Loretta Fergerson and her sister Tracey Fergerson Were Sent to Prison for Their Roles in Stolen Identity Refund Fraud

Source-  http://www.justice.gov/tax/2012/txdv12631.htm 

WASHINGTON – Loretta Fergerson and her sister, Tracey Fergerson, both of Montgomery, Ala., were each sentenced to 115 months prison for their involvement in a conspiracy to file claims for false income tax refunds using stolen identities, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Judge Mark Fuller ordered the Fergerson sisters to pay $504,305 in restitution to the IRS.

According to court documents, Loretta Fergerson owned and operated a tax return preparation business called Fast Tax Cash in Montgomery. From 2005 through 2008, Loretta and Tracey Fergerson filed tax returns using stolen identities in order to claim fraudulent tax refunds. Additionally, Loretta Fergerson and her employees filed tax returns for Fast Tax Cash customers that contained false information in order to obtain higher refunds for customers. Loretta Fergerson also created false driver’s licenses and false Social Security cards to be placed in customer files for returns that were prepared using stolen identities.

Court records established that Tracey Fergerson participated in the scheme by gathering stolen personal information and also by cashing refund checks for tax returns that were filed using the stolen personal information. Tracey Fergerson also recruited customers for Fast Tax Cash and coached them to provide false information in order to fraudulently increase their tax refund amounts. She further admitted that she improperly obtained personal information, including names and social security numbers, and used that personal information to have false tax returns prepared at Fast Tax Cash.

“The stolen identity refund fraud crimes committed by these defendants are an affront to honest, hard-working taxpayers,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “The lengthy prison sentences handed down recently by this court, in this and other cases, show the high price that will be paid by identity thieves.”

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Danita C. Doleman Pleads Guilty to Filing a False Tax Return

Source-  http://www.fbi.gov/washingtondc/press-releases/2012/head-of-non-profit-youth-organization-pleads-guilty-to-filing-a-false-tax-return 

WASHINGTON—Danita C. Doleman, 46, the president of a non-profit organization, pled guilty today to a charge of filing a false tax return stemming from her participation in a scheme involving former District of Columbia Council member Harry L. Thomas, Jr.

The guilty plea was announced by U.S. Attorney Ronald C. Machen, Jr.; James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office; and Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).

Doleman, of Washington, D.C., pled guilty in the U.S. District Court for the District of Columbia to a criminal information. The tax charge carries a maximum penalty of three years in prison, as well as a possible fine and an order to make restitution. No sentencing date was set. Under federal sentencing guidelines, the parties have agreed that the applicable range would be a maximum of six months of incarceration and a fine of up to $5,000. As part of the plea agreement, Doleman agreed to cooperate in any criminal investigation or prosecution.

According to a statement of offense signed by Doleman as well as the government, Doleman was the president of Youth Technology Institute (Youth Tech), one of the non-profits used by Thomas in a scheme in which he used more than $350,000 in taxpayers’ money for his own personal benefit. Among other things, she and Youth Tech helped channel more than $100,000 in taxpayers’ money to Thomas and a political organization to pay for an inaugural ball.

Thomas, who earlier pled guilty to theft and tax charges, was sentenced May 3, 2012 to 38 months in prison. As part of his plea agreement, he resigned from office in January 2012 and agreed to make restitution. Two others, leaders of another non-profit, have pled guilty in the case.

“Today’s guilty plea is one more step in our efforts to hold accountable those who collaborated with Harry Thomas, Jr. to divert tax dollars to his own pockets and his pet projects,” said U.S. Attorney Machen. “Danita Doleman was the head of a non-profit that helped Harry Thomas, Jr. funnel more than $100,000 that was intended for children towards paying expenses for an adult social event. I greatly appreciate the outstanding efforts of the agents and prosecutors who continue to work so hard on this matter.”

“Ms. Doleman knowingly participated in this public corruption scheme by allowing the misuse of taxpayer money for personal benefit,” said Assistant Director in Charge McJunkin. “Her guilty plea today demonstrates that those who commit corruption, as well as those who allow it, will be held accountable for their actions.”

“IRS-Criminal Investigation is working vigorously to stop the misuse and abuse of non-profits in promoting or concealing federal crimes,” said IRS Special Agent in Charge Hylton. “The message is clear that those who engage in this type of activity will face stiff criminal penalties.”

According to the statement of offense, Doleman helped Thomas and a political organization use D.C. tax money to recoup their expenses for the 51st State Inaugural Ball, an event at the John A. Wilson Building that took place on January 20, 2009. When Thomas announced plans for the event in December 2008, he stated that he would seek private donations to cover the difference between the event’s cost and admission revenues. Doleman and Youth Tech had no role in planning the event, and she was not even aware that it was taking place.

After the event, Thomas and the political organization had insufficient funds to cover the costs, and he turned to Doleman. Thomas told Doleman that Youth Tech had an opportunity to obtain a grant through a non-profit public-private partnership that provided resources and developed programs to benefit children and youth in the District of Columbia. Thomas said that Youth Tech would get the money, according to the statement of offense, and could keep a portion of it, but that Youth Tech would pass along most of the grant to the political organization.

