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| Highlights |
The Investigation Highlights are updated weekly.
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Former IRS Employee Pleads Guilty to Conspiracy to Defraud the IRS [1]
On November 8, 2018, in the Middle District of Florida, former Internal Revenue Service (IRS) employee Dawn Avalle pled guilty to conspiracy to defraud the United States and making and subscribing to a false tax return. Avalle was initially charged with the offenses on October 24, 2018.
According to the court documents, from about January 2011 through about July 2015, Avalle knowingly and willingly conspired with others to defraud the United States by impeding and obstructing the lawful function of the IRS with deceit and dishonest means by preparing and filing fraudulent individual income tax returns.
Avalle was an IRS revenue officer at the time of the conspiracy and also operated a family-owned tax preparation service in Bradenton, Florida. She and her coconspirators prepared and electronically filed a number of individual tax returns with fraudulently inflated deductions, such as medical and charitable contributions, which resulted in refund amounts substantially greater than their clients were entitled to receive. After the fraudulent returns were filed, the conspirators then destroyed or otherwise disposed of their work papers and other information obtained from their clients. The total loss to the IRS stemming from the conspiracy was approximately $249,000.
Additionally, under penalty of perjury, Avalle signed and filed with the IRS materially false returns, failing to report more than $165,600 in income she received from the tax preparation business over the course of five calendar years, which resulted in a tax loss of approximately $49,600 to the IRS.
Avalle could face a maximum statutory sentence of five years’ imprisonment. Sentencing has not been set for the matter.
[1] The facts in this case narrative come from the following publicly available documents: M.D. Fla. Information filed Oct. 24, 2018; M.D. Fla. Plea Agr. filed Oct. 25, 2018; M.D. Fla. Crim. Docket as of Nov. 14, 2018.
New Jersey Man Indicted for His Role in Scamming 87 Year Old Woman [1]
On October 31, 2018, in the District of Arizona, Joseph Batts was indicted for the offenses of conspiracy to commit mail fraud and wire fraud, wire fraud, and mail fraud, for his role in a fraudulent sweepstakes or lottery scheme.
According to the court documents, Batts, who was living with his sister in New Jersey, voluntarily conspired with others to execute a scheme to obtain money by means of false and fraudulent representations. The primary purpose of the scheme was to obtain money from victims through a fraudulent sweepstakes or lottery scheme. As part of the conspiracy, the coconspirators would e-mail fraudulent letters purporting to be from the Internal Revenue Service (IRS) and Publishers Clearing House®, falsely representing that the victims had won a prize and also fraudulently represented that the victims were required to make arrangements to pay taxes or other fees in order to obtain their winnings.
For example, an 87 year-old victim residing in Arizona received the fraudulent communications, which included a letter on IRS letterhead. The victim subsequently communicated with one or more of the coconspirators by phone to make arrangements to pay the fee. The victim was led to believe she had won $5 million and a brand new Lincoln MKZ automobile. The victim was instructed to deposit money into various bank accounts and also to mail and/or wire the money. The victim withdrew all of the money, approximately $72,000, from her individual retirement account (IRA) and provided it to the coconspirators. When she received a check from the coconspirators, she believed it was a portion of the prize winnings, but when the check was deposited it was deemed fraudulent and did not clear. The victim never received any legitimate money or prize winnings. As a result of the scheme, the victim lost a total of approximately $74,000.
If convicted, Batts could face a maximum sentence of 20 years’ imprisonment. A jury trial is set for December 26, 2018.
[1] The facts in this case narrative come from the following publicly available documents: D. Ariz. Crim. Compl. filed Oct. 5, 2018; D. Ariz. Indict. filed Oct. 31, 2018; D. Ariz. Crim. Docket as of Nov. 8, 2018.
Former Special Agent Sentenced for Designing a Scheme to Defraud and Obstruct the IRS [1]
On October 23, 2018, in the Eastern District of California, former Internal Revenue Service (IRS) Criminal Investigation (CI) Special Agent Alena Aleykina was sentenced for filing false tax returns, theft of Government funds, and obstruction of justice. A jury previously found Aleykina guilty of the offenses.
According to the court documents, Aleykina, a resident of Sacramento, California, was employed as an IRS-CI special agent from approximately 2006 to 2014. Aleykina was also a certified public accountant.
Between 2010 and 2012, Aleykina prepared six false tax returns. Three of the returns were Aleykina’s own individual income tax returns, and three were tax returns for trusts that she established. Each was signed under penalty of perjury and contained false statements.
On Aleykina’s individual tax returns, she falsely claimed head-of-household filing status. She claimed three dependents, tuition and fees deductions, and losses of up to $25,000 for trusts that she had established. She had knowledge that all of these claims were false and was aware that she was not entitled to make these claims. Aleykina also stole public money and converted it to her own use, despite knowing that she was not eligible for such money, by causing the IRS to issue IRS Tuition Assistance Reimbursement payments to her. In addition, the three trust tax returns prepared by Aleykina contained false statements, including but not limited to the amounts of rents received, deductions for negative income distributions, and claims of negative net income, all of which were declared as losses on two of her corresponding individual tax returns. The total loss to the Government was more than $60,000.
Additionally, Aleykina, knowingly and with the intent to obstruct the investigation, destroyed, altered, concealed, or falsified at least one record that was stored on a Government-issued computer and Government servers. Specifically, when special agents approached Aleykina to retrieve her Government laptop, she lied to them about its location and then began deleting files from it after they left.
Aleykina was sentenced to a total of 51 months’ imprisonment followed by 36 months of supervised release. In addition, Aleykina was ordered to pay a special assessment fee of $800 and restitution in the amount of $4,000.
[1] The facts in this case narrative come from the following publicly available documents: E.D. Cal. Superseding Indict. filed Oct. 20, 2016; E.D. Cal. Verdict Form filed June 15, 2018; E.D. Cal. Crim. Docket as of June 29, 2018; Department of Justice, Northern District of California, Press Release issued June 18, 2018; and E.D. Cal. Min. Entry filed. Oct. 23, 2018.
Tax Preparer Pleads Guilty to Theft of Tax Refunds and Subscription to False Returns [1]
On September 28, 2018, in the Central District of California, tax preparer Aaron Joshua was charged with, and pled guilty to, wire fraud and subscription to a false tax return.
According to the plea agreement, Joshua, a resident of Sherman Oaks, California, was the owner of a tax preparation business that operated under the names Joshua Management Group and The Joshua Group, LLC (collectively referred to as JMG). As the owner and operator of JMG, Joshua prepared Federal and State income tax returns for clients.
From about 2010 until at least February 2017, Joshua devised and executed a scheme to defraud his clients by obtaining monies for himself that were due to JMG’s clients. Without the knowledge or authorization of his clients, Joshua instructed the Internal Revenue Service (IRS) to deposit portions of his clients’ refunds into his bank accounts. In some cases, these deposits exceeded the amounts agreed upon for his tax preparation fees.
For example, Joshua prepared individual tax returns for one victim for five separate tax years and charged the client approximately $300 for each return. For each year, Joshua provided the client with an electronic copy of a tax return claiming a significantly smaller tax refund than what was claimed on the return that Joshua filed with the IRS. In addition, Joshua attached an IRS Form 8888, Allocation of Refund, containing the taxpayer’s name and Social Security Number, to each of the filed returns. However, Joshua’s client did not authorize him to attach these allocation forms, which stated significantly higher refund amounts than were claimed on the client’s copies of the returns. Joshua directed that the overages, i.e., the differences between the refund amounts claimed in the filed returns and the amounts stated on the client copies, to be paid into his bank accounts.
Between 2011 and 2016, portions of 212 Federal tax refunds totaling approximately $444,648 were deposited into Joshua’s bank accounts and other bank accounts used in the scheme.
Additionally, Joshua submitted a false individual tax return for his own account in 2015, claiming income of only $10,346, when, in fact, he knew that he had additional income of approximately $133,923 for the tax year.
[1] The facts in this case narrative come from the following publicly available documents: C.D. Cal. Crim. Docket filed Sep. 28, 2018; C.D. Cal. Info. filed Sep. 28, 2018; C.D. Cal. Plea Agr. filed Sep. 28, 2018.
November 21, 2018
Los Angeles Attorney Charged in Connection With Scheme Involving Stolen Federal Tax Refund Checks [1]
On October 5, 2018, in the Central District of California, Attorney Thaddeus Culpepper was indicted for his role in a scheme involving stolen Federal tax refunds issued via U.S. Treasury checks. Special agents of the Treasury Inspector General for Tax Administration previously arrested Culpepper for the offenses on October 1, 2018.
Accordig to the court documents, beginning no later than April 2015 and continuing through about September 2018, Culpepper opened accounts at three separate financial institutions in and around Los Angeles, California, all of which were insured by the Federal Deposit Insurance Corporation.
Culpepper and others then fraudulently obtained 21 tax refund checks (U.S. Treasury checks) totaling more than $1.3 million, made payable to other individuals due refunds on their Federal income taxes, and forged the payees’ endorsements without their permission or authorization. Culpepper then deposited the forged checks into the accounts in his control also without the payees’ permission or authorization. The listed payees confirmed that they never received their Federal tax refunds.
The 42-count indictment charges Culpepper with bank fraud and attempted bank fraud, aggravated identity theft, theft of Government property, and passing U.S. Treasury checks bearing forged endorsements.
[1] The facts in this case narrative come from the following publicly available documents: S.D. Fla. Indict. filed Apr. 12, 2018; S.D. Fla. Plea Agr. filed June 26, 2018; S.D. Fla. Factual Agr. filed June 26, 2018; S.D. Fla. Plea Agr. filed June 28, 2018; S.D. Fla. Factual Agr. filed June 28, 2018; S.D. Fla. Judgment filed Sep.14, 2018; S.D. Fla. Judgment filed Sep. 14, 2018.
Florida Men Sentenced For Laundering Proceeds of IRS Impersonation Scam [1]
On September 13, 2018, in the Southern District of Florida, Scott Levenberg and Bradley Wright were sentenced for their roles in a conspiracy involving the impersonation of Internal Revenue Service (IRS) employees. The pair had been indicted in April 2018, and each pled guilty to conspiracy to launder money and identity theft in June 2018. Levenberg also pled guilty to being a felon in possession of ammunition.
According to the court documents, from about September 2016 through about March 2018, Levenberg, a resident of Palm Beach County, Florida, conspired with others to launder money and commit identity theft in connection with a wire fraud scam. Coconspirator Wright, also a Palm Beach County resident, worked under the direction of Levenberg as a manager in the scheme from about October 2017 to about March 2018.
The wire fraud scam involved various individuals who called victims and pretended to be Government officials, most often pretending to be agents from the IRS. They falsely told victims that they owed money to the IRS and threatened arrest if they did not immediately deposit money into specified bank accounts.
As part of the conspiracy, Levenberg recruited others in South Florida to open bank accounts for the purpose of receiving these funds and agreed to pay the account owners a percentage of the deposited money for the use of their accounts. Levenberg and his managers, including Wright, instructed the account owners of the specific time and location to make withdrawals. Levenberg insisted the withdrawals be made as quickly as possible after the scammed funds were deposited, before the transactions could be reversed or the funds frozen.
After the victims made the deposits, the impersonators instructed the victims to send them copies of the deposit receipts and their driver’s licenses. The coconspirators then sent these items to Levenberg, who in turn, gave them to Wright or the account holders to use in withdrawing the scammed funds. This was done to create the appearance that the account holder knew the person who made the deposit.
In one instance, Wright instructed the account holder, who was an undercover officer, to tell bank officials that the individual was his aunt who had wired him money to purchase a car.
After collecting the money and taking their fees, Levenberg and Wright forwarded the remaining funds to third parties as directed by those perpetrating the wire fraud scheme, effectively laundering the fraud proceeds of their coconspirators.
Levenberg was sentenced to 84 months in prison followed by three years of supervised release. He was ordered to pay $339,396.30 in restitution to victims. Wright was sentenced to 24 months’ imprisonment followed by three years of supervised release and was ordered to pay $91,777.30 in restitution.
[1] The facts in this case narrative come from the following publicly available documents: S.D. Fla. Indict. filed Apr. 12, 2018; S.D. Fla. Plea Agr. filed June 26, 2018; S.D. Fla. Factual Agr. filed June 26, 2018; S.D. Fla. Plea Agr. filed June 28, 2018; S.D. Fla. Factual Agr. filed June 28, 2018; S.D. Fla. Judgment filed Sep.14, 2018; S.D. Fla. Judgment filed Sep. 14, 2018.
Nashville Man Charged in Conspiracy to Steal Tax Refunds [1]
On September 24, 2018, in the Middle District of Tennessee, Nashville resident Charles Burnett appeared in court and was arraigned on charges of conspiracy to commit theft of Government money and aggravated identity theft. An Information was initially filed on September 10, 2018, charging Burnett with the offenses.
According to the court documents, from about June 2014 through May 2017, Burnett and at least five other individuals knowingly and willfully conspired to steal Federal income tax refunds and convert the money to their own use.
As part of the conspiracy, it is alleged that one conspirator stole the income tax refunds, and Burnett and two other coconspirators met with this person to receive the stolen refunds. In furtherance of the offense, Burnett directed his coconspirators to open up bank accounts and create shell entities to deposit the stolen funds. Burnett and others then deposited the stolen refunds into the accounts.
For example, in March 2016, Burnett incorporated CB Entertainment and Marketing, LLC with the State of Tennessee. He subsequently opened a business bank account for CB Entertainment and Marketing, LLC and then deposited a stolen Federal income tax refund issued in the name of another into the business account. In doing so, Burnett possessed and used the personal identification information of the individual named on the refund without lawful authority.
If Burnett is convicted, the Government will seek forfeiture of any property he derived from the offenses, including a money judgment in the amount of $252,346.44. A jury trial has been scheduled for November 27, 2018.
[1] The facts in this case narrative come from the following publicly available documents: M.D. Tenn. Information filed Sep. 10, 2018; M.D. Tenn. Executed Summons filed Sep. 27, 2018; M.D. Tenn. Crim. Docket as of Oct. 5, 2018.
California Man Pleads Guilty for Submitting False Records on IRS Security Guard Contract [1]
On September 17, 2018, in the Eastern District of California, Robert Bejarano pled guilty to conspiracy to defraud the Government and false statements in connection with an Internal Revenue Service (IRS) contract for security services. Bejarano and coconspirators Scott Carlton and Matthew Cocola all were initially indicted in August 2015.
