbard Group PC. Hubbard embezzled more than $400,000 from two trusts placed under his control by local families between 1998 and 2009. The first of these trusts, created by Ms. Hazel Beatrice S. Hirst of Springfield designated four local charities as the beneficiaries of her life’s savings. The second trust, established by the heirs of Mr. Noel C. Rummens of Rogersville, Mo., was created for the express purpose of funding educational expenses for Mr. Rummens’s surviving heirs and relatives.
Rather than fulfilling the wishes of these families by faithfully executing their trust agreements, Hubbard instead took the vast majority of this money for himself, using it to pay personal expenses, to buy items such as automobiles and farm equipment and for travel. Virtually all of the money taken from these trusts went unreported to the IRS, resulting in a tax loss of approximately $79,434.
In addition to the 42 month prison term, Judge Smith also ordered Hubbard to pay full restitution to the victims in this case, including $389,221 to the lawful representatives of the estate of Ms. Hirst and the Noel C. Rummens Educational Trust and $79,434 to the IRS.
Friday, September 9, 2011
Miami Construction Business Owner Braynert Marquez Pleads Guilty to Tax Fraud
WASHINGTON - Braynert Marquez of Miami pleaded guilty to a one-count information charging him with aiding and assisting in the preparation and filing of a false employment tax return, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the plea agreement and information, Marquez operated and at least partly owned two Dade County, Fla., construction companies known as Bema Block Corp. and Bema Group Corp. From 2004 through 2007, Marquez paid employees of Bema Block and Bema Group “off-the-books” wages in two different ways. First, from late 2006 through 2007, Marquez obtained cash to pay his employees by causing Bema Block and Bema Group corporate checks to be issued to DJ Construction Group Inc. DJ Construction was a shell corporation created by others for use in the check cashing scheme. DJ Construction did no actual work for either Bema Block or Bema Group. Marquez caused the checks to be cashed at a check cashing store that was aware of the arrangement. Marquez then caused his employees to be paid with the cash from the checks. In 2007, $698,848.82 in Bema Block and Bema Group checks were written to DJ Construction and cashed to pay employees. Marquez failed to report the cash wages on quarterly employment tax returns and failed to withhold and pay over employment taxes on the wages.
According to court documents, Marquez also caused certain Bema Block employees to be paid with two checks: one payroll check from which the employment taxes were withheld and an additional check with no taxes withheld. The additional check was issued not from Bema Block, but from one of two corporations, MFCM Group Corporation and MJMF Group Corporation, created by Marquez and others solely for this purpose. From 2004 through 2007, Marquez caused approximately $664,535 in checks from MFCM Group and at least $469,049 in checks from MJMF Group to be written to Bema Block employees. Marquez failed to report the wages paid by these checks on quarterly employment tax returns and failed to withhold and pay over employment taxes on the wages.
According to the information, Marquez willfully aided and assisted in the preparation and presentation to the IRS of a false Employer’s Quarterly Federal Tax Return (IRS Form 941) for the calendar quarter ending Dec. 31, 2010. The tax return falsely and fraudulently reported $130,021 in wages, tips and other compensation by Bema Group Corp. to its employees that quarter.
The court scheduled sentencing for Nov. 3, 2011. Marquez faces a maximum of three years in prison, a maximum of one year of supervised release and a fine of $250,000. As part of his plea agreement, Marquez agreed that the United States suffered an employment tax loss of at least $200,000 but not more than $400,000 and he agreed to pay restitution to the IRS in the amount of $280,362.
Thursday, September 8, 2011
Six Individuals Indicted for Tax Fraud and Identity Theft Schemes in Alabama
WASHINGTON - Three separate indictments were returned by a federal grand jury in the Middle District of Alabama charging six different individuals on a variety of charges stemming from tax fraud and identity theft schemes, the Justice Department and Internal Revenue Service (IRS) announced today.
Alchico Grant, of Lowndes County, Ala.; and Melinda Clayton, Veronica Dale and Stephanie Adams, all of Montgomery County, Ala., were charged in a superseding indictment unsealed today on a variety of counts stemming from an identity theft and tax fraud scheme. The 43-count indictment charges all four with conspiring to defraud the United States by filing false claims. Clayton, Dale and Grant are also charged with filing false claims, wire fraud and aggravated identity theft, while Adams is charged with theft of government funds.
According to the superseding indictment, the defendants conspired to fraudulently obtain federal income tax refunds by using stolen identities to file tax returns. Dale illegally obtained stolen identity information during her earlier employment at Electronic Data Systems Inc., and passed that information along to her co-conspirators. Clayton also obtained identity information from other sources. Clayton and Dale electronically filed false tax returns using the stolen identities and had the refunds deposited into bank accounts and prepaid debit cards they controlled. Dale and Grant purchased prepaid debit cards to receive refunds, while Adams made her bank account available to receive refunds.