On or about February 4, 2009, a staff member under Thomas’s supervision submitted false paperwork to the public-private partnership seeking a $110,000 grant to fund a youth-centered inaugural event associated with Youth Tech. In fact, the money was to pay the debts from the 51st State Inaugural Ball. Doleman also signed a grant agreement even though she knew that Youth Tech had played no role in the inaugural event and that it already had occurred.

The public-private partnership issued a $110,000 check to Youth Tech on February 5, 2009. At Thomas’s direction, Doleman wired $104,500 of the grant funds to the political organization. She spent the remaining $5,550 on matters not related to the inaugural ball.

In addition, the statement of offense details Doleman’s involvement with Thomas regarding a sports camp conducted by Youth Tech for District of Columbia youth in the summer of 2009.

Youth Tech submitted a budget request form to the public-private partnership. The form showed a total budget of $39,086, including $13,000 designated for Doleman as salary.

After the program was complete, Doleman sought an additional $5,000 in salary, and she contacted Thomas’ office for help in securing more money from the public-private partnership. On August 8, 2009, at the direction of Thomas and the staff member under his supervision, the public-private partnership issued a $10,000 check to Youth Tech. Doleman then wrote a $5,000 check to an organization controlled by Thomas—as he directed—and she kept the remaining $5,000 as personal income.

The tax charge involves returns filed by Doleman for calendar 2009. Doleman failed to disclose $20,000 in personal income from Youth Tech that year.

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Local Restaurant Chain Owners Charged with Cheating the IRS of Millions of Dollars

Source-  http://www.fbi.gov/philadelphia/press-releases/2012/local-restaurant-chain-owners-charged-with-cheating-the-irs-of-millions-of-dollars 

PHILADELPHIA—Robert Mattei, Leo McGlynn, Brian Welsh, Joseph Donnelly, and Elena Ruiz—the owners and managers of the Nifty Fifty’s restaurant chain—were charged today by information in a tax evasion conspiracy that cheated the Internal Revenue Service by failing to properly account for more than $15 million in gross receipts. The case was announced by United States Attorney Zane David Memeger, IRS Acting Special Agent in Charge Akeia Connor with the Criminal Investigation Division, and FBI Special Agent in Charge George C. Venizelos. The defendants—Mattei, 73, of Del Ray Beach, Florida; McGlynn, 52, of Swarthmore, Pennsylvania; Welsh, 48, of Springfield, Pennsylvania; Donnelly, 49, of Springfield, Pennsylvania; and Ruiz, 46, of Drexel Hill, Pennsylvania—are charged with conspiracy to commit tax evasion and tax evasion for allegedly constructing a long-running scheme to avoid paying millions of dollars in personal and employment taxes as related to their restaurant chain. The information alleges that the defendants not only evaded paying the taxes they owed, but that they filed income tax returns claiming they were due refunds based on the erroneous reporting of their incomes. Mattei, McGlynn, Donnelly, and Welsh are also charged with bank fraud; and McGlynn and Donnelly are also charged with aggravated structuring of financial transactions.

According to the information, the defendants have evaded paying taxes since the restaurant was established in 1986 by, among other things, paying employees a portion of their wages with unreported cash in order to evade payroll taxes; paying suppliers with unreported cash; and having false tax returns prepared that under-reported income and falsely inflated expenses and deductions. Just between the years 2006 and 2010, it is alleged the defendants deliberately failed to properly account for $15.6 million in gross receipts, thereby evading $2.2 million in federal employment and personal taxes.

“Owning your own business is part of the American dream. But with that dream comes responsibilities, including paying your fair share of federal taxes,” said Memeger. “It is alleged that these defendants conspired to disregard their responsibilities, to the tune of over $15 million, so they could enrich themselves at the expense of all the hardworking Americans who follow the rules and pay their taxes.”

It is further alleged that in the course of their conspiracy, defendants Mattei, McGlynn, Donnelly, and Welsh committed bank fraud by submitting to the bank bogus income tax returns in order to secure several business loans; and that defendants McGlynn and Donnelly structured numerous cash deposits of undeclared income into a bank account in an effort to avoid federal reporting requirements.

“The charges announced today are the result of a lengthy and complex financial investigation involving Nifty Fifty’s restaurants,” said Acting Special Agent in Charge of IRS-Criminal Investigation Akeia Conner. “These charges summarize a scheme in which millions of dollars in income were skimmed from a successful business in order to evade paying taxes on the income. IRS-Criminal Investigation is committed to investigating these types of tax fraud schemes in order to build faith in our nation’s tax system and to ensure that everyone is paying their fair share. It is important to remember that tax evasion is not a victimless crime and the honest taxpayers suffer when others cheat the government.”

