The Most Aggressive Tax Representation Allowed By Law

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Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability. 

 

     

Selig & Associates represents Contractors and Subcontractors before the Internal Revenue Service, the New York State Department of Taxation and Finance, the New Jersey Division of Taxation, the Connecticut Department of Revenue Services, the Department of Justice Tax Division and the Defense Office of Hearings and Appeals (DOHA). 

 

 

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21.06.2017
The Most Aggressive Tax Representation Allowed by Law
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Tax Fraud Investigations - Fiscal Year 2016 The following examples of General Tax Fraud Investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted. Seaworld Manager Sentenced for Stealing More Than $1 Million On September 23, 2016, in San Diego, California, Wilfred David Joseph Jobin-Reyes (known as “Sebastian Jobin”) was sentenced to 30 months in prison, ordered to pay $818,000 in restitution to SeaWorld and $177,000 to the victim of the identity theft. He also is obligated to pay hundreds of thousands of dollars in back taxes and penalties to the IRS. Jobin-Reyes created fake invoices for a sham company he secretly owned, called “SJ Merchandise.” He then used his management position to approve the payments on behalf of SeaWorld. He also created an alias along with a dummy email account he used to correspond with SeaWorld officials, pretending to be SJ Merchandise owner “John Caldwell.” SeaWorld eventually discovered the fraud, but only after Jobin-Reyes had pocketed more than $800,000 in payments to his fake company. Jobin-Reyes’ also used the sham merchandise company to cheat the IRS by claiming fake expenses on his tax returns. By pretending that his business was underwater with hefty losses, Jobin-Reyes reduced the amount of taxes he claimed he owed, and underpaid more than $200,000 for tax years 2010 through 2014. In fact, none of the claimed expenses were true, because SJ Merchandise didn’t conduct any real business at all. Jobin-Reyes also stole the identity of a real person, his friend and former roommate who had once given Jobin-Reyes access to his personal information. Jobin-Reyes convinced his friend to open business banking and credit accounts, using the friend’s social security number and good credit, then used those accounts to receive and disburse the illegal proceeds from SeaWorld. He then went on to use the friend’s social security number to open several new credit cards, without the friend's knowledge. Jobin-Reyes admitted that he left his friend with unpaid and overdue balances of at least $177,000. Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability.  Former Towing Contractor Sentenced for Fraud Scheme and Filing a False Income Tax Return On September 20, 2016, in Scranton, Pennsylvania, Leo Glodzik, of Wilkes-Barre, was sentenced to 30 months in prison on charges of mail fraud, being a felon in possession of a firearm and subscribing to a false federal income tax return. Glodzik was also ordered to pay approximately $299,000 in federal taxes and penalties. According to court documents, Glodzik’s firm, LAG Transport, Inc. (LAG), had a contract with the City of Wilkes-Barre for the exclusive rights to tow all vehicles as requested by the City, and/or the Wilkes-Barre Police Department, the city’s agents. LAG towed the vehicles to locations owned and controlled by Glodzik. Glodzik devised a scheme to defraud lawful owners of the vehicles by charging them excessive towing and storage fees for LAG’s services or intentionally hindering the owners’ access to their vehicles creating additional fees. As a result, in some cases, owners signed over the title to vehicles to LAG or Glodzik to discharge the fees. Glodzik then gained ownership of the vehicles by misusing the abandonment procedures to unlawfully take ownership of the vehicles and used intentional misrepresentations to reduce his own expenses and costs. Additionally, Glodzik was charged with federal income tax fraud, specifically, the filing of a federal tax return for 2008, in which he claimed zero taxable income, when, in fact, his actual taxable income for that year was $408,618.   California Woman Sentenced for Mortgage Fraud and Identity Theft On September 20, 2016, in Sacramento, California, Rachel Siders, of Roseville, was sentenced to 174 months in prison for her involvement in mortgage fraud schemes that cost financial institutions over $17 million. Siders was found guilty by trial of multiple counts of bank fraud, wire fraud, mail fraud, making a false loan application, and committing aggravated identity theft. In 2008 Siders and co-defendant Theo Adams, applied for a home equity line of credit using his relative’s name on an underwater property owned by Adams. They submitted false tax returns in the relative’s name with significantly inflated income along with mortgage application documents with forged signatures. Siders, a notary public, falsely notarized the loan application documents, which were sent to Washington Mutual Bank. The bank relied upon the false documents to provide a $250,000 line of credit. Siders received $170,000 of the proceeds. After making minimal payments, the defendants defaulted on the loan. In a second scheme, from mid-2006 through early 2008, Siders and Vera Kuzmenko, and other defendants engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento area. They secured more than $30 million in residential mortgage loans on more than 30 homes purchased through straw buyers. The loan applications contained materially false information as to the straw buyers’ income, employment, assets, and intent to occupy the residences. Records showed that Vera Kuzmenko received millions of dollars, and that Rachel Siders received hundreds of thousands of dollars. Six codefendants were previously sentenced recieving prison terms ranging from 2 to 19 years in prison. Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability.  Former New York Resident Sentenced for $2.5 Million Fraud Involving Dozens of Fraudulent Loans On September 15, 2016, in Manhattan, New York, Baldev Tal, aka David Tal, was sentenced to 48 months in prison for conspiring to commit bank fraud. According to court documents, from about 2007 through about August 2015, Binder Tal, Baldev Tav, aka David Tal, aka Ashok Kumar, Shariful Mintu and their co-conspirators fraudulently obtained loans and lines of credit from banks, credit unions, and other lending institutions. The co-conspirators obtained the loans by providing materially false information to the lenders about the borrowers’ assets and income. The co-conspirators fraudulently obtained more than $2.5 million in proceeds in connection with dozens of loan applications and applications for lines of credit. The vast majority of the loans and lines of credit went into default, and millions of dollars were not repaid. Additionally, the co-conspirators engaged in extensive efforts to perpetuate and conceal the fraudulent scheme. Previously, Binder Tal was sentenced to 30 months in prison and Shariful Mintu was sentenced to 12 months and a day in prison. Zeekrewards’ Former Chief Operating Officer and Former Senior Technology Officer Sentenced for $850 Million Internet Ponzi On September 13, 2016, in Charlotte, North Carolina, Dawn Wright Olivares and Daniel C. Olivares both of Clarksville, Arkansas was sentenced to 90 and 24 months in prison, respectively, and ordered to serve three years of supervised release for their involvement in an $850 million Internet Ponzi scheme that promised victims a bogus return on investments. According to court documents, the two Arkansas residents were associated with the Lexington, N.C. based Rex Venture Group, LLC (RVG), which owned and operated Zeekler and ZeekRewards from January 2010 through August 2012, Dawn Wright Olivares, her step-son, Daniel Olivares, and Paul Burks, the owner of RVG, conspired with each other and engaged in Ponzi scheme that raised more than $850 million through a sham internet-based penny auction company named “Zeekler” and its purported advertising division “ZeekRewards” (collectively “Zeek”). The conspirators induced more than 900,000 victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards. At one point, the conspirators claimed that investors would be guaranteed a 125% return on their investment. Court records show that the co-conspirators represented that victim-investors in ZeekRewards could participate in the Retail Profit Pool (RPP), which supposedly allowed victims collectively to share 50% of Zeek’s daily net profits. The co-conspirators did not keep books and records needed to calculate such daily figures. Instead, Burks simply made up the daily “profit” numbers.Dawn Wright Olivares and Dan Olivares previously pleaded guilty to one count of investment fraud conspiracy. Dawn Wright Olivares also pleaded guilty to one count of tax fraud conspiracy. In July 2016, a federal jury convicted Paul Burks of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy, following a three-week trial. Burks is currently awaiting sentencing. Former Trucking Company Owner Sentenced for Federal Tax Evasion   On September 6, 2016, in Topeka, Kansas, Clifford C. Copp,the former owner of a trucking company in Kansas City, Kansas, was sentenced to 33 months and ordered to pay $939,408 in restitution. Copp admitted he filed reports to the Internal Revenue Service in 2001 indicating the company owed approximately $939,408 in employment taxes for that year. However, the company did not pay the employment taxes due. In February 2004 Copp was assessed trust fund recovery penalties of $669,037. When the IRS began collection efforts he concealed income. He filed a false statement to the IRS concealing his ownership interest in assets including livestock, life insurance and farm equipment. He also formed Wildcat Limo, LLC, and concealed his ownership interest in the company. Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability.  Former El Dorado Hills Man Sentenced for Scheme that Misappropriated Millions of Dollars of Workers' Compensation Funds On August 19, 2016, in Sacramento, California, Gregory J. Chmielewski, of West Bend, Wisconsin, was sentenced to 41 months in prison for mail fraud in connection with his misappropriation of funds from his insurance business into his own personal accounts for his personal use. Between September 2003 and September 2007, Chmielewski defrauded his clients and their employees in a workers’ compensation coverage scheme. Chmielewski set up a professional employer organization called Independent Management Resources (IMR), later operating under the name Management Resources Group (MRG). Chmielewski solicited an Indian tribe to partner with him to provide employee insurance coverage and other employee services at a reduced cost. He marketed the insurance coverage to California employers as a low-cost alternative to workers’ compensation coverage, and claimed that it was modeled after the California workers’ compensation statutes except that claims were made and adjudicated under the Tribe’s sovereign system. Because of the low rates, Chmielewski was successful in obtaining employers as clients. Chmielewski diverted and misappropriated millions of dollars from MRG accounts for his personal use. He caused over $7.3 million to be paid out of MRG’s accounts to other unrelated companies that he controlled. Eventually, the company experienced serious cash flow problems and was forced to cease operations, leaving approximately 117 injured workers with approximately $1.8 million in unpaid claims. Federal Fugitive Captured, Sentenced for Fuel Tax Excise Scheme On Aug. 11, 2016, in Houston, Texas, Yousef Ishaq Abuteir, was ordered to serve 60 months in prison and ordered to pay $3,328,459 in restitution for tax evasion regarding a fuel excise scheme. Abuteir pleaded guilty to the charge of conspiracy on April 14, 2008. He was also charged and convicted in state court on charges related to the same scheme. However, prior to sentencing in both cases, he fled the country. In 2014, Abuteir was located in Israel and subsequently extradited to the United States. Abuteir is the final defendant to be sentenced on related fuel tax investigations. The original 2007 indictment charged Abuteir, Sidney Berle Baldon II and Tracy Dale Diamond with conspiring in a multi-million dollar fuel excise scheme executed in Texas and Louisiana between October 2001 and November 2003. The indictment alleged that the fuel excise tax scheme involved the acquisition of more than 13 million gallons of kerosene from Calcasieu Refinery in Lake Charles, Louisiana, without paying federal excise taxes. The defendants were able to avoid paying the excise tax by falsely stating the fuel was for export, as opposed to for on-road use. The kerosene was then allegedly trucked to Houston, where it was blended with middle distillate oil, a by-product of asphalt production.  The resulting blend was eventually sold to various retail gas stations in and around the Houston area, where it was sold to consumers as diesel fuel. The retail stations collected the federal diesel fuel excise tax from their customers at the filling pump. Baldon and Diamond subsequently pleaded guilty and, in 2009, were sentenced to 60 months in prison and 12 months and one day in prison, respectively. Additionally, they were also ordered to pay more than $3 million in restitution to the IRS. Michigan Resident Sentenced for Investment Fraud Scheme On August 9, 2016, in Grand Rapids, Michigan, Steven Jack Hayes, of Hudsonville, was sentenced to 48 months in prison and three years of supervised release. Hayes was also ordered to pay $822,961 to the victims of his fraud and $90,806 to the IRS. Hayes was previously convicted of two felonies in connection with an investment fraud scheme he perpetrated between 2001 and 2015. According to court documents, Hayes operated a tax return and investment consulting business. Hayes falsely represented to clients that he would invest their money in retirement accounts and other investments. In total, nearly 20 individuals in West Michigan invested their money with Hayes. Hayes also pleaded guilty to filing a false 2011 federal tax return that underreported his income that year by at least $158,000. Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability.  