Oct 12th 2012
Two Plead Guilty to Inflating Charitable Contribution Amounts for the Purpose of Tax Evasion
Two Los Angeles defendants who made contributions to a variety of charitable organizations, including those operating under the umbrella of Spinka, pleaded guilty to tax fraud October 5, 2012. Bencion Jakobovits, eighty-nine, and Serena Jakobovits Apfel, fifty-five, both of Los Angeles, each pleaded guilty before US District Court Judge John F. Walter to three counts of tax evasion.
According to the plea agreements, during the period 2004 through 2007, Bencion made contributions to a variety of charitable organizations, including those operating under the umbrella of Spinka, totaling $463,650. During that same time period, Bencion accepted kickbacks on all his Spinka-related contributions totaling $431,195, or 93 percent of the contribution. Similarly, Serena made contributions to Spinka-related entities for the years 2003 through 2007 totaling $528,500. She received kickbacks totaling $491,505.
The defendants filed their respective tax returns claiming the inflated contribution amount for the purpose of tax evasion. However, following the arrest of the Grand Rabbi of Spinka in December 2007, each defendant decided not to claim the 2007 contributions as tax deductions. Consequently, the tax loss to the government for the remaining years was $58,347 with respect to Bencion, and $97,454 with respect to Serena.
According to the plea agreements, Bencion and Serena each entered into an arrangement through which they could make contributions to Spinka charitable organizations, including Yeshiva Imrei Yosef, Congregation Chakal Yitzchok, Mosdos Spinka International, Machne Sva Rotzohn, Mifal Hachesed, and Central Rabbinical Seminary. In return, agents of Spinka would secretly refund 93 percent of the defendants' contributions with cash payments arranged through various third parties. In addition, agents of Spinka would mail on behalf of the Spinka charitable organizations charitable contribution receipts in the full amounts of the defendants' contributions.
Spinka was a religious group within Orthodox Judaism. Spinka established a variety of charitable organizations which represented themselves to be public charities, contributions to which could be tax deductible under the Internal Revenue Code.
When sentenced by Judge Walter on February 4, 2013, the statutory maximum sentence each defendant will receive is fifteen years' imprisonment and a fine of at least $750,000. In addition, each defendant may be obligated to pay the cost of prosecution, estimated at $50,000, as well as restitution of $58,347 for Bencion and $97,454 for Serena.
Man Indicted in Conspiracy to File False Claims for Tax Refunds with the IRS, Bank Fraud, and Identity Theft
Aaron Jamaal Gilmore, twenty-eight, of Los Angeles, made his initial appearance before Judge Carla Woehrle October 4, 2012. On September 25, 2012, a federal grand jury returned an indictment charging Gilmore with conspiracy to file false claims for refunds with the IRS, filing false claims for refunds, bank fraud, and aggravated identity theft.
According to the indictment, between June 2007 and April 2009, Gilmore along with coconspirators, Tiffani Hess, Daniel Blake Harris, and others, participated in a scheme to defraud the United States by filing false claims in a fraudulent tax refund scheme. Gilmore, Hess, and others prepared false tax returns, claiming that federal taxes had been withheld in amounts exceeding the amounts of taxes owed in order to generate a false tax refund.
In furtherance of the conspiracy, Gilmore and Hess deposited fraudulently obtained tax refund checks into bank accounts controlled by Gilmore, Hess, and other coconspirators. The indictment alleges Gilmore filed at least six false claims for tax refunds totaling over $300,000 which were later deposited into bank accounts held at federally insured financial institutions.
Also according to the indictment, Gilmore and Hess obtained names and Social Security numbers of coconspirators and at least one unknowing individual, to file tax returns in the names of the coconspirator and the unknowing individual. On October 16, 2007, Gilmore deposited a tax refund check in the amount of $63,244 in the name of another individual. Gilmore and Hess then withdrew the money from the bank account.
On May 24, 2012, Hess was sentenced to twenty-four months' imprisonment, three years of supervised release, and ordered to pay restitution in the total amount $235,977.75 to victims. On October 24, 2011, Harris was sentenced to eighteen months' imprisonment, three years of supervised release, and ordered to pay restitution in the total amount of $89,833.85 to victims.
Gilmore is currently free on bond pending trial scheduled on November 27, 2012.
Man Indicted for Using Stolen Identities to Obtain Tax Refunds
Former Buckeye, Arizona, resident, Adrian Espiridion Lugo, twenty-nine, was arrested on January 24, 2012, in Pittsburgh, Pennsylvania, on identity theft and tax fraud charges. A federal grand jury in Phoenix returned an indictment on January 3, 2012, charging Lugo with using stolen identities to file false tax returns. The 104-count indictment, which was unsealed on January 30, 2012, following Lugo's arrest, charges Lugo with one count of conspiracy, thirty-four counts of false claims, thirty-four counts of wire fraud, one count of transactional money laundering/aiding and abetting, and thirty-four counts of aggravated identity theft.
According to the indictment, while a resident of Buckeye, Lugo operated a tax preparation business called Uncle Sam's Tax Service. The indictment alleges that between 2008 and 2009, Lugo used stolen names and Social Security numbers of deceased individuals to file false tax returns that fraudulently claimed refunds. Further, Lugo allegedly had the fraudulent refunds delivered to him or deposited into accounts that he controlled. The indictment also alleges that Lugo filed approximately thirty-four income tax returns and claimed over $279,000 in federal tax refund payments.