If convicted, Mattei and Welsh face a maximum sentence of 40 years of imprisonment, five years of supervised release, a fine of up to $1.5 million, full restitution to the IRS, and a $300 special assessment. If convicted, McGlynn and Donnelly face a maximum sentence of 50 years of imprisonment, five years of supervised release, a fine of up to $2 million, full restitution to the IRS, and a $400 special assessment. If convicted, Ruiz faces a maximum sentence of 10 years of imprisonment, three years of supervised release, a fine of up to $500,000, full restitution to the IRS, and a $200 special assessment.

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Roberto Olivares Charged In Scheme To Defraud Taxpayers Of Their Full IRS Refunds

Source- http://www.justice.gov/usao/cae/news/docs/2012/05-10-12OlivaresIndictment.html

FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced that Roberto Olivares, 34, and Rojelio Martin, 30, both of Tulare, have been arraigned and pleaded not guilty to charges brought by a federal grand jury. On April 19, 2012, Olivares and Martin were charged with 79 counts of wire fraud resulting from their scheme to defraud clients of tax refunds.

According to the indictment, from January to May 2008, Olivares and Martin defrauded clients of Olivares’s businesses: Success Auto Insurance and Success Income Tax Services. Olivares and Martin prepared tax returns for their clients that showed a lower tax refund then they were entitled to receive. The defendants gave the incorrect return to the client, but filed the correct return that gave the taxpayers a higher refund amount. The defendants then took the difference between what was shown to their clients and the actual refunds amounts and used it for their personal benefit.

Olivares was arrested Tuesday, May 8, 2012, and was arraigned the same day. He is being held in custody pending the posting of a $20,000 cash and property bond. Martin was arraigned today and was temporarily detained by United States Magistrate Judge Dennis L. Beck pending a detention hearing on Wednesday, May 16, 2012 at 1:30 p.m.

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Thomas K. Frye and Kathy M. Frye Plead Guilty to Tax Fraud Conspiracy

Source-  http://www.justice.gov/tax/2012/txdv12625.htm 

WASHINGTON – Thomas K. Frye and Kathy M. Frye, husband and wife, and residents of Andalusia, Ala., pleaded guilty to conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to court documents, 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 taxes. When the IRS attempted to collect back taxes owed by the Fryes, Thomas Frye submitted false financial instruments to the IRS in purported payment of his and his wife’s tax liability. In one such instrument, Mr. Frye represented to the IRS that the false instrument had a value of $100 billion. Court records also established that, as part of the conspiracy, the Fryes filed false federal income tax returns for the years 2000 through 2007 that substantially understated their incomes.

Sentencing has not yet been scheduled. The Fryes face a potential maximum of five years in prison, three years of supervised release, an order of restitution and a maximum fine of $250,000, or twice the loss caused by the offense.

Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division thanked the Special Agents of IRS - Criminal Investigation who investigated the case, Tax Division Trial Attorneys Charles M. Edgar, Jr. and Michael C. Boteler, who are prosecuting the case, and United States Attorney George L. Beck, Jr. and his entire office for their assistance with the prosecution.

Kathe Rascher Charged With Million Dollar Fraud And Tax Evasion

Source- http://www.justice.gov/usao/cae/news/docs/2012/05-10-12RascherIndictment.html

SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that on Wednesday a federal grand jury in Sacramento returned an indictment against Kathe Rascher, 53, of Citrus Heights, charging her with 12 counts of mail fraud and five counts of tax evasion. Rascher was arrested today. She is scheduled for arraignment today before U. S. Magistrate Judge Kendall J. Newman at 2:00 p.m.

According to the indictment, Rascher, a bookkeeper for River Valley Insurance Associates Inc., defrauded her employer of more than $1.7 million and evaded paying income taxes owed to the Internal Revenue Service for the tax years 2004 – 2008.

The indictment alleges that Rascher wrote checks to herself and her family members from the River Valley bank account. In order to make it look like the checks were issued for legitimate expenses, she changed the name of the payees on the unauthorized checks in the accounting records, altered carbon copies of the checks, and created fictitious invoices. She also reviewed the monthly bank statements and cancelled checks sent to River Valley and deliberately removed and destroyed any returned unauthorized checks that had been issued to her and her family. The indictment also alleges that Rascher did not disclose the embezzled income obtained from River Valley on her federal tax returns for tax years 2004 and 2005 and did not file federal tax returns for tax years 2006, 2007, and 2008.

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Joseph R. Algoo Sentenced to 21 Months in Prison for Theft and Tax Fraud

Source-  http://www.fbi.gov/newark/press-releases/2012/former-dynamex-corp.-employee-sentenced-to-21-months-in-prison-for-theft-and-tax-fraud 

TRENTON—A former employee of Dynamex Corp. was sentenced today to 21 months in prison for stealing almost $175,000 while managing the company’s New Jersey operations and failing to disclose his stolen income to the IRS, U.S. Attorney Paul J. Fishman announced.

Joseph R. Algoo, 39, of Monroe Township, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with wire fraud and subscribing to false tax returns. Judge Thompson imposed the sentence today in Trenton federal court.

