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| Highlights - 2009 Archive |
Woman Charged With Exceeding Authorized Access to a Computer
On October 22, 2009, in California, Rhonda Duncan was charged with intentionally accessing a computer and exceeding her authorized access. Duncan, while an Internal Revenue Service (IRS) employee, accessed electronically stored Federal tax information on the IRS’s electronic system 10 times without authorization.[1]
- [1] Source: Eastern District of California Information filed October 22, 2009.
Woman Charged With Exceeding Authorized Access to a Computer
On October 22, 2009, in California, Jenni Caballero was charged with intentionally accessing a computer and exceeding her authorized access. Caballero, while an Internal Revenue Service (IRS) employee, accessed electronically stored Federal tax information on the IRS’s electronic system 28 times without authorization.[1]
- [1] Source: Eastern District of California Information filed October 22, 2009.
Woman Charged With Exceeding Authorized Access to a Computer
On October 22, 2009, in California, Adriana Olivarria was charged with intentionally accessing a computer and exceeding her authorized access. Olivarria, while an Internal Revenue Service (IRS) employee, accessed electronically stored Federal tax information on the IRS’s electronic system 17 times without authorization.[1]
- [1] Source: Eastern District of California Information filed October 22, 2009.
Woman Pleads Guilty to Unauthorized Access to Tax Returns and Tax Return Information
On October 15, 2009, Andrea Schreindl pled guilty to two counts of unauthorized access to returns and return information. [1] On June 19, 2009, Schreindl was charged with accessing, without authorization, electronically stored Federal tax information provided to the California Franchise Tax Board (FTB) by the Internal Revenue Service (IRS). [2] At the time of the access, Schreindl was an employee of the FTB. Schreindl was also charged with unauthorized inspection of tax return information. [3]
- [1] Source: Eastern District of California Plea Agreement filed on October 15, 2009.
- [2] Source: Eastern District of California Information filed on June 19, 2009.
- [3] Ibid.
Woman Charged With Exceeding Authorized Access to a Computer
On October 8, 2009, in California, Christina Maldonado was charged with intentionally accessing a computer and exceeding her authorized access. Maldonado, while an Internal Revenue Service (IRS) employee, accessed electronically stored Federal tax information on the IRS’s electronic system 23 times without authorization.[1]
- [1] Source: Eastern District of California Information filed October 8, 2009.
Woman Charged With Unauthorized Inspection of Tax Returns
On October 8, 2009, in California, Patricia Ciano was charged with unauthorized inspection of tax returns. While employed as an Internal Revenue Service (IRS) employee, Ciano, on 16 occasions, inspected the tax returns of private individuals without authorization. [1]
- [1] Source: Eastern District of California Information filed October 8, 2009.
Man Charged With Receiving a Bribe
On October 7, 2009, Fernando Hernandez was charged with receiving a bribe. Hernandez, while an employee of the Internal Revenue Service, sought and demanded a payment of $2,000 from a taxpayer in return for Hernandez’s promise that he would ensure that no representative from the IRS would audit the taxpayer’s tax return. [1]
- [1] Source: Northern District of Texas Indictment filed October 7, 2009.
Woman Charged with Exceeding Authorized Access to a Computer
On October 8, 2009, in California, Denise Salado was charged with exceeding her authorized access to a computer and thereby obtaining information from a department or agency of the United States. On four occasions, while an employee of the Internal Revenue Service (IRS), Salado accessed, without authorization, electronically stored Federal tax information on the IRS’s electronic system. [1]
- [1] Source: Eastern District of California Information filed October 8, 2009.
Man to Plead Guilty to Assaulting an IRS Employee
On September 18, 2009, in California, Glenn Braly agreed to plead guilty to assault. [1]
On August 11, 2008, Braly, a certified public accountant, came into the Internal Revenue Service (IRS) office in Camarillo, California, for what he believed to be an appointment with an IRS agent to discuss the tax audit of one of his clients. When Braly used an office telephone to contact the IRS agent, he got the IRS agent’s voice mail. Braly enlisted the help of various employees at the IRS office, but was unable to reach the IRS agent. Braly then asked an IRS employee to go upstairs and get the IRS agent. The IRS employee told Braly that they were not going to do that and asked Braly to please sit down and wait. [2]
In response to the IRS employee’s assertion that the employee was not going to go get the IRS agent, Braly pushed over a stack of IRS customer survey forms in the direction of the IRS employee and made remarks that were intended to intimidate the IRS employee. That made the IRS employee fearful. The IRS employee subsequently activated the duress alarm. [3]
- [1] Central District of California Plea Agreement filed September 18, 2009.
