Crime Watch: April 29, 2013

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CPA Sentenced to Two Years in Prison and Ordered to Pay Restitution for Role in Stolen Identity Tax Refund Scheme

Masood Chotani, a CPA from Los Angeles, was sentenced April 25 to two years in prison, followed by one year of supervised release, the Justice Department and the IRS announced. Chotani was also ordered to pay $60,705 in restitution to the IRS.

On June 23, 2010, Chotani was indicted by a federal grand jury on charges of engaging in a scheme to file false tax returns with the IRS using the names and Social Security numbers of deceased individuals. He pleaded guilty to conspiracy to defraud the United States on January 15, 2013.

According to the indictment and the plea agreement, in 2002 and 2003, Chotani misappropriated employer identification information from his client files and provided them to his coconspirators, Haroon Amin and Ather Ali. Amin and Ali then prepared and filed fraudulent tax returns falsely stating that these deceased individuals earned wages from which income tax had been withheld. As part of the scheme, Chotani caused forty-seven tax returns to be filed with the IRS claiming an aggregate of $372,558 in false refunds. Although the IRS rejected the bulk of the refund claims filed in the scheme, a number of refund checks were issued and delivered to addresses controlled by Amin, Ali, and their coconspirators, including various mailboxes opened by Ali. Most of these refund checks then were delivered overseas to be deposited in bank accounts in Armenia and Pakistan. Chotani admitted that he was a knowing participant in this scheme.

Amin and Ali are serving prison sentences of thirty and thirty-seven months, respectively.

Source: US Department of Justice


Alabama Residents Indicted for Stolen Identity Refund Fraud Conspiracy

Several residents of Montgomery, Alabama, were indicted by a federal grand jury for their involvement in a conspiracy to receive fraudulent tax refunds into their bank accounts, the Justice Department and IRS announced April 26. Tarrish Tellis, Bobby Joe Means, Delancy Tolliver, Tracey Montgomery, and Glenn Powell Jr. were indicted on various charges, including conspiracy and theft of government money. Tellis was also indicted on five counts of aggravated identity theft.

According to the indictment, Tellis obtained the means of identification of individuals, including their names, dates of birth, and Social Security numbers for the purpose of filing false federal income tax returns. Means, Tolliver, Montgomery, and Powell provided Tellis with bank account numbers that were to receive the false federal income tax refunds. Tellis would then use the bank account numbers and means of identification to cause to be prepared and filed false federal income tax returns with the IRS. After the false refunds were deposited, Means, Tolliver, Montgomery, and Powell would withdraw the funds. The bank accounts received at least $500,000 in false tax refunds.

If convicted, each of the defendants faces a maximum potential sentence of five years in prison for the conspiracy charge and up to ten years in prison on each theft of government funds charges. Tellis also faces a mandatory two-year sentence for the aggravated identity theft counts. The defendants will also be subject to fines and mandatory restitution if convicted.

Source: US Department of Justice


Alabama Man Sentenced to Federal Prison for Stolen Identity Refund Fraud

Kenneth Jerome Blackmon Jr., a resident of Montgomery, Alabama, was sentenced April 24 to fifty-one months in prison, the Justice Department and the IRS announced.

In January 2013, Blackmon pleaded guilty to aggravated identity theft and access device fraud. According to court documents, Blackmon was involved in a scheme to use stolen identities to file false federal income tax returns with the IRS. He admitted to acquiring names and Social Security numbers, to using that identity information on false tax returns, and to directing fraudulent tax refunds onto debit cards. Blackmon also admitted to possessing at least fifteen Social Security numbers for the purpose of obtaining fraudulent tax refunds from the IRS.

In addition to prison time, Blackmon was ordered to pay $197,839 in restitution to the IRS and to serve three years of supervised release following his release from federal custody.

Source: US Department of Justice


Twenty-Four Current and Former IRS Employees Indicted for Benefits Fraud

United States Attorney Edward L. Stanton III and Shelby County District Attorney General Amy Weirich announced April 17 that twenty-four current and former employees of the IRS have been charged for crimes relating to fraudulently obtaining more than $250,000 in government benefits.

Thirteen of the current and former IRS employees have been charged federally with making false statements to obtain unemployment insurance payments, food stamps, welfare, and housing vouchers. All thirteen, individually charged in separate indictments, are alleged to have falsely stated that they were unemployed while applying for or recertifying those government benefits.

The thirteen IRS employees charged are Angela Allison, Jessica Davis, Serina Gaither, Lillian Hamilton, Teresa Jenkins, Joanne Johnson, Angela Scales, Dorothy Simmons, Mary Weeks, Evonna Yarbrough, Gale Baker, Shari House, and Talaria Mitchell. Each has been charged with multiple counts of false statements in violation of Section 1001 of Title 18 of the United States Code. A conviction under that statute can result in up to five years in prison.

Eleven other former and current IRS employees were charged by the Tennessee District Attorney General's Office with theft of property over $1,000, a class D felony. Those charged are Raya Banks, Clara Cannon, Alma Childers, Cathryn Fair, Robert Graves, Mechell Hampton, Nicole Nickson, Diane Malone, Myra Thompson, Katina Thurman, and Pamela Williams.

Source: US Department of Justice


Beverly Hills Tax Return Preparer Sentenced to One Year in Prison for Tax Fraud

John Trunzo, AKA: Giovanni, a tax return preparer doing business as "Your Tax Man", was sentenced to a year and one day in prison, a year of supervised release, and ordered to pay $67,231 in restitution for filing a false federal income tax returns (Form 1040), for himself, with the IRS.

On September 10, 2012, Trunzo, a resident of Beverly Hills, pleaded guilty to one count of filing a false federal income tax return Form 1040 for the 2007 tax year with the IRS.