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

From 1999 through November 2009, Algoo worked as the branch manager for Dynamex’s New Jersey operations, including its offices in North Bergen, Secaucus, and South Brunswick. He processed and submitted delivery orders for independent drivers who made deliveries for Dynamex, which is based in Dallas and was a provider of same-day and overnight delivery services.

Algoo admitted he accessed Dynamex’s internal computer systems and made changes to delivery orders, causing Dynamex to pay the independent drivers more than Dynamex should have. Algoo then obtained a portion of the improper payments and made significant cash deposits into his personal bank accounts. He obtained $174,285 in improper payments from Dynamex in 2007 and 2008.

Algoo also admitted that he signed false personal federal income tax returns in 2007 and 2008, when he did not disclose to the IRS the $174,285 in improper payments that he received from Dynamex in those years. Algoo’s intentional failure to disclose this income to the IRS resulted in a tax loss to the United States of approximately $51,487.

In addition to the prison term, Judge Thompson sentenced Algoo to three years’ supervised release and ordered him to pay $174,285 in restitution to Dynamex and to cooperate with the IRS in repaying more than $100,000 he owes the United States.

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Jobson Cenor Arrested in Identity Theft Tax Fraud Scheme Targeting U.S. Marines

Source-  http://www.fbi.gov/miami/press-releases/2012/u.s.-marine-arrested-in-identity-theft-tax-fraud-scheme-targeting-u.s.-marines 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI); and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, announced that Jobson Cenor, 22, of Miami, was arrested on charges of conspiracy to commit tax refund fraud, in violation of Title 18, United States Code, Section 286. Cenor will make his initial appearance today in federal court in Wilmington, North Carolina for removal to the Southern District of Florida to face the charges.

U.S. Attorney Wifredo A. Ferrer stated, “According to the criminal complaint, defendant Cenor, a U.S. Marine stationed in Afghanistan, sold the names, dates of birth, and Social Security numbers of fellow Marines serving our country in Afghanistan to a co-conspirator, who used the stolen identities to file tax returns seeking fraudulent refunds. Identity theft is a crime that victimizes millions of Americans every day. Tax refund scams are the latest crime du jour resulting from identity theft. Still, when identity theft tax refund scams pits one Marine against another, it brings home the point that these refunds scams have become a national epidemic that must be eradicated. For this reason, the investigation and prosecution of identity theft has become one of my top priorities.”

“The charges against Jobson Cenor show our resolve to proactively fight identity theft and tax fraud,” said Dena Choucair, Acting Special Agent in Charge of the FBI’s Miami Division.

IRS Special Agent in Charge José A. Gonzalez stated, “The harm done by this defendant goes far beyond the identities stolen to commit tax-related identity theft crimes. The devastating impact that his actions have on the honest men and women serving our country may never be fully measured. Together with our law enforcement partners, we will continue to aggressively pursue and investigate those who commit tax-related identity theft crimes.”

The affidavit filed in support of the criminal complaint alleges that alleges that on January 17 and January 19, 2012, Cenor’s co-conspirator submitted 14 fraudulent tax returns seeking refunds to an online tax preparation company. Several of these returns were in the name of U.S. Marines. On February 9, 2012, Cenor’s co-conspirator had lists with names, dates of birth, and Social Security numbers. Several U.S. Marines whose names and Social Security numbers appear on these lists also appeared on the tax returns submitted on January 17 and 19, 2012.

On February 9, 2012, Cenor’s co-conspirator, at the direction of the FBI, made a recorded telephone call to Cenor. During that conversation, Cenor requested the two speak in Creole. Cenor’s co-conspirator explained that he/she had started filing tax returns using the identities that Cenor had provided. Cenor’s co-conspirator explained that Cenor would get half of the tax refund money, or approximately $54,000. Cenor said his co-conspirator could hold the money until Cenor returned from Afghanistan.

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Harvey Zitron Charged with Filing False Tax Returns

Source-  http://www.fbi.gov/miami/press-releases/2012/boca-raton-resident-charged-with-filing-false-tax-returns 
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID); and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the unsealing of a two-count indictment charging defendant Harvey Zitron with filing false tax returns. Zitron had his initial appearance yesterday before U.S. Magistrate Judge Barry S. Seltzer.

More specifically, the indictment charges that Zitron filed with the IRS United States Individual Income Tax Returns, Forms 1040, for 2004 and 2005, knowing that his total income was greater than the amounts reported, in violation of Title 26 U.S.C. §7206(1).

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Leaders of Multi-million Dollar Fraud Ring That Used Stolen Information of Medicaid Recipients Each Sentenced to Over 25 Years in Prison

Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-594.html 

Veronica Dale and Alchico Grant, who jointly ran a stolen identity refund fraud ring that attempted to defraud the United States of millions of dollars over several years, were sentenced to federal prison today, the Justice Department and Internal Revenue Service (IRS) announced. Veronica Dale, of Montgomery, Ala., was sentenced to 334 months and Alchico Grant of Lowndes County, Ala., was sentenced to 310 months in prison. In addition, Dale and Grant were both ordered to pay over $2.8 million in restitution to the IRS.