According to the court documents, the IRS entered into a contract with E&A Protective Services-Bravo, LLC, to provide uniformed security guard services at the IRS’s Fresno Campus and at an IRS facility in Ogden, Utah, from February 2011 through March 2016. Guard services in Fresno were needed 24 hours per day, 7 days per week, 365 days per year, including holidays. It was a requirement of the contract that all guards sent out to the IRS had an active firearms qualification from the Federal Law Enforcement Training Center’s Practical Pistol Course (PPC). Guards who failed to obtain a qualifying score were not eligible to work at the IRS sites.
The plea agreement states that coconspirator Carlton was the regional manager for E&A in Fresno, California; Bejarano was the onsite project manager. Carlton hired Cocola, a certified firearms instructor, to certify the guards. Bejarano and Carlton then agreed to defraud the IRS by having Cocola falsify the scores to show the guards had passed the test, when in fact they had not. The form was signed by Cocola after the false “passing” score was written on it; Bejarano and Carlton then used these forms to falsely certify to the IRS’s contracting officers that the guards had qualified under the contract.
The plea agreement indicates that Bejarano and Carlton regularly certified the requirements under the contract were being met; based on this, IRS paid monthly invoices as submitted by E&A. In 2011, 12 of 62 PPC scores were falsified; in 2012, 11 of 69 were falsified; and in 2013, 18 of 66 scores were falsified. Therefore, between 2011 and 2013, E&A was paid more than $2 million on false and fraudulent claims submitted to the IRS for security guards who were not qualified to work under the contract.
Cocola pled guilty in September 2016 and was sentenced in January 2017. A jury trial is set for Carlton beginning November 6, 2018. A sentencing date has not been set for Bejarano.
[1] The facts in this case narrative come from the following publicly available documents: E.D. Cal. Indict. filed Aug. 20, 2015; E.D. Cal. Plea Agr. filed Aug. 27, 2018; E.D. Cal. Crim. Docket as of Sep. 18, 2018.
Office Manager Indicted for Impersonating IRS Employee in Embezzlement Scheme [1]
On September 12, 2018, in the District of Oregon, Anndrea Jacobs was indicted for impersonating an employee of the Internal Revenue Service (IRS), wire fraud, filing false tax returns, and aggravated identity theft.
According to the indictment, Jacobs was the office manager and bookkeeper for an Oregon medical practice. Jacobs devised a scheme to defraud a number of entities and individuals, including the owner of the medical practice, the IRS, the Oregon Department of Revenue (DOR), and others.
As part of her scheme, Jacobs exercised control over the books, records, and finances of the medical practice. Jacobs embezzled from her employer through a variety of actions and prepared and maintained false business financial books and records, from which she intentionally omitted payments to herself and other funds that she had diverted. Jacobs unlawfully used the name, Social Security Number, Oregon driver’s license, and signature of the medical practice owner to open a bank account; stole checks intended as payment for the medical practice; redirected a medical practice check payable to the Oregon DOR to herself; and applied for a loan on behalf of the practice’s owner without the owner’s knowledge or consent.
In furtherance of her scheme, Jacobs provided the practice’s owner with falsified e-mail messages and falsified bank statements purporting to show estimated tax payments made to the IRS and the Oregon DOR on behalf of both the medical practice and its owner. Additionally, she convinced the owner to give her a limited power of attorney to handle his collection action with the IRS and changed the owner’s contact information with the IRS to her own address and phone number in order to divert all IRS correspondence and communications to herself.
Subsequently, Jacobs falsely pretended to be an officer and employee of the IRS. In doing so, Jacobs created a fictitious identity as an IRS Taxpayer Advocate named “Linda Gibson.” She further established a phone number and voicemail account for the fictitious identity and provided the victim with a fictitious IRS case number. She then purported to assist the victim with his IRS collection issues, while impersonating “Linda Gibson.”
Jacobs also willfully filed false individual tax returns for herself for five separate tax years. In addition, she filed four fraudulent individual tax returns for the victim, understating his business income and overstating estimated tax payments and expenses.
If convicted, Jacobs could face a maximum statutory sentence of 20 years’ imprisonment, plus a mandatory two-year sentence for aggravated identity theft.
[1]The facts in this case narrative come from the following publicly available document: D. Or. Indict. filed Sep. 12, 2018.
October 24, 2018
Fifteen Individuals and Five Call Centers Indicted in IRS Impersonation Scam [1]
On September 4, 2018, in the Northern District of Georgia, 15 individuals and five India-based call centers were indicted for their roles in a scheme involving the impersonation of Internal Revenue Service (IRS) employees. TIGTA special agents arrested seven of the individuals on September 6, 2018.
According to the indictment, from at least 2013 through May 2018, the defendants knowingly and willfully conspired to devise a scheme to unjustly enrich themselves and others by fraudulently inducing U.S.-based victims to pay purported taxes, fines, and fees.
As part of the scheme, call centers primarily located in and around Ahmedabad, Gujarat, India, were involved in extorting money from victims in the United States, often by purporting to be U.S. Government officials, such as IRS employees. The conspirators contacted victims by telephone, using “Lead Lists,” which contained potential victims’ Personally Identifiable Information. In one scenario, callers would threaten to arrest victims if they did not pay alleged tax debts. The conspirators also engaged in a scheme in which they misled victims to believe that they were eligible for fictitious Government grants if they paid the IRS taxes or processing fees upfront. The conspirators also engaged in a scheme to defraud U.S. residents by pretending to be loan officers or persons associated with lending institutions and leading the victims to believe that they were eligible for fictitious “payday loans” if they paid upfront fees. The callers also left voicemail messages in an attempt to entice callbacks from potential victims, threatening “enforcement action” if the victims did not immediately return the calls.
The conspirators used multiple scripts for the schemes, outlining what to say to each victim contacted. The scripts included fraudulent names of IRS employees, Internal Revenue Code sections, and victim rebuttal scenarios.
Victims were instructed to go to banks or ATMs to withdraw money and purchase prepaid stored value cards from retail stores. They were then told to provide the unique serial number of each prepaid card to the scammers. Some victims were directed to wire scammed funds through money service businesses such as MoneyGram® and Western Union®. U.S.-based conspirators retrieved the scammed funds from locations in Georgia and elsewhere, using both authentic and fraudulent personal identification documents, and subsequently deposited the funds into designated bank accounts.
The defendants could each face a maximum statutory sentence of 20 years’ imprisonment.
[1] The facts in this case narrative come from the following publicly available documents: N.D. Ga. Indict. filed Sept. 4, 2018; N.D. Ga. Executed Arrest Warrants filed Sept. 10, 2018; N.D. Ga. Crim. Docket as of Sept. 12, 2018.
IRS Employee Pleads Guilty in a Stolen-Identity Refund Fraud Scheme [1]
On August 9, 2018, in the Northern District of Georgia, former Internal Revenue Service (IRS) employee Stephanie Parker pled guilty to one count of aggravated identity theft for her role in a stolen-identity refund fraud scheme. Parker was indicted in April 2017 for wire fraud and aggravated identity theft related to the scheme.
According to the court documents, Parker had been employed by the IRS since November 2010 in its Chamblee, Georgia, office. Through her employment, Parker had access to the means of identification of others, which could include any information used to identify a specific individual, such as name, Social Security Number (SSN), date of birth, and address.
The indictment alleged that from at least September 2012 through at least April 2013, Parker knowingly devised a scheme to defraud the IRS and to obtain money by means of false representations, in the course of which she used the means of identification of others without lawful authority. Specifically, through her IRS employment, Parker accessed taxpayer information, including the names and SSNs of five individuals, and used this information for her own benefit. Parker and others prepared and electronically filed fraudulent income tax returns in the names of those five individuals and directed the anticipated tax refunds to bank accounts held in the names of others. All of the fraudulent returns were electronically filed from Parker’s residence in Atlanta, Georgia.
Parker will face a mandatory two-year sentence of imprisonment for aggravated identity theft. Additionally, she may be subject to a fine of up to $250,000, full restitution to the IRS, and one year of supervised release following her imprisonment. A sentencing date has not been set.
[1] The facts in this case narrative come from the following publicly available documents: N.D. Ga. Indict. filed Apr. 25, 2017; N.D. Ga. Plea Agr. filed Aug. 9, 2018; N.D. Ga. Crim. Docket as of Sep. 6, 2018.
Georgia Man Sentenced in Refund Scheme Using Stolen Tax Information [1]
On August 13, 2018, in the Northern District of Georgia, Abdulrahman Tijani was sentenced for the theft of public money, aggravated identity theft, and making a false statement. Tijani had been arrested by agents of the Treasury Inspector General for Tax Administration (TIGTA) Cybercrime Investigations Division (CCID) in October 2017 and pled guilty to the offenses in March 2018.
According to the court documents, the Internal Revenue Service (IRS) maintains a computerized eAuthentication system, which was designed to verify and authenticate taxpayers’ identities and enable them to gain access to IRS services that are provided over the Internet. One such service, Get Transcript, allows an individual taxpayer to request and receive a transcript of his or her IRS tax records online. Through the use of this application, the taxpayer can obtain his or her tax account transactions, line-by-line tax return information, and wage and income information that was reported to the IRS for a specific tax year.
In 2015, TIGTA began investigating a group that used stolen Personally Identifiable Information (PII) to file fraudulent tax returns with the IRS. Before filing the returns, the perpetrators requested victim tax information through the IRS eAuthentication Get Transcript program. By using this program, the perpetrators were able to gain access to victims’ prior year tax information and test the validity of the stolen PII. Between February 2015 and April 2015, seven e-mail accounts were used in attempts to create Get Transcript accounts using the PII of more than 260 individuals with addresses in 34 States. Of these, 225 individual accounts were successful in passing all levels of authentication. Tax records were subsequently obtained and/or viewed for 175 individual victims.
Tijani’s cell phone number, known addresses, and e-mail addresses were identified in connection with accounts established in the names of others. Forty-seven fraudulent returns claiming approximately $265,960 in refunds were filed using accounts associated with Tijani. Of these 47 fraudulent returns, the IRS issued 12 refunds totaling $50,221.20.
Banking records from one of the accounts that received a fraudulent refund showed the purchase of a $791.65 U.S. Postal Service Money Order by Tijani. The money order was made payable to the Department of Homeland Security in connection with Tijani’s submission of a Federal immigration form. Additionally, Tijani made a false statement on that immigration form regarding his fitness to become a permanent resident of the United States, by stating that he had never knowingly committed any crime of moral turpitude for which he had not been arrested.
Tijani was sentenced to 48 months’ imprisonment. Upon completion of his imprisonment, Tijani will be turned over to immigration officials for appropriate removal proceedings from the United States. He was further ordered to pay $50,221 in restitution to the Department of the Treasury.
[1] The facts in this case narrative come from the following publicly available documents: N.D. Ga. Crim. Compl. filed Oct. 5, 2017; N.D. Ga. Indict. filed Nov. 21, 2017; N.D. Ga. Plea Agr. filed Mar. 30, 2018; N.D. Ga. Judgment filed Aug. 13, 2018.
Individual Sentenced to Nearly 20 Years in Prison for IRS Impersonation Scam [1]
On August 9, 2018, in the Middle District of Pennsylvania, Hiteshkumar Patel was sentenced for his role in a scheme involving the impersonation of Internal Revenue Service (IRS) employees. Patel was indicted for the scheme in June 2017, and in November 2017 he pled guilty to conspiracy to commit wire and mail fraud and aggravated identity theft.
According to the court documents, Patel, a resident of South Abington Township, Pennsylvania, came to the United States in 1995 and became a naturalized citizen in 2004. From about August 2015 through about May 2016, Patel knowingly and willingly conspired with others to devise a scheme and obtain money by means of fraudulent pretenses. Patel and his coconspirators contacted individuals by telephone and falsely claimed to represent the IRS. They told the victims that they owed money to the IRS and threatened them with arrest, fines, and imprisonment unless they immediately paid their debts. They instructed the victims to send payments directly to Patel or to one of his coconspirators to satisfy their purported IRS debts.
Patel and his coconspirators also accepted online loan applications and fraudulently caused applicants to believe that they had to pay fees in advance in order to receive guaranteed loans. In some cases, they falsely told the loan applicants that their prior IRS debts had to be satisfied before a loan could be approved.
The scheme perpetuated a stereotypical fear of Government agencies. Patel’s victims feared monetary sanctions and arrest by the IRS. The investigation identified 634 victims with a total loss of $934,406.77 directly attributed to the conspiracy. The scheme spanned 18 States and crossed international borders to the country of India. Patel and his coconspirators preyed on vulnerable victims with limited financial resources. One victim stated that her “golden years” were now her “stolen years,” as a result of Patel’s stealing more than $100,000 from her. Another victim said that he felt “frightened and bullied” into believing that he would be arrested if he did not send large amounts of money. Still other victims described physical illness due to stress caused by financial loss or eviction from a residence because of the scam.
Patel was sentenced to 234 months in prison followed by three years of supervised release. He was also ordered to pay $896,112.33 in restitution to the victims.
[1] The facts in this case narrative come from the following publicly available documents: M.D. Pa. Indict. filed June 20, 2017; M.D. Pa. Plea Agr. filed Nov. 9, 2017; M.D. Pa. Government’s Sentencing Memorandum filed Aug. 6, 2018; M.D. Pa. Sentencing Memorandum filed Aug. 7, 2018; M.D. Pa. Judgment filed Aug. 16, 2018.
September 18, 2018
New Jersey Tax Preparer Pleads Guilty in Scheme to Defraud the IRS and Clients [1]
On August 1, 2018, in the District of New Jersey, tax preparer Brian A. Day pled guilty to the filing of false tax returns and bank fraud in connection with a scheme to defraud the Internal Revenue Service (IRS) and to misappropriate his clients’ monies. Day was initially indicted for the offenses in February 2017.
According to the court documents, Day, a resident of Port Murray, New Jersey, was self-employed as a tax return preparer. Day was the sole owner and operator of various tax preparation businesses located in Essex County, New Jersey, including PTS; Tax Consultants; and Tax Consultants, LLC. On behalf of those businesses, Day met with taxpayers and collected information relating to the preparation of their individual income tax returns.
Day knowingly and intentionally executed a scheme to defraud and obtain money by means of false and fraudulent representations. Day’s purpose for the scheme was to misappropriate money from his taxpayer clients by falsely advising them that they owed tax payments to the IRS and directing them to give him checks made payable to the IRS in order to resolve their purported IRS liabilities. In fact, Day did not actually give the checks from his taxpayer clients to the IRS. Instead, he altered the payee on each check to a name matching or resembling that of one of his tax preparation businesses and deposited the checks into his own business bank account. Day made false or fraudulent representations to at least five individuals, resulting in a total loss of approximately $124,289.