Former El Dorado Hills Man Sentenced for Scheme that Misappropriated Millions of Dollars of Workers' Compensation Funds On August 19, 2016, in Sacramento, California, Gregory J. Chmielewski, of West Bend, Wisconsin, was sentenced to 41 months in prison for mail fraud in connection with his misappropriation of funds from his insurance business into his own personal accounts for his personal use. Between September 2003 and September 2007, Chmielewski defrauded his clients and their employees in a workers’ compensation coverage scheme. Chmielewski set up a professional employer organization called Independent Management Resources (IMR), later operating under the name Management Resources Group (MRG). Chmielewski solicited an Indian tribe to partner with him to provide employee insurance coverage and other employee services at a reduced cost. He marketed the insurance coverage to California employers as a low-cost alternative to workers’ compensation coverage, and claimed that it was modeled after the California workers’ compensation statutes except that claims were made and adjudicated under the Tribe’s sovereign system. Because of the low rates, Chmielewski was successful in obtaining employers as clients. Chmielewski diverted and misappropriated millions of dollars from MRG accounts for his personal use. He caused over $7.3 million to be paid out of MRG’s accounts to other unrelated companies that he controlled. Eventually, the company experienced serious cash flow problems and was forced to cease operations, leaving approximately 117 injured workers with approximately $1.8 million in unpaid claims. Michigan Resident Sentenced for Investment Fraud Scheme On August 9, 2016, in Grand Rapids, Michigan, Steven Jack Hayes, of Hudsonville, was sentenced to 48 months in prison and three years of supervised release. Hayes was also ordered to pay $822,961 to the victims of his fraud and $90,806 to the IRS. Hayes was previously convicted of two felonies in connection with an investment fraud scheme he perpetrated between 2001 and 2015. According to court documents, Hayes operated a tax return and investment consulting business. Hayes falsely represented to clients that he would invest their money in retirement accounts and other investments. In total, nearly 20 individuals in West Michigan invested their money with Hayes. Hayes also pleaded guilty to filing a false 2011 federal tax return that underreported his income that year by at least $158,000. Former Manager of Federal Credit Union Sentenced for Evading Federal Income Taxes on Embezzled Funds On July 20, 2016, in Harrisburg, Pennsylvania, Sherry Garner, of Red Lion, was sentenced to 24 months in prison and ordered to pay $252,106 in restitution to CUMIS Insurance Society, Inc. and $62,704 to the IRS. Garner pleaded guilty on Feb. 19, 2016, to bank larceny and tax evasion. According to court documents, Garner was the former CEO-Manager of the HD York Federal Credit Union in York, Pennsylvania. Garner embezzled $252,106 from the HD York Credit Union between 2010 and 2013 and failed to report the stolen income on her federal income tax returns. The total tax loss to the IRS was $62,704.   Nevada Man Sentenced For Perpetrating A Nationwide Multimillion-Dollar Fraud Scheme On July 19, 2016, in Las Vegas, Nevada, Anton Paul Drago was sentenced to 300 months in prison, five years of supervised release and ordered to pay $2.3 million in restitution. Drago, formerly known as Evan Fogarty, was convicted in March 2016 on one count of conspiracy to commit wire fraud, two counts of wire fraud, three counts of submitting false claims to the U.S. Department of Veterans Affairs (VA), one count of theft of government funds, one count of passing a fictitious financial instrument, one count of making false statements to federal agents and one count of failing to file a federal income tax return. According to court documents, Drago orchestrated a large-scale Nigerian oil investment fraud scheme.  From at least 2004 through 2012, Drago told investors that money they invested would be used for legal fees and business expenses to fund the production, refinement and shipment of crude oil from Nigeria to the Bahamas.  Along with co-conspirator Joseph Rizzuti, Drago also told investors that the money they invested would fund the purchase of an oil refinery in the Bahamas. Drago lied to investors about his background, falsely claiming that he was an engineer and an expert in the oil industry with over 30 years of experience working worldwide. He also falsely told some investors that he was the grandson of the Shell Oil founder and heir to a $500 million trust which he invested in the Nigerian oil investment deal. None of these claims were true. Drago and Rizzuti contracted with investors, promising them a short-term turnaround on their investment in just 60 days with a return of up to 400 percent. Unwitting investors gave the conspirators more than $2 million. Instead of investing in a Nigerian oil deal as promised, Drago and Rizzuti used most of the investors’ money for personal expenses. In addition, nearly $1 million of the investors’ money was transferred to unknown bank accounts in China. Despite Drago’s receipt of income from this fraudulent scheme, he failed to file his 2007 federal income tax return in a timely manner.  Drago also attempted to negotiate a fictitious financial instrument purporting to be an International Bill of Exchange worth $10 million at a Wells Fargo Bank branch in Las Vegas. At the same time he was perpetrating the fraudulent Nigerian oil investment scheme, Drago also falsely claimed individual unemployability compensation benefits from the VA.  Drago served in the U.S. Marine Corps. For decades, Drago falsely claimed to have a debilitating military service-related knee injury and was totally unable to work in any capacity, when in fact he was self-employed and running several businesses.  The evidence showed that Drago was active and an avid golfer, spending more than $100,000 on golf-related expenses between 2005 and 2008.  Based upon his false claims to the VA, he received thousands of dollars in monthly VA benefits to which he was not entitled. Rizzuti was sentenced in May 2013 to 80 months in prison.   Former New Hampshire Man Sentenced for Tax Evasion Stemming from Wire Fraud Scheme   On July 13, 2016, in Concord, New Hampshire, William M. Richmond, formerly of Atkinson, was sentenced to 24 months in prison and ordered to pay $743,171 in restitution to Richard Piller and Joan Ettelson. Richmond pleaded guilty to three counts of tax evasion on July 17, 2015. According to court documents, in 2006 through 2008 Richmond failed to report and pay taxes on more than $743,000 he stole through a wire fraud scheme. From about May 18, 2005, through about April 2009, Richmond held a durable power of attorney for Richard Piller. The power of attorney gave Richmond unrestricted access to Piller’s finances. Richmond was supposed to manage Piller’s personal and business affairs while Piller and his then-wife, Joan Ettelson, were out of the country for extended periods. Richmond used the power of attorney to commit a wire fraud scheme through which he stole more than $743,000 from Piller and Ettelson. Richmond failed to disclose the criminally derived income on his tax returns for 2006, 2007, and 2008, and he failed to list the substantial additional taxes he owed for each year based on that income. Instead, Richmond falsely claimed that his only income was taxable interest and that he owed no taxes for each of the three years. Pennsylvania Woman Sentenced for Selling Millions of Dollars in Fraudulent Telecom Equipment On July 13, 2016, in Trenton, New Jersey, Juanita L. Berry, of Phoenixville, Pennsylvania, was sentenced to 60 months in prison, three years of supervised release and ordered to pay restitution of $3.4 million. Berry was convicted in December 2015 of four counts of wire fraud, which caused more than $3.5 million in losses, and two counts of tax evasion for evading taxes in 2010 and 2011. According to court documents, from 2008 to 2011, Berry worked as a consultant for an Indiana company that installed and removed telecommunications systems, first as a sales representative and later as the company’s vice president for major accounts. Berry owned a company named J. Starr Communications Inc., (J. Starr) through which she arranged her consulting agreement and operated her fraudulent scheme. Without the knowledge or authorization of the telecommunications company’s management, Berry sold telecommunications equipment owned by her employer as though such equipment belonged to her or J. Starr. She then pocketed the proceeds from such fraudulent sales. Berry deceived employees into thinking that the shipments were part of the telecommunications company’s normal course of business. Between 2008 and 2011, the Florida company that purchased the equipment from Berry or J. Starr wired in excess of $3.5 million in payment to J. Starr’s bank account. Former Hunter Douglas Attorney Sentenced for Mail Fraud and Filing a False Tax Return On July 13, 2016, Jason Timothy Throne, formerly of Colorado, was sentenced to 71 months in prison, three years supervised release and ordered to pay $4,800,000 dollars in restitution to Hunter Douglas’s insurance companies and $345,000 to the IRS. Throne pleaded guilty on April 4, 2016. According to court filings, Throne, a lawyer, joined Hunter Douglas, Inc. as intellectual property counsel in 1993. He was promoted to intellectual property general counsel in 2001 and remained in that position until his employment was terminated in June 2014. Throne’s duties included managing and overseeing patents and trademarks for Hunter Douglas. Beginning in early 2000 and continuing to April 2014, Throne prepared 162 false PSG invoices, each addressed to “Jason T. Throne Hunter Douglas Inc.” Throne stated on each invoice that PSG had performed patent searches for Hunter Douglas and that Hunter Douglas owed money to PSG for those services. After writing “OK to pay” and his initials on each of the invoices, Throne submitted them on a monthly basis to the accounting department at the Hunter Douglas offices in Colorado. Relying on Throne’s approvals, the accounting department paid the invoices by mailing checks to PSG between April 18, 2000, and April 25, 2014.  The total amount of the checks was $4,841,146. After retrieving the checks from the post office, Throne deposited them into the PSG account at Vectra Bank. He then caused the money to be moved from that account to personal bank accounts and used it for mortgage payments, home renovations, landscaping, and other personal expenses. For the years 2009 through 2013, Throne prepared Forms 1040 U.S. Individual Income Tax Returns for himself and his wife and a 2014 Form 1040 for himself only. Throne should have reported all of the proceeds of the above described scheme on the returns as “Other income,” but he instead reported only some of the proceeds and mischaracterized them as other forms of income and also falsely claimed business expenses. The tax loss resulting from the false 2009 through 2014 returns is $345,348.   Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability.  Subway Franchisee and Gas Station Owner sentenced for Multi-Million Dollar Conspiracy to Defraud the Internal Revenue Service On July 8, 2016 in Washington, DC, Obayedul Hoque, of Arlington, Virginia, was sentenced to 30 months in prison, two years of supervised release and ordered to pay a $20,000 fine and $2,022,106 in restitution to the IRS for tax liabilities for the years 2008 through 2013. According to court documents, Hoque owned and operated Skyhill Shell, a gas station in Alexandria and multiple Subway restaurant franchises in Washington, D.C., and Arlington, Virginia, and Alexandria. Between 2008 and 2014, Hoque and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the IRS in the ascertainment and collection of individual and corporate income taxes. For the period of 2008 through 2013, point of sales records for the Subway franchises reflected total sales of $20,805,667. However, Hoque and his co-conspirators provided false monthly sales figures to the accounting firm to prepare the Subway entities’ tax returns.  As a result, Hoque and his co-conspirators caused false corporate and partnership tax returns to be filed for the Subway franchises which reported sales of only $14,377,696. Hoque and his co-conspirators also caused false corporate tax returns to be filed on behalf of Skyhill Shell.  For some years, some of the entities did not file tax returns with the IRS. Additionally, Hoque filed false individual income tax returns with the IRS. Hoque admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million.   Businessman Sentenced to Prison for Selling Millions of Dollars of Counterfeit Cell Phone Parts On July 5, 2016, in San Diego, California, Octavio Cesar Sana, a citizen of Spain, was sentenced to 41 months in prison and ordered to forfeit $3.2 million and to pay a fine of $10,000 for his role leading a years-long international conspiracy to import counterfeit goods from China into the United States. Sana was sentenced for conspiring to traffic in counterfeit goods and launder money. According to information presented at sentencing, Sana’s business, “Flexqueen.com,” sold at least $3.2 million of counterfeit cell phone components over the last eight years. Sana obtained his fake products from Chinese suppliers and sold them to individual consumers and other downstream businesses through the internet and from a storefront repair business in downtown San Diego. Over their years-long scheme, Sana and his co-conspirators employed extensive methods to frustrate the ability of customs officials to detect, inspect and intercept their counterfeit goods, both in the U.S. and in China. Sana was arrested Feb. 3, 2015, at the Imperial Valley Airport when he arrived to meet a co-conspirator to coordinate further counterfeit trafficking ventures. The day of his arrest, agents executed a search warrant at the home Sana was renting and discovered thousands of additional counterfeit parts. California Man Sentenced for Tax Evasion and Conspiracy to Defraud the United States On July 5, 2016, in San Francisco, California, Jay Scott Soderling was sentenced to 36 months in prison, three years supervised release and ordered to pay $345,697 in restitution. In December of 2015, Soderling and his wife, Jessica Lynn Soderling, were convicted by a federal jury of conspiracy to defraud the United States. Jay Soderling was also convicted on one count of tax evasion. The evidence at trial showed that the couple was involved in efforts to conceal assets from the IRS to avoid payment of Jay Soderling’s tax liabilities. During 2004 and 2005, Jay Soderling evaded payment of his taxes by hiding money and assets in the name of a corporation. In 2008 and 2009, after the IRS discovered Soderling was keeping his personal assets in the name of the corporation, the couple worked together to further conceal assets by, among other things, moving money into a bank account opened for this purpose in Jessica Soderling’s name. Jessica Soderling was sentenced to a three-year term of probation, and ordered to pay $153,242 in restitution, in April 2016. Disbarred New York Attorney Sentenced for Phony Ticket Resale, Real Estate Investment Schemes On June 28, 2016, in Newark, New Jersey, Pasquale Stiso, aka Pat Stiso, of New Rochelle, was sentenced to 43 months in prison, three years of supervised release and ordered to pay restitution of $460,000. Stiso, a disbarred New York attorney was previously convicted of one count of conspiracy to commit wire fraud, six substantive counts of wire