In December 2010, Dale and Grant were originally indicted, along with three others, on various tax and tax-related charges including aggravated identity theft. Dale and Grant continued their tax refund fraud while on pretrial release and as a result, Grant was indicted again in April 2011, and Dale was later named in a superseding indictment in August 2011. Both were ordered detained following the second set of indictments and have remained in custody.

On Sept. 14, 2011, Grant pleaded guilty to a total of five charges from both indictments, including conspiracy, wire fraud and aggravated identity theft. On Oct. 14, 2011, Dale pleaded guilty to a total of seven charges from both indictments, including conspiracy, filing false claims, wire fraud and aggravated identity theft.

According to the first indictment, the plea agreements and other court documents, beginning in 2009 and continuing through 2010, the defendants were part of a scheme that involved fraudulently obtaining tax refunds by filing false tax returns using stolen identities. Dale admitted that she filed over 500 fraudulent returns that sought at least $3,741,908 in tax refunds. These returns were filed using the names of Medicaid beneficiaries, whose personal information Dale obtained while earlier employed by a company that serviced Medicaid programs. Dale directed the refunds to different bank accounts that she and other co-conspirators controlled.

Also according to the first indictment, plea agreements and other court documents, Grant admitted that he opened bank accounts to receive some of the refunds and recruited others to do the same. One such recruit opened a bank account in the name of a business into which more than $1.3 million in fraudulently obtained tax refunds were deposited. Thereafter, Grant directed distribution of the proceeds which included having third parties cash checks drawn on the various accounts and remit the funds to him. Grant also instructed individuals to lie to law enforcement authorities when questioned about the checking account activities. Dale and Grant’s co-defendants – Laquanta Grant, Leroy Howard, and Isaac Dailey – have all pleaded guilty, as have two other co-conspirators, Wendy Delbridge and Betty Washington, who pleaded guilty to criminal informations.

The second indictment charged a conspiracy that involved Dale, Grant, Melinda Clayton, and Stephanie Adams. As court documents show, this conspiracy extended from January 2011 to April 2011, when federal agents executed a search warrant at Clayton’s house and arrested her. In her plea agreement, Dale admitted that this scheme involved a fraud loss of between $400,000 and $1 million. Dale admitted to providing Clayton with stolen identities in furtherance of the new scheme. Clayton stored these and other lists of stolen identities at her home. The tax refunds were directed to bank accounts and prepaid debit cards purchased by Dale and Grant. Dale, Grant, Clayton and Adams all pleaded guilty to their roles in the second scheme, as did Valerie Byrd, who pleaded guilty to a criminal information.

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Margaret Kirksey Sentenced to Federal Prison for Tax Conspiracy Involving Stolen Identity Refund Fraud

Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-592.html

Margaret Kirksey, a resident of Montgomery, Ala., was sentenced today in the Middle District of Alabama to 81 months in federal prison for filing false tax returns using stolen identities, the Justice Department and Internal Revenue Service (IRS) announced.

On Jan. 24, 2012, Kirksey pleaded guilty to charges of conspiracy to defraud the government and aggravated identity theft. She was indicted by a federal grand jury on July 27, 2011, on charges of conspiracy, aggravated identity theft, wire fraud, false claims and lying to federal agents.

According to court documents, Kirksey and her co-conspirator, Yumeitrius Manuel, each owned and operated a tax preparation business in Montgomery, located in the same physical place. The two fraudulently inflated tax refunds by placing false information on their clients’ tax returns. They also filed tax returns in the names and Social Security numbers of individuals who did not know about, and did not authorize, the filing of tax returns on their behalf. Both Manuel and Kirksey admitted that their respective crimes involved over $1 million in tax loss and more than 50 victims of identity theft. Manuel has also pleaded guilty to a tax conspiracy and is scheduled to be sentenced on Aug. 8, 2012.

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Former District of Columbia Council Member Harry Thomas, Jr. Sentenced to 38 Months in Prison for Theft, Tax Charges in Scheme Involving Government Funds

Source-  http://www.fbi.gov/washingtondc/press-releases/2012/former-district-of-columbia-council-member-harry-thomas-jr.-sentenced-to-38-months-in-prison-for-theft-tax-charges-in-scheme-involving-government-funds 

WASHINGTON—Harry L. Thomas, Jr., a former member of the Council of the District of Columbia, was sentenced today to 38 months in prison on federal theft and tax charges stemming from a scheme in which he used more than $350,000 in taxpayers’ money that was earmarked for the arts, youth recreation, and summer programs for his own personal benefit, including to pay for vehicles, clothing, and trips.

The sentence was announced by U.S. Attorney Ronald C. Machen, Jr.; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Ronald T. Hosko, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division; and Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).

Thomas, 51, pled guilty on January 6, 2012 in the U.S. District Court for the District of Columbia to a criminal information charging him with one count of theft concerning programs receiving federal funds and one count of filing a false tax return. As part of the plea agreement, he agreed to submit his resignation from the District of Columbia Council. Thomas is the first sitting member of the D.C. Council to be charged with and convicted of a felony.