According to the indictment, when Day’s clients contacted him regarding their checks, he presented fraudulent documents purportedly issued by the IRS to two of the taxpayers in an attempt to conceal and further his fraud. The IRS had never issued these documents. Additionally, Day prepared or presented at least 21 fraudulent and false tax returns to the IRS for Tax Years 2009 through 2015, resulting in a loss to the IRS of approximately $491,007.
Day could face a maximum statutory sentence of 30 years’ imprisonment and was ordered to forfeit $61,000. His sentencing is set for November 14, 2018.
[1] The facts in this case narrative come from the following publicly available documents: D.N.J. Indict. filed Feb. 1, 2017; D.N.J. Plea Agr. filed Aug. 1, 2018; D.N.J. Consent Judgment and Order of Forfeiture filed Aug. 1, 2018; D.N.J. Crim. Docket as of Aug. 15, 2018.
Twenty-One Individuals Sentenced in Houston for Their Roles in an IRS Impersonation Scam [1]
Between July 18, 2018 and July 20, 2018, in the Southern District of Texas, 21 defendants were sentenced for their roles in a conspiracy involving the impersonation of Internal Revenue Service (IRS) employees. All 21 of the defendants were part of an October 2016 indictment that charged 56 individuals, plus five major call centers located in Ahmedabad, Gujarat, India, with conspiracy to defraud the United States, conspiracy to commit wire fraud, and money laundering conspiracy. Three other coconspirators were sentenced earlier this year.
From about January 2012 and continuing until about October 2016, the coconspirators participated in a scheme to defraud U.S. residents by misleading them into sending money in connection with a number of different scams. In one of the scams, the coconspirators impersonated IRS officers to defraud U.S. residents by misleading them into believing that they owed money to the IRS and that they would be arrested and fined if they did not pay the alleged back taxes immediately. In another of the scams, the coconspirators impersonated U.S. Citizen and Immigration Services (USCIS) officers to defraud U.S. residents by misleading them into believing that they would be deported unless they immediately paid a fine for alleged problems with their USCIS paperwork.
These complex fraud schemes resulted in hundreds of millions of dollars in losses by the victims. More than 15,000 known victims have incurred losses attributable to scam calls, and upwards of 50,000 individuals have had their identities misappropriated based on the unauthorized use of their Personally Identifiable Information to register general purpose reloadable (GPR) cards.
The cumulative total of the prison sentences for these 21 defendants is more than 174 years.
Miteshkumar Patel, sentenced to 240 months’ imprisonment, was a runner and domestic manager of a crew of runners based primarily in Illinois. He is an Indian national with U.S. citizenship. He directed the activities of numerous Illinois-based runners, paid for their business expenses, and provided them with vehicles to drive to various retail stores and banks. He also facilitated their liquidation of GPR cards containing scammed funds at a gas station that he owned in Racine, Wisconsin.
Hardik Patel was sentenced to 188 months’ imprisonment. He is an Indian national residing in the United States on a nonimmigrant visa. He was identified as a co-owner and manager of an India-based call center associated with organizational codefendant HGlobal.
Sunny Joshi was sentenced to 151 months’ imprisonment, and his U.S. citizenship was revoked. He was identified as a runner operating in the Houston, Texas, area. He communicated extensively with India-based codefendants who were associated with organizational codefendant Call Mantra, and he directed the activities of other runners in the Houston area.
Other sentences ranged from 165 months’ imprisonment to three years’ probation. In addition to entering the prison sentences, the court filed orders of removal for several of the defendants. They will be deported from the United States upon completion of their prison sentences. The defendants are also jointly and severally liable for $8,970,396.15 in restitution.
[1] The facts in this case narrative come from the following publicly available documents: S .D. Tex. Superseding Indict. filed Oct. 19, 2016; S.D. Tex. Plea Agr. filed June 2, 2017; S.D. Tex. Plea Agr. filed Oct. 27, 2017; S.D. Tex. Plea Agr. filed Nov. 13, 2017; S.D. Tex. Judgments filed July 25, 2018, July 26, 2018, and July 27, 2018; S.D. Tex. Crim. Docket as of July 30, 2018; D. Ariz. Judgment filed Jan. 30, 2018; N.D. Ga. Minute Sheet filed Feb. 14, 2018.
Georgia Man Sentenced to 30 Months’ Imprisonment and Ordered to Pay More Than $1 Million in Restitution for Making False Statements [1]
On June 8, 2018, in the Northern District of Georgia, Thomas Bowman was sentenced for making a false statement on a bank loan application and forging a victim’s signature on an Internal Revenue Service (IRS) Form 2848, Power of Attorney and Declaration of Representative. Bowman previously pled guilty to the offenses on June 29, 2017.
According to the court documents, on or about November 17, 2014, Bowman made a false statement on a Small Business Administration Form 1919, Borrower Information Form, by failing to disclose that he had previously been placed on probation by the Superior Court of Cobb County, Georgia, in 2007. According to the same court documents, on or about December 28, 2012, Bowman forged the victim’s signature on an IRS Form 2848, which was fraudulently made to appear as if the victim had signed the form to give a power of attorney to Bowman.
Bowman was sentenced to 30 months’ imprisonment and ordered to pay restitution in the amount of $1,073,023.24.
[1] The facts in this case narrative come from the following publicly available documents: N.D. Ga. Judgment filed June 8, 2018; N.D. Ga. Restitution Order filed July 17, 2018; N.D. Ga. Plea Agr. filed June 29, 2017; and N.D. Ga. Crim. Info. filed June 1, 2017.
California Man Indicted for his Role in an IRS Impersonation Scam [1]
On July 10, 2018, in the District of Minnesota, Yu Zhang was indicted for wire fraud in connection with an interstate scheme to defraud by falsely impersonating Internal Revenue Service (IRS) employees.
Zhang, or persons acting in concert with him, contacted victims throughout the United States by telephone, falsely claimed to be IRS agents, and threatened to arrest them unless they made immediate payment for delinquent taxes. The caller instructed the victims to purchase Target™ gift cards from local Target stores and provide the caller with the gift card numbers and activation codes. Zhang traveled to Target stores in multiple States to purchase third-party gift cards using the Target gift card numbers and activation codes obtained from the victims.
In furtherance of the scheme to defraud, on May 31, 2018, an individual claiming to be an IRS employee contacted a victim, said the victim owed over $4,000 in taxes, and threatened the victim with arrest. The IRS impersonator then demanded that the victim go to the nearest Target store and purchase two $2,000 gift cards, which the scammer claimed that the IRS used as “Taxpayer Identification Forms.” The victim complied, used cash to purchase the gift cards, and provided the card numbers and activation codes to the IRS impersonator. The impersonator then instructed the victim to purchase an additional gift card for $2,000 to have the “arrest warrant” removed. The victim did as instructed.
According to the indictment, Target surveillance showed the victim leaving the Target store in Iowa after purchasing the third gift card. Shortly thereafter, Zhang used that same gift card at a Target store in Minnesota to purchase $1,000 worth of prepaid, third-party gift cards issued by Google Play™ and Steam™. He then traveled to another Target store in Minnesota and used the remaining $1,000 to purchase additional Google Play and Steam cards. Zhang was arrested at a Target store in Andover, Minnesota, by local law enforcement. At the time of his arrest, Zhang had in his possessions several hundred third-party gift cards worth tens of thousands of dollars.
Between May 28, 2018 and June 8, 2018, Zhang redeemed approximately $220,000 worth of Target gift cards by conducting hundreds of transactions at Target stores in Minnesota. Zhang was ordered to forfeit any property derived from proceeds traceable to the wire fraud scheme. A trial date is scheduled for September 17, 2018.
[1] The facts in this case narrative come from the following publicly available documents: D. Minn. Crim. Compl. filed June 8, 2018; D. Minn. Indict. filed July 10, 2018; D. Minn. Crim. Docket as of July 24, 2018.
August 22, 2018
Eight Indicted in Scheme Using Stolen Tax Refund Checks [1]
On July 9, 2018, an indictment was unsealed in the Western District of Missouri charging eight individuals in a scheme involving the theft of U.S. Treasury tax refund checks. Branden Belvin, Mistie Smith, Dante Chestnut, Susannah Lesaisaea, Cassandra Franklin, Sharieff Sylvester, Joseph Hooks, and Frances Wright were indicted on May 2, 2018, for conspiracy, bank fraud, and aggravated identity theft. Belvin, Smith, Chestnut, and Hooks were also charged with money laundering.
According to the court documents, Belvin and Smith, both residents of California, obtained approximately 99 U.S. Treasury checks that had been stolen from the U.S. Postal Service mail stream. The U.S. Treasury checks had been issued for tax refunds and were printed and mailed in Kansas City, Missouri. Belvin and Smith recruited the codefendants to participate in the scheme by negotiating the stolen checks. They created or obtained fraudulent identification documents, such as driver’s licenses, in order to deposit the stolen refund checks.
Between March 2016 and May 2016, the coconspirators traveled through Arizona, Colorado, Kansas, and Missouri negotiating the stolen refund checks at various branches of Academy Bank, a financial institution headquartered in Kansas City, Missouri. The defendants used the false identification documents in order to open bank accounts in the names depicted on the checks. They then deposited the checks into the newly created accounts and subsequently withdrew the majority of the money.
In April 2016, Denver, Colorado, police officers responded to an incident involving Belvin and Smith at a hotel. Officers recovered an envelope containing 19 counterfeit California driver’s licenses. The names on the counterfeit driver’s licenses matched the names of victims whose tax refund checks had been stolen and cashed, but most of the licenses pictured the same six individuals, coconspirators Chestnut, Sylvester, Franklin, Lesaisaea, Wright, and another individual.
The scheme resulted in the fraudulent negotiation of approximately 99 checks with a total financial loss of approximately $447,517. If convicted, the defendants could each face a maximum statutory sentence of 30 years’ imprisonment for bank fraud, plus a mandatory consecutive sentence of two years’ imprisonment for aggravated identity theft.
[1] The facts in this case narrative come from the following publicly available documents: W.D. Mo. Indict. filed May 2, 2018; W.D. Mo. Crim. Docket as of July 18, 2018.
Connecticut Man Sentenced for Corrupt Interference With the IRS [1]
On June 29, 2018, in the District of Connecticut, Terry DiMartino was sentenced for corrupt interference with the Internal Revenue laws, filing false tax returns, and willfully failing to file tax returns. A jury found DiMartino guilty in March 2016 of all eight counts charged in the indictment.
According to the court documents, DiMartino was a resident of Newington, Connecticut, and sold insurance from at least 1999 through 2013. From at least October 2004 through about May 2014, DiMartino corruptly endeavored to obstruct and impede the due administration of the Internal Revenue laws by various means. These means included, but were not limited to, submitting false and threatening correspondence to the Internal Revenue Service (IRS) in an attempt to defeat the assessment, collection, and investigative efforts of the IRS; filing false tax returns; submitting worthless bonds purporting to satisfy his tax liabilities; using nominees to hide and conceal assets and income from the IRS; and attempting to prevent insurance companies from complying with IRS levies.
Specifically, as part of his attempts to interfere with the IRS, DiMartino submitted false and threatening correspondence accusing IRS special agents and an Assistant U.S. Attorney of criminal misconduct. He also submitted documents purporting to be part of a legal case against IRS personnel for a number of purported criminal violations and a false claim stating that the IRS owed him $327,000, plus $327,000 in punitive damages. Additionally, DiMartino submitted to the IRS three false tax returns requesting a total of more than $14 million in false refunds, and worthless bonds with a total purported value of more than $101 billion, which he claimed satisfied his tax liabilities.
DiMartino also willfully failed to file tax returns from 2008 through 2012 and, according to the Government’s June 2018 sentencing memorandum, he continued to fail to file personal income taxes for another three years despite his 2016 conviction. The total tax loss to the IRS is more than $1.7 million.
DiMartino was sentenced to 70 months’ imprisonment followed by one year of supervised release. He was further ordered to pay restitution to the IRS in the amount of $658,547.62 and to cooperate with the IRS to pay all outstanding taxes, interest, and penalties.
[1] The facts in this case narrative come from the following publicly available documents: D. Conn. Indict. filed Aug. 14, 2014; D. Conn. Verdict Form filed Mar. 28, 2016; D. Conn. Government’s Supplemental Memorandum in Aid of Sentencing filed June 18, 2018; and D. Conn. Judgment filed July 6, 2018.
Seven Individuals Indicted in Treasury Check Theft Ring [1]
On June 18, 2018, in the Southern District of New York, seven individuals were indicted for their roles in a scheme involving the theft of U.S. Treasury checks, among other things. Lenin Guzman-Hidalgo, Ana Vianely Molina, Winston Ramirez, and four other defendants were charged with conspiracy to steal Government funds, theft of Government funds, and aggravated identity theft. Ramirez and the four others were also charged with conspiracy to commit bank fraud and bank fraud.
According to the court documents, from about May 2012 up to September 2017, Guzman-Hidalgo, Molina, Ramirez, and the others knowingly and willfully conspired to steal Government funds from the Internal Revenue Service (IRS) and converted them for their own use. The defendants wrongfully obtained U.S. Treasury checks in the names of victims and sold, deposited, or cashed the checks without the victims’ authorization.
Guzman-Hidalgo, Molina, Ramirez, and the other defendants knowingly used, aided, and abetted in the use of names, signatures, addresses, dates of birth, Social Security Numbers, and driver’s license numbers of other individuals, without lawful authority, in connection with the offenses.
In furtherance of the scheme, Ramirez and four other defendants, some of whom are Ramirez’s siblings, cashed and deposited stolen checks into bank accounts that were often opened by using stolen identities. The investigation identified deposits of approximately $3.5 million in stolen tax refund checks. A total of 58 third-party U.S. Treasury checks and one third-party cashier’s check, in the approximate amount of $157,529, were deposited into five bank accounts associated with Ramirez
Ramirez and the other defendants charged with bank fraud could each face up to 30 years in prison. Each of the defendants could face a maximum statutory sentence of 10 years’ imprisonment for the theft of Government funds, plus a mandatory consecutive sentence of two years’ imprisonment if convicted of aggravated identity theft.
[1] The facts in this case narrative come from the following publicly available documents: S.D.N.Y. Crim. Compl. filed May 16, 2018; S.D.N.Y. Indict. filed June 18, 2018.