fraud and three counts of money laundering. According to court documents, Stiso and his co-defendant, Paul Mancuso, obtained substantial investments from victims for various projects. Many of the victims of Stiso and Mancuso’s schemes lost all or substantially all of the money they invested. Stiso and Mancuso falsely represented to some victims that they would purchase event tickets at a lower or wholesale rate and then resell them to members of the public at an inflated rate, creating profits for their investors. Stiso and Mancuso also falsely represented to victims that they were investors in a real estate development projects and that investor money would be used to purchase an interest in real property. In reality, Stiso and Mancuso did not buy tickets or properties with their victims’ money. Instead, they engaged in monetary transactions designed to funnel, and in many instances launder, the victims’ investments for their own benefit, including paying illegal gambling debts and money owed to loan sharks. Mancuso previously pleaded guilty to conspiring with Stiso to commit wire fraud and awaits sentencing. Florida Business Entrepreneur Sentenced for Tax Evasion On June 24, 2016, in Pensacola, Florida, Trenton S. Sommerville of Destin, Florida, was sentenced to 51 months in prison for wire fraud and tax evasion. Sommerville pleaded guilty in January 2016. According to court documents, Sommerville obtained funds from investors for ventures he controlled, including that of an insurance provider and companies involved in gambling initiatives in the Caribbean. Sommerville concealed from investors that he would take a salary and pay for personal expenses with investment funds. He also did not invest any of his own capital in his ventures. Between January 2011 and December 2014, Sommerville embezzled investment funds by making personal expenditures directly from corporate accounts, transferring investment funds to his personal account, and writing corporate checks to a family member. As of May 2012, Sommerville owed approximately $549,789 in taxes to the IRS for the tax years 2004 through 2010. He tried to evade paying taxes by concealing income and assets from the IRS through the use of nominee names and accounts, by using a cashier’s check to pay off the mortgage on his residence, and by selling his personal shares and instructing the buyer to wire the money into another bank account. Sommerville failed to file federal income tax returns for the tax years 2011 through 2013, despite earning approximately $585,214 in income and owing approximately $103,279 in taxes for those years. Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability.  New York Investment Advisor Sentenced for Defrauding Investors in a Ponzi Scheme On June 8, 2016, in Rochester, New York, Eduardo Galan, of Brockport, was sentenced to 36 months in prison and ordered to pay $1,100,000 in restitution to victims of the fraud. Galan was convicted of mail fraud and money laundering. According to court documents, Galan owned and controlled a financial services business, S&G Unlimited Services. Galan was a registered securities broker until October 2008, at which time he was barred from the industry. From January 2008 to March 2013, Galan engaged in a Ponzi scheme. He promised investors that he would use their money to broker private mortgage transactions, but instead used it to repay earlier investors and cover personal and business expenses. In total, Galan defrauded 18 investors out of $821,912 before the fraud was discovered. Galan owed other clients money as well, for a total of $1,098,567. Physician Sentenced for Multi-Year Tax Evasion On June 3, 2016, in San Diego, California, Dr. William Richard Bailey was sentenced to 41 months in prison, three years of supervised release, ordered to pay $316,526, plus prejudgment interest, to the IRS, and pay $61,151 to the California Franchise Tax Board. Bailey was found guilty on Jan. 28, 2016, of eight counts of tax evasion for tax years 2004 through 2011. According to court records, Bailey, a physician of osteopathic medicine, provided physician services to the patients of several clinics. Despite earning more than $1 million in income, Bailey accomplished his tax evasion by concealing his income in a purported “trust” account. Thereafter, Bailey prepared and filed false federal income tax returns for the years 2004 through 2011 reporting nothing in taxable income and nothing in federal income tax due to the IRS. Bailey admitted during trial that he fabricated the “trust” documents by cutting and pasting them together and forged the signatures of known associates on the documents. Bailey also opened a bank account in the name of the “trust” and deposited income he earned into the “trust” account. Bailey transferred funds and drew checks on the “trust” bank account to pay for more than $1 million of his own personal expenses. Despite earning more than $1 million in income over 8 years, Bailey reported no taxable income on his tax returns he filed with the IRS during that same period of time. Bailey caused the IRS to lose $316,526 in unpaid federal income taxes and the California Franchise Tax Board to lose $61,151 in unpaid state income taxes. CEO of Mortgage Brokerage Engaged in Equity-Skimming Scheme Sentenced On June 1, 2016, in Los Angeles, California, David Singui, of Inglewood, the former CEO of Direct Money Source (DMS), was sentenced to 94 months in prison and ordered to pay just over $4 million in restitution. Singui pleaded guilty to conspiracy, loan fraud, aggravated identity theft and tax evasion charges. According to court documents, the scheme caused distressed homeowners to lose more than $4 million and lending institutions to suffer losses of more than $11 million. Homeowners suffered losses when they were induced to sell their homes to straw borrowers sponsored by DMS, which was supposedly going to hold these properties for one year while the distressed homeowners repaired their credit and would then be in a position to repurchase these properties from the straw borrowers. In fact, DMS and Singui took permanent title to these properties and misappropriated the distressed homeowners’ equity, while DMS and Singui ended up serving as the landlord of these distressed properties and collected rent from the homeowners for over five years. Co-defendant Aziz Meghji, who was the second-in-charge at DMS, was previously sentenced to four years in prison. Metal Recycling Business Owners Sentenced for Tax Fraud Scheme On May 31, 2016, in Lynchburg, Virginia, Edgar and Contina Foxx, were sentenced to 41 months and 30 months in prison, respectively. Both were also ordered to serve three years of supervised release and pay restitution of $147,708. On Nov. 6, 2015, Edgar Foxx was convicted of filing a false 2008 income tax return, failing to file his 2009 through 2011 tax returns and theft of government money. On the same date, Contina Foxx was also convicted of theft of government money as well as providing a false statement for health care benefits. According to court documents, the Foxxes owned and operated a metal recycling business between 2008 and 2012. They gathered scrap metal materials including junk cars and old appliances and sold them to recycling facilities. During the 2008 through 2011 time period, the Foxxes received over $500,000 in payments from several metal recycling companies and failed to report any of this income on their 2008 through 2011 individual income tax returns. At the same time, Contina Foxx provided false information to the Social Security Administration by failing to disclose the income earned from the metal recycling business.  As a result, the Foxxes unlawfully received approximately $80,000 in Medicaid benefits between 2010 and 2012. Leader of Multi-Million Dollar Bank ‘Bustout’ Scheme that used Counterfeit Checks Sentenced On May 19, 2016, in Los Angeles, California, Jae Ho Chung was sentenced to 63 months in prison and ordered to pay nearly $2.1 million in restitution to a variety of banks. Chung pleaded guilty in October 2015 to two counts of bank fraud. The overall scheme involved approximately $15 million in losses, but Chung was directly involved in criminal conduct that netted him approximately $2 million. Beginning in July 2008 and continuing until October 2013, Chung conspired with Michael Yeon Cho and 13 other co-defendants to defraud banks through the bustout scheme that used counterfeit checks to inflate account balances so that withdrawals could promptly be made before the banks learned that the deposited checks were worthless. Chung created and directed others to create counterfeit checks, directed others to arrange the establishment of “shell” corporations make it appear that bank accounts were legitimate; and withdrew funds from bustout accounts and transferred the fraudulent proceeds to himself and others. Cho, who was Chung’s primary co-conspirator, previously pleaded guilty and is scheduled to be sentenced at a later date. Out of the remaining 13 defendants, the charges against 12 of them have been resolved either through pre-trial diversion or through guilty pleas. Several of those defendants have been sentenced to prison terms as long as 33 months. One remaining defendant is scheduled to go on trial. Massachusetts Man Sentenced for $1.3 Million Hedgefund Fraud On May 18, 2016, in Boston, Massachusetts, Gregg D. Caplitz, of Woburn, was sentenced to 42 months in prison, three years of supervised release and ordered to pay restitution of $1,899,203. In April 2014, Caplitz pleaded guilty to conspiracy to commit investment adviser fraud, wire fraud, submitting false statements to the SEC, defrauding the United States by impeding the IRS, investment adviser fraud, submitting false statements to the SEC, four counts of wire fraud, and five counts of filing false tax returns. According to court documents, from 2008 to March 2013, Caplitz and his business partner, Rosalind Herman, pitched a new hedge fund company investment to existing clients. The purported investment was billed by Caplitz and Herman as a hedge fund company owned by Herman. No hedge fund ever existed, however, and the investment funds obtained from clients were used to fund personal expenses for Herman, her family and Caplitz. In total, more than a dozen victims lost more than $1.3 million in savings, most of which were retirement savings. In April 2016, Herman was convicted of investment advisor fraud, tax fraud, wire fraud and conspiracy. Herman’s sentencing has been scheduled. Payroll Company Owners Sentenced for Tax Evasion and Fraud On May 11, 2016, in Boston, Massachusetts, William McCullough, of Westborough, was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay restitution of $1,825,933. In September 2015, he pleaded guilty to two counts of conspiracy to defraud the IRS, four counts of making false statements in tax returns, four counts of tax evasion and one count of wire fraud. Robert McCullough, William’s son, and Gary Davis were sentenced to eight months in prison and six months in prison, respectively, for their parts in the conspiracy. According to court documents, the McCulloughs are co-owners of Harpers Data Services, a payroll company. William McCullough was the treasurer and his son, Robert, is the president. Gary Davis was a former owner and president of Harpers until his retirement in 2010. From 2007 to 2012, William and Robert McCullough failed to report approximately $11 million of income on the corporation’s annual tax returns resulting in the corporation failing to pay taxes of approximately $3.78 million. Also, William McCullough wrote checks from corporate accounts totaling approximately $7.4 million to himself, Robert McCullough, and Gary Davis. None of this income was reported to the IRS, and as a result, the defendants failed to pay approximately $1.7 million in taxes from 2007 through 2011. In a separate case, William McCullough was sentenced for committing wire fraud for his theft of approximately $1.8 million dollars from the company’s clients.    Selig & Associates provides the most aggressive tax representation allowed by law. Specializing in Trust Fund Recovery Penalty (TFRP) representation, and all payroll, income and sales tax controversies. We settle contested tax audits; negotiate excellent payment plans, compromise tax debts, and resolve all civil and criminal tax issues, including innocent spouse relief and separation of liability.  California Resident Sentenced on Federal Tax Charges On May 9, 2016, in Los Angeles, California, Donald M. Baxi, a Canadian citizen formerly residing in Ladera Ranch, was sentenced to 12 months and one day in prison and ordered to pay $56,319 in restitution. Baxi pleaded guilty in March to aiding and abetting in the preparation of a false income tax return. According to the plea agreement, Baxi was responsible for having the partnership income tax returns of Vintages Wine Bar, LLC (“VWB”), prepared and filed with the IRS. For each of the years 2003, 2004, and 2005, Baxi deliberately provided false and incomplete information to his tax return preparer so that VWB’s interest income would not be reported to the IRS. During these years however, VWB received interest income from two separate sources totaling $201,142. This unreported interest income caused a tax loss to the government of $56,319. Baxi fled the United States upon learning of his indictment and remained and fugitive for five years until he was arrested by German authorities and extradited back to the United States to face the charges contained in the indictment. Former Vice President of Paint Company Sentenced for Evading Taxes On May 2, 2016, in Greeneville, Tennessee, Charles J. Rutherford, of Johnson City, was sentenced to 18 months in prison and ordered to pay over $1.2 million in restitution to both the victim company and the IRS. Rutherford was convicted in January 2016 of filing false and fraudulent federal tax returns in an attempt to evade and defeat paying income tax. According to court documents, from 2006 through 2014, while serving as vice president of a paint company in Bristol, Rutherford embezzled approximately $1 million by paying his own personal expenses out of company accounts. Rutherford failed to report the embezzled money as income on his federal individual income tax returns for tax years 2008 through 2013. By filing false and fraudulent returns, he evaded paying well over $200,000 in federal taxes. Former Veterans Services Organization Bookkeeper Sentenced On April 29, 2016, in New Haven, Connecticut, Cynthia Tanner, formerly of Darien, was sentenced to 24 months in prison and three years of supervised release. Tanner was also ordered to pay full restitution to a national veterans’ service fund and back taxes, interest and penalties of more than $500,000. On Dec. 15, 2015, Tanner pleaded guilty to wire fraud and tax evasion. According to court documents, Tanner worked as a bookkeeper for the service fund. From approximately January 2009 through June 2014, Tanner used nearly $800,000 of the fund’s money to pay various personal expenses