Clayton and Grant had been charged in the first indictment in this case, which was returned April 27, 2011. The superseding indictment adds charges against both, and also charges Dale and Adams. Clayton had previously been arrested on a criminal complaint on April 8, 2011, following the execution of a search warrant at her house that same day. Grant and Dale had both previously been indicted in December 2010, along with several co-conspirators, for their involvement in an earlier conspiracy to obtain tax refunds using stolen identities.
The same federal grand jury in Montgomery, Ala., returned an indictment charging Chiquanta Davis, aka Nikki Davis, of Montgomery County, with using stolen identities to file false tax returns. She was charged on Aug. 31, 2011 with filing false claims, theft of government funds and aggravated identity theft.
Davis had earlier been charged with making false claims in a criminal complaint that was filed on July 12, 2011. She was arrested two days later. According to the indictment and other court documents, Davis used stolen identities to file false tax returns which fraudulently claimed refunds. Davis had some of the refunds deposited into her own bank accounts. Court documents state that nearly 200 tax returns were electronically filed from an IP address belonging to Davis.
Marsha Elmore of Elmore County, Ala., was also indicted on Aug. 31, 2011, by a federal grand jury in Montgomery, for using stolen identities to file false tax returns. The 32-count indictment charges Elmore with filing false claims, wire fraud and aggravated identity theft.
Elmore was also charged in a criminal complaint that was filed on July 12, 2011, with making false claims. She was arrested two days later. According to the indictment and other court documents, between 2009 and 2011, Elmore owned and operated a tax preparation business called Community Tax, located in Wetumpka, Ala. Elmore used stolen identities to file false tax returns which fraudulently claimed refunds. The indictment and other court documents state that Elmore has been filing false tax returns since 2009 and that 400 tax returns were linked to Elmore in 2011 and 2010.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Grant, Clayton, Dale and Adams face 10 years in prison for the conspiracy charge. Dale, Grant, Clayton, Davis and Elmore face five years in prison for each false claims count. Dale, Grant, Clayton and Elmore face 20 years in prison for each wire fraud count. Dale, Grant and Clayton, Davis and Elmore face a mandatory two year sentence for each aggravated identity theft counts. Adams and Davis also face five years in prison for each theft of government funds count. All the defendants are also subject to fines and mandatory restitution if convicted.
Wednesday, September 7, 2011
Laquanta Grant Sentenced 33 Months in Prison for Role in Tax Fraud Conspiracy
MONTGOMERY, Ala. - Laquanta Grant, a resident of Montgomery County, Ala., was sentenced to 33 months in prison for conspiring to defraud the United States and ordered to pay restitution in the amount of $2,326,738.08, the Justice Department and Internal Revenue Service (IRS) announced today.
Along with four other defendants, Grant was indicted by a Montgomery, Ala., federal grand jury on Dec. 14, 2010, on a variety of charges stemming from a large-scale tax fraud and identity theft conspiracy based in that city. According to the indictment and other court documents, the conspirators used stolen identities to file millions of dollars in false tax returns claiming fraudulent refunds over a two-year period in 2009 and 2010. During the conspiracy, Grant was responsible for funneling more than $100,000 in fraudulent refunds to her co-conspirators.
According to the indictment and other court documents, in February 2009, Grant caused another person (W.D.) to open a bank account that was used to deposit the fraudulent tax refunds. The false refunds were provided to co-conspirator Veronica Dale and others. Between March 2010 and May 2010, Grant accompanied W.D. to the bank to ensure that W.D. withdrew the fraudulent refunds from the bank account and provided the monies to Grant and her co-conspirators. Between March 2010 and July 2010, Grant received more than $100,000 in checks from Betty Washington, who was also helping move fraudulent refunds, and provided some of the money to Alchico Grant and others. Laquanta Grant retained a portion of the false refunds.
Several other members of the conspiracy have already been sentenced. Wendy Delbridge and Betty Washington, who were not indicted with the other conspirators, both pleaded guilty to charges of conspiring to defraud the United States. Delbridge was sentenced to three years probation with six months of home confinement, while Washington was sentenced to 21 months in prison. One of the individuals indicted with Laquanta Grant, Leroy Howard, pleaded guilty to conspiring to defraud the United States and was sentenced to four years of probation with six months home confinement.
Tuesday, September 6, 2011
Abbas Ghaddar Sentenced to More Than Six Years in Prison for $5.45 Million State and Federal Tax Fraud
CHICAGO—The owner of a chain of south suburban tobacco shops was sentenced to more than six years in federal prison and ordered to pay more than $5.45 million in state and federal taxes he owed over nine years during which he hid and failed to report more than $60 million in cash receipts from his stores. The defendant, Abbas Ghaddar, pleaded guilty in June to cheating the State of Illinois and the United States of tax revenue by deliberately hiding and failing to report cash receipts from his tobacco business, Tobacco House, Inc. Instead, Ghaddar used the money, in part, to fund a lavish lifestyle in Lebanon, where he spent considerable time and built a luxurious home, purchased a farm worth hundreds of thousands of dollars, and became a successful owner of a soccer club.
