Jun 7th 2013
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Montgomery Woman Sentenced to Ten Years in Prison for Identity Fraud – Tax Refund Scam
Rhashema Deramus of Montgomery, Alabama, was sentenced to ten years in prison for her part in an identity theft/tax refund scam. Deramus and those working for her stole people’s identities and used those stolen identities to file fraudulent tax returns and obtain tax refunds that were not owed to them. As part of her sentence, US District Judge Mark E. Fuller ordered Deramus to pay $1,198,063 in restitution.
On August 29, 2012, Deramus pled guilty to theft of government money, fraudulent use of debit cards, and aggravated identity theft, all related to filing fraudulent tax returns. Deramus was the leader of a ring of individuals who stole people’s names, dates of birth, and Social Security numbers. Eight hundred eighty-one of these identities were stolen from the Troy Regional Medical Center.
Deramus used these stolen information to file fraudulent tax returns. Deramus then directed the fraudulently obtained tax refunds generated from these tax filings to be placed on prepaid debit cards. Deramus, and others at her direction, took those debit cards and cashed them out at various ATMs. When she received the money from the tax refunds, she spent it on herself. She admitted that her sole source of income during this period was illegally obtained tax refunds.
In March 2011, as a result of numerous suspicious withdrawals from local ATMs, law enforcement agents ultimately identified a vehicle associated with those withdrawals. During a traffic stop of that vehicle, officers found 165 prepaid debit cards issued in other people’s names. Other items, including a computer containing stolen personal identifying information, were also located in the vehicle.
Agents then obtained a search warrant for Deramus’ residence, and during the execution of that warrant, agents located 276 more debit cards, computers, and thousands of pieces of personal information belonging to other people. Later, in November 2011, agents discovered another eighty-eight prepaid debit cards in Deramus’ possession. Ultimately, the investigation revealed Deramus’ ring possessed, at a minimum, 520 prepaid debit cards, on which $1,198,063 in fraudulently obtained tax refunds had been placed, and over 7,000 stolen names and personal identifiers of other people.
At the sentencing hearing, one of the victims testified that he lost his defense contracting job, making around $100,000 a year, as a result of financial problems from the theft and misuse of his personal information. Items containing his personal information were located during the execution of the search warrant at Deramus’ residence, along with thousands of other stolen identities. This victim’s financial issues severely impacted his credit, and as a result, his security clearance was suspended and later revoked. Because his security clearance was suspended, he lost his job as a defense contractor. Further, as a member of the Air National Guard, his military duties and hours have been scaled back because of his security clearance issues.
Two Montgomery County Sheriff’s Office employees also testified that they had been financially impacted by the theft and use of the personal information of their children.
Additionally, the CEO of Troy Regional Medical Center testified at Deramus’ sentencing hearing. She told the court that a contract employee, Angeline Austin, had access to all of Troy Medical Center’s patients’ information. Austin was a member of Deramus’ ring and was sentenced earlier this year to sixty-five months in federal prison for stealing personal information of Troy Medical Center patients and providing them to Deramus and her ring. The CEO further explained to Judge Fuller that Troy Medical Center has been operating at a loss for years and that the hospital was very concerned that it may be fined over $1.5 million dollars for violations of federal and state of Alabama health care privacy laws stemming from Austin stealing the patients’ identities and providing them for use by Deramus’ ring. This fine could severely impact the capability to operate the only hospital in Troy.
Source: US Attorney’s Office – Alabama
Former New Jersey Return Preparer Sentenced for Tax Fraud
Ashraf Hassan-Gouda, a former resident of Mays Landing, New Jersey, was sentenced June 4 in US District Court for the District of New Jersey to 541 days in prison, the Justice Department and the IRS announced. The sentence is for time served. Previously, Hassan-Gouda had pleaded guilty to willfully assisting in the preparation of a false federal individual income tax return for a client.
According to court documents, in 2003, Hassan-Gouda was the owner of Tax World, a tax preparation business located in Atlantic City. He prepared the false tax return for the client at his business. Hassan-Gouda was indicted in 2007 and fled to Egypt. In 2012, Hassan-Gouda was extradited to the United States from Germany.