for her and her family members. She altered records to conceal her scheme and by falsely claiming that the stolen monies were being paid to veterans in need. Tanner failed to report $794,768 in embezzled income on her 2009 through 2013 federal tax returns, resulting in a tax loss of $270,026. Missouri Woman Sentenced on Embezzlement & Tax Charges On April 20, 2016, in St. Louis, Missouri, Anastasia Grzeskowiak, of St. Charles, was sentenced to 51 months in prison and ordered to pay $3,558,993 in restitution to the victims of her crimes. Grzeskowiak pleaded guilty in January to one count of wire fraud and three counts of filing false tax returns. According to court documents, beginning in 2000, an individual with whom Grzeskowiak was previously acquainted developed a blinding eye disease that significantly impaired his vision and ability to read and thus to manage his own financial affairs. In June 2003, that individual asked Grzeskowiak to assist him in paying his personal bills, which she did until April 2013. Between June 2006 and continuing through April 2013, Grzeskowiak forged her victim’s signature on more than 800 checks which she made out to herself, endorsed, and used to pay her personal expenses, the expenses of others, and to gamble. In total, she obtained more than $2,916,091 from the victim without his authorization, as well as causing him to incur substantial legal and accounting expenses in order to uncover the fraud. Additionally, Grzeskowiak filed false tax returns for 2010 through 2012, understating her gross income from the illegal activity described above, resulting in a tax loss of $506,496. Montana Man Sentenced to Prison for Marijuana Manufacturing, Tax Evasion and Weapons Charges On April 19, 2016, in Great Falls, Montana, Dennis Peiker, of Lincoln, was sentenced to 60 months in prison, four years of supervised release and ordered to pay $409,819 in restitution to the IRS. In August 2015, Peiker was convicted of manufacturing more than 100 marijuana plants. In September 2015, Peiker pleaded guilty to two counts of felon in possession of a firearm and one count of tax evasion. According to court documents, Peiker evaded the payment of more than $628,000 in federal income tax, penalties and interest for the years 2002 through 2009 by concealing the true nature of his assets, making false statements to IRS officials, and placing funds and property in the names of others. Peiker was previously convicted in 1999 of filing false federal income tax returns. Despite the fact that Peiker is a convicted felon and therefore prohibited from possessing firearms, law enforcement agents seized ammunition and multiple firearms, from his residence on two separate occasions in 2011 and 2015.  Additionally, when Peiker was arrested in April 2015 following his indictment on the tax evasion charge, law enforcement agents discovered more than 100 marijuana plants at his residence.    Tennessee Attorney Sentenced for Real Estate Closing Scheme   On April 14, 2016, in Nashville, Tennessee, Garry Christopher Forsythe, of Hendersonville, was sentenced to 33 months in prison, two years of supervised release and ordered to pay $2,249,294 in restitution and to forfeit the proceeds of his crime. In December 2015, Forsythe pleaded guilty to wire fraud in connection with a scheme involving escrow funds held by his real estate closing company, Forsythe Title and Escrow. According to court documents, the company’s escrow accounts developed shortages of more than $2.2 million because Forsythe made inflated or unsupported transfers of funds from the escrow accounts to his company’s operating accounts. The escrow shortages resulted in bounced checks, delays in scheduled real estate closings, and instances in which borrowers were left with two mortgages because Forsythe Title & Escrow failed to pay financial institutions with funds that had been provided for that purpose. Former Part-Time Associate Pastor Sentenced for Defrauding Investors On April 13, 2016 in Fort Smith, Arkansas, Thomas Edward James, of Phoenix, Arizona, formerly of Fort Smith, was sentenced to 108 months in prison, three years of supervised release and was ordered to pay restitution of $524,203. James previously pleaded guilty to mail fraud and making a false tax return. According to court documents, James, was a part-time associate pastor of a church in Fort Smith. James fraudulently induced victims, the majority of whom were retired and members of the church, to invest their funds in what he falsely represented to be U.S. Treasury Bonds with a rate of return of in excess of 20 percent. James did not invest the funds but converted them to his personal use. James also filed false tax returns from 2008-2012, and owed the United States additional taxes in the amount of $205,566. Missouri Man Sentenced on Federal Fraud Charges On April 7, 2016, in St. Louis, Missouri, James Michael Arnold, of Sikeston, was sentenced to 30 months in prison for mail fraud, aggravated identity theft and failure to file tax returns. According to court documents, Arnold graduated from the University of Missouri School of Law, Kansas City, in July, 1992 but never passed the Missouri Bar Examination and has never been licensed to practice law in Missouri or elsewhere. Between January 2010 and January 2014, Arnold fraudulently represented that he was a licensed attorney in order to gain employment as an attorney. As part of his scheme to defraud, Arnold used the name and Missouri Bar number of a licensed Missouri attorney to apply for jobs as an attorney and to file court documents. Arnold’s unsuspecting victims paid him for his fraudulent representation. Additionally, for tax years 2011, 2012, and 2013, Arnold failed to file tax returns reporting the earnings from the illegal activity described. Arnold’s failure to file the required returns resulted in a tax loss of approximately $74,000. California CPA Sentenced For Defrauding New Jersey Religious Center, California Non-Profit Out Of More Than $4 Million On April 5, 2016, in Newark, New Jersey, Donald Gridiron, of Pomona, California, was sentenced to 57 months in prison, three years of supervised release and ordered to pay restitution of approximately $5.16 million. Gridiron previously pleaded guilty to wire fraud and filing a false tax return. According to court documents, a religious facility in New Jersey hired Gridiron agreeing to pay him a monthly salary and reimburse him for reasonable expenses related to his work. In addition, Gridiron was the treasurer for a non-profit entity registered in California. Gridiron used his employment with the worship center and his status with the non-profit to illegally syphon money without their consent or authorization. In total, Gridiron transferred more than $4 million to accounts he controlled and then used the funds for his own use. Gridiron also failed to report this income on his tax returns, including $950,000 he stole during the 2011 tax year. New Hampshire Man Sentenced for Tax Evasion in Connection With Fraudulent Investment Operation   On April 4, 2016, in Concord, New Hampshire, Aaron E. Olson, of Rindge, was sentenced to 60 months in prison for tax evasion. A restitution hearing has been scheduled. Olson pleaded guilty to four counts of attempted tax evasion on March 9, 2015. According to court documents, from 2007 through 2010, Olson was the sole proprietor of an investment business known as AEO Associates (AEO). In December of 2010, Olson formed another investment business, KMO Associates LLC (KMO). Olson used AEO and later KMO to obtain approximately $27.8 million from individuals and organizations ostensibly to invest on their behalf. Olson was not licensed as an investment broker and he did not register AEO and KMO with the State of New Hampshire as investment businesses. Olson used approximately $2.6 million of the investors’ money for his personal benefit and used some of the investors’ money to make fraudulent “earnings” payments to other investors. To conceal this conduct, Olson sent investors fictitious earnings statements that falsely showed significant earnings in their accounts. Olson also filed false individual tax returns with the IRS. In total, Olson fraudulently understated the income taxes he owed for the four years by more than $664,000. School Construction Authority General Contractor Sentenced for Long-Running Scheme   On April 1, 2016, in Brooklyn, New York, Muzaffar Nadeem was sentenced to 96 months in prison, ordered to pay more than $1.3 million in restitution to the IRS and forfeit over $7.1 million. On May 8, 2015, Nadeem was convicted of structuring financial transactions, money laundering, unlawful monetary transactions over $10,000, subscribing to false tax returns and multiple other related financial and conspiracy charges. According to court documents, Nadeem, owner of SM&B Construction Co., Inc. (SM&B), had a leadership role in a long-running scheme to pay workers a fraction of the prevailing wage on projects funded by the New York City School Construction Authority (SCA). Nadeem, Zainul Syed and Irfan Muzaffar illegally structured financial transactions, cashing hundreds of checks in amounts less than $10,000 to avoid federal reporting requirements. Since July 2006, Nadeem and others acting under his direction wrote more than $4.1 million in structured checks on SM&B’s account. Nadeem also laundered approximately $7 million in scheme proceeds through shell companies and sent millions of dollars through these shell companies to Pakistan to invest in an amusement park and resort complex. Finally, Nadeem filed false tax returns for SM&B and himself that fraudulently inflated SM&B’s business expenses and reduced its profits by more than $4 million. Nadeem’s co-conspirators Afzaal Chaudry and Irfan Muzaffar were sentenced to time served and 18 months in prison, respectively. Zainul Syed awaits sentencing. Missouri Man Sentenced for Bank Fraud Related to $1.6 Million Home On March 24, 2016, in Springfield, Missouri, Michael R. Ussery, of Bois D’Arc, was sentenced to 24 months in prison and ordered to pay $1.3 million in restitution to the victim bank. On Oct. 30, 2015, Ussery was convicted at trial of 12 counts of bank fraud. According to court documents, in 2007, Ussery was building a $1.6 million home for himself in Bois D’Arc. A bank agreed to provide a $1.6 million construction loan to build the residence; $1.15 million was used to pay off the previous bank which had financed the construction of the residence up to that point, and the remaining $450,000 was supposed to have gone to completing the construction of the residence. When work was done on the house, Ussery was supposed to obtain an invoice and a lien waiver from the contractors and submit these documents to the bank, which would then make a disbursement of the amount owed to Ussery’s personal bank account. From May 29 to June 25, 2007, a dozen false invoices and lien waivers were submitted to the bank and, as a result, the bank deposited $315,417 into Ussery’s personal bank account. Ussery eventually stopped construction on the Bois D’Arc property and the bank had to foreclose on the loan. The bank took a $782,349 loss after the sale of the property with its partially finished house. The bank also paid a total of $103,257 to settle mechanic liens placed on the residence by the contractors that Ussery claimed he had paid in the false lien waivers. Ussery filed for bankruptcy relief in 2011. South Dakota Woman Convicted of Tax Fraud On March 21, 2016, in Sioux Falls, South Dakota, Veronica Fairchild of Canistota, South Dakota, and Okoboji, Iowa, was sentenced to 33 months in prison and ordered to pay restitution of $214,000 to the IRS for unpaid taxes. Fairchild who was found guilty of tax fraud as a result of a federal jury trial in Sioux Falls, South Dakota, lost her appeal of the conviction. According to court documents, Fairchild filed her 2005 through 2008 income tax returns in 2010. Bank records revealed she had failed to claim over $850,000 in income over the four-year period of time. Fairchild claimed the unreported income she received from performing private shows as an exotic dancer was a gift. Hydroponics Store Owner Sentenced for Structuring Cash Deposits and Filing False Tax Returns On March 21, 2016, in Fresno, California, Branden Adam Eidson, of Turlock, was sentenced to 37 months in prison and ordered to pay $433,205 in restitution for structuring cash transactions and filing false tax returns. According to court documents, Eidson operated a hydroponics equipment and supply business, Hooked Up Hydroponics. Between 2008 and 2010, he filed false federal income tax returns by underreporting approximately $1,244,365 in gross receipts for his business, resulting in a tax loss to the IRS of more than $430,000. In addition, Eidson made multiple cash deposits of $10,000 or less during this same time period in an attempt to prevent his bank from filing Currency Transaction Reports. In total, Eidson made more than $1.5 million in structured cash deposits. Connecticut Resident Sentenced for Multiple Fraud Conspiracies On March 16, 2016, in New Haven, Connecticut, Ryan Geddes, of Litchfield, was sentenced to 30 months in prison, three years of supervised release and ordered to pay $703,698 in restitution. On April 28, 2015, Geddes pleaded guilty to one count of conspiracy to commit bank fraud and two counts of conspiracy to commit mail and wire fraud. According to court documents, Geddes had accrued a series of debts as of late 2005, and was the subject of various lawsuits and collection efforts for the next several years. Geddes participated in a bank fraud conspiracy in November 2005 when Geddes sold a lakefront home to Thomas Provenzano. Provenzano obtained a loan and a refinance based on applications on which he falsely listed employment by Geddes’s construction company and falsified his income. Geddes’s company verified Provenzano’s employment. The loan is now in default and the property is in foreclosure.  In December 2009 and January 2010, Geddes, Provenzano and others, commenced a mail and wire fraud conspiracy against a title insurance company. Geddes and Dustin Whitten commenced a second mail and wire fraud conspiracy in May 2009 against an insurance company. On Dec. 1, 2014, Provenzano was sentenced to 18 month in prison.  