Former IRS-CI Special Agent Found Guilty in a Scheme Designed to Defraud and Obstruct the IRS [1]
On June 15, 2018, in the Eastern District of California, a jury found former Internal Revenue Service (IRS) Special Agent Alena Aleykina guilty of filing false tax returns, theft of Government funds, and obstruction of justice. Aleykina was charged with the offenses in October 2016.
According to the court documents, Aleykina, a resident of Sacramento, California, was employed as an IRS-Criminal Investigation (CI) special agent from approximately 2006 to 2014. Aleykina also was a Certified Public Accountant in the State of California and held a master’s degree in business administration.
Between 2010 and 2012, Aleykina prepared six false tax returns. Three of the returns were Aleykina’s own individual income tax returns, and three were tax returns for trusts that she established. All were signed under the penalties of perjury and all contained false statements.
On Aleykina’s individual tax returns, she falsely claimed head of household filing status. She claimed three dependents, tuition and fees deductions, and losses of up to $25,000 for trusts that she had established. She knew all of these claims were false and was aware she was not entitled to make these claims. Aleykina also stole public money and converted it to her own use by causing the IRS to issue IRS Tuition Assistance Reimbursement payments to her, knowing that she was not eligible for such money. In addition, the three trust tax returns prepared by Aleykina contained false statements, including, but not limited to, the amounts of rents received, deductions of negative income distributions, and claims of negative net income, which were declared as losses on two of her corresponding individual tax returns. The total loss to the Government is more than $60,000.
Additionally, Aleykina knowingly destroyed, altered, concealed, or falsified at least one record that was stored on a Government-issued computer and Government servers with the intent to obstruct the investigation. Specifically, when criminal investigators approached Aleykina to retrieve her Government laptop, she lied to them about its location and then began deleting files from it after the agents left.
Aleykina’s sentencing is scheduled for September 25, 2018. She could face a maximum penalty of 20 years’ imprisonment for the destruction of records in a Federal investigation.
[1] The facts in this case narrative come from the following publicly available documents: E.D. Cal. Superseding Indict. filed Oct. 20, 2016; E.D. Cal. Verdict Form filed June 15, 2018; E.D. Cal. Crim. Docket as of June 29, 2018; Department of Justice, Northern District of California, Press Release issued June 18, 2018.
Man Sentenced To Eight Years in Prison for Role in an IRS Impersonation Scam [1]
On May 30, 2018, in the Southern District of Texas, Vedas Engineer was sentenced for his role in a scheme involving the impersonation of Internal Revenue Service (IRS) employees. Engineer and coconspirator Bhavdip Sanghavi were indicted in May 2017 for conspiracy to commit wire fraud and wire fraud in connection with the scheme. Engineer pled guilty to conspiracy to commit wire fraud in July 2017, and Sanghavi pled guilty in December 2017.
According to the court documents, from about June 2015 until May 2017, Engineer, Sanghavi, and others knowingly conspired to devise a scheme to defraud and to obtain money by means of false and fraudulent representations. Specifically, taxpayers received telephone calls from persons falsely representing themselves to be employees of the IRS. The callers told their victims that the victims owed money to the IRS, and then used threats and other methods of intimidation to convince the victims to pay money in order to resolve their purported tax debts immediately.
On or about May 2, 2017, a small business owner in Shreveport, Louisiana, reported that he had fallen victim to the IRS impersonation scam. Individuals claiming to be IRS employees had contacted him and directed him to send a $25,000 cashier’s check via United Parcel Service (UPS) overnight mail to an address in Houston, Texas. The victim believed that the funds were to satisfy a purported tax liability and that the recipient was an IRS attorney. Agents from the Treasury Inspector General for Tax Administration (TIGTA) witnessed the delivery of the UPS package to the specified address and observed a male, identified as Engineer, sitting in a vehicle parked one to two houses away. Agents made contact with Engineer and he agreed to meet with TIGTA agents on May 8, 2017, with his attorney. Approximately two hours before the scheduled meeting, TIGTA received information indicating that Engineer was attempting to leave the country via a flight from Chicago’s O’Hare airport for his native country of India. TIGTA agents subsequently arrested Engineer on the same date in Chicago, Illinois. Engineer’s plea agreement indicated that more than $1.7 million had been wired to him and his coconspirators during the conspiracy.
Engineer was sentenced to 96 months’ imprisonment followed by three years of supervised release. Restitution has not yet been determined; however, an order of forfeiture was filed ordering Engineer to pay a personal money judgment in the amount of $475,000 and to forfeit a piece of real property in Houston, Texas. Sanghavi’s sentencing is scheduled for July 11, 2018.
[1] The facts in this case narrative come from the following publicly available documents: S.D. Tex. Crim. Compl. filed May 8, 2017; S.D. Tex. Executed Arrest Warrant filed May 23, 2017; S.D. Tex. Indict. filed May 25, 2017; S.D. Tex. Plea Agr. filed July 25, 2017; S.D. Tex. Preliminary Order of Forfeiture filed Mar. 13, 2018; S.D. Tex. Order of Forfeiture at Sentencing filed May 30, 2018; S.D. Tex. Judgment filed June 4, 2018; S.D. Tex. Crim. Docket as of June 21, 2018.
July 26, 2018
IRS Employee Pleads Guilty to Making False Statements [1]
On May 31, 2018, in the District of New Jersey, Internal Revenue Service (IRS) employee Chandra Porter pled guilty to one count of making false representations and documents in violation of Title 18, United States Code § 1001. Porter was previously charged with the offense on June 13, 2017, for making and using false documents in order to defer the repayment of student loans provided by the United States. Special agents of the Treasury Inspector General for Tax Administration and the U.S. Department of Education’s (ED) Office of the Inspector General investigated this matter jointly.
According to the court documents, Porter, while employed full time by the IRS, knowingly and willfully signed and submitted multiple false Federal Family Education Loan Program (FFELP) Unemployment Deferment Request Forms, on which she falsely represented that she was unemployed and was diligently seeking but unable to find full-time employment, in order to defer the repayment of student loans.
Porter's child was enrolled as a student in a college education program during the time that ED was administering the FFELP to assist families with students in college to obtain financial aid. Porter signed and dated a completed Direct Plus Loan (DPL) Application and Master Promissory Note on or about June 16, 2008, for her child’s college tuition, which resulted in a disbursement of approximately $49,179 in FFELP funds. The repayment of the loan was deferred while Porter’s child was enrolled in college; however, on or about April 28, 2011, following her child’s completion of the college program, Porter began submitting deferment applications that falsely represented that she was unemployed or was working less than full time, when, in fact, Porter was gainfully employed full time at the IRS. The outstanding balance on the DPL loans owed by Porter is approximately $86,348.
Sentencing in this matter is scheduled for October 30, 2018. Porter faces a possible maximum statutory sentence of five years’ imprisonment, and a fine of not more than $250,000. As part of the plea agreement, Porter will be ordered to pay a $100 assessment fee, as well as restitution.
[1] The facts in this case narrative come from the following publicly available documents: D.N.J. Crim. Compl. filed June 13, 2017; D.N.J. Plea Agr. filed May 31, 2018; and D.N.J. Docket as of June 12, 2018.
Miami Tax Services Provider Charged With Assaulting and Threatening IRS Employee with Shotgun [1]
On June 5, 2018, in the Southern District of Florida, tax services provider Jimmy Sierra was charged with forcibly assaulting an Internal Revenue Service (IRS) revenue officer with a deadly weapon while the victim was in the performance of his official duties. Treasury Inspector General for Tax Administration special agents had previously arrested Sierra for the offense on May 21, 2018.
According to the court documents, on May 21, 2018, the victim went to Sierra’s tax business, in the course of his official duties as an IRS revenue officer, to collect a Federal tax payment. Upon arrival, the victim identified himself to Sierra as an IRS employee and presented his IRS-issued credentials. Sierra subsequently invited the victim inside. Shortly after the two entered Sierra’s office, Sierra summoned an unidentified male witness into the office. In the presence of the witness, Sierra then pulled a shotgun from his desk drawer, pointed it at the unarmed victim, and stated in part, “I’m going to shoot you. You want it in the balls or you want it in the chest?” At that time, the victim backed away, again displayed his IRS-issued credentials, and called 911.
Sierra stated aloud to the witness that he was going to shoot the victim. Fearing for his life, the victim wrestled the shotgun from Sierra but sustained injuries. The victim was able to flee Sierra’s office and was later transported to a hospital for medical attention.
On May 23, 2018, a court found Sierra to be a danger to the community, and a U.S. Magistrate Judge ordered his pretrial detention. If convicted, Sierra could face a maximum sentence of 20 years’ imprisonment.
[1] The facts in this case narrative come from the following publicly available documents: S.D. Fla. Indict. filed June 5, 2018; S.D. Fla. Docket as of June 7, 2018; S.D. Fla. Min. Order filed May 24, 2018; and S.D. Fla. Crim. Complaint filed May 23, 2018.
Former IRS Employee Sentenced for Stealing Taxpayer’s Identity [1]
On May 11, 2018, in the Western District of Arkansas, former Internal Revenue Service (IRS) employee Ryan Payne was sentenced and remanded to custody for aggravated identity theft and false representation of a Social Security Number (SSN). Payne had been indicted for the offenses in July 2017, and pled guilty in January 2018.
Payne was employed as a revenue agent by the IRS in Fayetteville, Arkansas, until January 2015, when he resigned. According to the indictment, in April 2015 and August 2015, Payne, knowingly and with the intent to deceive, falsely represented two SSNs to be his own while applying for a loan and a bank account, respectively, when in fact neither of the SSNs was assigned to him.
Payne admitted that he had obtained one of these SSNs during his employment with the IRS. Specifically, as part of his duties as a revenue agent, Payne conducted an audit of a victim’s business. During the audit, the victim provided Payne with a flash drive containing business records and personal identifying information. Payne admitted that he kept the flash drive after his resignation from the IRS and later retrieved the personal information from it.
CreditSecure notified the victim that his identity had been compromised and that multiple credit accounts had been set up using his name, date of birth, and SSN. For example, Payne had set up an account at Synchrony Bank using the victim’s SSN, but with a business name and billing address associated with himself.
Payne was sentenced to 52 months’ imprisonment followed by three years of supervised release. He was further ordered to pay restitution totaling $9,953.13. Payne is appealing his sentence.
[1] The facts in this case narrative come from the following publicly available documents: W.D. Ark. Indict. filed July 26, 2017; W.D. Ark. Plea Agr. filed Jan. 5, 2018; W.D. Ark. Judgment filed May 11, 2018; W.D. Ark. Notice of Appeal filed May 24, 2018.
Former IRS Employee Pleads Guilty for Impersonating a Federal Official During Traffic Stops [1}
On May 15, 2018, in the District of New Jersey, former Internal Revenue Service (IRS) employee Deon Owensby pled guilty to the misuse of an official badge, identification card, or other insignia. Owensby was initially charged with the offense in a criminal complaint filed on January 5, 2018.
According to the court documents, the IRS had previously employed Owensby as an attorney in Trenton, New Jersey, from about March 2010 until April 2015. During his employment, the IRS issued to Owensby an IRS Pocket Commission, which IRS employees use as a means of identifying themselves to the public when performing their official duties. When Owensby separated from employment with the IRS in April 2015, he was obligated to return all IRS property, including the IRS Pocket Commission. However, Owensby told his supervisor that his Pocket Commission had been stolen.
Between August 2015 and April 2017, law enforcement stopped Owensby on three separate occasions for traffic infractions. Each time, Owensby possessed and displayed his IRS Pocket Commission to the law enforcement officers who conducted the stops. One officer pointed out that the Pocket Commission was expired, but Owensby falsely claimed that it was still valid. Owensby intentionally did not return the Pocket Commission to the IRS after his employment ended, but instead kept and used it until about January 8, 2018, when law enforcement officials seized the IRS Pocket Commission pursuant to a warrant.
Owensby could face a maximum of six months’ imprisonment followed by up to five years’ probation and a fine of $5,000.
[1] The facts in this case narrative come from the following publicly available documents: D.N.J. Crim. Compl. filed Jan. 5, 2018; D.N.J. Information filed May 15, 2018; D.N.J. Application for Permission to Enter Plea of Guilty filed May 15, 2018; D.N.J. Plea Agr. filed May 15, 2018.
June 19, 2018
South Florida Woman Indicted for Her Role in an IRS Impersonation Scam [1]
On April 26, 2018, in the Southern District of Florida, Amy Ahrens was indicted for conspiracy to commit wire fraud and wire fraud in connection with a nationwide scheme involving the impersonation of Internal Revenue Service (IRS) employees. Treasury Inspector General for Tax Administration special agents subsequently arrested Ahrens for the offenses on April 27, 2018.
The scheme to defraud in this matter involves individuals misrepresenting themselves as employees of the IRS during unsolicited telephone calls to intended victims. During the calls, the impersonator tells the victim that he/she has an outstanding debt to the IRS, and that failure to pay will result in arrest.
According to the indictment, on November 2, 2017, Ahrens opened a bank account at Wells Fargo Bank and subsequently utilized that account, along with a previously established Bank of America account, to receive a total of approximately $47,366 in fraudulently obtained funds from numerous victims across the United States. Ahrens’ coconspirators ordered the victims in this scheme to transfer the funds into the accounts controlled by Ahrens to satisfy their alleged debts to the IRS. One victim reported that, in addition to threatening him with arrest, the coconspirators also threatened to seize all of his assets.
A jury trial is scheduled in this matter for June 4, 2018. If convicted, Ahrens could face a maximum statutory sentence of 20 years’ imprisonment followed by three years’ supervised release, and a $250,000 fine.
[1] The facts in this case narrative come from the following publicly available documents: S.D. Fla. Indict. filed Apr. 26, 2018; and S.D. Fla. Crim. Docket as of May 16, 2018.
Former IRS Employee Sentenced to Prison for Filing Fraudulent Tax Returns [1]
On April 16, 2018, in the Western District of Missouri, former Internal Revenue Service (IRS) employee Carla Mitchell was sentenced for filing false tax returns. Mitchell was initially charged with this offense, plus aggravated identity theft, in January 2017, in a 15-count indictment. In September 2017, she pled guilty to filing false tax returns.
At all times relevant, Mitchell was a contact representative at the IRS Service Center in Kansas City, Missouri. Mitchell was employed by the IRS from 2006 until June 2015, when she resigned. From at least February 2012 and continuing to about February 2014, Mitchell intentionally devised a scheme for the purpose of obtaining funds for herself and others by preparing false tax returns, in which she used false or stolen information to pay her own personal expenses and the expenses of family members.