Source: US Department of Justice
Owner of Window Installation Business Admits Tax Evasion
The owner of a window installation company located in Mt. Laurel, New Jersey, admitted June 4 he converted to cash millions of dollars in the company’s gross receipts and used the money to pay his workers without withholding employment taxes, the US Attorney’s Office and the US Department of Justice announced June 4.
Fred Marcus of Camden County, the owner and operator of Vortex Installations Inc., pleaded guilty before US District Judge Mary L. Cooper in Trenton federal court to one count of tax evasion.
According to documents filed in this case and statements made in court, from early 2006 through the end of 2009, Marcus cashed approximately $2.8 million in Vortex Installations’ gross receipts at a check casher. Marcus used $1,025,868 of that money to pay cash wages to his workers, which he did not report to the IRS and from which he did not withhold employment taxes. From 2006 through 2008, Marcus failed to file IRS Forms 941 – Employer’s Quarterly Federal Tax Returns – in which he was required to report the wages paid to his employees. In 2009, Marcus filed false Forms 941, in that he failed to report the cash wages that he paid to Vortex employees.
On the count of tax evasion, Marcus faces a maximum potential penalty of five years in prison and a fine of $250,000, along with restitution to the IRS. Sentencing is scheduled for September 19, 2013.
Source: US Attorney’s Office – New Jersey
Idaho Contractor Indicted on Federal Charges of Conspiracy, Money Laundering, Obstruction of Justice, Wire Fraud, and Tax Fraud
US Attorney Wendy J. Olson and Assistant Attorney General for the Tax Division Kathryn Keneally announced May 20 that a federal grand jury in Boise returned a forty-two-page indictment that charges Elaine Martin Meridian, Idaho, with making false statements, conspiracy, wire fraud, mail fraud, and obstruction of justice. It also seeks forfeiture of over $9 million as the proceeds of the alleged crimes. Darrell Swigert of Boise, Idaho, is charged with obstructing and conspiring to obstruct a federal criminal proceeding.
Martin was the president and majority stockholder of Marcon, Inc., a Treasure Valley construction company. Swigert was a minority shareholder. An earlier indictment that charged only Martin, filed on March 13, 2013, was unsealed by the court. A court date has not been set.
The indictment charges Martin with four counts of making and subscribing a false tax return, two counts of conspiracy, five counts of wire fraud, one count of making a false statement, five counts of mail fraud, four counts of interstate transportation of property taken by fraud, one count of conspiracy to commit money laundering, one count of conspiracy to obstruct justice, and one count of obstructing justice.
The indictment alleges that as early as 2000, and continuing through January 2012, Martin took steps to lower her personal net worth, such as acquiring, holding, and transferring assets into the names of nominees. According to the indictment, this and other alleged conduct enabled Martin to successfully apply for and be admitted into the US Small Business Administration (SBA) 8(a) Program. The superseding indictment alleges that Martin’s actions also allowed Marcon to fraudulently maintain its certification with the United States.
Department of Transportation’s Disadvantaged Business Enterprise (DBE) Program, in the states of Idaho and Utah. The SBA 8(a) Program and DBE Program are designed to help economically and socially disadvantaged business compete in the marketplace. Both programs require applicants to show that their personal net worth is below a certain statutory threshold. The indictment alleges that Martin remained in control of her assets while appearing to meet the personal net worth requirements of both programs.
According to the indictment, Martin also caused false and fraudulent tax returns to be filed for herself and Marcon, Inc., which did not report all of the income received by Martin or the company. These false returns were allegedly submitted in support of Marcon’s applications to the SBA 8(a) Program and DBE programs for Idaho and Utah, along with allegedly false personal financial statements. According to the indictment, Martin caused the financial books and records for Marcon to be false by purposefully omitting, deleting, altering, or miscategorizing entries. The indictment further alleges that Martin concealed her role or relationship in other business entities that dealt with Marcon, Inc.
While a participant in the SBA 8(a) Program, the indictment alleges that Martin sought to conceal withdrawals of capital that exceeded the SBA 8(a) Program limits by executing loans with her family members and with entities that she controlled.
The indictment charges that Marcon received more than $2.5 million in government contracts based on the company’s fraudulently obtained SBA 8(a) status. The indictment further alleges that Marcon received more than $6 million in government contracts based on the company’s fraudulently obtained DBE status in the states of Idaho and Utah.
