Crime Watch: January 9, 2013

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Woman Pleads Guilty to Failing to Disclose Income from Swiss Bank Accounts  Agrees to $21 Million Penalty

Mary Estelle Curran of Palm Beach, Florida, pleaded guilty January 8 in the US District Court for the Southern District of Florida to filing false tax returns for tax years 2006 and 2007, the Justice Department and the IRS announced.

According to court documents, Curran, a US citizen, maintained undeclared bank accounts at UBS AG in Switzerland and a bank in Liechtenstein, which she inherited from her husband in 2000. The accounts at UBS AG were held in the names of nominee foreign entities, including the Flognet Foundation and Norega Investment. The account earned income each year, which Curran failed to report on her 2001 through 2007 individual income tax returns.

According to the plea agreement, Curran's conduct caused a tax loss to the government of approximately $667,716. The value of all undeclared foreign financial accounts owned or controlled by Curran exceeded $42 million in 2007. In order to resolve her civil liability for failure to report her foreign bank accounts, Curran has agreed to pay a civil penalty in the amount of 50 percent of the high balance of the accounts, which is $21,666,929.

"Offshore accounts can no longer be used to hide from the IRS and avoid paying the fair amount of tax", said IRS Criminal Investigation Chief Richard Weber. "IRS Criminal Investigation is aggressively pursuing tax cheats – both domestically and internationally. We owe it to every American taxpayer to use all lawful means to identify and prosecute both those who evade their taxes and those who assist them in evading their tax obligations."

Curran faces a potential maximum prison term of six years. A sentencing date has not been set.


Louisiana Home Inspector Sentenced to Seventy-Eight Months in Prison for Tax Fraud

Jack Ray Carr, of Baton Rouge, Louisiana, was sentenced on January 7 to six and a half years in federal prison for one count of corruptly interfering with the due administration of the Internal Revenue laws, four counts of filing false income tax returns, and one count of aiding and assisting in the preparation of a false income tax return, the Justice Department, IRS, and Treasury Inspector General for Tax Administration (TIGTA) announced. Additionally, Carr was sentenced to one year of supervised release.

On June 20, 2012, following a three-day jury trial in the Middle District of Louisiana, Carr was convicted on all six counts. The evidence at trial established that Carr, a home inspector, threatened violence against a federal agent; filed false documents and tax returns with the IRS; and attempted to pay his tax debt with fraudulent bonds, fictitious money orders, and a fake check.

On three successive personal income tax returns, Carr falsely reported that his and his wife's income was "$0.00", despite earning hundreds of thousands of dollars in total during the 2001, 2002, and 2003 tax years. In 2009, on two tax returns, Carr falsely reported more than $100,000 of federal income tax withholdings based on fictitious IRS Forms 1099-OID attached to the tax returns that Carr filed in his own name and in the name of his wife. In doing so, Carr claimed more than $150,000 of fraudulent tax refunds from the US government.


Georgia Woman Indicted for Stealing Identities to Obtain Tax Refunds

A federal grand jury in Montgomery, Alabama, returned a superseding indictment charging Deatrice Smith Williams and Quentin Collick for their roles in a stolen identity refund fraud conspiracy, Assistant Attorney General Kathryn Keneally of the Justice Department and the IRS announced January 7. The thirteen-count indictment charges Williams and Collick with conspiracy to file false claims, theft of public funds, wire fraud, and aggravated identity theft.

On August 9, 2012, Collick was indicted for his role in the conspiracy. In November 2012, pursuant to a criminal complaint, Williams was arrested for her role in the conspiracy. 

According to court documents, Williams worked for a debt collection company in Georgia. As part of her employment, Williams had access to names and Social Security numbers. She provided several names and Social Security numbers to her son-in-law, Collick. Collick and his coconspirators used those names to file false tax returns from the Middle District of Alabama. Collick and his coconspirators, in turn, cashed several fraudulent federal refund checks. 

If convicted, Collick and Williams each face maximum potential sentences of ten years in prison for the conspiracy count, up to twenty years in prison for each wire fraud count, and a mandatory two-year sentence for the aggravated identity theft counts. Collick also faces up to ten years in prison for each theft of public funds count. They are also subject to fines and mandatory restitution if convicted. 