Specifically, Mitchell prepared false tax returns for Tax Years 2011, 2012, and 2013 for approximately 13 of her friends and family members, as well as for herself. As part of her scheme, Mitchell included false entries to lower the individual tax liability or increase refunds of her friends, family members, and herself. These false entries included false wages and occupations, fraudulent Federal income tax withholdings, false Schedule C entries, fraudulent dependents, and false education expenses and credits.
Mitchell prepared the false returns from her residence, her boyfriend’s residence, and from the IRS Service Center, Kansas City, Missouri. She charged approximately $150 each for the preparation of some of the returns, but did not sign the returns as a “paid preparer” and did not provide their copies of the completed returns to friends and family members. Mitchell directed refunds from seven of the false returns be deposited on a prepaid debit card mailed to her at her home address. Mitchell was linked to 27 fraudulent returns.
Mitchell was sentenced to 12 months and one day in prison followed by one year of supervised release. She was further ordered to pay $137,483.37 in restitution to the IRS and is prohibited from employment as a tax preparer or involvement in tax preparation for others in any capacity.
[1] The facts in this case narrative come from the following publicly available documents: W.D. Mo. Indict. filed Jan. 13, 2017; W.D. Mo. Plea Agr. filed Sep. 19, 2017; and W.D. Mo. Judgment filed Apr. 16, 2018.
Louisiana Man Sentenced for Misusing SSN in Attempts to Obtain President Trump’s Tax Information [1]
On April 25, 2018, in the Middle District of Louisiana, private investigator Jordan Hamlett was sentenced for false representation of a Social Security Number (SSN). Hamlett was indicted for the offense in November 2016, and pled guilty in December 2017.
According to the court documents, on September 13, 2016, Hamlett, knowingly and with the intent to deceive, falsely represented the SSN of another to be his own for the purpose of creating a Free Application for Federal Student Aid (FAFSA) and a Federal Student Aid Identification Number (FSA ID). Hamlett also used the name, date of birth, and other personal information associated with the SSN in his online FAFSA request.
As part of his fraudulent use of the SSN, Hamlett answered requests for information required by the online FAFSA and by the associated Internal Revenue Service (IRS) Data Retrieval Tool, falsely declaring that he was the individual who was assigned the SSN. In fact, the SSN was assigned to then-presidential candidate Donald J. Trump.
By making such a declaration, Hamlett obtained an FSA ID and subsequently used the IRS Data Retrieval Tool to unlawfully attempt, six separate times, to obtain the presidential candidate’s Federal tax information from the IRS servers.
Hamlett was sentenced to 18 months’ imprisonment, followed by two years of supervised release. He was further ordered to pay $14,794.96 in restitution to the U.S. Department of Education.
[1] The facts in this case narrative come from the following publicly available documents: M.D. La. Indict. filed Nov. 10, 2016 ; M.D. La. Plea Agr. filed Dec. 11, 2017; Department of Justice, M.D. La. Press Release issued April 25, 2018; and M.D. La. Judgment filed April 27, 2018.
California Tax Preparer Pleads Guilty in Embezzlement Scheme [1]
On April 11, 2018, in the Central District of California, tax preparer David Laskey was charged with, and pled guilty to, wire fraud in connection with a scheme to defraud a client.
According to the court documents, Laskey was a tax preparer and consultant in Lake Forest, California. Laskey, knowingly and with intent to defraud, devised and executed a scheme to obtain money by means of false representations and fraudulent and deceptive acts.
Specifically, the victim hired Laskey to prepare her tax returns and to handle her outstanding tax matters. Laskey told the victim that if she paid a lump sum of $22,453 to the Internal Revenue Service (IRS) that she would receive a penalty abatement of approximately $10,000. He further told her that the IRS preferred multiple money orders instead of a cashier’s check. Using her 401K funds, the victim obtained 22 money orders for $1,000 each, plus one for $453, and gave them to Laskey, who promised to overnight them to the IRS.
In furtherance of his scheme, Laskey then informed the victim via e-mail that he had also sent the penalty abatement request to the IRS. Subsequently, Laskey showed her a letter on IRS letterhead, which he had forged, purporting to be from Operations Manager Laura Fulmer and stating that the IRS had received her payment. The next day, Laskey called the victim from an unknown number, purporting to be Agent Coulsen from the IRS, confirming that the IRS had received the penalty abatement request, and stating that it would be processed in six weeks. A day or two later, Laskey placed another call to the victim, again from an unknown number, purporting to be IRS Operations Manager Laura Fulmer and stating that she was going on vacation and would call back when she returned.
In reality, Laskey did not use the victim’s funds to pay the IRS, nor did he ever file for a penalty abatement. Instead, he used the victim’s funds for his own personal use.
After agents of the Treasury Inspector General for Tax Administration (TIGTA) contacted Laskey regarding these matters, he approached the victim and told her that if she signed a promissory note stating that the $22,453 was a personal loan, he would repay her the money. He further instructed his attorney to e-mail the signed promissory note to TIGTA agents in an attempt to willfully obstruct TIGTA’s investigation.
Laskey could face a maximum statutory sentence of 20 years’ imprisonment.
[1] The facts in this case narrative come from court documents of the respective jurisdiction.
May 22, 2018
Jamaican Citizen Pleads Guilty for His Role in International Lottery Scheme
On April 11, 2018, in the Northern District of West Virginia, Zicko Peterkin pled guilty to conspiracy to commit wire fraud related to his role in an international lottery scheme. [1] Peterkin and his coconspirator were indicted in September 2013, and Peterkin was later arrested in February 2018. [2]
According to the court documents, Peterkin and his coconspirator, who both were residents and citizens of Jamaica, conspired with each other and others to fraudulently obtain money from U.S. citizens through an international lottery scam. [3]
As part of their conspiracy, Peterkin and his coconspirators obtained the phone numbers and e-mail addresses of numerous U.S. citizens and then made unsolicited telephone calls or sent unsolicited e-mail messages to those individuals. In these communications, they falsely informed the victims that they had won a multimillion-dollar lottery prize and a new Mercedes Benz or BMW vehicle. Peterkin and his coconspirators advised the victims that they must pay taxes and processing fees prior to the release of the lottery prizes. [4]
In furtherance of the scheme, fraudulent documentation that purported to be official Government forms was sent to the victims and unlawfully portrayed the names and symbols of the Internal Revenue Service (IRS), the Department of the Treasury, and the Federal Reserve Board. Some of these fraudulent documents also solicited personal identifying information such as address, e-mail address, phone number, and date of birth. Some victims received e-mail messages and telephone calls from an individual fraudulently impersonating the Commissioner of Internal Revenue, claiming to represent the IRS in facilitating the release and delivery of the lottery prizes. Additionally, Peterkin and his coconspirators e-mailed images of forged multimillion-dollar cashier’s checks to victims, each showing the victim as the payee of the check. [5]
Peterkin could face a maximum penalty of 20 years’ imprisonment. [6]
[1] N.D. W.Va. Plea Agr. filed Apr. 11, 2018.
[2] N.D. W.Va. Crim. Docket as of Apr. 19, 2018.
[3] N.D. W.Va. Indict. filed Sep. 4, 2013.
[4] Id.
[5] Id.
[6] N.D. W.Va. Plea Agr. filed Apr. 11, 2018.
Three Individuals Indicted for Their Roles in Scheme Involving Stolen Federal Tax Refund Checks
On March 22, 2018, in the Southern District of New York, Oswaldo Morel-Garden, Gerson Cabrera, and Geuris Rosario were indicted on charges of conspiracy to commit bank fraud and bank fraud. Morel-Garden and Rosario were also charged with aggravated identity theft. [1]
According to court documents, from at least about December 2016 up to and including about November 2017, the coconspirators knowingly and willfully executed their scheme to defraud numerous financial institutions by opening bank accounts in names other than their own with institutions insured by the Federal Deposit Insurance Corporation. They subsequently deposited falsely endorsed checks, including altered, fictitious, and stolen U.S. Treasury tax refund checks, into the accounts. They did so with the intent to use false and fraudulent pretenses to obtain funds from the accounts to which they were not entitled. U.S. Department of the Treasury records indicate that several refund checks were not received by victims. One of the checks, which had been deposited by Rosario into a fraudulently opened account, was subsequently reissued by the U.S. Treasury Department. [2]
While engaged in their fraudulent activity, Morel-Garden and Rosario also knowingly transferred, possessed, and used without lawful authority a means of identification of another person. According to the criminal complaint, it is estimated that the coconspirators opened approximately 29 bank accounts as part of their scheme, into which they deposited approximately $184,461.58 worth of checks that belonged to others. [3]
If convicted, the coconspirators could face a maximum statutory sentence of 30 years’ imprisonment related to the bank fraud charges and an additional mandatory sentence of two years’ imprisonment related to the aggravated identity-theft charges. They are also ordered to forfeit any and all proceeds fraudulently derived from their offenses. [4] Additional legal actions are anticipated.
[1] S.D.N.Y. Indict. filed. Mar. 22, 2018.
[2] S.D.N.Y. Crim. Compl. filed Feb. 15, 2018.
[3] Id.
[4] S.D.N.Y. Indict. filed. Mar. 22, 2018.
IRS Supervisor Arrested on Charges of False Statements and Theft of Government Property
On March 22, 2018, in the Central District of California, Internal Revenue Service (IRS) supervisor Leslie Williams was arrested by agents of the Treasury Inspector General for Tax Administration (TIGTA) on charges of theft of Government property and making a false statement. [1] Williams had been indicted for the offenses on March 21, 2018. [2]
According to the indictment, at all times relevant to the charges, Williams was employed by the IRS at an office located in Long Beach, California. Beginning on about February 12, 2016, Williams knowingly and willfully embezzled, stole, and converted for her own use Federal funds as the purported surviving spouse of her ex-husband, who had died on about January 22, 2016, and from whom she had been divorced since about November 15, 2013. Specifically, Williams claimed that, as the alleged surviving spouse, she was entitled to receive $25,999.50 in death benefit payments issued by the Office of Personnel Management, as well as $30,000 in retirement plan contributions issued by the Federal Retirement Thrift Investment Board.
On about February 14, 2017, when interviewed by TIGTA special agents, Williams allegedly made a materially false statement by continuing to claim she was married to her ex-spouse until his death, when, in fact, Williams knew she had been divorced since about November 15, 2013. [3]
Williams was released on a $10,000 appearance bond and ordered to surrender her passport. [4] If convicted, Williams could face a maximum statutory sentence of 10 years’ imprisonment. Additional legal actions are anticipated. [5]
[1] C.D. Cal. Executed Arrest Warrant filed. Mar. 22, 2018.
[2] C.D. Cal. Indict. filed Mar. 21, 2018.
[3] Id.
[4] C.D Cal. Release Order and Bond Form filed Mar. 23, 2018.
[5] C.D. Cal. Crim. Docket as of Apr. 4, 2018.
Contract IRS Employee Indicted For Theft of Federal Tax Remittances
On March 21, 2018, in the Western District of North Carolina, Internal Revenue Service (IRS) temporary contract employee Alicia Gambrell was indicted on eight counts of theft of Government funds. [1]
According to the court documents, from about March 2016 through about April 2017, Gambrell was an employee of a temporary employment agency that had placed her at an IRS lockbox facility, located in Charlotte, North Carolina. [2]
An IRS lockbox is a facility operated by a federally insured bank that the IRS has contracted for the purpose of, among other things, processing Federal tax remittances. Federal tax remittances are payments made payable to the IRS and/or the U.S. Treasury Department in the form of checks and money orders mailed by taxpayers to designated post office boxes for processing. IRS lockbox facilities hire temporary employees through temporary employment agencies and then screens them to work in the lockbox performing various duties, such as opening incoming mail. [3]
While working at the IRS lockbox facility in Charlotte, Gambrell stole approximately 34 checks and money orders which had been made payable to the IRS and totaled approximately $57,000. She did so by altering the payee information on the checks and money orders to reflect her own name. For example, she changed “IRS” to “MRS” then inserted “Gambrell.” She then either cashed the stolen and altered checks and money orders or deposited them into accounts in her name. [4]
If convicted, Gambrell could face a maximum of 10 years’ imprisonment. Additional legal actions are anticipated.
[1] W.D.N.C. filed Mar. 21, 2018.
[2] Id.
[3] Id.
[4] Id.
Former IRS Employee Sentenced for Making False Statements and Receiving Fraudulent Reimbursements
On March 15, 2018, in the Eastern District of Kentucky, former Internal Revenue Service (IRS) employee Jason Helton was sentenced for making false statements and for the theft of Government funds. [1] Helton was initially indicted for the offenses in February 2017 [2] , and was found guilty in a jury trial in August 2017. [3]
According to the court documents, Helton was an employee of the IRS stationed at its Prestonsburg, Kentucky, office between July 2014 and April 2016. [4] During this period, Helton knowingly and willfully made and submitted false documents to the IRS, knowing that they contained materially false and fictitious statements. Specifically, Helton falsely reported that he performed work that he did not actually perform and that he incurred work-related expenses that, in fact, he did not incur. [5]
Additionally, Helton knowingly received and retained stolen property of the United States, in that he received salary and expense reimbursements from the IRS to which he was not entitled, with the intent to convert the funds to his own use. [6]
Helton was sentenced to five months in prison, followed by two years of supervised release. He will be required to submit to electronic monitoring and home detention for a period of five months during his supervised release. Helton was also ordered to pay $8,114.75 in restitution to the IRS. [7]
[1] E.D. Ky. Judgment filed Mar. 19, 2018.
[2] E.D. Ky. Indict. filed Feb. 23, 2017.
[3] E.D. Ky. Verdict filed Aug. 17, 2017.
[4] E.D. Ky. Response to Motion in Limine filed July 11, 2017.
[5] E.D. Ky. Indict. filed Feb. 23, 2017.
[6] Id.
[7] E.D. Ky. Judgment filed Mar. 19, 2018.
April 16, 2018
South Florida Man Indicted for Theft of Federal Tax Refund Checks
On March 8, 2018, in the Southern District of Florida, Richard David was indicted for theft of Government money, [1] specifically stolen U.S. Treasury checks that had been issued as tax refunds to other individuals. [2]
According to the court documents, on or about February 23, 2018, a Confidential Source (CS) reported that David had been selling stolen Treasury checks. Several subsequent telephone calls between David and the CS were conducted and recorded with the consent of the CS. During those conversations, David offered to sell the CS two stolen Federal tax refund checks totaling approximately $5,000, and the CS agreed to purchase the checks from David for approximately half of their face value. The two agreed to meet behind a store located in North Miami Beach, Florida, to complete the transaction. [3]
On February 26, 2018, David met with the CS as agreed. After producing the stolen Federal tax refund checks, David was arrested by special agents of the Treasury Inspector General for Tax Administration. [4]
Additional legal action is anticipated. [5] If convicted, David could face a maximum sentence of 10 years’ imprisonment. [6]
[1] S.D. Fla. Indict. filed Mar. 8, 2018.