On Dec. 18, 2015, Whitten was sentenced to 12 months and one day in prison. Former Oklahoma State Senator Sentenced for Wire Fraud and Tax Evasion On March 11, 2016, in Tulsa, Oklahoma, Ricky L. Brinkley, a former Oklahoma State Senator, was sentenced to 37 months in prison and ordered to pay $1,829,033 in restitution. On Aug. 20, 2015, Brinkley, of Owasso, pleaded guilty to five counts of wire fraud and one count of subscribing to a false tax return. According to court documents, Brinkley represented the 34th District in in Oklahoma. From Aug. 2, 1999, to April 26, 2015, Brinkley was employed as the President and Chief Executive Officer and then the Chief Operations Officer of the Better Business Bureau (BBB). From November 2005 to February 2015, Brinkley diverted in excess of $1.2 million dollars through the creation of fraudulent invoices for services not rendered, and improperly represented these invoices as reimbursement for legitimate expenses. He fraudulently signed checks, transferred, used, and disbursed funds to pay personal expenses and debts. Brinkley also used his employer’s credit card to make cash withdrawals at automated teller machines in casinos to support his gambling habit. In addition, Brinkley failed to report approximately $165,625 in income for tax year 2013 to the IRS. Florida Resident Sentenced for Filing More Than $7 Million in False Refund Claims with the IRS On March 8, 2016, Efrain Galvez, was sentenced to 44 months in prison and three years of supervised release for filing more than $7 million in false refund claims with the Internal Revenue Service. Galvez previously pleaded guilty to one count of making a false, fictitious, and fraudulent claim against the United States. According to court documents, Galvez filed false federal income tax returns for 2005 through 2008 with the IRS claiming a total of $7,421,987 in fraudulent refunds. In the returns, Galvez falsely asserted that he was owed millions of dollars in income from various entities, and that those entities had withheld the money as federal income tax paid to the IRS. In fact, the entities owed no such income to Galvez, and withheld no such taxes on his behalf. Court documents indicate that Galvez had previously filed legitimate tax returns that did not include fabricated income and withholding amounts and he knew that he had not received the income from the various entities reported on the fraudulent returns. Illinois Man Sentenced for Income Tax Evasion On March 8, 2016, in Springfield, Illinois, Lorenzo Shane Stewart, of Tuscola, was sentenced to 30 months in prison and ordered to pay restitution of $1,122,074 to the IRS. Stewart was also ordered to serve the first six months of his three-year-term of supervised release under home confinement. Stewart pleaded guilty on Aug. 21, 2015, to two counts of income tax evasion According to court documents, in 2006 Stewart began conducting his excavation and construction business under the name Ten Acre Excavating. Stewart put the business under the name of one of his employees, thus not claiming income on his own tax returns. In approximately July 2008, Stewart was awarded contracts to perform excavating and construction work on several natural gas pipeline substations that were being built in the Tuscola area.  Stewart and his employees performed work on these substations and received checks related to this pipeline work totaling approximately $1.7 million in 2008 and $5.9 million in 2009. Stewart admitted that he failed to pay more than $1.2 million in income tax for the 2008 and 2009 tax years. Former Stockbroker Sentenced for Fraud and Tax Evasion On March 1, 2016, in Boston, Massachusetts, Jeffrey Eldred Gallagher, of Bradenton Beach, Florida, was sentenced to 36 months in prison. In December 2015, Gallagher pleaded guilty to one count of wire fraud, three counts of engaging in a monetary transaction and two counts of tax evasion. In 1989, Gallagher was convicted of one count of mail fraud and three counts of interstate transportation of stolen property in connection with his illegal and unauthorized options trading while he was a stockbroker. According to court documents, from at least 2008 through early 2012, Gallagher persuaded friends and associates to pay him money to invest and made promises that the investments would yield guaranteed returns. Gallagher commingled investor funds with his own personal funds, and paid some investors with monies given to him by other investors. When asked for the return of their investments, Gallagher provided investors numerous false explanations and bad checks totaling $1,783,375. In sum, 23 investors lost a total of approximately $617,475. As part of the scheme, in 2009 and 2010, Gallagher used approximately $249,703 of investor monies for his personal benefit, but did not report any of this income on his federal income tax returns for those years. Arkansas Man Sentenced for Federal Tax Crime On Feb. 24, 2016, in Fayetteville, Arkansas, Randall Acton West was sentenced to 14 months in prison, one year of supervised release and ordered to pay restitution of $95,825 to the IRS. West previously pleaded guilty to four counts of willfully failing to file individual income tax returns. According to court documents, West, a former real estate appraiser, failed to file federal income tax returns with the IRS for the years 2007 through 2010, despite earning gross income in excess of the tax return filing threshold.   Former Chairman of International Credit Union Sentenced On Feb. 22, 2016, in Gainesville, Florida, Samuel J. Cusumano, of Orlando, was sentenced to 144 months in prison and ordered to pay $7.8 million in restitution.  Cusumano pleaded guilty to wire fraud on June 24, 2015. According to court documents, between 2007 and 2009, Cusumano, as chairman of the board of Storehouse, promoted the international credit union as a high yield investment opportunity through intentionally misleading presentations and materials. Cusumano fraudulently induced investors from the US and abroad to transfer monies to investment accounts under his control. He falsely claimed that Storehouse used professional currency traders when, in fact, Cusumano personally executed all trades from his home. Although the business was losing money, Cusumano created fraudulent financial statements to convince investors that Storehouse was reaching or exceeding the high rates of return as he promised. When investors discovered they were unable to withdraw their funds due to trading losses, a financial review was conducted. The review revealed that investor funds had been depleted, that earnings had been overstated, and that Cusumano had used a large portion of the investors’ funds to pay personal expenses.   Recruiter in Multi-Million Dollar Mortgage Fraud Scheme Sentenced On Feb. 22, 2016, in Los Angeles, California, Chester Peggese was sentenced to 12 months and one day in prison, five years supervised release and ordered to pay restitution of $4.2 million to a bank and $38,609 to the IRS. Peggese pleaded guilty to bank fraud and subscribing to a false tax return. According to the plea agreement, Peggese held himself out to churches in the Los Angeles area as a consultant who could assist the churches in obtaining mortgage loans to purchase property or in obtaining loans to refinance existing mortgages. Between 2007 and 2009, Peggese would meet with churches and obtain financial information required as part of the loan application. Unidentified co-schemers would alter the financial information provided to make it appear as if the churches were more financially sound than they were. Peggese caused these false loan applications to be submitted to a bank. An insider at the bank, Paul Ryan, provided a template for presenting financial information for the churches to ensure that the church loan applications which contained inflated financial information would be approved. Peggese received payment out of escrow on the loans and would kickback a portion of the funds to Ryan. As a result of this false information, the bank issued a loan of $1,331,250. The actual loss to the bank on this loan was $403,010. Peggese also had additional gross business receipts for calendar year 2008 of $106,325 that was not reported on his tax return. South Carolina Man Sentenced for Tax Fraud On Feb. 17, 2016, in Columbia, South Carolina, Jose Boyzo, of Myrtle Beach, was sentenced to 18 months in prison, three years of supervised release and ordered to pay $1.6 million in restitution to the IRS for theft of government property. According to court documents, Boyzo operated a licensed check cashing business in Myrtle Beach. From 2009 to 2014, Boyzo cashed more than 4,305 tax refund checks that were generated from fraudulent tax returns.  By cashing tax refund checks that he knew were fraudulently generated, Boyzo aided and abetted the tax fraud and caused a loss of approximately $1.6 million to the United States Treasury. Missouri Woman Sentenced for Ponzi Scheme On Feb. 16, 2016, in Kansas City, Missouri, Terina K. Carney, aka Terina Humphrey, of Lebanon, was sentenced to 36 months in prison and ordered to pay restitution of $396,246 to victim investors and $118,241 to the IRS. On Aug. 4, 2015, Carney pleaded guilty to wire fraud, money laundering and failure to file a tax return. According to court documents, Carney was the owner of Riverside Lease, LLC. She promised investors a high rate of return at little to no risk. Carney actually used the money she received to pay other investors or for personal expenses. Carney defrauded numerous investors, for a total of $697,918. During the course of the Ponzi scheme she repaid initial investors $326,328 from monies obtained from later investors. Thus, the total amount lost was $396,246. Texas Businessman Sentenced for Tax Evasion On Feb. 11, 2016, in Fort Worth, Texas, Avan Nguyen, of Arlington, was sentenced to 36 months in prison and ordered to pay a $250,000 fine. Additionally, Nguyen agreed to forfeit $1.1 million previously seized and he made restitution of approximately $337,864 to the IRS prior to sentencing. Nguyen pleaded guilty in August 2015 to aiding and assisting in the preparation and presentation of a false and fraudulent return, statement or other document. According to court documents, Nguyen operates Nava Material Goods, Inc., a wholesale business for beauty and/or nail salon products. In 2012, Nguyen aided and assisted in the preparation and presentation of Nava Material Good Inc.’s U.S. Corporate Income Tax Return (Form 1120) for 2011. When filing that return, Nguyen aided and assisted another by willfully omitting approximately $4,910,697 of income on the return. Former Plan Trustee Sentenced for Embezzling over $1 Million, Income Tax Evasion On Feb. 10, 2016, in Dayton, Ohio, Timothy Hock, currently of Chicago, Illinois, was sentenced to 42 months in prison and ordered to pay approximately $1 million in restitution to a victim company and approximately $326,000 in restitution to the IRS. Hock pleaded guilty to embezzlement and tax evasion charges on Aug. 19, 2015. According to court documents, Hock, a Certified Public Accountant, was the controller for a company when it (and five other related entities) filed for Chapter 11 bankruptcy in September 2009. Hock embezzled approximately $1,080,289 which belonged to the bankruptcy estate of the company through a variety of means, including writing checks to himself from the trust’s bank accounts. Hock committed tax evasion on his 2010, 2011 and 2012 tax returns by claiming that his taxable income was much less than it actually was. In total, he attempted to evade paying approximately $326,000 in federal income taxes for those years. Canadian Sentenced for Mail and Wire Fraud Conspiracy On Feb. 8, 2016, in Richmond, Virginia, David Solomon, aka David Chityal, was sentenced to 60 months in prison for his role in a conspiracy to commit mail and wire fraud. Solomon pleaded guilty on Nov. 30, 2015. According to court documents, from about September 2009 to March 8, 2010, Solomon was in a federal prison with an individual who had been convicted of a $126 million fraud scheme, sentenced to 100 years in prison and was ordered to pay approximately $128 million in restitution to victims. The other individual had conveyed assets to his bankruptcy estate for this restitution, including approximately $2 million in tax refunds. However, upon Solomon’s release and deportation back to Canada, Solomon and this other individual schemed to gain access to the $2 million in tax refunds and use the funds for the other’s criminal appeal. Through attorneys, the men were able to have the $2 million fraudulently refunded and endorsed. However, when one of the attorneys attempted to deposit the funds in an overseas trust account, he was informed of the fraud and returned the funds to the bankruptcy estate, which then paid the funds out to the victims. Kansas Man Sentenced In $6 Million Embezzlement On Feb. 8, 2016, in Kansas City, Kansas, Kenneth Voboril, of Overland Park, was sentenced to 63 months in prison for embezzling more than $6 million from an Overland Park company. Voboril pleaded guilty to wire fraud and filing a false tax return. According to his plea, Voboril was hired in 2005 by Commodity Specialists Company to run its subsidiary, TransMaxx. TransMaxx brokered trucking deliveries for customers and occasionally provided services to CSC. Voboril devised a scheme to defraud CSC by creating fake companies and billing CSC for deliveries that never occurred. He caused false truck load information to be entered into TransMaxx’s computer system, resulting in invoices being created by TransMaxx’s account software program. Voboril embezzled more than $6 million from CSC. In addition, he failed to report the income on his federal tax returns. Husband and Wife Sentenced for Tax Fraud Scheme On Feb. 3, 2016, in Miami, Florida, Raul Sosa and Maura Sosa were sentenced to 78 months and 48 months in prison, respectively. Each will serve three years of supervised release and pay $1,488,213 in restitution. The husband and wife were convicted on Nov. 10, 2015, for criminal tax offenses arising out of a five-year scheme to defraud the IRS. According to court documents, starting in 2003, the defendants operated Accion 1 Auto Sales, Inc., an automobile salvage and recycling business in Hialeah.  After purchasing junked and non-functioning cars, the defendants would strip the cars; sell the usable parts and components to businesses in the secondary auto parts market, and then sell the remaining metal as scrap to a local metal recycler. Sometimes the defendants would resell whole cars. The Sosa’s underreported Accion 1’s annual sales revenue on the businesses’ federal income tax returns, which lowered the net profits reported on the businesses’ returns, the income reported on their individual returns, and their federal income tax owed. From 2004 through 2008, the defendants’ business had sales of over $28.6 million. However, the defendants reported only approximately $3.9 million on the businesses’ federal income tax returns during that period. In addition, when the defendants learned they were under investigation, they caused the filing of false amended tax returns in an attempt to minimize the seriousness of their tax offenses. Wisconsin Attorney Sentenced for Defrauding Financial Institutions and Clients On Feb. 2, 2016, in Milwaukee, Wisconsin, Sarah E.K. Laux, a/k/a “Sarah Kitzke” of Mequon, was sentenced to 48 months in prison and five years of supervised release. The Court also ordered Laux to pay a forfeiture of $2,072,276 and forfeited Laux’s interests in other properties, $5,000 in currency, jewelry, and two insurance businesses. On Oct. 6, 2015, Laux pleaded guilty to bank fraud, wire fraud, mail fraud, money laundering, and tax fraud. According to the indictment, Laux defrauded four different clients – an entity and three individuals – to whom Laux had provided trust and estates advice and to whose funds Laux gained access through her solo-practice law firm. Laux defrauded those clients out of more than $2.2 million in funds that Laux then converted to her own use. She also filed a materially false and fraudulent personal income tax return for tax year 2010.   