- [2] Ibid.
- [3] Ibid.
Man Charged With Making Threats to the IRS
On September 14, 2009, Michael Belair was charged in Florida with using interstate communications to threaten to injure another person. [1]
On March 19, 2009, the Internal Revenue Service (IRS) received a letter from Belair that contained several threatening statements. Belair's letter was in response to official IRS correspondence advising him of an outstanding tax liability. [2]
Belair was interviewed by special agents with the Treasury Inspector General for Tax Administration (TIGTA) on April 10, 2009. During the interview, Belair stated, "Don't ask me to pay this Nazi country, I won't do it." Belair also stated that he had been under tremendous amounts of stress due to an illness, had been frustrated because of his situation with the IRS, and did not care if he was arrested because he was going to die soon anyway. Belair was advised that he may not threaten the IRS or its employees and that making such threats is a violation of Federal law. [3]
On June 26, 2009, the IRS reported receipt of correspondence from Belair dated
June 12, 2009. This letter was in response to official IRS correspondence advising him that the IRS was going to deduct money from his Social Security benefits in order to pay his tax liability. In the letter, Belair stated, "...if one cent is deducted from my SS check I am quite certain that I will be outraged and might even be pushed to take this atrocity to the IRS offices and kill myself in the lobby..." [4]
On June 30, 2009, a monitored telephone call was completed between an IRS employee and Belair. During the monitored call, Belair stated, "If one cent is touched from my Social Security check, there will be violence." Belair also stated, "I have attempted suicide three times. I'm a loose cannon and people better step off." [5]
On June 30, 2009, TIGTA special agents and the Hollywood Florida Police Department contacted Belair. The Hollywood Florida Police officers took Belair into custody for safety reasons and transported him to a hospital to receive a psychological evaluation. [6]
- [1] Southern District of Florida Criminal Complaint filed September 14, 2009.
- [2] Southern District of Florida Affidavit in Support of a Criminal Complaint filed September 14, 2009.
- [3] Ibid.
- [4] Ibid.
- [5] Ibid.
- [6] Ibid.
Man Indicted for Interference with Internal Revenue Laws
On September 9, 2009, Fred Covey was indicted in Idaho for interference with Internal Revenue laws. [1]
In 1993, Covey stopped voluntarily filing tax returns. On or about March 4, 2005, Covey filed frivolous Uniform Commercial Code (UCC) financial statements against three Internal Revenue Service (IRS) employees, two of whom had been assigned to collect Covey's outstanding tax debt. The UCC filings falsely claimed that each IRS employee was indebted to Covey for $166,676,468. On or about March 4, 2005, Covey also filed a frivolous UCC financial statement against the Secretary of the Treasury, falsely claiming that the Secretary of the Treasury was indebted to him for $177,636,572.04. [2]
On or about November 29, 2005, a U.S. Department of Justice attorney filed a civil complaint against Covey seeking to have the false and frivolous UCC financial statements that were filed against the IRS employees expunged. Throughout the course of the civil suit, Covey filed in court and mailed frivolous documents claiming that the assigned judicial officer, U.S. Marshal, court clerk, and Government attorneys had acted improperly, threatening lien filings and purporting to charge hundreds of thousands of dollars for trespassing and incarceration. [3]
On or about February 22, 2009, Covey mailed or caused to be mailed to the IRS a false and fraudulent document purporting to pay his Federal tax debt and demanding that his account be balanced to zero, when, in fact, no actual cash or negotiable financial instrument was included in the mailing. On or about May 29, 2009, Covey hand-delivered to the IRS a false and fraudulent document purporting to pay his outstanding tax debt and demanding that his account be balanced to zero, when, in fact, no actual cash or negotiable financial instrument was included in the delivery. [4]
- [1] Source: District of Idaho Indictment filed September 9, 2009.
- [2] Ibid.
- [3] Ibid.
- [4] Ibid.