According to the plea agreement, he chose to file false returns for three consecutive years, 2005, 2006, and 2007, omitting $99,505 in income from his tax preparation business on his 2007 federal income tax return. As a result, he failed to pay a cumulative total of $67,231 in taxes.

In addition to knowingly and willfully filing false returns for himself, Trunzo, attempted to obstruct and impede the due administration of the internal revenue laws by, during audits, sending the IRS his own receipts to substantiate improperly claimed deductions on returns he prepared for his clients.

According to Trunzo's sentencing papers filed with the court, Trunzo asserted he willfully filed his false returns and sent in fraudulent receipts to the IRS on behalf of his clients in order to afford a move from his Hollywood apartment to an apartment in Beverly Hills and gain access to Beverly Hills schools for his son. Trunzo's submission of false returns on his own behalf and illegitimate receipts on behalf of his clients stopped only after he was first confronted with his illicit conduct by IRS special agents on October 24, 2008.

Source: US Attorney's Office, Los Angeles


Paramount Man Sentenced to Federal Prison for Bank Fraud

Appearing before US District Judge R. Gary Klausner, a Paramount man was sentenced April 22 to thirty-six months in federal prison for conspiring to commit bank fraud. Victor Eze was further ordered to spend two years on supervised release following his prison sentence. Eze has been in federal custody since his arrest in April of last year. Eze pleaded guilty to one count of conspiring to commit bank fraud on June 11, 2012. 

According to the plea agreement, between 2005 and April 18, 2012, Eze altered the payee name on stolen checks received from his unnamed coconspirators. Eze also counterfeited checks for his coconspirators. The coconspirators then cashed and deposited the checks that Eze had altered and counterfeited. Many federally insured financial institutions suffered actual losses as a result of this conspiracy, including Chase Bank and US Bank.

According to court documents initially filed in this case, Eze admitted to investigators that other members of the conspiracy would bring him fraudulent checks and he would alter payee names and addresses upon their request and would be paid $100 per check for his alterations.

Source: US Attorney's Office, Los Angeles 


New York Woman Charged for Defrauding Bank and Stealing Hundreds of Thousands of Dollars from the IRS

The US Attorney for the Southern District of New York, the FBI, and the IRS announced April 23 the arrest of Melanie Ferreira for engaging in a series of frauds, which included cheating the IRS of nearly $500 million and perpetrating a bank fraud scheme. 

According to the allegations in the complaint unsealed in White Plains federal court, on October 15, 2009, Ferreira filed a US Individual Income Tax Return, Form 1040, for the year 2008 (2008 return). In her 2008 return, she falsely reported interest income of $661,600 from three different banks. She then falsely claimed that she had paid taxes in the amount of $661,536 to the IRS for tax year 2008. On that basis, she claimed a refund of $440,924. In reality, she actually earned only $17 in interest income from those three banks. Furthermore, contrary to her claim on her 2008 return that she had already paid $661,536 in federal taxes, she actually paid only $236.

On October 23, 2009, the IRS wired $440,924 to Ferreira's bank account.

On April 15, 2010, Ferreira tried to carry out the same type of scheme when she filed her Form 1040 for the year 2009, but this time, the IRS rejected her refund request.

In addition, Ferreira also perpetrated a bank fraud scheme against the Bank of America (BOA), which was the bank that held the mortgage for her house in Dutchess County, New York (house 1). In May 2010, she caused a forged cashier's check for $316,966.05, purporting to be drawn on the Federal Reserve Bank of Cleveland, Ohio (check 1), to be sent to BOA in satisfaction of the mortgage on house 1. Believing that check 1 was legitimate, BOA filed a satisfaction of mortgage with the Dutchess County Clerk's Office. BOA subsequently determined that check 1 was fraudulent and filed suit in New York State Supreme Court in order to have the mortgage reinstated.

Similarly, on June 2, 2012, Ferreira sent a check in the amount of $305,000 (check 2) to BOA, purporting to pay off the balance of her mortgage from BOA on house 1. When BOA tried to negotiate check 2, it was returned since the originating bank account had been closed. On the memo line of check 2, Ferreira wrote, in red ink",For discharge of debit EFT only." On the back of the check, she wrote several lines in a different color of ink, including the following: "Not for deposit; EFT only; discharge of debt."

Ferreira's scheme - sometimes known as an electronic funds transfer or EFT scheme - is a scheme often used by adherents to the Sovereign Citizens Movement, a group composed of individuals who, although they reside in the United States, assert the position that they do not have to answer to any government authority, including courts, taxing entities, motor vehicle departments, or law enforcement.

Source: US Attorney's Office, New York


Attorney Convicted of Tax and Money Structuring Crimes

A bench trial before a federal judge concluded with the conviction on April 19 of Las Vegas attorney Paul Wommer on tax and money structuring charges, Nevada's US Attorney Daniel Bogden said.

In a trial before US District Judge Gloria Navarro, Wommer was convicted of three counts of structuring financial transactions, one count of tax evasion, and one count of making and subscribing a false tax return, statement, or other document.

According to court records and evidence introduced at trial, Wommer in 2010 made or assisted in fifteen structured deposits totaling $138,700 for the purpose of evading bank reporting requirements. He also allegedly attempted to evade $13,020 in federal income taxes by concealing his assets, making false statements to the IRS, and placing funds and property in the names of nominees.

Wommer is scheduled to be sentenced August 1. He faces up to ten years in prison and a $500,000 fine on each structuring count, up to five years in prison and a $250,0000 fine on the tax evasion count, and up to three years in prison and a $250,000 fine on the false return count.

Source: US Attorney's Office, Nevada



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