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| Highlights - 2007 Archive |
IRS Employee Pleads Guilty to Unauthorized Inspection of Tax Return Information
On December 19, 2007, Ericka Duson pleaded guilty in the U.S. District Court for the Eastern District of California to unauthorized inspection of tax return information.
According to court documents, between January 3, 2000, and January 24, 2004, Duson, as an employee of the Internal Revenue Service, unlawfully and without authorization accessed and inspected the tax return information of approximately one hundred and eighty-three (183) private individuals.
Individual Charged with Corruptly Interfering with the Administration of Internal Revenue Laws
On December 7, 2007, Walter Martin Helwich was sentenced in the U.S. District Court, Northern District of Illinois, Eastern Division, to 27 months imprisonment, one year of supervised release, and ordered to pay restitution in the amount of $388,373 to the Internal Revenue Service (IRS). Helwich was found guilty on one count of 26 USC 7212(a); attempts to interfere with the administration of Internal Revenue Laws.
In December 2006, Helwich was charged with corrupt or forcible interference with the administration of Internal Revenue laws. According to an indictment, Helwich impeded and impaired the IRS in carrying out its lawful function to assess and collect income taxes, penalties, interest, and fines for the U.S. Helwich signed and filed purported income tax returns for four tax years on behalf of “Senior America Estate Planning Trust,” falsely reported his own income as income of the alleged trust, and claimed that the trust owed no taxes. He also signed and filed individual income tax returns for nine tax years on behalf of himself and for seven years on behalf of his spouse, and falsely reported that he earned zero gross and taxable income. But, in fact, Helwich had earnings during those tax years, including but not limited to $739,725. He also submitted altered documents, frivolous correspondence and forms to the IRS, and made false statements to the IRS concerning his gross and taxable income. In furtherance of the corrupt endeavor, Helwich passed checks drawn on a closed bank account in purported payment of outstanding income taxes, penalties, and interest that he owed the IRS. Between December 2002 and October 2004, Helwich submitted almost 40 checks to the IRS, ranging from a few hundred dollars to over $380,000. He continued to submit checks to the IRS on the closed bank account even after IRS agents told him the account had been closed.
Defendant Teasley Charged with Illegally Obtaining Taxpayer Information
On December 10, 2007, an Information was filed in the United States District Court, Northern District of California, Oakland Division, charging Davina Teasley with Fraud and Related Activity in Connection with Computers.
According to court documents, between on or about February 4, 2003, and on or about May 20, 2004, Teasley intentionally accessed an Internal Revenue Service (IRS) computer on six different occasions and obtained individual personal taxpayer information.
Tax Preparers Plead Guilty to Stealing Approximately $438,159.59 in Clients’ Tax Refunds
On November 20, 2007, Aloysius Amante and Amorito Amante each pled guilty in the United States District Court, District of New Jersey, to one count of Theft of Government Property.
According to court documents, Aloysius Amante owned and operated Jersey Tax and Financial Services, and Amorito Amante operated Mabuhay Accounting Services, in which they provided a variety of services, including the preparation and electronic filing of Federal income tax returns. On or about January 1, 2005, to on or about December 31, 2006, Aloysius Amante knowingly converted approximately $225,609.24 in illegally obtained tax refunds for his own personal use, and Amorito Amante knowingly converted approximately $212,550.35 in illegally obtained tax refunds for his own personal use.
Marcus Saenz Sentenced for Filing a Fictitious Power of Attorney with the IRS
On November 7, 2007, Marcus Saenz was sentenced in the United States District Court, Western District of Texas, to three (3) years probation and to pay a special assessment of $100. While on probation, Saenz was ordered not to engage in any accounting and/or bookkeeping including but not limited to the preparation of any forms related to the filing of Internal Revenue Service (IRS) returns and/or appeals to the IRS, and to submit to psychiatric/psychological evaluation. Saenz was sentenced after pleading guilty on August 22, 2007, to making a material false statement.
According to court documents, on or about October 30, 2006, Saenz submitted to the IRS Legal Counsel office, Austin, Texas, an IRS Form 2848, Power of Attorney and Declaration of Representative, falsely representing that he was a Certified Public Accountant (CPA), duly qualified to practice in the State of Texas. Saenz made this fictitious and fraudulent material statement in an attempt to represent a taxpayer before the IRS.
Lisa Blechman Arrested for Assaulting an IRS employee
On November 14, 2007, Lisa Blechman was arrested by Treasury Inspector General for Tax Administration special agents in response to an arrest warrant issued on November 13, 2007, by the United States District Court, Central District of California. Blechman was arrested for intentionally assaulting an employee of the Internal Revenue Service (IRS) through the unleashing of two dogs, in the course of that employee's performance of her official duties.
According to court documents, on October 30, 2007, an IRS employee went to Blechman's residence to serve an IRS summons. When the IRS employee identified herself, Blechman became visibly agitated and began yelling and swearing at her. After the IRS employee taped the summons to the front door, Blechman told the IRS employee that if she did not remove the summons from the door, Blechman was going to come outside with her dogs. As the IRS employee began to walk to her vehicle, Blechman opened the front door and let the dogs out in an attempt to scare and intimidate the IRS employee.
John Steven Romero Arrested for Assaulting an IRS employee
On November 16, 2007, John Steven Romero was arrested by Treasury Inspector General for Tax Administration special agents in response to an arrest warrant issued on November 15, 2007, by the United States District Court, Southern District of California. Romero was arrested for assault on an Internal Revenue Agent, while engaged in the performance of his official duties.
According to court documents, on November 15, 2007, an Internal Revenue Service Revenue Agent (RA) went to Romero's residence for the purpose of serving a summons. Romero approached the RA in an apparent attempt to use force against him, slapping the summons from the RA's hand and stating in an angry tone, “get the hell out of here or I will kick your ass.” These actions caused the RA to fear that Romero's threatened use of force was imminent.
Tax Preparer Dennis Kelley Pleads Guilty to Mail Fraud in Obtaining More Than $178,500 of his Clients' Funds by False Pretenses
On November 14, 2007, Dennis Kelley pled guilty in the United States District Court, District of New Jersey, Trenton, to one count of mail fraud.
According to court documents, from on or about April 1995 to on or about April 15, 2002, Kelley owned and operated MAS Financial Planning Corporation (MAS), Meridian Accounting (Meridian), and FAS Financial Accounting Services (FAS). Kelley was in the business of preparing tax returns, including personal income tax returns, and providing general accounting services to clients. He maintained a personal Post Office Box in Haddonfield, New Jersey, which was used to receive mail related to MAS, Meridian, and FAS. Kelley obtained checks directly from his clients under false pretenses, and used his clients' personal information to falsely and fraudulently obtain tax refunds, open bank accounts, and obtain lines of credit for his own benefit. Kelley failed to file his clients' tax returns and did not forward to the Internal Revenue Service approximately $178,500, which Kelley received from his clients for the purpose of paying their taxes.
Civil Complaint Filed against Keith O'Brien Slade and the Controlled Quality Corporation for False Claims against the IRS
On October 31, 2007, a civil complaint was filed by the U.S. Attorney's Office in the U.S. District Court, District of Columbia, against the Controlled Quality Corporation (a defunct company formerly doing business in the District of Columbia) and its owner,
Keith O'Brien Slade, to recover damages and civil penalties under the False Claims Act, 31 U.S.C. §§ 3729-3733.
According to court documents, from approximately June 2001 to February 2004, the defendants had a contract with the Government Printing Office (GPO) to provide printing services. The defendants entered into a contractual agreement with the GPO beginning June 9, 2001, in which the defendants agreed to prepare and duplicate various documents for GPO customer agencies. The Internal Revenue Service (IRS) was one of those customer agencies.
During the contract period, the defendants were found to be using a subcontractor to perform 100 percent of the printing services awarded to the defendants by the GPO. The defendants prepared and certified vouchers for payment, attesting that they prepared and performed the work. These invoices contained inflated prices for the production of the printed work for the IRS. The IRS made at least 28 procurements from the defendants, totaling approximately $499,782. The defendants paid their subcontractor a sum of only $61,678.
Individual Indicted for Attempting to Interfere with Administration of Internal Revenue Laws
On October 17, 2007, Eugene George Warner was indicted by a grand jury in the U.S. District Court for the District of Alaska for attempting to interfere with the administration of internal revenue laws, tax evasion, false tax returns, bankruptcy fraud, and mail fraud.
According to court documents, Warner engaged in a course of conduct intended to evade the payment of lawful debts, conceal assets from creditors, and obstruct collection activities by those creditors.