At sentencing, the Honorable John D. Bates said that Thomas’s crimes were a “betrayal of the public trust” and directly affected programs meant to help needy, underprivileged youths.

Thomas will be required to make restitution in an amount to be set later by Judge Bates. In addition, he must forfeit a 2008 Victory motorcycle and 2008 Chevrolet Tahoe truck, both of which are traceable to proceeds of his crimes. Thomas also must pay all outstanding taxes, interest, and penalties. Finally, upon completion of his prison term, Thomas will be placed on three years of supervised release.

According to a statement of offense signed by the government as well as the defendant, Thomas arranged to steer a total $353,500 from a non-profit public-private partnership that received funding from the District government. Thomas directed the money to two entities that he controlled, and he then used it for his own purposes.

Among other things, money that was meant to benefit the District’s residents was spent by Thomas to purchase a $69,149 Audi luxury sport utility vehicle, the $23,245 Victory motorcycle, expensive clothing, restaurant meals, and luxury vacations. Thomas also used the money to cover his expenses in helping to arrange entertainment for a 2009 inaugural ball.

The case remains under investigation. Two others also pled guilty to charges in January 2012 and are awaiting sentencing.

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Stacy L. Attisano Charged with Embezzling from Credit Union and Tax Evasion

Source-  http://www.fbi.gov/pittsburgh/press-releases/2012/butler-county-woman-charged-with-embezzling-from-credit-union-and-tax-evasion 

PITTSBURGH, PA—A resident of Butler County, Pennsylvania has been indicted by a federal grand jury in Pittsburgh on charges of embezzlement from an institution insured by the NCUA and income tax evasion, United States Attorney David J. Hickton announced today.

The five-count indictment named Stacy L. Attisano, 43, of Portersville, Pennsylvania, as the sole defendant.

According to the indictment, between 2004 and 2010, Attisano embezzled in excess of $1,000 from the Lawrence County School Employee Federal Credit Union, where she was employed as the assistant manager. Attisano was also charged with tax evasion for the years 2006 through 2009.

The law provides for a maximum total sentence of 50 years in prison, a fine of $2,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Shaun E. Sweeney is prosecuting this case on behalf of the government.

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Nine Alabama Family Members Indicted in Conspiracy to Obtain Tax Refunds Using Stolen Identities

Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-580.html 

Barbara Murry, Douglas Murry, Douglas Murry III, Yolanda Moses, Lee Moses, Veronica Temple, Jeffrey Temple, Almetta Johnson and Courtney Johnson were charged in an indictment by a federal grand jury in the Middle District of Alabama on a variety of counts stemming from an identity theft and tax fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today. The 33-count indictment charges all nine with conspiring to defraud the United States and to commit theft of public funds and with theft of public funds. Barbara Murry, Yolanda Moses and Veronica Temple are also charged with aggravated identity theft. The indictment was unsealed today.

According to the indictment, all of the defendants are related to each other. Barbara Murry owned and operated B & B Weaving Shop, located in Montgomery, Ala. B& B Weaving Shop was located in the same building as B & B Tax Service. Barbara Murry’s daughter, Yolanda Moses, owned and operated B & B Tax Service. Between 2006 and 2012, Barbara Murry, Yolanda Moses and Veronica Temple allegedly filed false federal income tax returns with stolen identities and had refunds directly deposited into the bank accounts of the defendants and others. The bank accounts received at least $1.3 million in false tax refunds.

An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, all the defendants face terms of five years in prison for the conspiracy charge and 10 years for each theft of government funds count. Barbara Murry, Veronica Temple and Yolanda Moses face mandatory 2-year sentences for the aggravated identity theft counts. All the defendants are also subject to fines and mandatory restitution if convicted.

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Cincinnati Attorney Suzanne Land, Pleads Guilty to Obstructing IRS

Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-570.html 

Suzanne Land, a Cincinnati attorney, pleaded guilty today to obstructing and impeding the Internal Revenue Service (IRS) while representing the estates of two deceased clients, the Justice Department and IRS announced. District Court Judge Herman J. Weber presided over the guilty plea hearing.

Land, who until recently was a partner at a Cincinnati law firm, admitted in court documents that from January 2010 through July 2010 she actively obstructed and impeded the IRS during two separate civil audits her clients’ estate tax returns.

According to the plea agreement and statements made in court, to conceal from the IRS the deficiencies in the documents that she drafted for her wealthy clients, Land forged the posthumous signatures of both her deceased clients and their living children on amendments to the documents. Land also misled an appraiser as to the value of the estates, created fake legal invoices that reflected work she never performed, and lied to the IRS about the circumstances surrounding the creation of the amendments. According to the terms of the plea agreement, Land admitted that the “relevant and foreseeable” tax loss that could have resulted from her obstruction was approximately $1,140,636.

Judge Weber set sentencing for Aug. 7, 2012 in Cincinnati. The maximum potential sentence for obstructing and impeding the IRS is up to three years in prison.