Pennsylvania Man Sentenced for Fraud and Tax Charges On Feb. 2, 2016, in Philadelphia, Pennsylvania, Chaka Fattah, Jr. was sentenced to 60 months in prison and ordered to pay $1,172,157 in restitution. On Nov. 5, 2015, Fattah, Jr. was found guilty of 22 counts of fraud and tax charges in connection with a scheme to defraud banks, the IRS and the Philadelphia School District. According to court documents, in 2005, Fattah, Jr. and an associate supplied fictitious earnings to banks to obtain numerous business lines of credit which he then used primarily for personal expenses. In 2010, Fattah, Jr. provided false information to two banks, the SBA and an SBA investigator in an attempt to settle the debts for less than what was owed. Additionally, for tax years 2005, 2006 and 2008, Fattah, Jr. filed false federal income tax returns, and in 2010, failed to pay on a timely basis federal income tax of approximately $51,141 on more than $150,000 in reported income. Finally, while Fattah, Jr. was serving as the chief operating officer of Delaware Valley High School, he submitted false expense information and inflated salary figures resulting in approximately $940,000 of fraudulently obtained payments from the school district.   Missouri Business Owner, Son Sentenced for $5.5 Million Fraud Scheme On Jan. 22, 2016, in Springfield, Missouri, Bruce Swisshelm, of Battlefield, and his son, Bruce Swisshelm II, of Springfield, were sentenced in separate appearances. Swisshelm was sentenced to 12 months and one day in prison and ordered to pay $5,492,853 in restitution. Swisshelm II was sentenced to four weeks in custody and five years of probation and ordered to pay $100,000 in restitution. On July 22, 2015, Swisshelm pleaded guilty to bank fraud and money laundering; Swisshelm II pleaded guilty to misprision of a felony. According to court documents, Swisshelm was the owner of Horned Frog Deli, Inc., and Swisshelm Properties, Inc. Swisshelm II was the president of Swisshelm Properties. These corporations specialized in the restaurant industry and owned and developed commercial properties. Swisshelm submitted false financial documents to a bank to receive four commercial loans, totaling $5,592,583, from February to June 25, 2011. Swisshelm submitted financial statements to the bank that claimed his businesses earned a net income of more than $780,000 in 2010. Tax documents submitted by Swisshelm to the IRS revealed those businesses had losses that exceeded $1.8 million in 2010. Swisshelm II became aware that financial statements submitted to the bank by his father were false but he failed to notify authorities. Pennsylvania Man Sentenced on Multiple Fraud Charges On Jan. 20, 2016, in Philadelphia, Pennsylvania, Istvan Merchenthaler, of Downingtown, was sentenced to 140 months in prison, three years of supervised release and ordered to pay more than $3.4 million in restitution. Merchenthaler’s charges included wire fraud, aggravated identity theft, money laundering, filing false tax returns, interstate transportation of stolen property, possessing unregistered destructive devices, possessing firearms and ammunition as a fugitive and possessing an illegally manufactured firearm. According to court documents, between May 2006 and February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company that purportedly distributed prepaid phone cards, prepaid phones and prepaid “adult entertainment cards.” In reality, Merchenthaler operated a “Ponzi” scheme, stealing over $3 million from over 250 investors. Merchenthaler used stolen identities, impersonated corporate executives, forged signatures and fabricated bogus contracts. He also filed false tax returns, defrauding the United States of over $400,000. Merchenthaler amassed approximately 17 firearms and over approximately 11,580 rounds of ammunition, as well as approximately 634 improvised explosive devices (IEDs).   Former Controller of Non-Profit Organization Sentenced for Embezzling Over $2 Million and Tax Evasion   On Jan. 20, 2016, in Manhattan, New York, Karen Alameddine, aka “Karen Dean,” was sentenced to 48 months in prison and ordered to pay $2,674,983 in restitution, including $1,934,000 to the non-profit organization and $640,000 to the IRS. Alameddine was also ordered to forfeit $1,828,000 in proceeds she obtained from the embezzlement offense. Alameddine, of Perris, California, previously pleaded guilty to wire fraud and tax evasion. According to court documents, from approximately 2008 through 2014, while working as the controller for a New York-based non-profit organization, Alameddine diverted over $2 million of the organization’s funds to her own bank accounts and for her own personal use. She then further transferred the funds to other accounts she controlled, and then used those funds for various personal expenses. Also, Alameddine carried out the scheme through additional means  including procuring and using a credit card in the organization’s name for personal expenses, submitting fraudulent reimbursement requests and making illicit transfers from the organization’s bank account. In addition, for calendar years 2009 through 2013, Alameddine filed tax returns with the IRS in which she deliberately omitted reporting the income she received from the fraud resulting in evading over $640,000 for those years. New Jersey Man Sentenced for Biodiesel Fraud Scheme On Jan. 7, 2016, in Indianapolis, Indiana, Joseph Furando, of Montvale, New Jersey, was sentenced to 240 months in prison, three years of supervised release and ordered to pay more than $56 million in restitution and forfeit a Ferrari, a million-dollar home and other property. According to court documents, Furando and his companies, Caravan Trading Company and CIMA Green, began supplying Indiana-based E biofuels with biodiesel that was actually made by other companies and had already been used to claim tax credits and renewable identification number (RIN). Furando and his co-conspirators claimed that E-biofuels made the fuel making it eligible for the tax credits despite the fact that the credits were already utilized. Over approximately two years, the defendants fraudulently sold more than 35 million gallons of fuel for over $145.5 million realizing $55 million in gross profits. Furando’s companies, CIMA Green LLC, and Caravan Trading LLC, were both sentenced to pay $56 million in restitution and million dollar fines. E biofuels LLC, operated by Furando’s co-defendants Craig, Chad and Chris Ducey, was also sentenced to pay $56 million in restitution. E-biofuels is in bankruptcy and its few remaining assets are being distributed to creditors and victims through the bankruptcy process. All of the other defendants in this case have pleaded guilty and are awaiting sentencing. Another co-conspirator, Brian Carmichael, was sentenced to five years in prison.    Plumber Sentenced for Filing False Tax Returns On Jan. 5, 2016, in Portland, Oregon, Gary L. Ford, of Bend, was sentenced to 18 months in prison, one year of supervised release and ordered to pay $580,454 in restitution for filing false tax returns in 2007, 2008, and 2009. According to court documents, Ford, the sole proprietor of Summit Plumbing, filed tax returns claiming he lived at or below the poverty line, even going so far as to claim refunds for the years in question. In reality, between 2006 and 2009, Ford failed to report almost $1.7 million in income and to pay more than $580,000 in federal income taxes. Ford evaded his full tax obligation by failing to include as income monies received from customers who did not issue him a Form 1099. The only income Ford reported was the payments that his customers independently reported to the IRS. Former Bookkeeper Sentenced for Embezzlement and Signing a False Tax Return On Dec. 21, 2015, in Oklahoma City, Oklahoma, Bonnie Charlene Doran, aka Bonnie Sparks, of Newalla, was sentenced to 12 months and a day in prison and three years of supervised release for embezzlement and signing a false federal income tax return. In addition, Doran will pay restitution of $120,197 to the victim company and $26,115 in restitution to the IRS. Doran pleaded guilty on Aug. 26, 2015 to wire fraud and signing a false income tax return. According to court documents, from April 2012 until January 2015, Doran was employed as the bookkeeper for Cox Systems Technology and directed BancFirst to wire extra payroll transfers to her personal account at Arvest Bank and adjusted entries in company records to hide the extra payments. In addition, Doran admitted that in April 2014, she signed a personal federal tax return for the 2013 calendar year that she knew was false because it didn’t report the income she actually received. Former Bank Vice President Sentenced in Connection with Rothstein Case On Dec. 18, 2015, in Miami, Florida, Frank Spinosa, of Fort Lauderdale, was sentenced to 30 months in prison and one year of supervised release. On Oct. 8, 2015, Spinosa pled guilty to conspiracy to commit wire fraud in connection with the operation of the former Fort Lauderdale law firm of Rothstein, Rosenfeldt and Adler, P.A. (RRA). According to court records, it was discovered in 2009 that RRA was being utilized by its chairman and chief executive officer, Scott W. Rothstein, to commit a massive Ponzi scheme stemming from the sale of fictitious confidential settlements. Spinosa, who, at the time, was a regional vice president with TD Bank, admitted that he conspired with Rothstein to induce certain persons into investing money by fraudulently creating documents that made it appear that certain investment funds were being held in restricted accounts at TD Bank when, in fact, they were not. New Mexico Man Sentenced on Embezzlement and Tax Charges On Dec. 16, 2015, in Albuquerque, New Mexico, Thomas Keesing, of Pecos, was sentenced to 35 months in prison and three years of supervised release. Keesing was also ordered to pay, jointly, restitution of $3,575,000 to the Indian Pueblo Federal Development Corporation (IPFDC), $554,250 to the IRS and a fine of $40,000. On Jan. 28, 2015, Keesing pleaded guilty to aiding and abetting embezzlement from an Indian tribal organization and willful failure to file an income tax return. According to court documents, between 2003 and 2009, Keesing, a real estate developer, and co-defendant Bruce Sanchez, a former Governor of Santa Ana Pueblo, conspired to embezzle approximately $3,575,000 from the IPFDC. Keesing also failed to file federal tax returns for calendar years 2006, 2007 and 2008, even though he received gross income in the aggregate amount of $2,771,250 during those three years. On Sept. 15, 2015, Sanchez was sentenced to 51 months in prison and three years of supervised release. Sanchez was also ordered to pay, jointly, restitution of $3,575,000 to the IPFDC and $655,276 to the IRS.    California Man Sentenced for Embezzling More Than $400,000 from Employer On Dec. 15, 2015, in Sacramento, California, Jeffrey Lamson, of El Dorado Hills, was sentenced to 30 months in prison and ordered to pay over $400,000 in restitution. Lamson was sentenced for wire fraud in connection with a scheme to embezzle money from his former employer. According to court documents, from at least 2009 through 2011, Lamson embezzled over $400,000 from a company while he served as controller. Lamson used company funds to make unauthorized payments to himself and others and made payments to a fictitious vendor, controlled by Lamson, for services that were never performed. California Art Dealer Sentenced for Smuggling and Charitable Deduction Tax Scam On Dec. 14, 2015, in Los Angeles, California, Jonathan M. Markell, the owner of Silk Roads Design Gallery, was sentenced to 18 months in prison. Markell’s wife, Carolyn Markell, was also sentenced for her role in the tax fraud conspiracy. Both were ordered to pay restitution to the IRS and repatriate 337 antiquities seized from their residence and gallery to Thailand, Burma, Cambodia and China. Markell previously pleaded guilty to conspiring to smuggle stolen antiquities into the United States by making false declarations to U.S. Customs authorities. In a second case, Markell pleaded guilty to conspiring to commit tax fraud. According to court documents, Markell smuggled looted antiquities into the United States for sale in his art gallery. Markell engaged in a tax fraud scheme by promoting and participating in a false charitable deduction scheme. Markell bundled the antiquities into “charitable donation packages” that were donated to charitable institutions such as museums and universities. Markell prepared fraudulent appraisals in order to falsely inflate the value of the antiquities, which he provided to co-conspirators, who used the fraudulent documents to claim inflated charitable donation tax deductions. Former Associate Dean of MIT Sloan School and Harvard MBA Son Sentenced for Hedge Fund Scam On Dec. 14, 2015, in Boston, Massachusetts, Gabriel Bitran, of Newton, a former professor and associate dean of the Massachusetts Institute of Technology (MIT) Sloan School of Business, and his son Marco Bitran, of Brookline, a Harvard Business School graduate and money manager, were each sentenced to 45 months in prison, three years of supervised release and ordered to pay forfeiture and restitution of more than $11 million. The Bitrans were sentenced for conspiring to mislead investors into investing more than $500 million in their fraudulent hedge fund business. According to court documents, from 2005 through 2011, Gabriel and Marco Bitran solicited and maintained investors through false claims about the historical average annual return. They also falsely told investors that the money would be invested according to a complex mathematical trading model developed by Gabriel Bitran based upon his MIT research. In total, the Bitrans lost more than $140 million of their investors’ principal. Illinois Couple Sentenced for Multi-Million Dollar State Grant Fraud Scheme On Dec. 14, 2015, in Springfield, Illinois, Leon Dingle, Jr., was sentenced to 72 months in prison, three years of supervised release and ordered to pay restitution of $2,900,000 to the Illinois Department of Public Health. Leon Dingle’s wife, Karin, was sentenced to 36 months in prison and ordered to pay $2,100,000 in restitution jointly with her husband. On Dec. 17, 2014, Leon and Karin Dingle were convicted on charges they took millions of dollars in state grant funds for their personal benefit and use. According to court documents, from 2004 to June 2010, the Dingles owned and operated a for-profit corporation known as Advance Health, Social and Educational Associates, Inc., (AHSEA). The Dingles used non-profit organizations as straw grantees to