According to the indictment, Warner did corruptly endeavor to obstruct and impede the due administration of the internal revenue laws by threatening his son-in-law who was managing real estate for Warner. Warner informed his son-in-law that he might be in "jeopardy" of "civil liability" or criminal prosecution for "conversion" or "conspiracy" if he complied with a notice of levy sent by the Internal Revenue Service (IRS) concerning Warner.
Warner presented the IRS an "Order" purportedly issued "In The Grand National Council of Confederated Nations for Cherokee Nations West" awarding Warner a "Default Judgment"[sic] in the amount of "one million five hundred thousand U.S. dollars plus interest" and ordering respondents "United Stated of America, et. al., a private corporation" to "immediately cease and desist all actions" against Warner or his property.
Warner also provided the IRS with a letter, specifically addressed to an IRS attorney and revenue officer, declaring that any liens placed upon his property in Hawaii were "void" and that there was "great jeopardy upon the IRS and its agents so involved in placing said liens." Another document mailed to the IRS by Warner declared that particular IRS employees were in violation of various criminal laws and demanded payment. The document purported to issue a "Protective Order" prohibiting the IRS from ever coming within one mile of Warner, removing "even one dollar" from his retirement, and entitling him to be "exempt" from withholding taxes forever.
IRS Employees Indicted for Fraudulently Obtaining HUD Funds
On October 2, 2007, Cheryl Esters and Michelle Parker were indicted in the U.S. District Court for the Northern District of Texas for fraudulently obtaining U.S. Department of Housing and Urban Development (HUD) Section 8 funds. Both individuals were indicted based on a joint investigation by the Treasury Inspector General for Tax Administration (TIGTA) and HUD's Office of Inspector General.
The Housing and Community Development Act of 1974 made Federal funds available to local housing authorities to help low-income individuals obtain housing. Part of this Act included the Section 8 Rental Voucher Program, which authorized financial assistance to low income individuals. Section 8 payments subsidized the rent of low-income families to help them afford decent housing in the private market.
According to court documents, Esters and Parker were both Internal Revenue Service employees at the time they fraudulently obtained HUD Section 8 payments. Both Esters and Parker fraudulently obtained these payments when they each concealed their receipt of income as Federal employees while applying for HUD Section 8 rental assistance payments on a form titled, "Personal Declaration and Questionnaire for Rental Assistance." The court documents stated that Esters fraudulently obtained HUD Section 8 payments totaling $34,869 from 2002 through 2006, and Parker fraudulently obtained HUD Section 8 payments totaling $26,950 from 2002 through 2005.
Former CEO Pleads Guilty to Bribing a Government Official for $130 Million in Federal Contracts
According to court documents, on October 3, 2007, Michael B. Holiday, the former chief executive officer and sole shareholder of a company that provided security to Federal installations in Maryland and California, pleaded guilty in the U.S. District Court for the District of Maryland to bribery and tax evasion in connection with a scheme involving three Federal Government contracts worth over $130 million.
In an October 3, 2007, Department of Justice press release, Rod J. Rosenstein, the U.S. Attorney for the District of Maryland, praised the Treasury Inspector General for Tax Administration (TIGTA), the Federal Bureau of Investigation, the Internal Revenue Service (IRS) Criminal Investigation function, the Defense Criminal Investigative Service, and several other Offices of Inspector General for their involvement in the investigation.
Individual Sentenced for Misuse of Department of the Treasury Symbols
On September 21, 2007, Larry D. Brown was sentenced by the U.S. District Court for the Central District of California to five years of probation and a special assessment of $25. Brown was sentenced after pleading guilty on May 4, 2007, to one count of misuse of the Department of the Treasury symbols.
According to court documents, during a business transaction on January 10, 2005, Brown knowingly used a symbol of the Department of the Treasury in a manner that could reasonably be interpreted as conveying the false impression that his business activity is approved, endorsed, sponsored, authorized by, or associated with the Department of
the Treasury.
Jackson Hewitt Tax Service Employee Sentenced for Preparing and Filing False Tax Returns
On September 24, 2007, Shamick Jones was sentenced in the U.S. District Court for the Western District of Michigan to a term of three years' probation, restitution in the amount of $11,960.50, and an assessment of $100. Jones was sentenced after pleading guilty to one count of theft of government property.
According to court documents, in February 2006, Jones was an employee of Jackson Hewitt Tax Service, a tax return preparation business. In her capacity as an employee of the business, Jones prepared three different Federal tax returns without the knowledge and consent of the person whose identity and information were used on the tax returns. Jones then caused her employer to issue "cash cards" based on tax refunds allegedly owed to the individuals named on the Federal tax returns she had prepared and filed. Jones used the "cash cards" for her own personal benefit.
Ketan Shah Sentenced for Conspiring to Defraud the United States and Obstruction of a Federal Audit
On September 25, 2007, Ketan R. Shah was sentenced in the U.S. District Court, District of Maryland, to 30 months in prison followed by three years of supervised release, restitution in the amount of $1,379,639, and a $200 special assessment. Shah pleaded guilty on June 12, 2007, to conspiracy to defraud the United States and obstruction of a Federal audit.
According to a September 24, 2007, press release issued by the U.S. Attorney for the District of Maryland, Public Affairs International, Inc. (PAI) entered into a contract with the Internal Revenue Service (IRS) to organize and host informational programs concerning changes in Federal tax law and IRS policies. According to the contract, PAI was supposed to use the fees from attendees and exhibitors at these tax forums to pay for expenses, and use the surplus at the end of each fiscal year to offset PAI's management fee under the contract. The IRS was obligated to pay any unpaid balance after the tax forum income was applied to the fee.
As indicated in the press release, from 2000 through 2003, Shah, who served as Vice President of PAI, and Brosim Ekpone, who served as President of PAI, under-reported the tax forum income and over-reported expenses so that there appeared to be no surplus income to apply to the management fee at the end of each fiscal year. As a result of the false invoices, the IRS paid PAI management fees totaling approximately $1,379,630 for the years 2000 through 2003.
In October 2003, the Treasury Inspector General for Tax Administration's (TIGTA) Office of Audit initiated an audit of PAI's records related to the contract. TIGTA subpoenaed PAI for documents relating to PAI's earnings and expenses under the contract. In responding to the subpoena, Shah and Ekpone directed PAI employees to alter or manufacture invoices from vendors to increase PAI's apparent expenses, and to remove participant names from the tax forum participant lists, thereby reducing PAI's apparent income. Furthermore, Shah and Ekpone intentionally failed to provide certain documents requested in the subpoena.
According to the press release, Ekpone pleaded guilty on September 12, 2007, to conspiracy to defraud the United States and obstruction of a Federal audit.
Individual Sentenced for Attempting to Bribe Internal Revenue Service Revenue Agent
On September 5, 2007, Paul Huynh was sentenced in the U.S. District Court for the District of Connecticut, to probation for three years, a fine of $3,000, and a special assessment of $100. Huynh was also ordered by the court to cooperate with the Internal Revenue Service (IRS) to pay all outstanding taxes, interest, and penalties. Huynh was sentenced after pleading guilty on February 27, 2007, to one count of bribery.
According to court documents, Huynh, who is the owner of Dayville Fine Wines and Spirits in Dayville, Connecticut, was being audited by the IRS for Tax Years 2003 and 2004. During a meeting on December 15, 2005, between Huynh and the IRS Revenue Agent (RA) conducting the audit, Huynh offered the RA $3,000 in cash and a bottle of champagne. The RA refused both the money and the champagne. During a meeting on December 21, 2005, the RA asked Huynh about the gift that Huynh had previously offered. Huynh agreed to give the money and liquor to the RA in return for having his tax returns corrected so that he had nothing wrong with it, or words to that effect. Huynh provided the RA with $3,000 in cash and three bottles of wine.
On January 9, 2006, the RA met with Huynh again. During the meeting, Huynh agreed to give the RA $7,000 to make any remaining problems with the 2004 tax return go away and take care of any tax problems with the 2003 tax return.
On June 20, 2006, Huynh admitted to Treasury Inspector General for Tax Administration (TIGTA) Special Agents that he gave the RA $10,000 and knew it was illegal.
Individual Sentenced after Pleading Guilty to Embezzling Taxpayer Remittance Payments
On August 27, 2007, Mary Austin was sentenced in the U.S. District Court for the District of Arizona to three years of probation, restitution in the amount of $5,103.32, and a special assessment of $100. Austin was sentenced after pleading guilty on May 3, 2007, to 10 counts of theft of government property.
According to court documents, between January 24, 2003, and November 14, 2003, Austin willfully and knowingly embezzled and converted to her use 10 cash payments with a total value of $5,103.32. The cash payments came into her possession and care by virtue of her employment as an Internal Revenue Service (IRS) employee.