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David Marrero Indicted in Alabama for Filing False Tax Returns

Source-  http://www.justice.gov/opa/pr/2012/May/12-tax-567.html 

A federal grand jury sitting in Montgomery, Ala., has returned an indictment charging David Marrero, formerly a resident of Florida, with corruptly endeavoring to obstruct the Internal Revenue Service (IRS) and filing false claims, the Justice Department and IRS announced today.

According to the indictment, while Marrero was serving a federal sentence in the custody of the Federal Bureau of Prisons in Montgomery County, Ala., he began sending various false documents to the IRS and to the federal judge who had presided over his case. Among the documents he is alleged to have sent were false money orders and false tax returns making claims for refunds, which were based upon false IRS Forms 1099-OID that Marrero had prepared. Marrero also allegedly used financial documents he had obtained from other people, without their knowledge or consent, as supporting documentation for his fraudulent claims.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Marrero faces a potential maximum of three years in prison on the obstruction count and five years in prison on each false claims count, well as up to $1 million in fines.

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Curtis Morris and Richard Kellogg Armstrong Were Found Guilty for Scheme to File Approximately $22 Million in False Claims with the Irs

Source-  http://www.justice.gov/opa/pr/2012/May/12-crt-564.html 

Curtis Morris, 43, of Elizabeth, Colo., and Richard Kellogg Armstrong, 77, of Prescott, Ariz., were found guilty on April 30, 2012, by a jury for mail fraud, filing false claims against the United States and conspiracy to file false claims against the United States, announced the Justice Department’s Tax Division, the U.S. Attorney’s Office for the District of Colorado and IRS-Criminal Investigation. In addition to these counts, Armstrong was also found guilty of engaging in monetary transactions in property derived from the mail fraud. The guilty verdicts were the result of a three week trial before U.S. District Court Judge Robert E. Blackburn. Morris and Armstrong are scheduled to be sentenced on Aug. 10, 2012.

Morris and Armstrong were indicted by a federal grand jury in Denver on June 8, 2010 and were subsequently charged in a superseding indictment on Feb. 15, 2011. The superseding indictment charged a total of twenty-eight counts as well as forfeiture allegations and included, as a defendant, the late Larry Hall. The jury returned guilty verdicts against Morris and Armstrong on all counts with which they were respectively charged. Morris was found guilty of three counts of mail fraud, seventeen counts of filing false claims against the United States and one count of conspiracy to defraud the United States. Armstrong was found guilty of one count of mail fraud, eight counts of filing false claims against the United States, three counts of engaging in monetary transactions in property derived from mail fraud and one count for conspiracy to defraud the United States.

According to the testimony at trial, the scheme involved Hall and Morris working with others to solicit individuals to file tax returns claiming large tax refunds based upon fictitious federal income tax withholdings taken from bogus Forms 1099-OID. Morris was the scheme tax preparer. He prepared over fifty fraudulent tax returns for at least twenty clients claiming illegal refunds of approximately $22 million. Original issue discount (OID) income is a form of interest income typically realized on debt instruments issued at a discount to, or purchased at less than, the ultimate redemption value of the debt instrument. This type of income is reported to the IRS on a Form 1099-OID and can be subject to federal income tax withholding in certain exceptional circumstances that didn’t apply in this case. As part of this scheme, Morris and others fabricated IRS Forms 1099-OID claiming large amounts of bogus federal income tax withholding to make it appear that these forms had been issued by legitimate financial institutions. Morris then used these bogus forms to prepare false tax returns for clients such as Armstrong. He used the federal income tax withholding amounts reported on the bogus Forms 1099-OID to offset and exceed his clients’ calculated income tax liabilities often resulting in hundreds of thousands of dollars in claimed refunds per client per year.

Armstrong was one of the clients who successfully secured a refund through the filing of tax returns prepared by Morris and subsequently served as a promoter and recruiter for the scheme. Armstrong received over $1.6 million and, according to the testimony at trial, quickly moved most of this money into accounts in the names of shell entities and offshore bank accounts. The government seized and is seeking forfeiture of Armstrong’s private plane and two pieces of real property purchased with the fraud proceeds, one of which is a house in Brighton purchased through Larry Hall by a nominee land trust.

“Those who defy the tax laws by preparing or filing false and frivolous tax returns risk criminal prosecution resulting in conviction, substantial penalties and time in prison, as well as being required to pay their taxes, interest and penalties,” said Assistant Attorney General for the Tax Division Kathryn Keneally. “The Tax Division remains committed to prosecuting tax defier conduct.”

“The guilty verdicts are a tribute to the hard work of the trial team,” said U.S. Attorney for the District of Colorado John Walsh. “The defendants have been held accountable for their fraudulent scheme thanks to the prosecutors and IRS-Criminal Investigation. Tax preparers should take note that if they attempt to defraud the IRS they will be caught and held accountable.”

“This verdict should send a clear message that promoting or participating in a fraudulent tax scheme will not be tolerated; rest assured those who do will be brought to justice,” said Sean Sowards, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.

