Former State Representative Pleads Guilty to Wire Fraud and Tax Evasion
by AccountingWEB on
By AccountingWEB Staff
According to a report from the US Department of Justice, on March 16, 2012, Richard David Miranda, a former Arizona state representative, plead guilty in the US District Court for the District of Arizona to a two-count information charging him with defrauding a charity of more than $140,000 and evading income tax related to those unlawfully obtained funds.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; Special Agent in Charge James L. Turgal of the FBI's Phoenix Field Office; and Special Agent in Charge Dawn Mertz of the Internal Revenue Service-Criminal Investigation (IRS-CI) Phoenix office.
Assistant Attorney General Breuer said, "Having admitted this illegal conduct, Miranda will now face the consequences of his actions. This Justice Department will continue to hold elected officials, just like ordinary citizens, accountable for their crimes."
"The Federal Bureau of Investigation, the Internal Revenue Service, and the Department of Justice remain steadfast in our efforts to combat public corruption at all levels of government by investigating and prosecuting those who deliberately abuse the public's trust by using their office for personal gain stated," said FBI Special Agent in Charge James L. Turgal Jr. "The FBI and our law enforcement partners are committed to holding our elected officials accountable from intentionally engaging in schemes to profit from fraudulent activity and exploiting the faith placed in them by the American public."
"It is an embarrassment to the state and its people when a state representative deceives those he was elected to represent," said IRS Special Agent in Charge Mertz. "Former Representative Miranda selfishly defrauded a charity that was established to assist disadvantaged members of the community and used the profits for his own benefit. Those in public office should be held to a higher standard and are not exempt from criminal prosecution."
Miranda, age fifty-five, of Tolleson, Arizona, served as a member of the Arizona House of Representatives for the 13th District from 2011 until his resignation, effective February 20, 2012. ABC 15.com reported that Miranda cited family and health concerns as the reason for his resignation.
Miranda previously served as a member of the Arizona State Senate from 2002 until 2011, and the Arizona House of Representatives from 1999 until 2002. According to court documents, since July 2002, Miranda also served as executive director of Centro Adelante Campesino Inc. (Centro), a nonprofit charitable organization that provided food, clothing, and educational assistance to persons in need, including migrant farm workers, in and around Maricopa County, Arizona.
According to court documents, in May 2005, Miranda initiated a scheme to wind down Centro, sell Centro's sole remaining asset (a building), and use the proceeds of the sale for personal expenses. To do so, Miranda removed the charity's longstanding volunteer accountant as an authorized signer on the charity's bank and credit union accounts and assumed sole control of the charity's accounts and financial records. He also told the volunteer accountant that the proceeds of the sale would be used to fund scholarships. In March 2007, the building was sold for $250,000, and on March 7, 2007, a significant portion of the profits of that sale - $144,576 - was wired across state lines into Centro's credit union account.
Within one week of the wire transfer, according to court documents, Miranda began to withdraw the proceeds from Centro's credit union account without the authorization or knowledge of Centro's board of directors. For example, Miranda obtained two checks payable to himself, totaling $37,000, and paid off personal credit card debts totaling more than $60,000. By December 31, 2007, Miranda had withdrawn the remaining proceeds (approximately $46,836) using checks, withdrawals, and electronic funds transfers. He used the funds to pay off additional personal debts and to make numerous purchases for personal travel, services, clothing, food, and household items.
Miranda also failed to report the proceeds of the sale as income on his IRS Form 1040 for calendar year 2007.
The charge of wire fraud carries a maximum penalty of twenty years in prison and a $250,000 fine, or twice the amount gained or lost in the scheme. The charge of attempt to evade or defeat tax carries a maximum penalty of five years in prison and a $100,000 fine. Sentencing has been scheduled for June 5, 2012.
According to an ABC 15.com report, Miranda told US District Judge Roslyn Silver, "I made some false documents." Just before Miranda plead guilty, the judge asked him if he knew what he did was wrong; Miranda simply answered, "Yes."
The case is being prosecuted by trial attorneys Edward T. Kang, Monique T. Abrishami, and Brian A. Lichter of the Criminal Division's Public Integrity Section, and by Assistant US Attorney Frederick A. Battista of the District of Arizona. The case is being investigated by agents from the FBI Phoenix Field Office and IRS-CI Phoenix Office.
The Private Officer News Network reported that following the court hearing, Miranda said, "I have accepted all responsibility for my actions. I would like to thank my family, friends, and supporters in the community. I hope in the future I can overcome the hurt and disappointment I have caused."
According to the Private Officer News Network, Miranda refused to answer questions about why he did what he did. Miranda's attorney, Jose Montano denied that Miranda's actions were a violation of the public's trust. "This was a personal matter. This had nothing to do with his job at the legislature."
- CPA Accused of Tax Fraud Is Now Suspect in Plot to Murder Witnesses
- Maryland Tax Defier Sentenced to Sixty-Five Months in Prison
You may like these other stories...
Camp to Obama: Let’s talkHouse Ways and Means Committee Chairman Dave Camp (R-MI) said on March 6 there are some areas in his proposal to overhaul the tax code where he thinks he can work with President Obama, Bernie...
The tax-filing season got off to a slow start because the IRS said it needed more time to gear up for this year’s returns. But now the pace has picked up considerably.About 40 percent of the returns expected to be...
Tax preparers have completed a lot of returns since the season began and will complete a lot more before April 15 – but that's just the beginning for many accountants and their clients. In the weeks and months that...
Upcoming CPE Webinars
BAR is an acronym for: Boundaries, Authority and Role. This simple tool will provide participants with a solid understanding of leadership essentials to improve their performance.
This material is designed to provide a start-to-finish overview of how to plan and complete high-quality small audits efficiently.
In this session Excel expert David H. Ringstrom, CPA shares numerous techniques that you can use to work with charts more efficiently.
Key Accounting and Reporting Issues for Nonprofits No. 1: Overview and Statement of Financial Position
This material focuses on non-profit organizations organization, accounting and reporting.