Individual Sentenced for Wire Fraud Scheme Using a Fraudulent IRS Document
On August 31, 2007, Chris Joseph Wade was sentenced in the U.S. District Court for the Northern District of California to 46 months in prison, three years of supervised release upon his release from prison, restitution in the amount of $124,050.13, and a special assessment of $100. Wade was sentenced after pleading guilty to one count of wire fraud.
According to court documents, Wade represented to victims that he would purchase vehicles for them at an IRS auction, when in fact there was no such IRS auction. As part of his scheme, Wade produced a letter (on IRS letterhead) to a victim listing three vehicles he had purportedly purchased for the victim, knowing that the letter was not issued by the IRS. As a further part of his scheme, Wade caused the victims to provide him with cash to pay for the vehicles that he fraudulently claimed to have purchased from the IRS. Wade also caused a victim to wire him money using Western Union.
Former IRS Employee Pleads Guilty to the Unauthorized Inspection of Tax Returns and Return Information
On August 9, 2007, Diane Snyderman, a former Internal Revenue Service (IRS) employee, pleaded guilty in the U.S. District Court for the District of New Jersey to the unauthorized inspection of tax returns and return information.
According to court documents, an investigation was initiated after the Treasury Inspector General for Tax Administration's (TIGTA) Strategic Enforcement Division (SED) established that on April 22, 2005, Snyderman inspected the return information of an individual who was a certified public accountant (CPA) and who had prepared Snyderman's tax returns for the past 30 years. The SED also established that between August 1997 and September 2006, Snyderman engaged in a variety of unauthorized activities and accesses that were outside the scope of her duties. According to court documents, Snyderman inspected tax returns and/or return information of approximately 56 individuals who were all clients of her CPA. She also inspected tax returns and return information relating to a real estate sales firm listed on her IRS employment application as her former employer. Snyderman also inspected tax returns and return information relating to her friends and relatives, as well as her friends' relatives.
Individual Sentenced For Using Fraudulent Tax Returns to Obtain a Bank Loan
On August 15, 2007, Harold Slawson was sentenced by the U.S. District Court for the District of South Carolina, to a prison term of five months, three years of supervised release at the conclusion of his prison term, and an assessment of $100. Slawson was sentenced after pleading guilty on February 6, 2007, to one count of bank fraud.
According to court documents, beginning in October 2001 and continuing to December 2001, Slawson, doing business as National Tax Services, and John Lambert, Jr., doing business as #1 Truck Stop, devised a scheme to defraud the National Bank of Commerce (NBC), a financial institution with deposits insured by the Federal Deposit Insurance Corporation. As part of the scheme, Slawson prepared two sets of tax returns for Lambert. The first set of returns was meant to be filed with the Internal Revenue Service (IRS). The second set of returns fraudulently specified that #1 Truck Stop generated a profit of $159,052 in 1997; $163,029 in 1998; and $151,911 in 1999. The second set of false tax returns was presented and used to obtain a mortgage loan in the amount of $650,000 from the NBC. In December 2001, Lambert received a check from the NBC in the amount $650,100, representing the proceeds of the mortgage loan.
Kevin Lackland Sentenced for Theft of IRS Computer Equipment
On July 30, 2007, Kevin Lackland was sentenced by the U.S District Court for the District of Maryland, to a term of five years of probation, restitution of $10,930, and a special assessment of $100.
According to a Department of Justice press release, Lackland, who began work as an information technology specialist with the Internal Revenue Service (IRS) on December 29, 2003, pleaded guilty to the theft of IRS computer equipment. The equipment, which included computers, hard drives, and monitors, was valued at $20,647. Lackland used eBay.com to sell much of the computer equipment he stole from the IRS. Some of the stolen equipment was recovered in Lackland's home.
Lockbox Employee Charged with Attempted Theft of Taxpayer Remittance
On July 17, 2007, Sharon Walker was charged in Hamilton County Municipal Court, Cincinnati, Ohio, with one count of attempted theft.
According to court documents, on or about April 12, 2007, Walker, while employed at the United States Bank Government Lockbox facility as a processor of Internal Revenue Service taxpayer remittances removed a $100 bill in U.S. currency from an IRS taxpayer remittance and placed the $100 bill in her pocket. The attempted theft of the $100 occurred during an integrity check being conducted by Treasury Inspector General for Tax Administration (TIGTA) special agents and was recorded by video surveillance. Walker subsequently admitted to taking the money, and the currency was recovered by a TIGTA special agent.
Individual Sentenced After Pleading Guilty to Conspiracy to Disclose Tax Records
On July 19, 2007, Jean Christian was placed on probation by the U.S. District Court for the Eastern District of Virginia, for a term of two years. As a special condition of the probation, Christian will participate in a home confinement program, including electronic monitoring, for a period of 90 days. Christian was also ordered by the court to pay a $100 special assessment and the costs of prosecution in the amount of $4,646.49. Christian was sentenced after pleading guilty to conspiring to commit unauthorized access to a Government computer and disclosing tax records to an unauthorized person.
According to court records, Christian, who was employed by the Internal Revenue Service (IRS), knowingly and unlawfully accessed the tax records of several individuals 137 times between 1997 and 2004 and then disclosed the records to a friend.
Individual Found Guilty of Making Fraudulent Declarations
On July 31, 2007, a jury convened by the U.S. District Court for the District of Oregon, found Steven Kelton guilty of 20 counts of making fraudulent declarations under penalties of perjury.
According to court documents, from September 18, 2000, to April 17, 2001, Kelton willfully made, subscribed, and filed 20 documents with the Internal Revenue Service (IRS). Specifically, Kelton made and subscribed 20 Reports of Cash Payments Over $10,000 Received in Trade or Business (Form 8300), in which he falsely claimed payments of $100,000 to $500 million to various individuals. Although each document contained a written declaration that the document was made under the penalties of perjury, Kelton did not believe them to be true and correct as to every material matter.
According to a U.S. Department of Justice press release, this investigation was conducted jointly by the Treasury Inspector General for Tax Administration (TIGTA) and the IRS's Criminal Investigation function.
Individual Sentenced for Misuse of Treasury Names and Symbols
On July 23, 2007, Angelo M. Vitale was sentenced by the U.S. District Court for the Eastern District of California to 12 months of probation, a fine in the amount of $500, and a special assessment of $25. Vitale was sentenced after previously pleading guilty on April 5, 2007, to one count of misuse of Department of the Treasury names and symbols.
According to court documents, on or about April 13, 2006, Vitale contacted another individual and solicited his financial participation in a real estate venture. Vitale told the individual that he planned to purchase a distressed property from a bank. Vitale also told the individual that the property in question had an Internal Revenue Service (IRS) tax lien that needed to be cleared before the property could be purchased and that Vitale had negotiated a settlement with the IRS to clear the lien.
In support of these statements, Vitale provided the individual with a letter that purported to be from the Department of the Treasury, Internal Revenue Service. Based on the letter fabricated by Vitale and equally phony letters purporting to be from the bank and another company, the individual paid Vitale $5,000 as an investment in the property.
Former IRS Employee Sentenced for Wire Fraud
On July 24, 2007, the U.S. District Court for the District of Massachusetts sentenced Robert P. Dooley to a prison term of 60 months, 36 months of supervised release, restitution in the amount of $335,665.75, and an assessment of $1,200. Dooley was sentenced after pleading guilty on April 13, 2007, to 12 counts of wire fraud.
According to court documents, Dooley engaged in a scheme to defraud Home Depot, Inc., which operates a chain of retail home improvement stores throughout the United States. Dooley was employed as a clerk at the IRS Andover Campus in Andover, Massachusetts, from about February 25, 2001, to about September 13, 2002. In connection with Dooley's employment by the IRS, he was issued an identification badge. As part of Dooley's scheme to defraud Home Depot, he fraudulently obtained Home Depot store credit by taking items from a Home Depot store without purchasing them. Dooley would then bring the items to the return desk at a Home Depot store and falsely claim that he had purchased the items but did not have a receipt for the purchases. Dooley utilized his IRS identification badge as his proof of identity and, at times, made claims that he was trustworthy because he worked for the IRS. Dooley would receive store credit in the amount of the "returned" items, and he would sell or barter the fraudulently obtained store credits at a reduced price to other individuals.
Between about May 2002 and October 2005, Dooley executed this scheme at
Home Depot stores in Massachusetts, New Hampshire, Maine, Vermont, Rhode Island, Connecticut, New York, Texas, and Oklahoma. During the period of July 2004 through October 2005, Dooley defrauded Home Depot of an amount in excess of $330,000.
Individual Sentenced for Possession of a Controlled Substance
On July 11, 2007, Victoria Marshall was sentenced to 30 days home detention, 12 months of probation, a $1,000 fine, and a $25 special assessment by the U.S. District Court for the Eastern District of California. Marshall was sentenced after pleading guilty to possession of a controlled substance on April 12, 2007.