Mail fraud carries a penalty of not more than 20 years in prison and up to a $250,000 fine, per count. Filing false claims against the United States carries a penalty of not more than 5 years imprisonment and a fine of up to $250,000 per count. Engaging in monetary transactions in property derived from mail fraud carries a penalty of not more than 10 years imprisonment and a fine of up to $250,000 per count. Conspiracy to defraud the United States carries a penalty of not more than 10 years imprisonment and a fine of up to $250,000 per count.

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Eight Defendants Charged as Part of an Identity Theft Tax Refund Undercover Operation

Source-  http://www.fbi.gov/miami/press-releases/2012/eight-defendants-charged-as-part-of-an-identity-theft-tax-refund-undercover-operation 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announced the filing of charges against seven defendants arrested in connection with an FBI-led undercover operation targeting identity theft tax refund fraud. Charged in the complaint are Regina Carroll, 37, of Miami; Lanny Fried, 34, of Miami Lakes; former NFL player Louis Gachelin, 31, of Miramar; former NFL player William Joseph, 32, of Miramar; Guy Maxineau, 35, of Miami; Castra Pierre-Louis, 34, of Miami; and Gunie Similien, 32, of Miami. Each defendant allegedly negotiated between 11 and 35 fraudulently obtained tax refund checks, ranging in total value from $70,000 to $120,000. The defendants are expected to make their initial appearances in court before U.S. Magistrate Judge Robert L. Dube at 1:30 p.m. today.

More specifically, the defendants are charged with forgery of U.S. Treasury checks, in violation of Title 18, United States Code, Section 510, theft of government money, in violation of Title 18, United States Code, Section 641, and use of five or more identification documents with unlawful intent, in violation of Title 18, Untied States Code, Section 1028(a)(3). If convicted, these charges carry a maximum statutory sentence of between five to 15 years in prison.

According to the complaint, from February 2012 to April 2012, the FBI operated a financial services store (the store) in North Miami to accept fraudulently obtained tax refund checks from individuals looking to cash those checks. Undercover FBI agents worked at the store and charged large fees, ranging from 35 percent to 45 percent of the face value of the checks, for their check cashing services. According to the complaint, individuals would come to the store to cash the fraudulently obtained tax refund checks using false identification documents in the name of taxpayer victim whose refund had been stolen. Often, the defendants would forge the victim’s signature on the back of the check while inside the store. Many of the victim taxpayers whose names appear on the refund checks have already filed identity theft affidavits with the IRS.

During the three-month undercover operation, the defendants negotiated with undercover agents at the store to cash approximately $500,000 in fraudulently obtained tax refund checks. The conversations and transactions between the customers and undercover agents at the store were audio and video recorded by the FBI. The FBI paid the thieves from official FBI funds and none of the tax refund checks were actually cashed.

U.S. Attorney Wifredo A. Ferrer stated, “Not only is identity theft America’s fastest-growing crime, it’s also a consumer’s worst nightmare. Most recently, identity theft has become a taxpayer’s worst nightmare also. As this three month undercover operation illustrates, identity thieves are using stolen identities to commit steal tax refunds from legitimate taxpayers. Identity theft, when combined with tax refund schemes, threatens the financial security of our citizens. It is time for tax refund scammers to realize that we will not allow them to steal others’ identities and line their pockets through fraud.”

“Organized criminals are stealing $5 billion and more by fraudulently claiming tax refunds,” said John V. Gillies, Special Agent in Charge of the FBI’s Miami Division. “Without proper safeguards, identity theft tax fraud has become a growing epidemic. The FBI is proactively going undercover to fight the fraud but unfortunately today’s arrests are just the tip of the iceberg.”

José A. Gonzalez, Special Agent in Charge of IRS-CID, added, “Tax-related identity theft crimes are corrupting our tax system with false information, to the detriment of innocent taxpayers and the United States Treasury. For this reason, IRS is committed, along with our law enforcement partners, to aggressively investigating all parties involved in these crimes, and making sure that no such crime goes undetected.”

In a separate but related case, another former NFL player, Michael Antwon Bennett, 33, was charged by complaint with wire fraud, in violation of Title 18, United States Code, Section 1343. He is expected to make his initial appearance in federal court this afternoon before U.S. Magistrate Judge Robert L. Dube at 1:30 p.m.

The complaint alleges that Bennett, a former NFL player, attempted to obtain a $200,000 loan on April 18, 2012 from the same FBI undercover store, using a bank statement falsely indicating that Bennett had $9 million in collateral for the loan. According to the complaint, on April 18, 2012, to obtain the loan, Bennett showed an undercover agent at the store a UBS financial statement in Bennett’s name. The bank statement purportedly showed a balance of approximately $9 million. Bennett signed a loan agreement for the loan. On April 30, 2012, Bennett picked up $150,000 in a cashier’s check from the store and was subsequently arrested. FBI agents contacted UBS, and UBS confirmed that Bennett’s account held a zero balance and that the account never had any money in it.

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