Both Martin and Swigert are charged with conspiracy to obstruct justice by fabricating documents and making false statements that sought to conceal the true nature, source, and extent of property belonging to Martin. According to the indictment, Martin and Swigert fabricated a loan document and a document that purported to memorialize a gift in order to impede a civil audit by the IRS and criminal investigation by the IRS and US Attorney’s Office. Swigert is also charged with a second count of obstruction of justice based on allegedly false statements that he made to conceal the nature, source, and extent of property belonging to Martin.
The government seeks forfeiture of $9,237,722.10, which represents the proceeds that Martin obtained as a result of the alleged offenses.
- Each charge of making and subscribing a false return is punishable by up to three years in prison, a maximum fine of $250,000, and up to three years of supervised release.
- Each charge of conspiracy is punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release.
- Each count of wire fraud is punishable by up to twenty years in prison, a maximum fine of $250,000, and up to five years of supervised release.
- The charge of making a false statement is punishable by up to two years in prison, a maximum fine of $250,000, and up to one year of supervised release.
- Each charge of mail fraud is punishable by up to twenty years in prison, a maximum fine of $250,000, and up to five years of supervised release.
- Each charge of interstate transportation of property taken by fraud is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
- The charge of conspiracy to commit money laundering is punishable by up to twenty years in prison, a maximum fine of $250,000, and up to three years of supervised release.
- The charges of conspiracy to obstruct justice are each punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Source: US Attorney’s Office – Idaho
Alabama Employee Pleads Guilty to Providing Names for a Million-Dollar Identity Theft Scheme
On May 30, Lea’Tice Phillips pleaded guilty to one count of wire fraud and one count of aggravated identity theft for her role in a stolen identity refund fraud scheme, announced US Attorney George L. Beck, Jr. announced.
According to the court documents, Phillips worked for an Alabama State agency and had access to state databases which contained means of identification of individuals. Between October 2009 and April 2012, Phillips conspired with Antoinette Djonret and others to file false tax returns using stolen identities.
On multiple occasions, Phillips accessed a state database to obtain means of identification. Phillips used her state e-mail to send means of identification to Djonret. Djonret and others used those means of identification to file false tax returns. Djonret and her coconspirators filed most of the tax returns from her residence in Montgomery, Alabama.
Djonret and her coconspirators used an elaborate network of individuals to launder the tax refunds. The defendants recruited individuals to purchase prepaid debit cards and to provide the cards to the defendant and her coconspirators. The fraudulent tax refunds were directed to the prepaid debit cards. Djonret and her coconspirators would then use the prepaid debit cards to obtain the proceeds. Some of the prepaid debit cards were in the name of Lea’Tice Phillips. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds.
Sentencing has not yet been scheduled. Phillips faces between two and twenty-two years in prison, three years of supervised release, restitution, and a maximum fine of $750,000, or twice the loss caused by the offense. Djonret was previously sentenced to 144 months in prison.
Source: US Attorney’s Office – Alabama
Former Florida Travel Agent Convicted in Scheme to Cash Tax Refunds Obtained with Stolen Identities
US Attorney Robert E. O'Neill announced May 30 that a federal jury has found Ana Orosa Parada guilty of conspiracy to obtain payment of false claims. Parada faces a maximum penalty of ten years in federal prison. Her sentencing hearing is scheduled before US District Judge Charlene E. Honeywell on August 13, 2013. Parada was indicted on September 19, 2012.
According to testimony and evidence presented at trial, Marisol Panel and her husband, Wilfredo Flores, both held travel accounts at Holiday Travel and Tours. Panel testified that she had illegally obtained identities of adults and children who lived in Puerto Rico and said she prepared tax returns using a tax filing program and paid local residents to receive refund checks at their residences.
After the refund checks arrived, Panel and her codefendant husband, Flores, would pick up the refund checks and deliver them to Parada. Parada would either cash the refund checks belonging to the identity theft victims or apply the checks to Panel and Flores' travel packages. Parada testified that she knew cashing and exchanging the refund checks for Panel and Flores’ travel packages was wrong.