According to court documents, on August 10, 2005, Marshall, an Internal Revenue Service (IRS) employee at the time, knowingly possessed methamphetamine stored in a glass vial tube and three small baggies. Testing of the glass vial tube and one of the bags identified .40 grams and 1.53 grams of methamphetamine in the vial and bag, respectively.
IRS Employee Charged With Unauthorized Access of Computer Data
On July 18, 2007, a Criminal Information was filed against Patricia Moreno in the U.S. District Court for the Eastern District of California, charging her with three counts of unauthorized access of computer data.
According to court documents, Moreno, in her capacity as an IRS Tax Examining Technician, exceeded her authorization to access the confidential tax records of three individuals at least 110 different times between March 17, 2003, and April 22, 2004.
Individual Sentenced for Embezzling Client's Federal Tax Payments
On June 28, 2007, Stephen E. Taylor was sentenced by the U.S. District Court, Northern District of Georgia, to 78 months of imprisonment and three years of supervised release, and was ordered to make restitution in the amount of $4,174,144.61 and pay a special assessment of $100. Taylor was sentenced after previously pleading guilty to wire fraud on April 18, 2007.
According to court documents, in February 2005, Taylor, who was the president of 20/20 Payroll Solutions, began diverting funds from 20/20 Payroll Solutions' payroll account to pay for personal expenses and invest in real estate. The payroll account was established by 20/20 Payroll Solutions to receive its clients' payroll and tax payments. The funds were supposed to be used to make Federal and State tax payments on behalf of 20/20 Payroll Solutions' clients.
As a result of Taylor's diversion of company money, 20/20 Payroll Solutions was unable to pay its clients' Federal tax liabilities on a timely basis, even though it had already collected the amount due from its clients.
Individual Pleads Guilty to Attempting to Interfere with the Administration of Internal Revenue Laws
On June 27, 2007, Larry Canoso pleaded guilty in the U.S. District Court, District of Utah, to attempting to interfere with the administration of Internal Revenue laws.
According to the plea agreement, on November 13, 2003, Canoso caused a lien release to be filed at the Salt Lake County Recorder's Office to release an Internal Revenue Service (IRS) lien in the amount of $47,149. The IRS filed the lien as a result of taxes due and owed for the year of 1995. This release was not an official release and was not a duly executed document of the IRS.
IRS Employee Sentenced after Pleading Guilty to the Unauthorized Inspection of Return or Return Information
On June 22, 2007, Eric Sanchez was sentenced in the U.S. District Court for the Northern District of Texas, to probation for a term of two years. He was ordered to participate in mental health treatment as directed by his probation officer, file all outstanding tax returns, and pay all outstanding taxes, interest, and penalties. Sanchez was also assessed a $25 criminal monetary penalty. Sanchez was sentenced after previously pleading guilty to willfully and in excess of any authorization, accessing and inspecting the return or return information of a private individual.
According to court documents, on June 4, 2004, Sanchez, who was an Internal Revenue Service (IRS) employee, knowingly and without authorization, accessed tax return information in the IRS's Integrated Data Retrieval System concerning the ex-husband of another individual with whom Sanchez had a personal relationship. Sanchez obtained and inspected the ex-husband's tax return information, including his return filing history.
Mellon Bank Agrees to Pay Additional $16.5 Million for the Destruction of Tax Returns and Checks
On June 28, 2007, the U.S. Department of Justice (DOJ) announced via a press release that Mellon Bank, N.A., agreed to pay an additional $16.5 million to settle claims related to the 2001 destruction of tens of thousands of individual tax returns and checks that the bank was supposed to process as an agent for the Treasury Department.
According to the release, the civil settlement resolves claims that Mellon Bank violated the False Claims Act when it falsely reported to the Internal Revenue Service (IRS) that it had completed a special program to process tax returns and checks received during the peak April 2001 tax period when, in fact, Mellon Bank never completed the program. Instead, Mellon Bank employees destroyed tens of thousands of tax returns and checks received from taxpayers in an effort to deceive the IRS about Mellon Bank's failure to complete the 2001 tax program in a timely fashion.
Mellon Bank previously paid approximately $18 million as part of a separate administrative settlement with the Treasury Department, the release stated. This payment was to reimburse the Federal Government for the value of the interest lost on the destroyed checks and to cover the costs incurred by the Federal Government in obtaining replacement checks from the affected taxpayers.
The U.S. Attorney for the Western District of Pennsylvania noted in the press release that seven former Mellon Bank employees had previously been charged in connection with the destruction of the tax returns and had entered guilty pleas in each of their cases.
Individual Sentenced after Pleading Guilty to False Impersonation of a United States Officer
On June 22, 2007, Anthony DiNapoli was sentenced in the U.S. District Court, District of Massachusetts to 24 months of probation and a special assessment of $100. DiNapoli was sentenced after previously pleading guilty to falsely impersonating a U.S. government employee.
According to court documents, on February 22 and 23, 2005, DiNapoli pretended to be a Federal Government employee in order to demand that another individual dismiss a civil suit.
Individual Sentenced after Pleading Guilty to the Unauthorized Inspection of Return or Return Information
On June 14, 2007, Ellen McCall was sentenced by the U.S. District Court, Northern District of Texas, to 18 months of probation, a $500 fine, and an assessment of $25. On March 6, 2007, McCall pleaded guilty to the unauthorized inspection of return or return information.
According to court documents, on August 19, 2005, McCall, who was employed by the Internal Revenue Service (IRS) at the time, willfully and in excess of any authorization, accessed and inspected the return or return information of a private individual.
Individual Charged with Illegally Obtaining Information from an IRS Computer System
On June 6, 2007, a criminal information was filed in the U.S. District Court, Southern District of New York, charging Melody Woods with intentionally and knowingly accessing an IRS computer without authorization. During the period of June 2006 to about February 7, 2006, Woods exceeded her authorized access in order to access and obtain information concerning at least six taxpayers.
Tax Preparer Sentenced for Theft of Tax Refund Check
On May 2, 2007, Perla Molina was sentenced by the U.S. District Court, District of Maryland, to probation for a term of 2 ½ years, fined $10,000, ordered to make restitution in the amount of $7,119, and ordered to pay an assessment of $25. Molina was sentenced after previously pleading guilty to the theft of government property.
According to court documents, a taxpayer paid Molina to prepare his 2003 Federal and State tax returns at her tax service. The taxpayer never saw or signed the returns submitted by Molina on his behalf to the Internal Revenue Service (IRS) and the State of Maryland. When the taxpayer never received his IRS or Maryland refunds, he contacted Molina about his IRS refund and asked for a copy of his 2003 tax return. Molina refused to provide the taxpayer with a copy of his tax return. The taxpayer reported Molina to the IRS, and it was subsequently determined that the taxpayer's refund check had been deposited into Molina's bank account. It was also determined that the taxpayer's return filed by Molina contained her address and the Social Security number of another individual.
Ketan R. Shah Pleads Guilty to Conspiracy to Defraud the United States and Obstruction of a Federal Audit
According to a June 12, 2007, press release issued by the United States Attorney for the District of Maryland, Northern Division, Ketan R. Shah of Public Affairs International, Inc. (PAI), pleaded guilty to conspiracy to defraud the United States and obstruction of a Federal audit.
The release stated that PAI entered into a contract with the Internal Revenue Service (IRS) to organize and host informational programs concerning changes in Federal tax law, as well as IRS policies. According to the contract, PAI was supposed to use the fees from attendees and exhibitors at these tax forums to pay for expenses, and use the surplus at the end of each fiscal year to offset PAI's management fee under the contract. The IRS was obligated to pay any unpaid balance after the tax forum income was applied to the fee.
As indicated in the press release, from 2000 through 2003, Shah, who served as vice president of PAI, and others under-reported the tax forum income and over-reported the expenses so that there appeared to be no surplus income to apply to the management fee at the end of each fiscal year. As a result of the false invoices, the IRS paid PAI management fees totaling approximately $1,379,630 for the years 2000 through 2003.
In October 2003, the Treasury Inspector General for Tax Administration's (TIGTA) Office of Audit initiated an audit of PAI's records related to the contract. Pursuant to that audit, TIGTA subpoenaed PAI for documents relating to PAI's earnings and expenses under the contract. In responding to the subpoena, Shah and others directed PAI employees to alter or manufacture invoices from vendors to increase PAI's apparent expenses, and to remove participant names from the tax forum participant lists, thereby reducing PAI's apparent income. Furthermore, Shah intentionally failed to provide certain documents requested in the subpoena.