Ghaddar, 43, formerly of Frankfort, was sentenced to 76 months in prison yesterday by U.S. District Judge Samuel Der-Yeghiayan in Federal Court in Chicago. Ghaddar was ordered to pay restitution in the amounts of $4,828,800 to the State of Illinois and $650,452 to the United States, for a total of $5,479,252. A native of Lebanon and a naturalized U.S. citizen, Ghaddar was arrested in December 2009 in Germany and was extradited to the U.S. in May 2010 to face charges in a 13-count federal indictment. He has remained in federal custody and pleaded guilty in June 2011 to tax fraud conspiracy and mail fraud.
According to court documents, at various times between 2001 and 2009, Ghaddar operated retail tobacco stores in Fankfort, Tinley Park, Orland Park, Glendale Heights, and Bradley, Ill., which sold cigarettes, cigars, and other tobacco products. An analysis of cash receipts and expenditures showed that the stores generated more than $102 million in gross revenues, at least $60 million of which were cash receipts. However, Ghaddar deposited less than one percent of those cash receipts into his corporate bank accounts and declared little, if any, of those cash receipts on his corporate tax returns. As part of his tax fraud scheme, Ghaddar filed false federal income tax returns for calendar years 2003, 2004, and 2005; failed to file federal income tax returns for calendar years 2006, 2007, and 2008; and filed false sales tax returns with the Illinois Department of Revenue from 2002 through 2009.
Overall, Ghaddar under-reported his corporate gross receipts by more than $74 million from January 2002 through November 2009. Ghaddar’s failure to report these revenues resulted in a tax loss of more than $4.8 million to the State of Illinois and a tax loss to the United States of $650,452, resulting in a total tax revenue loss of more than $5.45 million.
Monday, September 5, 2011
Ricky Walter Denton Sentenced to One Year and a Day in Prison for Tax Fraud
BIRMINGHAM—A federal judge today sentenced a Tuscumbia woman to one year and a day in prison for a tax fraud conspiracy she helped a prison inmate conduct, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Special Agent in Charge Reginael McDaniel.
U.S. District Judge Inge Johnson sentenced JOANN SMITH CHOAT, 55, for conspiracy to defraud the Internal Revenue Service, mail fraud, and conspiracy to commit mail fraud. Choat pleaded guilty to the charges in June. The judge ordered her to pay $148,685 in restitution to the IRS.
Choat was involved in the tax fraud scheme with RICKY WALTER DENTON, 46, of Tuscumbia. Denton pleaded guilty to the conspiracy and mail fraud charges in August.
According to court records, the couple defrauded the IRS of $148,685 through falsified income tax forms between January 2007 and May 2010. Denton obtained Social Security numbers and other identifying information of fellow inmates and used that information to create false tax forms, which he mailed to post office boxes in Tuscumbia that Choat had opened at his request, according to Denton and Choat’s plea agreements.
Choat submitted the fraudulent 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 court records.
Sunday, September 4, 2011
Hussein Ali Mehdi Sentenced to 51 Months’ Incarceration for $840,000 Investment Scheme and Tax Fraud
EUGENE, OR—Today, U.S. District Judge Michael R. Hogan sentenced Hussein Ali Mehdi, 48, of Eugene, Oregon, to serve 51 months in prison and ordered him to pay more than $840,000 in restitution for his role in an investment scheme and tax fraud.
According to court documents, defendant submitted more than 192 fraudulent claims in more than 70 class-action settlements associated with various securities litigation and received more than $740,000 of fraudulent proceeds through this fraudulent investment scheme.
In the fraudulent claims, defendant falsely asserted that he and others held stock in the companies subject to the class-action settlements. To support the false claims, defendant created fraudulent brokerage account statements purported to be from various investment brokerage firms, including Charles Schwab, TD Waterhouse, and Ameritrade, that falsely represented that he and others owned shares of the securities covered by the settlements. To pull off this sophisticated scheme, defendant used several nominees, including his wife, sister, and father, at least eight different addresses in three different states, and 14 different bank accounts.
In connection with the investment fraud scheme, defendant also admitted filing a false federal income tax return on which he severely understated his income. On the false tax return, defendant claimed his taxable income was only $58,241, when, in reality, he knew it was more than $290,000.
U.S. Attorney Dwight C. Holton said, “Sophisticated fraud schemes like this hit hardworking people in their pocketbooks—forcing them to absorb the costs of phony claims. Tax fraud costs us all dearly. We take these schemes with the utmost seriousness.”