Bank records showed Prada deposited 123 refund checks into her business checking account. The records also showed business checks which Parada had made payable to Marisol Panel for the amount of the refund checks, minus the fee Parada had charged for cashing the checks. Parada’s fee ranged from $700 to $1,000 per check. Other evidence showed that refund checks also had been applied to the cost of the travel packages purchased through Parada’s now defunct travel agency, Holiday Travel and Tours.
Both Panel and Flores have pleaded guilty for their role in the conspiracy. They are scheduled to be sentenced on July 9, 2013.
Source: US Attorney’s Office – Florida
Federal Court Permanently Enjoins Florida Tax Return Preparer
A federal court in Miami has permanently barred Osvaldo J. Diaz of Coral Gables, Florida, from preparing federal tax returns for others, the Justice Department announced June 6. The permanent injunction order was signed by Judge Jose E. Martinez of the US District Court for the Southern District of Florida.
The government's complaint alleged that Diaz prepared tax returns that fabricated deductions and credits in an attempt to understate his customers' tax liabilities or inflate his customers' refunds. Specifically, the government alleged that Diaz fabricated business and personal expenses and inflated real estate losses for his customers. According to the complaint, the IRS examined 250 returns prepared by Diaz and found that 93 percent resulted in additional taxes being owed. The government alleged that the tax loss from the returns prepared by Diaz could be tens of millions of dollars.
Source: US Department of Justice
Businessman Sentenced to Two Years in Prison for Obstructing the IRS and Concealing Property in Bankruptcy Proceedings
On June 6, US District Judge Roger W. Titus sentenced Darryl A. Stuckey, formerly of Fort Washington, Maryland, to two years in prison, followed by three years of supervised release, for corruptly obstructing the IRS and fraudulently concealing assets in a bankruptcy proceeding. Judge Titus also ordered Stuckey to pay restitution of $300,632.
According to his plea agreement, from 1996 to 2009, Stuckey served in various roles in companies that he caused to be created or purchased. Between 2004 and 2009, Stuckey engaged in a scheme to obstruct the IRS from determining his income. For example, instead of using his personal bank accounts, Stuckey used corporate bank accounts and credit cards from his businesses to pay for the majority of his personal expenses, such as gambling, child support, medical expenses, shopping, travel, gifts, and entertainment.
From 2004 to 2009, although Stuckey received substantial income from the businesses he controlled, he did not file individual or corporate federal tax returns, and he did not pay any federal income taxes, state income taxes, or self-employment taxes. In fact, Stuckey admitted that he had not filed individual or corporate federal tax returns since 1993.
In 2009, Stuckey caused a business he purchased, CTI/D.C., to end its use of an outside company to manage its payroll. Although Stuckey continued to have CTI/D.C. deduct FICA taxes, federal income taxes, and other items from the employees’ paychecks, he failed to pay over to the IRS the FICA and federal income taxes that were withheld.
As a result of Stuckey’s actions, the tax loss was $300,632.
Source: US Attorney's Office - Maryland
Man Sentenced to Four Years in Prison for Filing Fraudulent Tax Returns in the Names of Others
A Las Vegas man was sentenced June 6 to four years in prison, three years of supervised release, and ordered to pay restitution of $64,921 to the IRS for his guilty pleas to filing multiple false tax returns in the names of others, announced Daniel G. Bogden, US Attorney for the District of Nevada.
Joseph Glendon Austin was sentenced by US District Judge Larry R. Hicks. Austin pleaded guilty on February 21, 2013, to one count of presenting a false claim to the United States and one count of aggravated identity theft.
According to the guilty plea agreement, sometime before March 31, 2009, in Nevada, Austin obtained access to the personal identifying information of clients of an unnamed tax preparer. On March 31, 2009, Austin unlawfully filed a tax return using the personal identifiers of a client of the tax preparer, but containing falsified income, withholding, and other information. The fraudulent return requested a refund of $4,147, which Austin admitted he received. Austin then filed multiple false tax returns using the identifiers of other clients of the tax preparer and claimed refunds in the form of refund anticipation loans placed on debit cards. Austin admitted no one gave him permission to use his or her identifying information.
Source: US Attorney’s Office - Nevada