IRS Employee Indicted for Falsifying Information about Work Completed
On May 15, 2007, Internal Revenue Service (IRS) employee Maulik B. Desai was indicted in the U.S. District Court, Southern District of Ohio, on one count of wire fraud and eight counts of making or signing fraudulent entries or statements in IRS records by knowingly falsifying examination or audit activities while working as a revenue agent. Specifically, Desai made or signed fraudulent entries regarding telephone communications, work activities, travel, and meetings with respect to examinations or audits that Desai had been assigned to carry out regarding certain taxpayers.
Harry Kyllo Sentenced After Pleading Guilty to Stealing Clients' Tax Remittances
On May 23, 2007, Harry Kyllo was sentenced in the U.S. District Court, District of Oregon, to a term of 51 months of imprisonment, $1,322,582 in restitution, and three years of supervised release upon his release from prison, after he pleaded guilty on January 23, 2007, to mail fraud, attempting to defeat the payment of tax, and impersonation.
According to court documents, beginning about 2000 and continuing to about September 30, 2005, Kyllo prepared Federal and State income tax returns for a number of clients that reflected taxes due. The clients signed these returns and paid Kyllo the funds to pay the taxes due. Kyllo never filed the returns, and he did not pay the money to the Internal Revenue Service (IRS). On several occasions, after the IRS notified his clients that their returns had not been filed, Kyllo created letters purportedly from the IRS indicating that the problem had been resolved. He sent these letters to his clients using the U.S. Postal Service.
Individual Sentenced for Disclosing Confidential Information
On May 8, 2007, Robert M. Golub was sentenced to one year of supervised probation, ordered to pay a fine of $3,450 and a special assessment of $25, and to participate in mental health treatment, after pleading guilty on January 22, 2007, to one count of Disclosing Confidential Information.
Golub was employed as an Internal Revenue Service (IRS) revenue agent. As part of his revenue agent duties, Golub had access to a database known as the Currency and Banking Retrieval System (CBRS), which is maintained by the Department of the Treasury. The CBRS contains information collected by financial institutions pursuant to the reporting authority of the Bank Secrecy Act. While working at the IRS, Golub, without authorization, used his U.S. Government password to electronically examine and access confidential information from the CBRS relating to several private individuals and a business entity. Golub also intentionally disclosed some of the confidential information he obtained from the CBRS to individuals outside the IRS.
Individual Arrested by TIGTA Agents After Violating Terms of Her Probation
Christina Unser was arrested by TIGTA special agents on May 4, 2007, at Dallas Fort Worth International Airport. A warrant had previously been issued on May 3, 2007, for her arrest by the U.S. District Court, Western District of Texas, for violating the terms of her probation.
Unser, a former IRS seasonal employee, was previously sentenced to two years of probation, restitution in the amount of $55,659.52, and a fine of $2,400, after pleading guilty on May 12, 2006, to accessing a protected computer, exceeding her authorized access to fraudulently obtain over $11,900 in Federal income tax refunds; and possessing and using the name and social security number of another person to fraudulently obtain approximately $43,174 in social security benefits.
While on probation, Unser was given permission by the judicial district overseeing her probation to travel to France for personal reasons. As a condition of her travel, Unser agreed to return to the United States (U.S.) by March 20, 2007. Unser failed to return to the U.S. by said date and was believed to have remained in France. Unser also failed to submit monthly supervision reports required by the terms of her probation agreement to her probation officer for the months of March and April 2007. As a result of these violations, an arrest warrant was issued for Unser.
Evette Merritt Sentenced for Stealing Clients' Tax Refund Checks
On April 27, 2007, Evette Merritt was sentenced to 10 months of incarceration, three years of supervised release upon the completion of her prison term, ordered to make restitution, and pay a special assessment of $200. Merritt was also ordered to register with the self-exclusion lists maintained by the New Jersey Casino Control Commission and Racetrack Commission and, at the discretion of the U.S. Probation Office, to attend Gamblers Anonymous or a similar organization. Merritt was sentenced after pleading guilty on October 31, 2006, to one count of theft and one count of conspiracy.
The indictment alleged that from January 15, 2002, to March 20, 2003, Merritt conspired with another individual to solicit taxpayers to prepare their tax returns in exchange for a fee. Merritt forged signatures and filed the tax returns on behalf of her clients in which she falsely and fraudulently claimed that the taxpayers authorized their refund checks to be deposited into bank accounts controlled by Merritt and her co-conspirator. Merritt and her co-conspirator then converted the funds obtained from the scheme to their own use.
Larry Canoso Charged With Filing a Fraudulent Lien Release
On April 17, 2007, a Criminal Information was filed in the United States District Court for the District of Utah, Central Division, charging Larry James Canoso with one count of Attempting to Interfere with Administration of Internal Revenue Laws.
According to court documents, Canoso corruptly endeavored to obstruct and impede the due administration of the laws of the Internal Revenue Service (IRS) when he fraudulently prepared and filed a lien release at the Salt Lake County Recorder's Office, and he falsely represented the release to be an official and duly executed document of the IRS. The lien, in the approximate amount of $47,149, had been recorded as a result of taxes due and owed to the IRS for the tax year 1995.
Todd Schulze Sentenced for Making a Threat to the IRS to "Start Killing People"
On April 23, 2007, Todd W. Schulze was sentenced to one month in a residential re-entry center, a one-year term of probation, and a $25 assessment penalty by the United States District Court for the Western District of Wisconsin after pleading guilty to one count of Attempting to Interfere with Administration of Internal Revenue Laws.
According to court documents, Schulze was audited by the Internal Revenue Service (IRS) and was assessed delinquent taxes with interest and penalties in the amount of $3,653.02 for tax year 2003 and $2,726.89 for tax year 2004. On October 4, 2006, Schulze was contacted by telephone by an IRS representative regarding the amount he owed to the IRS. During the conversation, which was recorded, Schulze stated to the IRS representative: "I'm a little concerned about this because this is strictly a matter where you want to call to seize my account, and if you do that, I'll start killing people and you can record that." On October 6, 2006, Schulze was arrested by TIGTA special agents.
Kevin Lackland Pleads Guilty to Theft of IRS Computer Equipment
On April 19, 2007, Kevin Lackland, who began work as an Information Technology Specialist with the Internal Revenue Service (IRS) on December 29, 2003, pled guilty to the theft of IRS computer equipment.
According to a Department of Justice press release, dated May 1, 2007, Lackland admitted to stealing computer equipment belonging to the IRS. The equipment, which included computers, hard drives, and monitors, was valued at $20,647. Lackland used the website eBay.com to sell much of the computer equipment he stole from the IRS. Some of the stolen equipment was recovered in Lackland's home.
Antonino Giuliano Sentenced for Stealing Federal Income Tax Refunds
On April 13, 2007, Antonino Giuliano was sentenced in the U.S. District Court, Middle District of Florida, Orlando Division, on one count of mail fraud and one count of theft of Government property. He was sentenced to nine years in prison on each count to run concurrently, three years of supervised release, 150 hours of community service, a special assessment of $200, and restitution of $330,477.
According to court documents, Giuliano prepared tax returns for three individuals for calendar year 2004. Giuliano provided copies of the tax returns to two of the individuals showing balances due when, in fact, the Internal Revenue Service (IRS) issued refunds for the individuals that were deposited into Giuliano's bank account. Giuliano falsely advised one individual that the IRS was not issuing the tax refund, when Giuliano had already received it. During 2005 and 2006, Giuliano advised one of his clients that she was being audited by the IRS and that he was representing her. Giuliano induced his client to send him payments of $1,233, $1,974, and $1,050, telling her that the payments would be forwarded to the IRS to keep interest and penalties from accruing. The client was not being audited by the IRS and did not owe any money to the IRS.
Stephen Taylor Pleads Guilty to Embezzling his Client's Federal Tax Payments
On April 18, 2007, Stephen E. Taylor pleaded guilty in the U.S. District Court, Northern District of Georgia, to wire fraud.
According to court documents, in February 2005, Taylor, who was the president of 20/20 Payroll Solutions, began diverting funds from 20/20 Payroll Solutions' payroll account to pay for personal expenses and to invest in real estate. The payroll account was established by 20/20 Payroll Solutions to receive its clients' payroll and tax payments. The funds were supposed to be used to make Federal and State tax payments on behalf of 20/20 Payroll Solutions' clients. As part of the plea agreement, Taylor agreed to the court entering a money judgment in the amount of $4,011,368.90.
Former IRS Employee Pleads Guilty to Wire Fraud
On April 13, 2007, former IRS employee Robert P. Dooley pleaded guilty to 12 counts of wire fraud in the U.S. District Court, District of Massachusetts.