fraudulently solicit and obtain more than $11 million in grant funds awarded by the Illinois Department of Public Health. Former Property Manager Sentenced for Stealing from Employer and Clients On Dec. 11, 2015, in Washington, D.C., Lorraine Cyr, of Palm Bay, Florida, was sentenced to 41 months in prison, three years of supervised release and ordered to pay $380,537 in restitution to a property management company and other victims of her scheme, as well as $96,112 to the IRS. She will also pay a forfeiture money judgment of $342,917. Cyr pleaded guilty in July to wire fraud and income tax evasion. According to court documents, from 2001 until 2009, Cyr worked for a property management company in Washington, D.C. She was vice president of operations during her last four years of employment. Between July and November of 2009, Cyr embezzled $37,620. In 2009, Cyr started her own property management company, also in Washington, D.C., in which she performed similar duties for various clients. Between March 2010 and April 2011, she stole $342,917 in funds from eight clients. In addition, Cyr evaded paying income taxes on the money that she was stealing, as well as the legitimate income that she was earning, during the course of her scheme. Operator of Loan Modification Scam Sentenced On Dec. 7, 2015, in Riverside, California, Andrea Ramirez, of Rancho Cucamonga, was sentenced to 216 months in prison and ordered to pay $6,764,743 in restitution. Ramirez previously pleaded guilty to conspiracy to commit mail fraud and wire fraud. According to court documents, Ramirez was the organizer of a telemarketing operation known under a series of names – including 21st Century Legal Services, Inc. – that bilked more than 4,000 homeowners out of more than $7 million, many of whom lost their homes to foreclosure. Ramirez operated 21st Century, which defrauded financially distressed homeowners by making false promises and numerous misrepresentations, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the United States government. Previously in this case, the other co-owner of 21st Century – Christopher Paul George, of Rancho Cucamonga, was sentenced to 240 months in prison. Nine additional defendants have been convicted for their roles in the 21st Century scam. Seven have been sentenced to terms ranging from 12 to 72 months in prison.   Connecticut Construction Company Fined for Underfunding Retirement Plan, Filing False Tax Return   On Dec. 4, 2015, in New Haven, Connecticut, Cherry Hill Construction, Inc. (“Cherry Hill”), a company based in North Branford, was sentenced to three years of probation and fined $200,000. On Jan. 13, 2015, Cherry Hill pleaded guilty to filing a false tax return and making a false statement in relation to documents required by the Employee Retirement Income Security Act of 1974 (“ERISA”). According to court documents, Cherry Hill opened a profit sharing/401(k) plan that was covered under ERISA. In 2010 and 2011, Cherry Hill underfunded its retirement plan by approximately $950,000. Cherry Hill filed a corporate tax return for the 2010 tax year that inflated its actual contribution to the plan, which resulted in an increased employee benefit deduction. Cherry Hill has fully funded its retirement plan and paid $193,000 in back taxes, interest and penalties. North Carolina Appliance Repairman Sentenced for Wire Fraud and Tax Fraud On Dec. 3, 2015, in Charlotte, North Carolina, John Wesley Clark, AKA John Isaacs, Jonathan Fitzgerald, and JA Adams, was sentenced to 30 months in prison, two years of supervised release and ordered to pay $761,379 in restitution. Clark pleaded guilty to wire fraud and filing a false tax return in June 2015. According to court documents, Clark was the owner and operator of various appliance repair companies. Beginning in at least 2010 and continuing through 2012, Clark defrauded a major electronics company by submitting false and fraudulent warranty work order claims, for warranty work that was not performed. He received $576,000 in payments for the fraudulent warranty claims. In addition, for tax years 2010 through 2012, Clark failed to report all of the income he obtained from the fraudulent warranty claims on his federal tax returns. Additionally, Clark filed fraudulent forms W-2 with his federal tax returns that falsely stated that tax withholding had been paid over to the IRS.   Former Enzyme Company Owner Sentenced for Filing False Tax Returns and Perjury On Dec. 2, 2015, in Fort Wayne, Indiana, Jared E. Hochstedler was sentenced to 27 months in prison, one year of supervised release and ordered to pay $1,232,739 in restitution to the IRS. Hochstedler pleaded guilty on February 26 to two counts of willfully filing false income tax returns for 2008 and 2009 and one count of committing perjury. According to court documents, Hochstedler owned Enzyme Environmental Solutions (EESO). As the owner of EESO, Hochstedler participated in stock exchanges of EESO stock with third party companies for which he received more than $2.8 million. Hochstedler failed to report these funds as income on his 2008 and 2009 individual income tax returns. In addition, Hochstedler received loans from these third party companies which he did not repay. Hochstedler used a substantial portion of the loan proceeds for personal expenditures and failed to report that income on his tax returns. In 2009, Hochstedler also sold stock in another company for more than $1 million and failed to report the full amount of the proceeds as a capital gain on his 2009 tax return. In June 2009, Hochstedler lied under oath about the nature of the transactions and the amount of money he received. Iowa Woman Sentenced to Prison for Filing a False Tax Return On Nov. 23, 2015, in Des Moines, Iowa, Julilath Kouangvan was sentenced to 14 months in prison, one year of supervised release and ordered to pay restitution of $522,233 to victims and $199,042 to the IRS. According to court documents, from approximately 2006 until at least 2009, Kouangvan solicited investment funds from individuals by promising a high rate of return. Unbeknownst to the individuals, the money was not invested by Kouangvan. Kouangvan failed to account in her 2009 tax return for the funds provided to Kouangvan. Retirement Community Manager Sentenced for Embezzling Funds On Nov. 23, 2015, in Springfield, Massachusetts, Alice Lacroix, formerly of East Longmeadow, was sentenced to 52 months in prison, three years of supervised release and ordered to pay restitution of $323,000. In July 2015, Lacroix pleaded guilty to nine counts of wire fraud, nine counts of money laundering and two counts of filing false tax returns. According to court documents, from 2011 through February 2013, Lacroix embezzled funds from her employer, a retirement living community. Lacroix, as manager of the community, took rent checks paid by tenants as well as other checks and property belonging to her employer. Lacroix established a bank account without authorization in the name of the community into which she deposited the embezzled funds.  During the course of the scheme, Lacroix deposited $325,000 into this fake bank account and engaged in financial transactions designed to disguise the proceeds of the fraudulent scheme. Lacroix deceived her employer through emails that provided false information about the rent payments she took. Lacroix also submitted false income tax returns for the years 2011 and 2012. Massachusetts Man Sentenced for Fraud Scheme and Filing False Tax Returns On Nov. 19, 2015, in Boston, Massachusetts, Michael S. Denning, of Peabody, was sentenced to 78 months in prison, three years of supervised release and ordered to pay restitution of $1,391,618. In January 2015, Denning pleaded guilty to mail fraud and filing false tax returns. According to court documents, Denning, the former Director of Technical and Development Operations at a South Boston-based media technology company, engaged in a fraud scheme in which he stole almost a million dollars’ worth of iPads and other Apple products from his employer. Denning also filed income tax returns that falsely listed his salary as his only source of income.   Former Office Manager Sentenced on Tax Charges On Nov. 17, 2015, in Las Cruces, New Mexico, Connie C. Sims, of Eunice, was sentenced to 12 months and one day in prison, one year of supervised release, and ordered to pay $169,951 in restitution to the IRS in addition to a $100,000 fine. On March 18, 2015, Sims pleaded guilty to four counts of federal tax evasion and admitted that she knowingly evaded approximately $120,366 in federal taxes by failing to report an aggregate of $482,890 in income during tax years 2009, 2010, 2011 and 2012. In her plea agreement, Sims admitted that from 2010 through 2013, she wrote checks to herself on the company’s bank accounts and did not report the money as compensation when she filed her federal tax returns. Mortgage Broker Sentenced for Mortgage Fraud On Nov. 12, 2015, in Sacramento, California, Anthony Salcedo, of Fair Oaks, was sentenced to 64 months in prison for a mortgage fraud scheme. Salcedo was found guilty of one count of conspiracy and four counts of mail fraud in June 2015. According to court documents, Salcedo worked in the real estate industry beginning in 2000 and was licensed as a real estate agent in 2004 and a mortgage broker in 2006. When selling his personal properties in 2005 and 2006, Salcedo worked with mortgage broker Sean McClendon, of Fair Oaks, and Anthony Williams, previously of Memphis, Tennessee, to find buyers. Salcedo paid kickbacks to the buyers and to McClendon outside of escrow. Salcedo artificially inflated the value of his properties and paid the kickbacks out of the excess financing paid by the lenders who were deceived as to the true value of the purchases they were underwriting. In all, approximately $2.6 million in fraudulently obtained loans were involved in the scheme, while Salcedo and his family got out from under their $1.6 million in mortgage debt and made over $600,000 of profit. Co-defendant McClendon was sentenced on Nov. 5, 2015, to 20 months in prison. Co-defendant Williams is currently serving his sentence of 33 months in prison. Administrative Assistant Sentenced on Embezzlement and Tax Charges On Nov. 12, 2015, in Kansas City, Missouri, Jennifer Regans was sentenced to 15 months in prison, five years supervised release and ordered to pay $967,791 in restitution. Regans pleaded guilty on April 2, 2015, to embezzlement by a bank employee and filing a false income tax return. According to the plea agreement, from at least Nov. 30, 2007 to July 2, 2012, as an administrative assistant, Regans embezzled up to $1,013,980 from her employer, Pioneer Services Division of MidCountry Bank, in Kansas City, Missouri. She did not pay taxes on the embezzled funds, although the IRS concluded that she should have paid a total of $139,746 during that time frame. Regans also embezzled $84,989 via her corporate American Express card, and purchased another $75,380 worth of American Express Gift Cheques that were deposited to her personal bank accounts. Pioneer Services found that she embezzled $828,045 on her American Express Corporate card. From 2007 through 2012, Regans deposited approximately $112,180 in American Express Gift Cheques and Travelers Cheques into her bank account. The embezzled funds were knowingly omitted from Regans’ Forms 1040 Federal Income Tax Returns for 2008-2012. The omission of the embezzled funds from these tax returns resulted in an additional tax due and owing of $139,746.   Kansas Attorney Sentenced On Federal Tax Evasion Charge  On Nov. 12, 2015, in Wichita, Kansas, Eldon L. Boisseau, a Whichata attorney, was sentenced to 30 months in prison for evading federal taxes. In July, Boisseau was found guilty on one count of tax evasion. In a written decision, the court found that during 1998 through 2000, 2002 through 2005 and 2007 through 2008 Boisseau attempted to evade paying federal income taxes, as well as a trust fund recovery penalty from 1999. He interfered with the government’s efforts to collect the taxes he owned by putting his law firm in the name of a nominee, terminating his own pay agreement with the law firm and then having the firm pay for his personal expenses. Two Men Sentenced to Prison for Defrauding New Mexico-Based Company On Nov. 6, 2015, in Albuquerque, New Mexico, Johannes Jarvis, of Portland, Ore., was sentenced to 46 months in prison followed by three years of supervised release, and John A. “Jack” Hope, of Huntingdon Valley, Pa., was sentenced to 37 months followed by three years of supervised release.  The defendants were ordered to pay restitution to Kinesio USA in the amount of $2,008,450. Jarvis and Hope each entered a guilty plea to conspiracy to commit wire fraud. According to the indictment, from late 2007 through April 2010, Jarvis and Hope conspired to defraud Kinesio USA LLC, a New Mexico-based company that sells therapeutic elastic tape and related products, of approximately $4.3 million, at least $1.2 million of which Jarvis and Hope retained as profits. In April 2008, Jarvis and Hope incorporated Grace International (HK) Limited (“Grace International”) in Hong Kong, of which they were the sole owners. Jarvis told Kinesio that Grace International was an experienced company, when in reality it had no other clients.  Jarvis represented to Kinesio that Grace International would broker the relationship between Kinesio and the tape manufacturer. Concealing their ownership and other misrepresentations, Kinesio entered into a contract with Grace International pursuant to which they paid Grace International to produce therapeutic elastic tape between July 2008 and Jan. 2010. Jarvis and Hope defrauded Kinesio by having Grace International charge a significant undisclosed markup above the manufacturer’s price for the tape, which Jarvis and Hope hid from Kinesio. Jarvis and Hope then shared the profits. Real-Estate Broker Sentenced to Prison for Mortgage Fraud Scheme On Nov. 5, 2015, in Boston, Massachusetts, Joan Ruggiero was sentenced to nine months in prison and nine months of home detention, ordered to pay a fine of $100,000 and restitution of $4.1 million to the lenders. In October 2013, Ruggiero pleaded guilty to one count of conspiracy. Ruggiero, who owned a real-estate business and her co-conspirator, identified buildings for sale that they could purchase and then convert into individual condominium units.  