Crime Watch: December 20, 2013

Dec 20th 2013
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Bay Area Woman Guilty in Investment Scam That Caused Over $9 Million in Losses

A San Jose, California, woman was convicted December 18 of a federal fraud charge for running a Ponzi scheme that bilked more than 250 victims out of approximately $9.5 million.

Bich Quyen Nguyen was found guilty of conspiring to commit wire fraud, a crime that carries a possible penalty of twenty years in federal prison.

The evidence presented during a six-day trial showed that Nguyen told victims that she was the CEO of a Swedish credit union that offered guaranteed returns as high as 46.2 percent on one-year certificates of deposit involving at least $1 million. Victims from Southern California and Nevada organized private investment clubs to pool the required $1 million.

Nguyen told victims that she used "trading platforms" and made trades at a high frequency and velocity to achieve the high rates of return, and that their investments were safe because the victims' money would be in "blocked" accounts. 

Read more on the Department of Justice website. 

Emergency Room Doctor Sentenced for Failure to File Tax Returns

Dr. Michael Austin of Atlanta, Georgia, was sentenced December 11 to serve one year and one day in federal prison for willfully failing to file individual income tax returns for tax years 2008 and 2009. Austin was further ordered to serve one year of supervised release and to pay restitution to the IRS of at least $215,906.44. 

According to court documents, during 2008 and 2009, Austin was a medical doctor licensed by the state of Georgia who earned substantial income from practicing of medicine at various hospitals, clinics, and other health care institutions. Austin earned at least $213,931 in 2008 and $210,644 in 2009; nonetheless, he willfully failed to file an individual income tax return for both years. 

Read more on the Department of Justice website.

Former Washington, DC-Area Accountant Sentenced to Prison for Tax Fraud

John T. Hoang of Woodbridge, Virginia, was sentenced in federal district court in Washington, DC, for willfully aiding and assisting in the preparation of false income tax returns for the 2004 tax year. 

Hoang is to serve forty-eight months in prison, twenty-four months of supervised release, and 240 hours of community service. He was also ordered to pay $331,896 in restitution to the IRS. Hoang previously pled guilty on July 31, 2013.

According to court documents and statements made in court, Hoang was a CPA and an attorney. From January 2005 through April 2007, he operated John T. Hoang CPA, a tax return preparation business, and was one of two partners who owned Tax-Smart Technology Services. In 2008, a federal district court in Virginia barred Hoang from preparing federal tax returns.

Despite earning revenue through his businesses of approximately $1 million in 2004, $2 million in 2005, and $3 million in 2006, Hoang failed to file any federal income tax returns or pay any federal income taxes for himself or his businesses during this time.

Hoang admitted that he prepared and caused the preparation of false and fraudulent 2004, 2005, and 2006 income tax returns for his clients. When preparing these false tax returns and related schedules for his clients, Hoang created wholly fictitious business income and expenses for what seemed to be a technology licensing business. He admitted that the tax loss caused by certain false returns he prepared was greater than $30,000 per return, and that he prepared at least twenty-four such false returns for the 2004 through 2006 tax years.

As part of the plea agreement, Hoang admitted that the total tax loss caused by his criminal conduct is greater than $1.5 million.

Read more on the Department of Justice website.

Federal Court Shuts Down Atlanta-Area Tax Preparer Who Allegedly Falsified Tax Returns at Cost of Millions to US Treasury

A federal court in Atlanta permanently barred Matthew Adegbite and his companies, MAS & Associates CPA LLC and Mathew A. Adegbite CPA PC, from preparing federal income tax returns for others. 

According to the complaint, Adegbite has prepared more than 1,000 returns since 2008. Allegedly, Adegbite repeatedly understated his clients' federal tax liabilities by claiming false or inflated tax deductions and credits his clients were not eligible to take. Adegbite's alleged schemes include claiming the First Time Home Buyer Credit for taxpayers who did not actually purchase homes, deducting fictitious business expenses for taxpayers who did not operate a business, and inflating deductions for legitimate businesses to claim losses for otherwise profitable enterprises. 

The complaint further alleged that the harm to the US Treasury could amount to millions of dollars, and a permanent injunction was warranted to prevent further harm.

Read more on the Department of Justice website.

Former Parker Man Sentenced to Serve Fifty-One Months in Federal Prison for $1.7 Million Fraudulent Ponzi Scheme

Shawon McClung, formerly of Parker, Colorado, was sentenced to serve fifty-one months in federal prison for wire fraud. Following his prison sentence, the judge ordered McClung to serve three years on supervised release. The defendant was also ordered to pay $1,756,750 in restitution to the fifteen victims of his fraud. 

According to court documents, in 2009, McClung began Flint-McClung Capital, LLC (FMC) in Indiana. In November 2010, McClung moved FMC from Indiana to Denver, Colorado. In early 2009, McClung entered into financing discussions with a software programmer for the development of proprietary software to make automated trades on the foreign currency (FOREX) market. The goal was to develop a software program that would perform numerous automated trades during a short time based on an algorithm designed to predict and exploit differences in foreign exchange rates. On December 15, 2010, an agreement was reached by McClung and the software programmer to provide funding for the software program. However, McClung only provided approximately $213,000 of the promised $614,790, and the software program was never developed and was never available for FMC's use.

Despite the fact that the software program had not been developed, from approximately March 2009 to approximately April 2011, McClung solicited investor money by falsely representing that FMC owned and used a proprietary "massively parallel automated trading system" to trade currencies on the FOREX market. McClung falsely told investors that this proprietary software was already being used at FMC and had a history of success. Both verbally and in writing, McClung falsely represented to investors, potential investors and others that investors in the investment programs he was offering "historically" received returns of 15 percent to 100 percent approximately every fourteen to thirty days. In reality, as McClung well knew, the software program did not exist and had no history of success.

McClung did make some promised payouts to early investors using money he received from other investors. Some of those early investors told other potential investors about their successful "investments" with FMC, which reassured others about investing their money with McClung and FMC. 

Read more on the Department of Justice website.

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