According to the criminal information, Dooley was employed as a clerk at the IRS' Andover Service Center from February 25, 2001, to September 13, 2002. As part of his employment, Dooley was issued an IRS identification badge. From July 2004 through October 2005, Dooley engaged in a scheme to defraud Home Depot of more than $330,000. Dooley fraudulently obtained Home Depot store credit by taking items from a Home Depot store without purchasing them and then bringing those items to the return desk at a Home Depot store. Dooley falsely claimed that he had purchased the items but that he did not have receipts for the items. Dooley showed his IRS identification badge as his proof of identity and, at times, made claims that he was trustworthy because he worked for the IRS. Dooley received store credit in the amount of the returned items, which he then sold or bartered at a reduced price.
Ka'munja Lockett Charged in Assault of an IRS Employee
On April 16, 2007, a criminal complaint was filed in the U.S. District Court, Southern District of Texas, charging Ka'munja R. Lockett with assault of an employee of the United States.
According to the complaint, Lockett came into the IRS walk-in Taxpayer Assistance Center in Houston, Texas. When she came to the front desk, she told an IRS employee, "I'm tired of y'all stealing my money. You're going to fix this." She slammed a book and documents on the desk and said, "I'm sick of this." Lockett then picked up a chair and threw it, hitting a customer and causing minor injuries. She then threw a second chair at an IRS employee. Lockett was eventually apprehended by Federal Protective Service officers who relinquished custody of Lockett to the Treasury Inspector General for Tax Administration (TIGTA). Two IRS employees sustained injuries as a result of the incident.
Individual Sentenced for Corrupt Interference and False Statements
On March 20, 2007, Carol Coleman was sentenced in the U.S. District Court, Eastern District of Michigan, on one count of attempting to interfere with the administration of the Internal Revenue laws, and 11 counts of fraudulent and false documents. She was sentenced to time served, one year of supervised release, and a $1,200 assessment.
According to the indictment, Coleman corruptly obstructed and impeded the due administration of the Internal Revenue laws by submitting false returns on Report of Cash Payments Over $10,000 Received in a Trade or Business (Form 8300). The Form 8300 falsely stated that Coleman engaged in financial transactions with law enforcement personnel, prosecuting attorneys, a defense attorney, judges, and court personnel who were involved in prosecutions of her in Michigan and Georgia. She also filed a Form 8300 that falsely stated that she had engaged in a financial transaction with an attorney representing an insurance company to whom she submitted a false insurance claim. The returns stated that Coleman had engaged in more than $56 million in transactions, when she knew no such transactions had occurred.
Individual Sentenced for Unauthorized Access to a Computer
On April 2, 2007, Patricia Kraft was sentenced in the U.S. District Court, Eastern District of California, for tampering with a witness and unauthorized access to a computer. She was sentenced to 36 months of probation with the special conditions that she complete 200 hours of unpaid community service and 180 consecutive days of home detention. She was also ordered to pay a $750 fine and a $125 assessment.
According to court documents, Kraft intentionally exceeded her authorized access to the IRS Integrated Data Retrieval System and obtained tax return information from a tax account of a taxpayer with whom she had a personal relationship. Kraft also attempted to offer to forgive a $200 debt owed to her by a family friend, if the friend falsely told law enforcement agents that he had requested previously filed W-2 Forms and other documents from IRS employees, when he had not done so. Kraft did this with the intent to prevent the communication of information to a law enforcement officer relating to the unauthorized access to a computer.
Individual Charged with Unauthorized Inspection of Return Information
On April 9, 2007, Devon Kerr was charged in the U.S. District Court, Western District of Texas, Austin Division, with six counts of unauthorized inspection of returns or return information.
According to the criminal information, Kerr willfully inspected return information of six people without authorization.
Individual Sentenced for Stealing Government Money
On March 26, 2007, Sidequa Henry was sentenced in the U.S. District Court, District of South Carolina, for converting money belonging to the United States to her own use. She was sentenced to five years probation, in addition to serving six months of home confinement with monitoring using the voice recognition system. She was also ordered to pay restitution of $9,414 to the Internal Revenue Service (IRS).
According to the indictment, from February 2003 through October 2003, Henry willfully and knowingly embezzled, stole, and converted to her own use money belonging to the
United States.
Individual Indicted for Bribery of IRS Revenue Officer
On April 4, 2007, Jeffrey N. Darr was indicted in the U.S. District Court, Central District of Illinois, on two counts of bribery.
According to the indictment, on November 21, 2006, Darr corruptly offered and promised to give money to an IRS revenue officer, with the intent to induce the revenue officer to violate his or her lawful duty. On December 7, 2006, Darr corruptly gave money to an IRS revenue officer, with the intent to induce the revenue officer to violate his or her lawful duty.
Former CPA Sentenced for Providing False Power of Attorney Form to the IRS
On March 28, 2007, Richard Soscia was sentenced in the U.S. District Court, Southern District of New York, for false statements. He was sentenced to five years of probation, and was ordered to pay a $100 assessment and a $5,000 fine.
According to the indictment, on December 27, 2001, Soscia falsely stated to the IRS on a Power of Attorney and Declaration of Representative (Form 2848), that he was a Certified Public Accountant (CPA) when he was not a CPA.
Individual Charged with Misuse of Department of the Treasury Symbol
On March 16, 2007, a criminal information was filed in the U.S. District Court, Central District of California, that charged Larry Brown with violating 31 U.S.C. § 333, Misuse of Department of the Treasury symbols. According to court documents, on January 10, 2005, Brown knowingly used a Department of the Treasury symbol during a business transaction that could reasonably be construed as conveying the false impression that his business activity was authorized by the Department.
IRS Employee Charged with Unauthorized Inspection of Tax Return Information
On March 22, 2007, Internal Revenue Service (IRS) employee Gwendolyn Robinson was charged in the U.S. District Court, Eastern District of California, with unauthorized inspection of returns or return information. According to the criminal information, on July 14, 2004, Robinson, while an employee of the IRS, willfully made unauthorized accesses to inspect the tax return information of two private individuals. She did so without the authorization of the IRS or the individuals.
Automobile Repossession Employee Sentenced for Misusing the U.S. Department of the Treasury Name
On March 13, 2007, Jason Latzman, an automobile repossession employee, was sentenced in the U.S. District Court, Eastern District of Michigan, for conveying the false impression that a communication was from the U.S. Department of the Treasury. Latzman was placed on probation for two years with the special condition that he participate in a substance abuse program, and he was ordered to pay a $25 assessment.
According to court documents, from September 22, 2005, through the end of
October 2005, Latzman falsely pretended to be a U.S. Department of the Treasury agent when repossessing automobiles from individuals. During contacts with the individuals, Latzman wore a bulletproof vest or jacket with "Treasury Agent" on it, and a gold badge around his neck.
Former IRS Employee Pleads Guilty to Unauthorized Inspection of Returns or Return Information
On March 6, 2007, former IRS employee Ellen McCall pleaded guilty in the U.S. District Court, Northern District of Texas, Dallas Division, to unauthorized inspection of returns or return information.
According to court documents, on August 19, 2005, McCall, as an employee of the IRS, willfully and in excess of any authorization, accessed and inspected the return or return information of a private individual.
Accountant Charged with False Statements
On January 10, 2007, Leyba Adler (aka "Len Adler") was charged in the U.S. District Court, Southern District of New York, with making false statements.
According to the complaint, from September 14, 2004, through September 21, 2004, Adler knowingly and willfully made materially false, fictitious, and fraudulent statements and representations by telling special agents from the Treasury Inspector General for Tax Administration (TIGTA) and the Internal Revenue Service's (IRS) Criminal Investigation (CI) Division that he had not had contact with an IRS employee who was under investigation by TIGTA and the IRS' CI function for possible criminal tax offenses.
IRS Revenue Agent Indicted For Tax Fraud
On March 8, 2007, IRS Revenue Agent Harry Willner was indicted in the U.S. District Court, Southern District of New York, on four counts of aiding or assisting in the preparation of false tax returns and one count of attempt to interfere with the administration of the Internal Revenue laws.
According to court documents, Willner was an IRS revenue agent assigned to the Large and Midsize Business Division and was also an officer of NIA Advertising, Inc. (NIA). Willner did not have the IRS' approval to serve as a corporate officer of NIA, but did receive the IRS' approval to engage in outside, part-time employment, to include an unspecified position with Royal Magazine, Inc. According to certain NIA records, NIA's address was the same as Willner's home address.
According to NIA's books and records, NIA purportedly loaned sums totaling approximately $849,000 to Royal Magazine, Inc. On NIA's 2002 Federal tax return, Willner reported gross receipts and a bad debt deduction associated with the purported loan, which resulted in NIA reporting a net operating loss of approximately $758,081. Willner then attempted to make fraudulent use of NIA's net operating losses. In the first scheme, Willner attempted to sell NIA's net operating losses to other taxpayers, thereby enabling those taxpayers to offset the income on their own tax returns and fraudulently reduce their tax liabilities. In the second scheme, Willner used NIA's net operating losses to offset his own individual income tax liability by having fee income of $66,345 earned by Willner in his individual capacity paid or assigned to NIA. Willner thereafter fraudulently reported the fee income on NIA's corporate income tax returns as receipts of NIA, rather than on his individual income tax return, thus causing the taxability of that income to be offset by NIA's net operating losses. As a result of the second scheme, Willner evaded approximately $20,957 in Federal income taxes.