[2] S.D. Fla. Crim. Compl. filed Feb. 27, 2018.
[3] Id.
[4] Id.
[5] S.D. Fla. Crim. Docket as of Mar. 14, 2018.
[6] S.D. Fla. Indict. filed Mar. 8, 2018.
Former IRS Employee Sentenced for Filing False Tax Returns
On March 5, 2018, in the Eastern District of California, former Internal Revenue Service (IRS) employee Pamela Pringle was sentenced for making opportunities for persons to defraud the United States and for making and subscribing false returns. [1] Pringle was indicted for the offenses in March 2017 [2] and pleaded guilty in November 2017. [3]
According to the court documents, Pringle was employed from 2000 to 2015 by the IRS in Fresno, California, in various positions, including as a contact representative. As a contact representative, she was responsible for responding to taxpayers’ inquiries regarding tax filings and for making adjustments to taxpayers’ accounts. [4]
At all times relevant to the charges, Pringle was an IRS employee and created opportunities for individuals to defraud the United States by offering to increase their tax refunds or offset their tax liabilities through the preparation and filing of Federal income tax returns that included false deductions. Pringle also filed fraudulent tax returns for herself by falsely claiming deductions to which she was not entitled. [5]
Around 2009, the IRS informed Pringle that expenses reported on her tax return related to her photography work were not allowed as a deductible expense, because that work was considered to be a hobby for tax reporting purposes, not an activity engaged in for profit. Despite this, Pringle filed three subsequent tax returns between 2011 and 2013 claiming unauthorized and excessive business expenses related to her photography activities, and received tax deductions and credits to which she was not authorized. Pringle knew at the time that she had not incurred such expenses and was not authorized to claim such expenses. [6] The false information resulted in a total tax loss of approximately $30,000. [7]
Additionally, according to the indictment, Pringle knowingly made and caused to be filed fraudulent tax returns for five other taxpayers, claiming false expenses such as child care expenses, tax preparation fees, medical expenses, and other Schedule A deductions. Pringle knew these taxpayers did not incur the claimed expenses and were not entitled to deduct them. [8] This false information resulted in a total tax loss of approximately $26,000. [9]
Pringle was sentenced to five months’ imprisonment followed by 36 months of supervised release, five months of which will be home confinement. Pringle was further ordered to pay $56,857 in restitution. [10]
[1] E.D. Cal. Judgment filed Mar. 8, 2018.
[2] E.D. Cal. Indict. filed Mar. 30, 2017.
[3] E.D. Cal. Crim. Docket as of Mar. 8, 2018.
[4] E.D. Cal. Indict. filed Mar. 30, 2017.
[5] Id.
[6] Id.
[7] E.D. Cal. Plea Agr. filed Oct. 26, 2017.
[8] E.D. Cal. Indict. filed Mar. 30, 2017.
[9] E.D. Cal. Plea Agr. filed Oct. 26, 2017.
[10] E.D. Cal. Judgment filed Mar. 8, 2018.
Two Nigerian Citizens Sentenced in Theft Scheme Using Illegally Obtained Tax Information
On February 12, 2018, in the Northern District of Georgia, Anthony Adewale Oloko was sentenced for the theft of public money and aggravated identity theft. [1] Codefendant Temilola Brown was sentenced on February 13, 2018, for the theft of public money. [2] Oloko and Brown were both indicted in September 2017, [3] and Brown pleaded guilty in October 2017. [4] Oloko pleaded guilty in November 2017. [5]
According to the court documents, both of the defendants are citizens of Nigeria. Oloko has legal permanent residency in the United States, while Brown is in the United States on a visitor visa. [6] Oloko and Brown, using the identification of others without lawful authority, attempted to steal and convert to their own use, money of the United States in the form of Federal tax refunds, which they were not entitled to receive. [7]
As indicated in the plea agreements for Oloko and Brown, TIGTA was investigating a group of perpetrators who fraudulently requested tax information through the Federal Student Aid Datashare (FSAD) program using stolen personally identifiable information (PII). The FSAD program allows Federal student aid applicants to import their tax information into the student aid application. By using this program, the perpetrators were able to gain access to tax information and also test the validity of the stolen PII. The perpetrators then used the stolen PII to file fraudulent tax returns with the Internal Revenue Service (IRS) and direct the tax refunds into fraudulently opened bank accounts. [8]
Oloko’s role in the offense was to file the fraudulent tax returns using the stolen PII. Between February 2014 and February 2017, he filed 139 fraudulent returns claiming tax refunds totaling $886,895. Of these 139 returns, nine refunds were actually issued for a total of $27,129. Oloko admitted that he filed fraudulent tax returns using victims’ PII that was obtained from another individual. He also admitted that he obtained bank account numbers from Brown and another conspirator and used those accounts to direct the fraudulent refunds. Agents identified Internet chat sessions between Oloko and others exchanging Federal tax documents and instructions on obtaining tax information from the FSAD website. [9]
Brown’s role in the scheme was to open a fraudulent bank account at Bank of America using a false name and identification. The investigation revealed that there were attempts to direct five fraudulent refunds totaling $37,320 into this specific account. Only one refund of $9,472 was actually deposited into the account, which Brown and others subsequently withdrew. In February 2017, Oloko attempted to direct $136,741 in refunds from 14 fraudulent tax returns into various bank accounts, including the Bank of America account opened by Brown. When interviewed by TIGTA special agents, Brown admitted to opening the Bank of America account using a false name and a fraudulent passport. She also acknowledged that she was aware Oloko was directing fraudulent tax refunds into this account. [10]
Oloko was sentenced to 51 months’ imprisonment, followed by three years of supervised release. Oloko was further ordered to pay restitution in the amount of $27,129, of which, Brown is jointly and severally liable for $9,472. [11] Brown was sentenced to 12 months and one day in prison, and shall be remanded to Immigration Customs Enforcement for possible deportation proceedings upon her release. [12]
[1] N.D. Ga. Judgment 1:17-CR-330-2-MHC filed Feb. 14, 2018.
[2] N.D. Ga. Judgment 1:17-CR-330-1-MHC filed Feb. 14, 2018.
[3] N.D. Ga. Indict. filed Sep. 19, 2017.
[4] N.D. Ga. Plea Agr. filed Oct. 19, 2017.
[5] N.D. Ga. Plea Agr. filed Nov. 1, 2017.
[6] N.D. Ga. Order of Detention 1: 17-MJ-536-AJB-2 filed June 30, 2017; N.D. Ga. Order of Detention 1: 17-MJ-536-AJB-1 filed June 30, 2017.
[7] N.D. Ga. Indict. filed Sep. 19, 2017.
[8] N.D. Ga. Plea Agr. filed Nov. 1, 2017.
[9] Id.
[10] N.D. Ga. Plea Agr. filed Oct. 19, 2017.
[11] N.D. Ga. Judgment 1:17-CR-330-2-MHC filed Feb. 14, 2018.
[12] N.D. Ga. Judgment 1:17-CR-330-1-MHC filed Feb. 14, 2018.
Man Sentenced for Role in IRS Impersonation Scam and Illegal Entry Into the United States
On February 14, 2018, in the Northern District of Georgia, Dipakkumar Sankalchand Patel was sentenced for conspiracy to commit money laundering and false use of a passport. [1] Patel was charged with the offenses in two separate cases filed in May 2017, [2] and August 2017, [3] and pleaded guilty to both charges on August 17, 2017. [4]
According to the court documents, Patel, a native and citizen of India, [5] was admitted to the United States in Atlanta, Georgia, on or about March 26, 2012, by presenting a Portuguese Republic passport that was false, forged, and counterfeited as his own identification. [6] Subsequently, from about September 2014 through about June 2015, Patel knowingly and intentionally conspired with others to conduct financial transactions in a scheme that involved the impersonation of U.S. Government officials, including the impersonation of Internal Revenue Service (IRS) officials. [7]
As part of the complex scheme, individuals from call centers located in Ahmedabad, India, impersonated U.S. Government tax and immigration officials and contacted potential victims to defraud them out of money by threatening them with arrest, imprisonment, fines, or deportation if they did not pay alleged taxes or penalties to the Government. [8]
In order to liquidate the illegal proceeds, U.S.-based individuals, known as “runners,” were employed by the India-based call center conspirators. Patel was part of a crew of runners responsible for the liquidation of victims’ scammed funds. Patel communicated with coconspirators via the WhatsApp messaging service to receive his instructions. He purchased general purpose reloadable (GPR) cards that were then registered using the misappropriated Personally Identifiable Information (PII) of unsuspecting victims and were later used to retrieve victims’ funds. Patel used the GPR cards containing victims’ funds to purchase money orders and then deposit those money orders into bank accounts as directed by his coconspirators. Runners also received victims’ funds via MoneyGram® and Western Union® wire transfers using fictitious identities, and iTunes® or other gift cards purchased by victims. [9]
One victim, a resident of Naperville, Illinois, was extorted out of more than $37,000 by individuals purporting to be employees of the U.S. Treasury and the IRS demanding payment for alleged tax violations. The victim was instructed to purchase about 72 prepaid cards with a total stored value of more than $37,000. [10]
Patel was sentenced to a total term of 51 months’ imprisonment, followed by three years of supervised release if not deported. [11] However, an order of removal was filed ordering Patel be promptly removed from the United States to India at the conclusion of his term of imprisonment. [12] Patel was further ordered to forfeit $24,000. [13]
[1] N.D. Ga. Judgment filed Feb. 16, 2018.
[2] N.D. Ga. Indict. 1:17-cr-00158-ELR-JSA filed May 3, 2017.
[3] N.D. Ga. Crim. Information 1:17-cr-00277-ELR filed Aug. 17, 2017.
[4] N.D. Ga. Plea Agr. filed Aug. 17, 2017.
[5] N.D. Ga. Order of Removal filed Feb. 14, 2018.
[6] N.D. Ga. Indict. 1:17-cr-00158-ELR-JSA filed May 3, 2017.
[7] N.D. Ga. Crim. Information 1:17-cr-00277-ELR filed Aug. 17, 2017.
[8] Id.
[9] Id.
[10] Id.
[11] N.D. Ga. Judgment filed Feb. 16, 2018.
[12] N.D. Ga. Order of Removal filed Feb. 14, 2018.
[13] N.D. Ga. Order and Judgement of Forfeiture filed Feb. 14, 2018.
March 28, 2018
IRS Impersonator Sentenced in Mississippi
On January 22, 2018, in the Northern District of Mississippi, Joel Pando was sentenced for conspiracy to commit wire fraud in association with a scheme involving the impersonation of Internal Revenue Service (IRS) employees. [1] Pando was initially indicted for this offense and others in April 2017, [2] and was arrested by Treasury Inspector General for Tax Administration special agents in May 2017. [3] Pando pleaded guilty to the conspiracy charge in August 2017. [4]
According to the court documents, between August 2015 and January 2016, Pando knowingly and willfully conspired with others to devise a scheme to defraud and obtain money by means of false and fraudulent pretenses. [5]
To wit, coconspirators, working in conjunction with Pando, made unsolicited telephone calls to target victims and identified themselves either as IRS employees or as representatives of loan companies. If the caller was posing as an IRS employee, the victim was told that he or she owed money to the IRS, and that the debt must be paid immediately or the individual would risk arrest, deportation, or suspension of a driver’s license. The caller would direct the victim to a certain location to wire funds, typically a Walmart store. The caller would provide the victim with a name, location, and dollar amount for the wire transfer and would remain on the telephone with the victim to monitor the transactions. [6]
One victim was told she owed back taxes and if she did not pay immediately she would be arrested, her Social Security benefits would be taken, and she would lose her home. The victim wired a total of $18,800 to Pando as instructed. [7]
Pando would go to the location where the funds were being sent and show identification that was in the name of the person designated to receive the funds. Pando used at least 21 names as aliases in the execution of the scheme, including some of legitimate IRS executives and employees, and received wire transfers in at least eight different States. In furtherance of the conspiracy, Pando would also purchase airfare and rental vehicles for other conspirators in order for them to travel to various locations to receive wire transfers from victims. [8]
Pando was sentenced to 46 months’ imprisonment, followed by three years of supervised release. [9]
[1] N.D. Miss. Judgment filed Jan. 24, 2018.
[2] N.D. Miss. Indict. filed Apr. 19, 2017.
[3] N.D. Miss. Crim. Docket as of Feb. 14, 2018.
[4] N.D. Miss. Plea Agr. filed Aug. 21, 2017.
[5] N.D. Miss. Indict. filed Apr. 19, 2017.
[6] Id.
[7] Id.
[8] Id.
[9] N.D. Miss. Judgment filed Jan. 24, 2018.
Office Manager Pleads Guilty to Submitting Forged IRS Levy Release
On January 18, 2018, in the Northern District of New York, Kristina Gross was charged with, and pleaded guilty to, the misuse of the Department of the Treasury name. [1]
According to the court documents, Gross knowingly used the words “Department of the Treasury” and the name of the Internal Revenue Service (IRS) in connection with, and as a part of, a business activity in a manner conveying the false impression the activity was authorized by the Department of the Treasury and the IRS, when in fact, it was not. [2]
At all times relevant to the charge, Gross was the office manager for Casale Construction Services, Inc. based in Wyantskill, New York. In February 2017, an IRS revenue officer issued a Notice of Levy against Casale in the amount of $15,608.28 and served the notice on a bank where Casale maintained accounts. Subsequent to the IRS’s service of the levy notice, Gross sent an IRS Form 668-D, Release of Levy/Release of Property from Levy, to the bank via e-mail on two occasions. She did so in order to induce the bank to let Casale obtain access to its funds that the bank had frozen as a result of the IRS levy. Gross knew that the document she had sent to the bank was forged, and that it had not been approved, authorized, or issued by the Department of the Treasury or the IRS. [3]
Gross could face up to one year in prison and a fine of $10,000. [4] Her sentencing is set for May 18, 2018. [5]
[1] N.D.N.Y. Information filed Jan. 18, 2018; N.D.N.Y Plea Agr. filed Jan. 18, 2018.