After this conversion, Ruggiero and the co-conspirator recruited individuals to pose as purchasers of the condominiums, promising them that they were making a good investment. Ruggiero, who held herself out as a broker, and her co-conspirator actually owned the units. After she recruited the “buyers,” Ruggiero arranged for the submission of mortgage applications to various lenders, which contained false information about the “buyers’” income, assets, and intentions to live in the properties. The scheme also involved creating entirely fictitious documents, such as phony leases, bank documents, and verifications of employment. Relying on the false information provided, the lenders approved the mortgages and provided the required funds at the property closings. Ruggiero and her co-conspirator took those funds – over $4 million – and deposited them into their own accounts. Registered Securities Agent and Financial Advisor Sentenced for Defrauding Victims for More Than $1.1 Million On Nov. 2, 2015, in Minneapolis, Minnesota, Susan Elizabeth Walker was sentenced to 88 months in prison, three years supervised release and ordered to pay $978,950 in restitution. Walker pleaded guilty to mail fraud and tax evasion. According to court documents, from October 2008 until March 2013, Walker provided financial planning services to several clients through her affiliation with Ameriprise Financial Inc. She was a securities agent registered with the Minnesota Department of Commerce and a financial advisor registered with the Financial Industry Regulatory Authority (FINRA). Walker stole more than $1.1 million from at least 24 victims who were clients of a financial planning company run by her and her mother. Walker misused her access to several victim retirement accounts causing checks to be drawn from victim accounts and deposited into accounts that she controlled. Walker also opened investment brokerage accounts in her own name, and in the names of several victim-clients without their knowledge or authorization, which she used to conceal money stolen from other clients. She caused money to be withdrawn from retirement accounts belonging to clients and deposited in those brokerage accounts, which she took for her own personal use. Walker also failed to report any of the funds obtained through fraud on her tax returns. The total tax loss on her unreported income is approximately $325,000. Michigan Ferrari Mechanic Sentenced for Tax Fraud On Oct. 29, 2015, in Detroit, Michigan, Terry Myr, of Smith’s Creek, was sentenced to 24 months in prison, two years of supervised release and ordered to pay back taxes, penalties and interest. On April 29, Myr was convicted on one count of attempted tax evasion and four counts of failure to file tax returns. According to court documents, Myr specialized in repairing classic and rare cars. The IRS assessed Myr approximately $195,000 in taxes, interest and penalties for his failure to report all of his income for the tax years 2000 through 2003. In 2009, when his tax liabilities remained unpaid, Myr sold a rare Ferrari engine for $610,000. To prevent the IRS from collecting the taxes he owed, Myr transferred property that he owned to a third party, used nominee companies to conceal his income and assets and otherwise dealt in cash. Myr used some of the Ferrari engine proceeds to purchase more than $360,000 in gold and silver coins. Myr also attempted to evade the payment of his taxes by asking his customers to pay him in cash, money orders, or prepaid debit cards. Although Myr was required to file individual income tax returns, he had not filed a tax return or paid federal income taxes since 2001.  Myr’s actions caused a total tax loss of $738,904. Florida Woman Sentenced For Investment Fraud On Oct. 28, 2015, in Ocala, Florida, Jenifer E. Hoffman, of Clermont, was sentenced to 108 months in prison and ordered to pay more than $10.7 million in restitution. On June 29, 2015, Hoffman pleaded guilty to conspiracy to commit wire fraud and filing a false tax return. According to court documents, Hoffman and her two conspirators, John C. Boschert and Bryan T. Zuzga, defrauded more than 100 victims out of over $10 million through investments offered in connection with a company called Assured Capital Consultants.  As part of their solicitations, the conspirators made numerous false representations to investors. In reality, the three operated a scheme in which money from later investors was paid to earlier investors. They also used some of the money from the scheme for themselves, including purchasing residences for Hoffman and Zuzga. Boschert was sentenced to 108 months in prison and Zuzga was sentenced to 72 months in prison. Both residences purchased with funds from the scheme were forfeited. Former Real Estate Developers Sentenced for Mortgage Fraud Scheme On Oct. 14, 2015, in Fresno, California, Eliseo Jara Jr., was sentenced to 78 months in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $4.3 million in restitution and a money judgement of $5,664,250. Sergio Jara, was sentenced to 78 months in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $3,249,624 in restitution and a money judgement of $4,743,500. Melissa Rochelle Jara, was sentenced to time served and five years of supervised release for wire fraud, and was ordered to pay $271,171 in restitution and a money judgement of $534,750. The Jaras were also ordered to forfeit their interests in six properties in Bakersfield, a 2007 Lexus, and approximately $110,419 seized from a bank account. According to court documents, from 2007 to 2010, the Jaras conspired with other defendants to use straw buyers to purchase residential properties developed by Jara Brothers Investments (JBI), owned by Eliseo Jara and Sergio Jara, and Pershing Partners LLC, owned by co-defendant Lucia Chavez. The conspirators paid straw buyers to purchase the properties from JBI and Pershing Partners, and funded the purchases using loans they obtained for the straw buyers from lenders based on false and fraudulent loan applications. Co-defendant Antonio Perez-Marcial was sentenced on May 12, 2014 to 46 months in prison, and co-defendant Arlene Jeanette Mojardin was sentenced on May 18, 2015 to 30 months in prison, for their roles in the conspiracy. Former CEO of Marketing Agency Sentenced for $2 Million Fraud and Kickback Scheme On Oct. 14, 2015, in Manhattan, New York, Michael J. Mitrow, Jr., of Whitehouse Station, New Jersey, was sentenced to 42 months in prison, three years of supervised release and ordered to pay restitution of $83,219 to the IRS and $1,468,259 to the victim company. In January 2015, Mitrow pleaded guilty to conspiracy to commit wire fraud and tax evasion. According to court documents, Mitrow was the CEO and President of a pharmaceutical marketing company. From approximately 2008 through 2009, Mitrow defrauded the company by submitting fraudulent invoices for consulting services and then used the proceeds to fund more than $600,000 in private jet travel. Mitrow willfully failed to report to the IRS (1) his income from the fraudulent consulting invoices, (2) $1.4 million in kickback payments he received from companies owned by co-defendant Robert Madison, (3) $200,000 in personal purchases Mitrow made with his corporate credit card and (4) $415,000 in payments by the company to a relative of Mitrow and his co-defendant and brother, Matthew Mitrow. In July 2015, Matthew Mitrow, of Westfield, New Jersey, was sentenced to three months in prison and ordered to pay restitution of $30,822 to the IRS for filing a false tax return for the 2008 tax year. Co-defendant Robert Madison, of Henderson, Nevada, was sentenced in May 2015 to 18 months in prison and will be ordered to pay restitution at an amount to be determined at a later date. Washington Man Sentenced for Wire Fraud and Tax Evasion Scheme Cheating State Out Of Millions in Tobacco Taxes On Oct. 30, 2015, in Tacoma, Washington, Hyun Seung Kim, the owner and manager of a tobacco wholesaling company, was sentenced to 48 months in prison for wire fraud and tax evasion. Kim was also ordered to pay nearly $2.5 million in restitution to the state of Washington for tobacco taxes owed and $294,922 to the U.S. Treasury for taxes he failed to pay on unreported income between 2009 and 2013. According to court records, between 2009 and 2015, Kim’s company purchased and distributed wholesale non-cigarette tobacco products to retailers. Using cash, Kim would purchase substantial amounts of tobacco products from a smoke shop on the Puyallup Indian Reservation. Kim would purchase a small portion of the product using checks. Kim reported the purchases made by check to the state Department of Revenue and paid the tax on those purchases. He did not report the cash purchases.  Kim’s company sold the products to various retail outlets – again failing to report the cash sales. Kim had various relatives open bank accounts so that he could deposit the cash in their names to hide it from regulators. By dealing in cash Kim avoided paying state taxes on the tobacco products and also avoided paying federal income taxes. For example, in 2013 Kim claimed his taxable income was $8,000 so that he owed tax of just $593. In fact Kim earned more than $200,000 from CP Trading Company and owed more than $50,000 in federal income tax. Maine Man Sentenced for Mail and Tax Fraud On Oct. 9, 2015, in Portland, Maine, Russell W. Brace, a/k/a “Rusty,” of Camden, was sentenced to 48 months in prison, two years of supervised release and ordered to pay full restitution. He pleaded guilty to mail and tax fraud on May 29, 2015. According to court documents, between about July 1999 and Sept. 25, 2014, Brace, the president and director of United Mid-Coast Charities, Inc. (“UMCC”), fraudulently obtained $4,646,636 by claiming that monies donated to UMCC, would be used for UMCC’s charitable purposes and not diverted for the defendant’s personal expenses or benefit. In fact, Brace diverted the funds into his own accounts and used them for his benefit and to pay personal expenses. To execute the scheme, he used the U.S. Postal Service to mail donation request letters, UMCC brochures, self-mailer remittance envelopes and thank-you letters. Brace failed to report the money he obtained as income on annual federal tax returns thus failing to pay almost $390,000 in taxes. He also filed false non-profit income tax returns for UMCC in which he failed to disclose the funds he illegally obtained. Lead Defendant in Shoplifting Ring Sentenced On Oct. 06, 2015, in Sacramento, California, Jason Samuel Schroeder, of Sacramento, was sentenced to 84 months in prison for his role in a shoplifting ring that stole over $2.5 million in retail goods and resold them on eBay.  On March 3, 2015, Schroeder pleaded guilty to interstate transportation of stolen property. Schroeder, is the sixth defendant sentenced to prison in this case. Kirk Arthell Sanderson, was previously sentenced to 48 months in prison; John Judah Young, was sentence to 30 months in prison; and David Reed, was sentenced to 12 months in prison. Two others, Andrea Lynn Turner and Joshua Roy Payne, were sentenced to two months in prison. Jason Nathaniel Reed, is scheduled for sentencing later this year. According to the plea agreement, in October 2012, a sporting goods company with retail stores in Sacramento reported that an eBay account was listing items for sale it suspected were stolen. Follow-up investigation revealed that the account was controlled by Schroeder using co-defendant Young’s name, and since 2009, it listed more than 17,000 items for sale, including sporting goods, household items, recreational equipment and pet care products. Most of the items were listed as new or with tags. Virtually all of the items sold on the account were stolen by Schroeder, Young, or others, and were sold at a discount to buyers across the country. The proceeds of the sales were deposited into a PayPal account also controlled by Schroeder and then laundered through ATM withdrawals, cash-back purchases, and the purchase of more than $600,000 in money orders. Surveillance of Schroeder revealed that he spent multiple hours a day traveling to different stores and appearing to steal a variety of items. Those items were later listed on his eBay account. David Reed assisted Schroeder with the packaging and shipment of the stolen merchandise. Sanderson assisted in moving items away from Schroeder’s residence when he learned of the federal investigation. Turner and Payne provided false statements to federal agents upon being interviewed regarding their assistance to Schroeder. Iowa Woman Sentenced for Filing a False Tax Return On Oct. 2, 2015, in Des Moines, Iowa, Kathy Joan Cullen, of Cumberland, Iowa, was sentenced to 18 months in prison, one year of supervised release, and ordered to pay restitution in the amounts of $1,384,374 to 21st Century Cooperative; $422,411 to the Internal Revenue Service; and $131,040 to the State of Iowa. Cullen had previously pleaded guilty to filing a false tax return. According to the plea agreement, Cullen embezzled money from her employer, 21st Century Cooperative. Cullen wrote over $1.3 million in checks to herself over a period of six years and deposited the proceeds into a personal bank account. Cullen admitted that she failed to account for the embezzled funds in her 2009 tax return. Utah Man Sentenced for Fraud Scheme On Oct. 2, 2015, in Philadelphia, Pennsylvania, Robert G. Wray, of Torrey, Utah, was sentenced to 48 months in prison and three years of supervised release. Additionally, Wray was ordered to pay $519,229 in restitution and forfeiture including $256,926 to IRS and $262,303 to the Department of Health and Human Service (HHS). On May 28, 2015, Wray was found guilty of one count of conspiracy, 30 counts of wire fraud, one count of bankruptcy fraud, and one count of failure to appear. According to court documents, Wray conspired with Dr. Dennis Erik Fluck Von Kiel, a doctor of osteopathy in Macungie, Pennsylvania, to help Dr. Von Kiel evade a six-figure debt he owed to HHS for unpaid medical school loans and avoid paying personal income taxes to the IRS. The scheme defrauded the government of hundreds of thousands of dollars. Wray used many different names for himself in an attempt to evade federal and other laws by arguing that he has not been properly identified in legal documents. Wray also claimed he was not subject to federal laws, including laws regarding personal income taxation. Florida Resident Sentenced for Filing False Refund Claims with the IRS On Oct. 1, 2015, in Miami, Florida, Mavys Galvez was sentenced to 24 months in prison and three years of supervised release. Galvez previously pleaded guilty to filing false refund claims with the Internal Revenue Service. According to court documents, Galvez filed false 2006, 2007, 2008 and 2009 amended federal income tax returns with the IRS claiming fraudulent refunds. In the returns, Galvez falsely asserted that she and her husband were owed millions of dollars in income from various entities, and that those entities had withheld the money as federal income tax paid to the IRS. In fact, the entities owed no such income to Galvez or her husband, and withheld no such taxes on their behalf. Galvez filed a 2006 amended tax return with her husband claiming a tax refund of $1,049,270 based in large part on claimed income and $810,224 of tax withheld by a bank. The tax return also attached a false Form 1099-OID purportedly from the bank reflecting those totals, as well as false 1099-OID forms from other entities. The total amount of fraudulent refunds claimed by Galvez for tax years 2006 through 2009 is $3,424,834.

 

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