IRS Employee Charged with the Unauthorized Inspection of Tax Return Information
On March 5, 2007, IRS employee Cheryl DesRosche was charged in the U.S. District Court, District of Connecticut, with five counts of unauthorized inspection of tax return information.
According to the criminal information, during the period of December 6, 2001, to May 20, 2005, DesRosche willfully inspected, without authorization, the tax return information of five individuals.
Taxpayer Indicted for Bribery of an IRS Official
On February 20, 2007, Yan Borr was indicted on two counts of bribery of a public official in the U.S. District Court, Eastern District of New York.
According to court documents, on December 3, 2004, and September 19, 2006, Borr knowingly, intentionally, and corruptly gave, offered, and promised U.S. currency to a person acting on behalf of the IRS with the intent to influence an official act.
During several meetings, Borr and IRS Revenue Officers (RO) discussed his outstanding IRS tax liabilities. Borr indicated that he could not fully pay the outstanding tax liabilities, which were approximately $15,000 and indicated that he had a couple of "bonds" that he could cash and give to the RO if the RO could take care of his situation. At another meeting, Borr met with another RO and gave the RO an envelope containing $1,000 in exchange for the reduction of his tax liability from approximately $22,000 to approximately $8,500. Borr then offered and gave the RO an additional $500 to reduce the tax liability by an additional $2,000.
Wisconsin Man Pleads Guilty to Making a Threat to an IRS Employee
On February 14, 2007, Todd Schulze pleaded guilty in the U.S. District Court, Western District of Wisconsin to knowingly and unlawfully endeavoring to obstruct or impede the due administration of the Internal Revenue laws by threatening force in an interstate telephone call from New York to Wisconsin.
According to court documents, Schulze stated in a recorded conversation with an IRS Brookhaven Campus employee, "I'm a little concerned about this because this is strictly a matter where you want to call to seize my account, and if you do that, I'll start killing people and you can record that." Based on this threat, the IRS taxpayer assistance office in Madison, Wisconsin, was shut down from 1:00 p.m. to 4:30 p.m.
Certified Public Accountant Pleads Guilty to One Count of Misuse of Treasury Department Names and Symbols
On February 15, 2007, Certified Public Accountant (CPA) William Himmelmann pleaded guilty in the U.S. District Court, Eastern District of California to one count of misuse of the Department of the Treasury names and symbols.
According to the plea agreement, on November 19, 2004, Himmelmann drafted a letter to himself, purporting to be an individual with the IRS. The letter was printed on IRS letterhead with the IRS insignia at the top, and declared that Pacific Justice Institute (PJI) was a public foundation with tax exempt status. The PJI then used the letter to solicit donations for the foundation. The IRS had no knowledge of Himmelmann's actions and did not authorize him to write any correspondence on behalf of the Treasury Department or the IRS.
Individuals Indicted for Conspiracy to Commit Fraud Against the IRS Regarding the Low Income Taxpayer Clinic Program
On February 7, 2007, Marwan Othman El-Hindi and Ashraf Zaim were charged in a seven-count indictment in the U.S. District Court, Northern District of Ohio, Western Division, for conspiracy, theft of public money, wire fraud, and false statements in connection with the Internal Revenue Service's (IRS) Low Income Taxpayer Clinic (LITC) grant program.
According to the indictment, in July 2001, El-Hindi and Zaim willfully and knowingly conspired to fraudulently obtain approximately $40,000 in Federal Government funds through the LITC grant program by using Educational Social Foundation Services, Inc. (ESFS). ESFS was founded by El-Hindi and purported to be a non-profit charitable organization. El-Hindi and Zaim made false and fraudulent representations to and concealed material facts from the government in the grant application process and, thereafter, diverted the awarded grant funds for their own personal use.
In a separate indictment, El-Hindi allegedly conspired with others to kill or maim people, including U.S. armed forces personnel serving in Iraq, and to research and solicit potential funding sources for jihad, or "holy war," training. The funding sources included government grants from which funds would be diverted for training purposes. It was part of the conspiracy to propose potential training sites for use in providing ongoing firearms, hand-to-hand combat, explosives, and other paramilitary training to prospective recruits. El-Hindi knowingly distributed information pertaining to the manufacture of an explosive with the intent that such information would be used for training individuals in the construction and use of bomb vests. El-Hindi also distributed information that contained a slide show demonstrating the preparation and use of improvised explosive devices against apparent U.S. military vehicles and personnel.
IRS Employee Charged with the Unauthorized Access to a Computer
On February 1, 2007, criminal information was filed against IRS employee Silvia Perez in the U.S. District Court, Eastern District of California. The information charged that on February 7 and 8, 2002, Perez intentionally exceeded her authorized access to a computer, and obtained the tax return of a private individual
Former IRS Employee Pleads Guilty to the Unauthorized Inspection of Returns or Return Information
On February 8, 2007, former IRS employee Sherry Hintz pleaded guilty in the U.S. District Court, Eastern District of California, to the unauthorized inspection of returns or return information. According to the plea agreement, from February 2004 to July 2005, Hintz willfully and unlawfully made numerous unauthorized accesses to inspect tax return information of four private individuals without the authorization of the IRS or the private individuals.
Former IRS Employee Indicted on Two Counts of False Statements and One Count of Making Demands Against the United States
On February 8, 2007, former IRS employee Quincy Harkness was indicted in the U.S. District Court, Eastern District of Kentucky, Northern Division, Covington, on two counts of false statements, a violation of Title 18 U.S.C. § 1001, and one count of making demands against the United States, a violation of Title 18 U.S.C. § 1003.
According to the indictment, on October 28, 2005, and November 7, 2005, Harkness knowingly and willfully made materially false, fictitious, and fraudulent statements and representations by falsely reporting hours worked to his employer, the IRS. Harkness also knowingly and fraudulently demanded to have a debt due from the United States paid by a false instrument, by submitting a false travel voucher and obtaining a sum not in excess of $1,000.
Tax Preparer Charged for Theft of Government Funds
In January 2007, Rose Vasquez, a tax preparer, was charged in the U. S. District Court, District of Delaware, for theft of government funds. Vasquez was arrested on January 19, 2007.
According to the criminal complaint, Vasquez prepared and filed Federal income tax returns for two taxpayers and stole their income tax refunds, totaling more than $8,500, by diverting the refunds into her bank account and keeping the funds for her own use. Neither taxpayer was aware that he or she was due the Federal income tax refunds and neither taxpayer authorized Vasquez to deposit his or her refund into Vasquez's bank account.
Individual Charged with Threatening to Kill an IRS Employee
In January 2007, William Kelly was charged in the U.S. District Court, District of Oregon, for threatening to assault an Internal Revenue Service (IRS) auditor with the intent to impede, intimidate, and interfere with the performance of her official duties.
According to the criminal complaint, in June 2005, Kelly called the IRS concerning his tax issues and stated to an IRS employee, "I have told and informed the Internal Revenue Service in previous phone calls if any, any messenger, law enforcement agent, agency of the Internal Revenue Service touches or messes with any of my property, accounts or anything, they will be put to death." During the call, Kelly also threatened an IRS auditor, who previously audited his tax returns. The criminal complaint also indicates that in 1996 and 2001, Kelly made similar threatening statements involving IRS employees.
Former IRS Employee Sentenced for Theft of Government Funds
On January 4, 2007, former Internal Revenue Service (IRS) employee Therese Rivers was sentenced in the U.S. District Court, Eastern District of Pennsylvania, for theft of government funds. Rivers was sentenced to five years of probation, restitution in the amount of $11,083.83, a $100 assessment, and continued mental health treatment.
According to court documents, Rivers was charged on September 20, 2006, with one count of theft of government funds for embezzling and knowingly converting to her own use $20,135 that a taxpayer sought to apply to his tax obligations. The taxpayer filed a tax return with the IRS, instructing it to apply prior tax overpayments in the amount of $20,135 to his other tax obligations. Instead of processing the tax return as Rivers was required to do, she altered the tax return and made it appear that the taxpayer sought a refund of the tax overpayments and asked the IRS to deposit the refund into a bank account that Rivers had opened under a false name.
Certified Public Accountant Pleads Guilty to Defrauding the IRS and Others of More Than $1.3 Million
In January 2007, Certified Public Accountant Harry Kyllo pleaded guilty in the U.S. District Court, District of Oregon, to mail fraud, false personation, and attempt to defeat payment of tax, all related to a scheme he devised to defraud the IRS, the Oregon Department of Revenue, and various clients.