[2] N.D.N.Y. Information filed Jan. 18, 2018.
[3] N.D.N.Y Plea Agr. filed Jan. 18, 2018.
[4] Id.
[5] N.D.N.Y. Crim. Docket as of Feb. 8, 2018.
South Carolina Woman Pleads Guilty in IRS Impersonation Scam
On January 23, 2018, in the District of South Carolina, E’Shellah Calhoun pleaded guilty to conspiracy for her role in a scheme involving the impersonation of IRS employees. [1] Calhoun was indicted for the conspiracy and other offenses on June 20, 2017, [2] and was arrested in Rock Hill, South Carolina, on June 28, 2017, by Treasury Inspector General for Tax Administration special agents. [3]
According to the indictment, from at least March 2015 until June 20, 2017, Calhoun knowingly conspired with others to devise a scheme to defraud and to obtain money by means of false and fraudulent representations. The conspiracy included falsely pretending to be an officer or employee acting under the authority of the United States and obtaining property by the wrongful use of fear. [4]
Members of the conspiracy would contact individuals and pretend to be employees of the IRS, demanding that money be sent to specified bank accounts in order to settle outstanding tax delinquencies. Victims were told they would face the consequence of a criminal tax prosecution if the delinquencies were not resolved. Victims were instructed to wire funds to a specified bank account, which Calhoun and others then withdrew for their own personal benefit. [5]
Calhoun could face up to five years’ imprisonment for the offense. [6] Her sentencing is scheduled for May 15, 2018. [7]
[1] D.S.C. Plea Agr. filed Jan. 23, 2018.
[2] D.S.C. Indict. filed June 20, 2017.
[3] D.S.C. Executed Arrest Warrant filed June 29, 2017.
[4] D.S.C. Indict. filed June 20, 2017.
[5] Id.
[6] D.S.C. Plea Agr. filed Jan. 23, 2018.
[7] D.S.C. Crim. Docket as of Feb. 9, 2018.
Former IRS Employee Charged with Impersonating a Federal Officer During Traffic Stops
On January 24, 2018, in the District of New Jersey, the Department of Justice announced that former Internal Revenue Service (IRS) employee Deon Owensby was facing charges for impersonating a Federal officer or employee and possessing an official badge or identification card without authorization. [1] Owensby was charged with the offenses in a criminal complaint filed on January 5, 2018. [2]
According to the criminal complaint, Owensby was previously employed by the IRS in Trenton, New Jersey, as an attorney from about March 2010 until April 2015. During his employment with the IRS, Owensby was issued an IRS Pocket Commission, which IRS employees use as a means of identifying themselves to the public when performing their official duties. When Owensby separated from employment with the IRS in April 2015, he was obligated to return all IRS property, including the IRS Pocket Commission. However, Owensby instead told his supervisor that his Pocket Commission had been stolen. [3]
Between August 2015 and April 2017, Owensby was stopped by law enforcement on three separate occasions for traffic infractions. Each time, Owensby displayed a purported Federal employee identification card to the officers in support of his assertions that he was a Federal agent, an IRS employee, and an IRS tax attorney. One officer pointed out that the Pocket Commission was expired, but Owensby falsely claimed it was still valid. [4]
Owensby could face a maximum statutory penalty of three years’ imprisonment and a $250,000 fine. Additional legal actions are anticipated.
[1] Department of Justice, D.N.J. Press Release 18-029 issued Jan. 24, 2018.
[2] D.N.J. Crim. Compl. filed Jan. 5, 2018.
[3] Id.
[4] Id.
Delaware Restaurant Owner Pleads Guilty to Attempting to Bribe an IRS Employee
On January 16, 2018, in the District of Delaware, Domenico Procope pleaded guilty to attempting to bribe a public official. [1] Procope was initially charged in June 2016 for knowingly and corruptly offering and promising something of value to an employee of the Internal Revenue Service (IRS) with the intent to influence official acts. [2]
According to the court documents, Procope is a Delaware resident who owns and operates several restaurant establishments in the State. Procope had accumulated a significant business-related and personal income tax liability, which, as of February 2016, had grown to a total of approximately $531,000. Of that amount, Procope’s personal liability was approximately $434,000. [3]
An IRS revenue officer assigned to resolve Procope’s tax liabilities issued a Notice of Levy on Procope’s retirement account after he failed to provide the requested documentation. As a result, approximately $16,000 was turned over to the IRS from the retirement account. Prompted by the levy on his retirement account, in February 2016, Procope communicated with the IRS revenue officer several times by telephone and in person and offered to pay her a sum of money in exchange for reducing or eliminating his income tax liabilities. Specifically, Procope told the revenue officer he wanted “this to go away,” and offered the revenue officer $70,000 to make his tax debt “go away.” [4]
During an in-person meeting at Procope’s place of business in Bear, Delaware, immediately after the departure of Procope’s accountant from the meeting, Procope reiterated that he had $70,000 to resolve his tax debt. Procope proposed he pay $40,000 to the Government and $30,000 in cash for the revenue officer. Procope said the cash payment would be in exchange for a reduction in his IRS tax liabilities and indicated that he expected the revenue officer, in her official capacity, to cause the IRS to issue a letter stating that he had satisfied his personal liability of approximately $434,000. [5]
The following day, Procope gave the revenue officer a check in the amount of $40,000, made payable to the IRS, with the memo of “paid in full” written on the check. Additionally, he gave the revenue officer $30,000 in cash. [6]
Procope’s sentencing is scheduled for April 25, 2018. [7]
[1] D. Del. Plea Agr. filed Jan. 16, 2018.
[2] D. Del. Indict. filed June 7, 2016.
[3] D. Del. Crim. Complaint filed May 16, 2016.
[4] Id.
[5] Id.
[6] Id.
[7] D. Del. Crim. Docket as of Jan. 24, 2018.
February 27, 2018
Former IRS Employee Pleads Guilty for Stealing Taxpayer’s Identity
On January 5, 2018, in the Western District of Arkansas, former Internal Revenue Service (IRS) employee Ryan Payne pleaded guilty to aggravated identity theft and false representation of a Social Security Number (SSN). [1] Payne was indicted for the offenses in July 2017. [2]
Payne was employed as a revenue agent at the IRS in Fayetteville, Arkansas, until January 2015, when he resigned. [3] According to the indictment, in April 2015 and in August 2015, Payne, knowingly and with the intent to deceive, falsely represented two SSNs to be his own while applying for a loan and applying for a bank account, respectively, when in fact neither of the SSNs was assigned to him. [4]
Payne admitted that one of these SSNs was obtained during his employment with the IRS. Specifically, as part of his duties as a revenue agent, Payne conducted an audit of the victim’s business. During the audit, the victim provided Payne with a flash drive containing business records and personal identifying information. Payne admitted he kept the flash drive after his resignation from the IRS and later retrieved the personal information from it. [5]
The victim was notified by Credit Secure that his identity had been compromised and multiple credit accounts were set up using his name, date of birth, and SSN. To wit, Payne had set up an account at Synchrony Bank using the victim’s SSN, but a business name and billing address associated with himself. [6]
Payne could face a maximum sentence of five years’ imprisonment for misuse of the SSN, plus a mandatory consecutive term of imprisonment of two years for aggravated identity theft. [7] A sentencing date has not been scheduled. [8]
[1] W.D. Ark. Plea Agr. filed Jan. 5, 2018.
[2] W.D. Ark. Indict. filed July 26, 2017.
[3] W.D. Ark. Plea Agr. filed Jan. 5, 2018.
[4] W.D. Ark. Indict. filed July 26, 2017.
[5] W.D. Ark. Plea Agr. filed Jan. 5, 2018.
[6] Id.
[7] Id.
[8] W.D. Ark. Crim. Docket as of Jan. 19, 2018.
Woman Sentenced in Scheme Using Fictitious IRS Tax Liability
On January 5, 2018, in the Southern District of Florida, Doris Y. Ortega was sentenced for wire fraud [1] in connection with a scheme involving the impersonation of the Internal Revenue Service (IRS). Ortega was initially indicted for the offense in June 2017 [2] and pleaded guilty in October 2017. [3]
According to the court documents, Ortega knowingly devised a scheme to defraud and obtain money by means of materially false and fraudulent pretenses in order to unjustly enrich herself by inducing victims to make payments for fictitious debts. [4]
As part of the scheme, Ortega contacted the victims in person and falsely represented that they would have to make mortgage payments to her to avoid foreclosure on a home and tax payments to the IRS to avoid criminal prosecution. [5]
Ortega informed the victims that the bank requested approximately $60,000 related to the foreclosure and directed one victim to sell a home in Guatemala in order to pay it. Unable to sell the home, the victim obtained an equity line of credit on the property in the amount of $20,000 and wired the funds to the United States as instructed by Ortega. Prior to the victim’s return from Guatemala, Ortega advised that the victim would be arrested upon attempting to reenter the United States because of an IRS tax liability of around $28,000. The victims provided Ortega with $7,000, which she said would be enough for her to obtain clearance to allow the individual back into the U.S. [6]
Ortega later informed the victim that the remaining IRS tax liability of about $21,000 needed to be paid. Ortega supposedly applied two installments of $10,938 and $10,928 to the tax balance and sent a text message each time, purportedly from the IRS, stating the victim’s payment had been received. In reality, Ortega did not forward any of the funds to the IRS, but rather retained the money for herself. The victims eventually visited an IRS office and learned that they had never had a tax liability, and that the text messages provided by Ortega had not come from the IRS. [7]
Ortega was sentenced to 18 months’ imprisonment, to be served consecutively to the undischarged terms of imprisonment in several State cases. Upon release from imprisonment, Ortega will be on supervised release for three years. Additionally, she is ordered to pay $37,928.47 in restitution. [8]
[1] S.D. Fla. Judgment filed Jan. 5, 2018.
[2] S.D. Fla. Indict. filed June 14, 2017.
[3] S.D. Fla. Plea Agr. filed Oct. 11, 2017.
[4] S.D. Fla. Indict. filed June 14, 2017.
[5] Id.
[6] S.D. Fla. Factual Proffer filed Oct. 11, 2017.
[7] Id.
[8] S.D. Fla. Judgment filed Jan. 5, 2018.
South Florida Man Pleads Guilty to Theft of Federal Tax Refunds
On December 13, 2017, in the Southern District of Florida, Carl Andre Guillaume pleaded guilty to theft of Federal tax refunds. [1] Guillaume had been indicted for the offense on October 10, 2017, [2] after agents of the Treasury Inspector General for Tax Administration had arrested him on September 27, 2017. [3]
According to the indictment, from about June 17, 2017 through September 27, 2017, Guillaume knowingly and willfully conspired with another to receive, conceal, and retain a U.S. Department of the Treasury tax refund check, with the purpose of unjustly enriching himself. They did so knowing the check to have been stolen. [4]
As part of the conspiracy, on June 20, 2017, Guillaume opened three Bank of America accounts under the name “K.B. Trust.” [5] When opening the accounts, Guillaume presented corporation documents filed with the State of Florida, which listed him as the registered agent/officer. Three days after opening the accounts, Guillaume deposited into one of them a U.S. Treasury check in the amount of $133,008, which was issued to K.B. Trust for a tax refund. [6] He and an alleged coconspirator then began writing and cashing checks payable to themselves, which were drawn on the same account. [7]
The Treasury check was confirmed to be a genuine trust fund income tax refund check. The trustee for K.B. Trust was identified and interviewed, and confirmed that he/she had not received an anticipated Federal tax refund check in the amount of $133,008, that he/she did not authorize anyone else to open a bank account in the name of K.B. Trust at Bank of America, and that he/she did not authorize or endorse the check to anyone else for deposit. [8]
Sentencing is scheduled for March 2, 2018. [9] Guillaume could face a maximum of 10 years’ imprisonment, followed by three years’ supervised release and a fine up to $250,000. [10] The court could further impose a special assessment fee and restitution in the amount of $133,008. Additional legal actions are anticipated. [11]
[1] S.D. Fla. Plea Agr. filed Dec. 15, 2017.
[2] S.D. Fla. Indict. filed Oct. 10, 2017.
[3] S.D. Fla. Crim. Docket as of Jan. 3, 2018.
[4] S.D. Fla. Indict. filed Oct. 10, 2017.
[5] Id.
[6] S.D. Fla. Crim. Compl. filed Sep. 29, 2017.
[7] S.D. Fla. Indict. Filed Oct. 10, 2017.
[8] S.D. Fla. Crim. Compl. filed Sep. 29, 2017.
[9] S.D Fla. Crim. Docket as of Jan 3, 2018.
[10] S.D. Fla. Plea Agr. filed Dec. 15, 2017.
[11] Id.
Texas Man Pleads Guilty to Conspiracy to Commit Wire Fraud
On December 1, 2017, in the Southern District of Texas, Bhavdip Sanghavi pleaded guilty to conspiracy to commit wire fraud. [1] Sanghavi was indicted for the offense on May 25, 2017. [2] According to the court documents, from about June 2015 until May 2017, Sanghavi and a coconspirator knowingly conspired to intentionally devise a scheme to defraud and obtain money by means of false and fraudulent representations. Sanghavi and his coconspirator posed as Internal Revenue Service (IRS) agents and unlawfully pressured victims to send fictional delinquent taxes to persons in the Houston, Texas, area via wire or mail. They then utilized runners to acquire the money. [3]
The runners would provide the money to Sanghavi and his coconspirator, who would then give the runners a small payment for their participation. [4]
On May 9, 2017, TIGTA special agents arrested Sanghavi. [5] On December 1, 2017, Sanghavi pleaded guilty to conspiracy to commit wire fraud for his role in defrauding victims of more than $1.7 million during the conspiracy. [6]
Sentencing is scheduled for February 28, 2018. [7] Sanghavi could face a maximum penalty of 20 years’ imprisonment and a fine of not more than $250,000. In addition, he is subject to a mandatory special assessment fee, and there could be consequences pertaining to his immigration status if he is not a citizen of the United States. Additional legal actions are anticipated. [8]
[1] S.D. Tex. Plea Agr. filed Dec. 1, 2017.
[2] S.D. Tex. Indict. filed May 25, 2017.
[3] Id.
[4] Id.
[5] S.D. Tex. Crim. Docket as of Dec. 27, 2017.
[6] S.D. Tex. Plea Agr. filed Dec. 1, 2017.
[7] S.D. Tex. Crim. Docket as of Dec. 27, 2017.
[8] S.D. Tex. Plea Agr. filed Dec. 1, 2017.