“All income, including illegally obtained income, is taxable unless specifically exempted by Congress,” said Marcus Williams, the IRS Special Agent in Charge of the Pacific Northwest.
“Hiding income from the taxman seldom works for long and when you get caught, the consequences are severe.
Saturday, September 3, 2011
Onuoha “Iggy” Nwokoro Pleads Guilty to Preparing False Income Tax Returns
WASHINGTON - Onuoha “Iggy” Nwokoro pleaded guilty in federal district court in Washington, D.C., to willfully aiding and assisting in the preparation of a false income tax return for 2004, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court documents, from 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. Nwokoro admitted to preparing at least 41 false returns, causing a tax loss of at least $532,939. According to the plea agreement, Nwokoro also admitted that his own 2004, 2005 and 2006 personal tax returns were false in that they under-reported his income by $585,537.
Friday, September 2, 2011
Bill Melot Sentenced to Five Years in Prison for Tax Fraud, Fraudulently Collecting Farm Subsidies
WASHINGTON - Bill Melot, a Hobbs, N.M., farmer, was sentenced to five years in prison yesterday to be followed by three years of supervised release for tax evasion, program fraud and other crimes, the Justice Department, Internal Revenue Service (IRS) and U.S. Department of Agriculture’s (USDA) Office of Inspector General announced today.
Melot was previously convicted of tax evasion, failure to file tax returns, making false statements to the USDA, and impeding the IRS following a four-day jury trial in Albuquerque, N.M. According to the indictment and evidence presented at trial and at sentencing, Melot owes the IRS more than $25 million in federal taxes and more than $7 million in taxes to the state of Texas. Melot has not filed a personal income tax return since 1986. In addition, Melot has improperly collected more than $225,000 in federal farm subsidies from USDA by furnishing false information to the agency. Specifically, Melot provided the USDA with a false Social Security number (SSN) and fictitious employer identification number (EIN) to collect federal farm aid.
According to the indictment and evidence presented at trial, Melot took numerous steps to conceal his ownership of 250 acres in Lea County, N.M., including notarizing forged deeds and titling the property in the name of nominees. The evidence also showed that Melot used false SSNs and fictitious EINs to hide his assets from the IRS. Additionally, Melot maintained a bank account with Nordfinanz Zurich, a Swiss financial institution, which he set up in Nassau, Bahamas, in 1992. Melot failed to report the Swiss bank account to the U.S. Treasury Department as required by law.
Melot was also ordered to pay $18,493,099 in restitution to the IRS and $226,526 in restitution to the USDA.
Thursday, September 1, 2011
Anthony Chaudhuri and Margaret Chaudhuri Indicted for Conspiracy to Defraud The United States and Failure to Account for and Pay Over Employment Taxes
WASHINGTON - Anthony Chaudhuri and Margaret Chaudhuri, of Naples, Fla. were indicted by a federal grand jury on Aug. 8, 2011, in Detroit, with one count of conspiracy to defraud the United States, 11 counts of failure to account for and pay over employment taxes and one count of corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws, the Justice Department and the Internal Revenue Service (IRS) announced today. The Chaudhuris appeared in U.S. District Court today for arraignment.
The indictment alleges that Anthony and Margaret Chaudhuri owned and operated a hospital inventory control software company under the name Ariel Computing and various other nominee names, including ADI. Ariel Computing was operated from various addresses in Ann Arbor, Mich. The indictment alleges that between 1996 and 2008 the Chaudhuris withheld approximately $888,353.23 in employment taxes from Ariel Computing employees, but failed to pay over to the IRS approximately $600,984.11 of these withheld taxes. Instead, the Chaudhuris used these monies on business expenses, employee salaries and personal expenses.
The indictment further alleges that between 2004 and 2007, Anthony Chaudhuri earned approximately $985,857.39 in income from Ariel Computing, yet failed to file any U.S. Individual Income Tax Return Form 1040 for the tax years 2004 through 2008, or pay any federal income tax due and owing in those years. Additionally, the indictment alleges that between 2005 and 2007, the Chaudhuris generated more than $2 million in income in the name of ADI, but failed to file any income tax return reporting that income. Instead, in an effort to obstruct and impede the due administration of the Internal Revenue laws, the Chaudhuris committed a number of corrupt endeavors, including making false statements to the IRS misrepresenting their income and the source of their income, using nominee bank accounts, issuing false and fraudulent Forms W-2 to Ariel Computing employees and failing to file individual tax returns.
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 Chaudhuris face a maximum of five years in prison and a $250,000 fine for the conspiracy charge and for each of the failure to account for and pay over employment tax charges and a maximum of three years in prison and a $250,000 fine for the corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws charge.