According to court documents, Kyllo instructed his clients to leave the payee line blank on checks they provided to him, which he was supposed to use to pay their tax liabilities. Kyllo then fraudulently endorsed the checks and deposited them into one of his own bank accounts. In furtherance of his scheme, Kyllo told his clients that he had hand-delivered their returns to the IRS, when in fact he had not even filed their returns. When his clients received notices from the IRS indicating that they had outstanding tax liabilities and/or their returns had not been filed, Kyllo mailed his clients fraudulently created letters purportedly from the IRS that indicated the problem had been resolved. As a further means of delaying discovery of his fraud, Kyllo prepared false tax returns for his clients and filed them with the IRS, which stopped the IRS from sending notices to his clients. As a result of his scheme, Kyllo caused losses totaling more than $1.3 million. He also billed and collected fees for his services.
Former IRS Employee Indicted on One Count of False Statements
On January 17, 2007, former Internal Revenue Service (IRS) employee Duane Duplantis was indicted in the U.S. District Court for the District of Nevada, on one count of false statements, a violation of Title 18 U.S.C. § 1001.
According to the indictment, on July 7, 2005, Duplantis knowingly and willfully made a false statement to the IRS when he submitted a signed application for a promotion to a Grade 13 Internal Revenue Agent position that included a falsified annual evaluation document from 2004.
Former IRS Employee Sentenced for Theft of Government Funds
On January 11, 2007, former Internal Revenue Service (IRS) seasonal employee Shelly Thompson was sentenced in the U.S. States District Court, Eastern District of California, to 24 months of probation, 150 hours of unpaid community service, $5,048 in restitution, and a $25 assessment.
According to court documents, from February 22 to March 19, 2004, Thompson caused a tax refund intended for taxpayers to be deposited directly into her bank account. Thompson prepared the taxpayers' 2003 Federal joint tax return and signed their signatures. She provided her bank account information as the location to which the refund was to be directly deposited, and she received the tax refund of $5,048. Thompson did this without the knowledge or consent of the taxpayers.
IRS Employee Sentenced for One Count of Fraudulent Use of an Unauthorized Access Device
On December 1, 2006, John S. King, an IRS secretary, was sentenced in the U.S. District Court, Northern District of Texas, Dallas Division, to three years of probation, 180 days in a community corrections center, $10,339.97 in restitution, and a $100 assessment.
According to court documents, King unlawfully, knowingly, and with the intent to defraud, used a false social security number to open a credit card account. He made a $1,958.74 credit transaction as payment for the purchase of goods. As part of the scheme, King used his name and another person's social security number.
Tax Return Preparer Indicted for the Fraudulent Transfer of an Identification Document
On January 10, 2007, tax return preparer Hussein Bazzi was indicted in the U.S. District Court for the Eastern District of Michigan, Southern Division, on one count of transferring a fraudulent identification document – a violation of Title 18 U.S.C. § 1028(a)(2).
According to the indictment, on August 8, 2006, Bazzi knowingly transferred false identification documents, specifically two Internal Revenue Service (IRS) Forms W-2, which appeared to be issued under the authority of the United States. Bazzi also transferred two pay stubs that affected interstate commerce, knowing that such documents were produced without lawful authority.
Former IRS Employee Sentenced for the Unauthorized Inspection of Returns or Return Information
On January 10, 2007, former IRS employee Michael Glenn Womack was sentenced in the U.S. District Court, Northern District of Texas, Dallas Division, for unauthorized access and inspection of financial information from the IRS tax account of a taxpayer. He was sentenced to two years of probation, a $2,000 fine, and a $25 assessment. Womack was also prohibited from being employed by, affiliated with, owning or controlling, or otherwise participating, directly or indirectly, in the business of tax preparation or filing without the U.S. Probation Officer's approval.
IRS Employee Charged with the Unauthorized Inspection of Returns or Return Information and Fraud and Related Activities with Computers
On December 28, 2006, Internal Revenue Service (IRS) employee Joanne C. Morado was charged in the United States District Court for the Eastern District of California with five counts of unauthorized inspection of returns or return information, and four counts of fraud and related activities with computers.
According to the criminal information, during the period of February through March 2005, Morado unlawfully, willfully, and without authorization, accessed and inspected the accounts of four private individuals. The information further indicated that, during this period, Morado intentionally accessed a computer without authorization or exceeded her authorization, and obtained tax return information from the IRS' Integrated Data Retrieval System regarding private individuals.
Individual Sentenced for Bribing an IRS Employee
On December 12, 2006, Diana Hong was sentenced in the United States District Court, Middle District of Florida, Tampa Division, for bribery of a public official. Hong was placed on probation for 12 months and 1 day, and was ordered to pay a $100 assessment.
According to the indictment, Hong willfully and corruptly gave $1,500 to an Internal Revenue Service (IRS) representative for the delivery of a "no change" letter concerning her sister's 2002 individual income tax return.
Former IRS Employee Indicted for False Personation and Bank Fraud
On December 20, 2006, former IRS employee Jacqueline Exum was indicted in the United States District Court, Western District of Tennessee, Western Division, for false personation, bank fraud, and bankruptcy fraud.
According to the indictment, Exum pretended to be an IRS employee acting under the authority of the United States and demanded and obtained money, paper, documents, and things of value. Exum devised a scheme to defraud various banks and credit unions by applying for and receiving a new social security number (SSN). Using the new SSN, her original SSN, and variations thereof, she applied for credit, personal loans, and car loans. She used variations of her maiden name in connection with her new and original SSNs in an effort to conceal her true identity when applying for loans at financial institutions. Exum also created fictitious SSNs, leave and earning statements as well as tax documents, and provided them to the lending institutions in support of her loan applications. As part of the scheme, Exum received in excess of $100,000 in cash, merchandise, and loans.
In an effort to conceal her fraudulent scheme, when the loans became delinquent and foreclosure proceedings were imminent, Exum filed bankruptcy petitions to maintain her vehicles and other possessions.
Individual Charged with Corruptly Interfering with Administration of Internal Revenue Laws
On December 5, 2006, Walter Helwich, a self-employed insurance salesman, was charged in the United States District Court, Northern District of Illinois, Eastern Division, with corrupt or forcible interference with the administration of Internal Revenue laws.
According to the indictment, beginning in 1997, Helwich impeded and impaired the IRS in carrying out its lawful function to assess and collect income taxes, penalties, interest, and fines for the United States. Helwich signed and filed purported income tax returns for four tax years on behalf of "Senior America Estate Planning Trust," falsely reported his own income as income of the alleged trust, and claimed that the trust owed no taxes. He also signed and filed individual income tax returns for nine tax years on behalf of himself and for seven years on behalf of his spouse, and falsely reported that he earned zero gross and taxable income. But, in fact, Helwich had earnings during those tax years, including but not limited to $739,725. Helwich also submitted altered documents, frivolous correspondence and forms to the IRS, and made false statements to the IRS concerning his gross and taxable income.
In furtherance of the corrupt endeavor, Helwich passed checks drawn on a closed bank account in purported payment of outstanding income taxes, penalties, and interest that he owed the IRS. Between December 2002 and October 2004, Helwich submitted almost 40 checks to the IRS, ranging from a few hundred dollars to over $380,000. He continued to submit checks to the IRS on the closed bank account even after IRS agents told him the account had been closed.
Former IRS Employee Pleads Guilty to Unauthorized Access to a Computer
On December 6, 2006, former Internal Revenue Service (IRS) employee Patricia Kraft pleaded guilty in the United States District Court, Eastern District of California, to tampering with a witness and unauthorized access to a computer.
According to court documents, Kraft, as an employee of the IRS, intentionally exceeded her authorized access to the IRS' Integrated Data Retrieval System and obtained tax return information from a tax account of a taxpayer with whom she had a personal relationship. Kraft also attempted to offer to forgive a $200 debt owed to her by a family friend if the friend falsely told law enforcement agents that he had requested previously filed W-2 Forms and other documents from IRS employees, when he had not done so. Kraft did this with the intent to hinder, delay, and prevent the communication of information to a law enforcement officer relating to the commission of a violation of unauthorized access to a computer.
Individual Pleads Guilty to Impersonating an IRS Employee
On November 27, 2006, Elizabeth Terry pleaded guilty to false personation in the United States District Court, District of New Jersey.
According to the plea agreement, on March 31, 2004, Elizabeth Terry falsely pretended to be an officer and employee of the IRS. She delivered a letter claiming that a Notice of Levy, issued by the IRS to collect more than $90,000 owed by a taxpayer, had been withdrawn by the IRS.
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