If convicted, Lugo faces a potential maximum penalty of five years in prison for each false claims count, twenty years in prison for each wire fraud count, and a mandatory two-year sentence for each aggravated identity theft count, to run consecutive to any other sentence imposed. Lugo is also subject to fines and mandatory restitution if convicted.
Former Insurance Salesman Sentenced to Prison for Aiding the Filing of False Tax Returns
A federal judge in Albuquerque sentenced Michael Craig Celenze, sixty-eight, a former Albuquerque resident currently residing in Odessa, Texas, to prison for a year and a day for aiding and abetting the filing of a false income tax return, announced US Attorney Kenneth J. Gonzales. Celenze will be on supervised release for one year after he completes his prison sentence.
Celenze also was ordered to pay $380,863.17 to the Crime Victim's Fund of the United States Treasury, which represents the total tax loss caused by his unlawful conduct, plus applicable interest. Celenze is required to surrender himself to a federal correctional institution to be designated by the US Bureau of Prisons as directed by the US Marshal.
On October 14, 2010, Celenze was charged in a thirteen-count indictment alleging three counts of mail fraud, four counts of wire fraud, and six counts of assisting in the preparation of false income tax returns. According to the indictment, Celenze held seminars around the United States in which he marketed the ownership of fractional shares in properties located in Puerto Peñasco, Mexico, as tax-free investments with large returns. Celenze's seminars generally targeted older investors with established retirement funds, and Celenze required a minimum $50,000 investment from each investor. Celenze collected monies from investors and falsely represented to investors that their investment was part of an Allianz Life Insurance retirement program. At the time, Celenze was, in fact, affiliated with Allianz as an insurance salesman, but he was not authorized to collect any rollover funds on behalf of Allianz. Celenze devised a scheme to provide false information to financial institutions to transfer investors' retirement accounts into an account that he controlled.
On May 17, 2012, Celenze pled guilty to Count 8, charging him with assisting in the preparation of a false income tax return under a plea agreement with the US Attorney's Office. In his plea agreement, Celenze admitted initiating a business venture in 2004 that sought to make a profit through the purchase of property in Puerto Peñasco, Mexico, and actively solicited investors in a limited liability corporation, Puerto Peñasco Getaway LCC (PPG), from 2004 through 2006. Celenze admitted that he falsely represented to investors that PPG was a qualified rollover vehicle, which permitted the investors to withdraw funds from their 401(k)s and other retirement accounts without having to pay taxes on those funds. At the time, Celenze knew that PPG was not a qualified rollover vehicle and that funds withdrawn from retirement accounts would give rise to tax liability. Celenze also admitted that he assisted investors in making similar misrepresentations regarding the status of PPG as a qualified rollover vehicle to the financial institutions that served as custodians of the investors' retirement accounts. He did so knowing that the investors would file false returns, which failed to declare as taxable income the funds withdrawn from the retirement accounts, with the IRS.
Under the terms of the plea agreement, the United States moved to dismiss the remaining twelve counts of the indictment after Celenze was sentenced.
Four Individuals Charged for Participating in Tax Refund Fraud Schemes Involving Nearly $1.5 Million
Preet Bharara, the United States Attorney for the Southern District of New York; Toni Weirauch, the Acting Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Mary Galligan, the Acting Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), announced October 10, 2012, charges against three former employees of a bank (the bank), along with one other individual, for participating in a tax refund scheme that used the identities of Puerto Rican citizens to fraudulently obtain tax refund checks.
Ronald Espinal, Juri Santos, Anais Munoz - former employees of the Bank - and Kenny Grullon are charged in a scheme that defrauded the IRS and New York State out of nearly $1.5 million. Grullon, Munoz, and Santos were arrested October 10, 2012, and will be presented and arraigned in Manhattan federal court before US District Judge John F. Keenan. Espinal remains at large.
FBI Acting Assistant Director in Charge Mary Galligan said, "The scheme used stolen identities to generate bogus tax refunds. But the payoff was accomplished only when the corrupt bank employees cashed the intercepted checks. They were the insiders in this inside job."
According to the indictment which was unsealed today in Manhattan federal court, participants in the tax fraud scheme would unlawfully obtain identification information, including names, dates of birth, and Social Security numbers of Puerto Rican citizens. These Puerto Rican identities would then be used to file fraudulent tax returns, which claimed large refunds from New York State and the federal government. Participants in the scheme had the resulting tax refund checks directed to addresses they controlled, or along specific mail routes assigned to a US Postal Service employee who would be paid to pull the checks from the mail. The checks were then cashed at a branch of the bank at which one or more employees had been bribed to facilitate the transactions.
Grullon, Munoz, Espinal, and Santos conspired to cash, and share in the proceeds of, more than $1.5 million in fraudulently issued tax refund checks. Between 2008 and 2010, Munoz, a supervising bank teller at the bank's branch in the Bronx, New York, along with Espinal and Santos, who worked as regular tellers at the same branch, cashed numerous tax refund checks provided to them by Grullon. Grullon and Espinal paid cash bribes of more than $1,000 to one or more bank tellers whom they directed to cash the checks in furtherance of the scheme.
Munoz, twenty-seven, and Santos, twenty-seven, both of New York City, are each charged with one count of conspiracy and one count of theft of government funds. They each face a maximum sentence of fifteen years in prison. Grullon, twenty-three, of New York City, and Espinal, twenty-four, of Brooklyn, New York, are each charged with one count of conspiracy, one count of theft of government funds, and one count of bank bribery. They each face a maximum sentence of forty-five years of in prison.