Connecticut Woman Sentenced to Five Years in Prison for Role in IRS Impersonation Scam
On December 4, 2017, Nancy Frye was sentenced in the District of Connecticut for conspiracy to commit wire fraud. [1] A criminal complaint was previously filed on September 13, 2016, charging Frye and her accomplice Douglas Martin with the offense in connection with an IRS impersonation scheme. [2] Frye and Martin were subsequently arrested by TIGTA special agents on September 15, 2016. [3]
The scheme to defraud in this matter involves individuals misrepresenting themselves as employees of the IRS during unsolicited telephone calls to intended victims. During the calls, the impersonator tells the victim that he/she has outstanding IRS debt and that funds must be wired immediately. [4]
According to the criminal complaint, in October 2015, Frye received telephone calls and text messages from individuals who successfully recruited her to pick up money that was wired through MoneyGram® and Western Union® and to deposit the money into specific bank accounts. Frye, in turn, recruited Martin and others to assist her in picking up the wired funds from locations in Connecticut. Between October 2015 and May 2016, Frye and others working at her direction received approximately $547,000 in wired funds. Frye received approximately $40 per transaction and made approximately $500 per day. [5]
Martin was previously sentenced to a total of 41 months’ imprisonment, followed by three years of supervised release. He was also ordered to pay restitution in the amount of $279,881.13. [6] Frye was sentenced to a total of 60 months’ imprisonment, followed by three years of supervised release, during which time she may be subject to psychiatric and/or psychological evaluation and substance abuse treatment at the discretion of a U.S. probation officer. Frye was also ordered to pay $588,221.01 in restitution. [7]
[1] D. Conn. Judgment filed Dec. 4, 2017.
[2] D. Conn. Criminal Complaint filed Sept. 13, 2016.
[3] U.S. Dept. of Justice Press Release issued Sept. 15, 2016.
[4] D. Conn. Criminal Complaint filed Sept. 13, 2016.
[5] Id.
[6] D. Conn. Judgment filed Nov. 2, 2017.
[7] D. Conn. Judgment filed Dec. 4, 2017.
January 31, 2018
Louisiana Man Pleads Guilty for Misusing SSN in Attempts to Obtain President Trump’s Tax Information
On December 11, 2017, in the Middle District of Louisiana, Jordan Hamlett pleaded guilty to the false representation of a Social Security Number (SSN). [1] Hamlett was indicted for the offense in November 2016. [2]
According to the court documents, on September 13, 2016, Hamlett knowingly and with the intent to deceive, falsely represented the SSN of another to be his own for the purpose of creating a Free Application for Federal Student Aid (FAFSA) and a Federal Student Aid Identification Number (FSA ID). Hamlett also used the name, date of birth, and other personal information associated with the SSN in his online FAFSA request. [3]
As part of his fraudulent use of the SSN, Hamlett answered requests for information required by the online FAFSA and by the associated Internal Revenue Service (IRS) Data Retrieval Tool, falsely declaring that he was the individual who was assigned the SSN. In fact, the SSN was assigned to then-presidential candidate Donald J. Trump. [4]
By making such a declaration, Hamlett obtained an FSA ID and subsequently used the IRS Data Retrieval Tool to unlawfully attempt, six separate times, to obtain the presidential candidate’s Federal tax information from the IRS servers. [5]
Hamlett’s sentencing has not been scheduled. [6] He could face a maximum penalty of five years’ imprisonment. [7]
[1] M.D. La. Plea Agr. filed Dec. 11, 2017.
[2] M.D. La. Indict. filed Nov. 10, 2016.
[3] M.D. La. Plea Agr. filed Dec. 11, 2017.
[4] Id.
[5] Id.
[6] M.D. La. Crim. Docket as of Dec. 14, 2017.
[7] Id.
Four Individuals Charged and Arrested in IRS Impersonation Scam
On November 30, 2017, the Department of Justice, United States Attorney’s Office for the Eastern District of Wisconsin, announced that four individuals had been charged in a scheme involving the impersonation of Internal Revenue Service (IRS) employees. Nakul Chetiwal, Parvez Jiwani, Moin Gohil, and Pratik Patel were each charged via criminal complaint and were subsequently arrested by Federal and local law enforcement, [1] including agents of the Treasury Inspector General for Tax Administration.
According to one of the criminal complaints, Gohil, Chetiwal, and Jiwani were identified as “runners,” who used fraudulent identification to pick up fraud proceeds for the scheme. Patel aided and abetted at least one of the runners. [2]
As part of the scheme, unknown members called victims and made misrepresentations to them, typically stating that they owed taxes, and caused the victims to wire money through a wire service such as MoneyGram®. One such victim received a phone call from an individual claiming to be employed by the IRS and stating that the individual had been audited for the past three years and needed to pay $4,700 to the IRS in order to avoid being arrested, taken to court, and having a hold put on his Social Security. [3]
Gohil, Chetiwal, and Jiwani utilized fraudulent identities to pick up payments wired from victims. The three received a total of $666,537 from 784 victims between January 25, 2016 and August 8, 2017. The coconspirators were identified picking up money transfers in a number of States, including Wisconsin, Illinois, Tennessee, Kentucky, Virginia, and North Carolina. The false identities used by Gohil, Chetiwal, and Jiwani are potentially linked to an additional 6,530 fraudulent transactions totaling more than $2.8 million. [4]
Additional legal proceedings are anticipated.
[1] E.D. Wis. DOJ Press Release issued Nov. 22, 2017.
[2] Id.
[3] E.D. Wis. Crim. Compl. Filed Nov. 22, 2017.
[4] Id.
Two Former IRS Employees Sentenced for Preparing and Filing Fraudulent Tax Returns While Employed by the IRS
On November 13, 2017, in the Eastern District of California, former Internal Revenue Service (IRS) employees Della Ornelas and Randall Ruff were each sentenced for aiding and assisting in the preparation of fraudulent income tax returns and for making fraudulent tax returns while an employee of the United States. [1] Ornelas and Ruff were initially charged with the offenses in a 38-count indictment in April 2016, [2] and were subsequently arrested by agents of the Treasury Inspector General for Tax Administration. [3] They each pled guilty in August 2017. [4]
According to the court documents, at all times relevant to the charges, Ornelas and Ruff were both IRS employees working in Fresno, California. Ruff had been employed by the IRS for approximately 31 years, and Ornelas for approximately 25 years. The two have been married since 2012 and lived together for approximately 20 years prior to that time. [5]
Between 2005 and 2013, [6] Ornelas and Ruff prepared and filed, or caused to be filed, numerous fraudulent Federal income tax returns for themselves, their family members, their friends, and others. [7] Specifically, Ornelas willfully aided in the preparation and presentation of 20 Forms 1040, U.S. Individual Income Tax Return, all of which contained fraudulent information resulting in higher tax refunds for the taxpayers. Additionally, Ruff willfully aided in the preparation and filing of 14 Forms 1040, all containing similar types of fraudulent information. [8]
In addition to the charges related to the fraudulent returns of others, Ornelas, as an employee of the IRS, and in connection with a U.S. revenue law, knowingly made and signed her own Federal income tax return for Tax Year 2009, making false claims. Ruff made the same false claims on three of his own tax returns for Tax Years 2009, 2010, and 2011. [9]
As a result of their fraudulent conduct, Ornelas and Ruff caused a total tax loss to the IRS of $130,124. [10]
Ornelas and Ruff were each sentenced to six months in prison, followed by three years of supervised release, six months of which will be monitored with location monitoring technology. Ornelas was ordered to pay restitution to the IRS in the amount of $76,897. Ruff was ordered to pay $53,227 in restitution. [11]
[1] E.D. Cal. Judgment filed Nov. 16, 2017; E.D. Cal. Judgment filed Nov. 16, 2017.
[2] E.D. Cal. Indict. filed Apr. 14, 2016.
[3] E.D. Cal. Executed Arrest Warrant filed Apr. 15, 2016; E.D. Cal. Executed Arrest Warrant filed Apr. 15, 2016.
[4] E.D. Cal. Crim. Docket as of Dec. 8, 2017.
[5] E.D. Cal. Indict. filed Apr. 14, 2016.
[6] E.D. Cal. Plea Agr. filed July 26, 2017; E.D. Cal. Plea Agr. filed Aug. 25, 2017.
[7] E.D. Cal. Indict. filed Apr. 14, 2016.
[8] Id.
[9] Id.
[10] E.D. Cal. Plea Agr. filed July 26, 2017; E.D. Cal. Plea Agr. filed Aug. 25, 2017.
[11] E.D. Cal. Judgment filed Nov. 16, 2017; E.D. Cal. Judgment filed Nov. 16, 2017.
Nigerian Man Sentenced to Seven Years in Prison for Role in Sophisticated Scheme Using Stolen Identities to Defraud the IRS
On November 8, 2017, Michael Oluwasegun Kazeem was sentenced in the District of Oregon for conspiracy to commit mail fraud, mail fraud, and aggravated identity theft. [1] Kazeem was initially indicted for the offenses on February 4, 2016, [2] and arrested on February 17, 2016, in Atlanta, Georgia [3] by agents of the Treasury Inspector General for Tax Administration and other Federal law enforcement agencies. Kazeem pled guilty on April 24, 2017. [4]
According to the indictment, beginning as early as Tax Year 2012 and continuing until May 2015, Kazeem knowingly conspired with others to commit mail fraud, to defraud the IRS and obtain money through false and fraudulent representations, and to use the means of identification of others without lawful authority. Kazeem resides in Nigeria and in the State of Georgia. His brother (and coconspirator) lives in Maryland, and a third coconspirator resides in Georgia. [5]
It was the object of the conspiracy to obtain stolen personally identifying information (PII) and use that information, coupled with information illegally obtained from IRS data systems, for the purpose of preparing and electronically filing fraudulent tax returns with the IRS to claim fraudulent refunds. [6]
Kazeem and his coconspirators obtained, by unauthorized means, the names and other PII of over 250,000 U.S. taxpayers without their knowledge or consent. In furtherance of their conspiracy, Kazeem and his coconspirators then used the stolen PII for unauthorized access to the IRS transcript system, which was available online through the “Get Transcript” application, in order to obtain over 1,200 taxpayer transcripts for subsequent use in filing fraudulent returns in those taxpayers’ names. An IRS transcript shows the taxpayer’s tax return information, including line items from the return, income information, and basic data such as marital status, adjusted gross income, and taxable income. [7]
The coconspirators used the stolen names and other PII, along with any IRS transcript information acquired, to create fraudulent income tax returns and false Forms W-2. The coconspirators also used the stolen PII to obtain Electronic Filing PINs in the names of the victims. An Electronic Filing PIN is a five-digit personal identification number required for electronically filed tax returns when the filer does not have certain items of information from the previous year. Kazeem sent communications to his brother containing over 4,000 fraudulently obtained Electronic Filing PINs and stolen taxpayer PII. [8]
In total, Kazeem and his coconspirators used the stolen PII to file over 2,900 false Federal income tax returns seeking more than $25 million dollars in fraudulent refunds. The actual loss exceeded $4.7 million from tax returns accepted for payment by the IRS. [9]
Kazeem was sentenced to a total of 84 months’ imprisonment, followed by three years of supervised release. He was further ordered to pay $4,298,860 in restitution and may face deportation. [10]
[1] D. Or. Judgment filed Nov. 14, 2017.
[2] D. Or. Indict. filed Feb. 4, 2016.
[3] D. Or. Executed Arrest Warrant filed Feb. 18, 2016.
[4] D. Or. Plea Agr. filed Feb. 24, 2017.
[5] D. Or. Indict. filed Feb. 4, 2016.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] D. Or. Judgment filed Nov. 14, 2017.
Former IRS Revenue Agent Sentenced for False Statements and Aggravated Identity Theft
On November 7, 2017, in the District of New Mexico, former Internal Revenue Service (IRS) employee Joan Mobley was sentenced on charges of making false statements and of aggravated identity theft. [1] Mobley was initially charged with the offenses in December 2014 in a 28-count indictment; [2] she pled guilty on March 13, 2017. [3]
According to the court documents, Mobley was previously employed as a revenue agent for the IRS and in that capacity was responsible for conducting audits of small businesses. [4] The Indictment charged that between about December 2010 and December 2011, Mobley willfully and knowingly made materially false, fictitious, and fraudulent statements in matters within the jurisdiction of the IRS and knowingly transferred, possessed, and used the means of identification of another person without lawful authority. [5]
Specifically, the Indictment alleged Mobley made false statements and representations to the IRS concerning seven taxpayers. She falsely stated and represented to the IRS that the taxpayers had consented to the extension of time to assess employment taxes and/or had agreed to the assessment and collection of additional tax. In fact, none of these taxpayers had consented or agreed to these items. Additionally, Mobley unlawfully used the identification of these seven taxpayers in connection with her false statements to the IRS. [6]
In her plea agreement, Mobley unambiguously admitted that while she was a revenue agent, she was assigned to conduct an audit of a business based in Yuba City, California. She acknowledged that she did not complete the audit as assigned, however, and instead falsified official records incorrectly showing that she had completed the audit. In doing so, Mobley signed the name of the company president to the records, knowing that she did not have permission from the president or any other company representative to do so or to act on behalf of the business in any way, including with respect to taxes. [7]
Mobley further admitted that she falsified the SS-10, Consent to Extend the Time to Assess Employment Taxes, to falsely represent that an authorized party of the business had agreed to an extension of time to assess employment taxes, knowing this was not true. Mobley also falsified a Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment (Excise or Employment Tax), to state that the company agreed to the assessment and collection of additional tax. Again, Mobley knew at the time she falsified the form that no representative of the business had consented to the assessment and collection of additional tax. [8]
Mobley was sentenced to a period of 27 months in prison, followed by three years of supervised release. MOBLEY was also ordered to pay restitution in the amount of $39,738.32, and a $4,000 fine. [9] In addition, MOBLEY was ordered to participate in a 500-hour drug treatment program. [10]
[1] D.N.M. Docket as of Nov 22, 2017; D.N.M. Plea Agr. filed Mar. 13, 2017.
[2] D.N.M. Indict. filed Dec. 3, 2014.
[3] D.N.M. Plea Agr. filed Mar. 13, 2017.
[4] Id.
[5] D.N.M. Indict. filed Dec. 3, 2014.
[6] Id.
[7] D.N.M. Plea Agr. filed Mar. 13, 2017.
[8] Id.
[9] D.N.M. Docket as of Nov 22, 2017.
[10] D.N.M. Sentencing Minute Sheet filed Nov 7, 2017.
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