Federal Court Bars Alleged Co-owner of Las Vegas Instant Tax Service Franchise from Preparing Tax Returns

A Nevada federal court has permanently barred Benyam Tewolde from preparing tax returns for others, the Justice Department announced December 28, 2012. Tewolde and his wife, Yordanos Kidanits, are the alleged co-owners of an Instant Tax Service franchise that operates at multiple locations in the Las Vegas area. Instant Tax Service is a nationally franchised tax preparation company based in Dayton, Ohio.

Kidantis and the franchisee, Koraggio LLC, were also permanently enjoined from engaging in certain abusive practices. The civil injunction orders, to which the defendants consented without admitting the allegations against them, were signed on December 27 by Judge Miranda M. Du of the US District Court for the District of Nevada.

According to the government complaint, the defendants helped employees at their Instant Tax Service franchise offices to engage in a variety of misconduct, including:

  • Preparing phony tax return forms with fabricated businesses and income,
  • Falsely claiming education credits,
  • Claiming false filing status,
  • Claiming false dependents,
  • Selling deceptive loan products,
  • Filing tax returns without customer consent or authorization, and
  • Preparing bogus W-2 forms based on information from employee paystubs.

The complaint further alleged that Tewolde personally prepared fraudulent returns.

The injunction permanently bars Tewolde from preparing or filing federal tax returns for others, training tax preparers, and owning or managing a tax preparation business.

Kidane and Koraggio are enjoined from violating the federal tax laws and consumer protection laws. The court order requires them to hire a monitor at their expense who will periodically report to the Justice Department to ensure compliance with the injunction. The order also bars Kidane and Koraggio from marketing abusive loan products, including holiday, or instant cash loan, or advance products offered to customers based on information obtained from the customer's paystub.

The case is one of five similar lawsuits that the Justice Department brought against Instant Tax Service franchises earlier this year. One of those suits is pending against the nationwide franchisor of Instant Tax Service and its owner, Fesum Ogbazion, in Dayton. The court in that case has entered a preliminary injunction, and trial on the government's request to shut down the Instant Tax Service franchisor permanently is scheduled for May 2013.


Los Angeles Man Pleads Guilty to Conspiracy to File False Claims for Tax Refunds 

Aaron Jamaal Gilmore, twenty-nine, of South Los Angeles, pleaded guilty to conspiracy to filing false claims for tax refunds with the IRS before Judge Margaret M. Morrow January 7.

According to court documents, 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. Gilmore and Hess deposited fraudulently obtained tax refund checks into bank accounts controlled by Gilmore, Hess, and other coconspirators. 

According to the plea agreement, on April 14, 2008, Gilmore and his coconspirator Tiffani Hess knowingly electronically filed a Form 1040 with the IRS in the name of another coconspirator, whom Gilmore recruited in order to file false claims. The tax return falsely stated that during 2007 the coconspirator's total income was $28,803, and the coconspirator had $57,961 in federal income tax withheld. The tax return also falsely claimed a tax refund of $51,578. 

Gilmore admitted he knew the statements on the false tax return were fraudulent. As a result of the false claims, the IRS wired a tax refund of $51,578 to a bank account controlled by the coconspirator. The coconspirator then withdrew $46,000 in the form of a cashier's check from the bank account and gave the cashier's check to Gilmore, who deposited the check into a bank account in his control. 

Gilmore along with his conspirators filed false tax refunds seeking between $200,000 and $400,000 in refunds in which they were not entitled. 

On May 24, 2012, Tiffani Hess was sentenced to two years of imprisonment, three years of supervised release, and ordered to pay restitution in the total amount $235,977.75 to victims. On October 24, 2011, Daniel Blake Harris was sentenced to eighteen months of imprisonment, three years of supervised release, and ordered to pay restitution in the total amount of $89,833.85 to victims. 

At sentencing, Aaron Jamaal Gilmore faces a maximum sentence of ten years in prison, a fine of $250,000, or twice the gain or loss as a result of his offense. Sentencing is scheduled April 15, 2013.

Source: US Department of Justice



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