Man Charged in Scheme to Defraud His Tax Return Customers and the IRS
On September 2, 2009, in Wisconsin, Terry Stewart was charged in a scheme to defraud both his tax return customers and the IRS. [1]
Stewart worked in the Madison, Wisconsin, area as a self-employed tax return preparer doing business as Madison Urban Tax Service. Beginning in or about January 2007, and continuing to in or about June 2007, Stewart devised a scheme to defraud his tax return customers and the IRS. [2]
For the purpose of executing the scheme to defraud, Stewart transmitted by the Internet a series of 19 tax returns to the IRS. In each of these returns, Stewart intentionally made false statements concerning the taxpayer's qualification for the "Earned Income Credit," itemized deductions, dependants, and/or income, which triggered a higher tax refund than the taxpayer was entitled to receive. [3]
Stewart had some of his customers' tax refunds issued in the form of refund anticipation loan debit cards. Stewart spent all or part of the value of the debit cards for his own use. Stewart also gave cash or checks to other customers in amounts significantly less than they should have received for their tax refunds and then kept the customer's refund. [4]
Stewart stole approximately $38,000 of the tax refunds that should have been provided to his customers. [5]
This case was worked jointly with the IRS's Criminal Investigation Division.
- [1] Source: Western District of Wisconsin Information filed September 2, 2009.
- [2] Ibid.
- [3] Ibid.
- [4] Ibid.
- [5] Ibid.
IRS Employee Charged With Theft
On September 3, 2009, Vickie McGrue was charged in California with theft of government money. Beginning in May 2004 and continuing until or about October 2006, McGrue failed to report wages earned to the Department of Housing and Urban Development in order to receive housing assistance payments. McGrue received $13,408 in housing assistance payments to which she knew she was not entitled. [1]
- [1] Source: Eastern District of California Indictment filed September 3, 2009.
IRS Employee Charged With Theft of Government Property
On August 28, 2009, in California, Carl Smith, an Internal Revenue Service (IRS) employee, was charged with theft of Government property for stealing and converting to his own use a $300 remittance payment. The remittance payment was payable to the IRS. [1]
- [1] Eastern District of California Information filed August 28, 2009..
Man Indicted for Interference with Internal Revenue Laws
On September 9, 2009, Fred Covey was indicted in Idaho for interference with Internal Revenue laws. [1]
In 1993, Covey stopped voluntarily filing tax returns. On or about March 4, 2005, Covey filed frivolous Uniform Commercial Code (UCC) financial statements against three Internal Revenue Service (IRS) employees, two of whom had been assigned to collect Covey's outstanding tax debt. The UCC filings falsely claimed that each IRS employee was indebted to Covey for $166,676,468. On or about March 4, 2005, Covey also filed a frivolous UCC financial statement against the Secretary of the Treasury, falsely claiming that the Secretary of the Treasury was indebted to him for $177,636,572.04. [2]
On or about November 29, 2005, a U.S. Department of Justice attorney filed a civil complaint against Covey seeking to have the false and frivolous UCC financial statements that were filed against the IRS employees expunged. Throughout the course of the civil suit, Covey filed in court and mailed frivolous documents claiming that the assigned judicial officer, U.S. Marshal, court clerk, and Government attorneys had acted improperly, threatening lien filings and purporting to charge hundreds of thousands of dollars for trespassing and incarceration. [3]
On or about February 22, 2009, Covey mailed or caused to be mailed to the IRS a false and fraudulent document purporting to pay his Federal tax debt and demanding that his account be balanced to zero, when, in fact, no actual cash or negotiable financial instrument was included in the mailing. On or about May 29, 2009, Covey hand-delivered to the IRS a false and fraudulent document purporting to pay his outstanding tax debt and demanding that his account be balanced to zero, when, in fact, no actual cash or negotiable financial instrument was included in the delivery. [4]
- [1] Source: District of Idaho Indictment filed September 9, 2009.
- [2] Ibid.
- [3] Ibid.
- [4] Ibid.
Man Charged in Scheme to Defraud His Tax Return Customers and the IRS
On September 2, 2009, in Wisconsin, Terry Stewart was charged in a scheme to defraud both his tax return customers and the IRS. [1]
Stewart worked in the Madison, Wisconsin, area as a self-employed tax return preparer doing business as Madison Urban Tax Service. Beginning in or about January 2007, and continuing to in or about June 2007, Stewart devised a scheme to defraud his tax return customers and the IRS. [2]
For the purpose of executing the scheme to defraud, Stewart transmitted by the Internet a series of 19 tax returns to the IRS. In each of these returns, Stewart intentionally made false statements concerning the taxpayer's qualification for the "Earned Income Credit," itemized deductions, dependants, and/or income, which triggered a higher tax refund than the taxpayer was entitled to receive. [3]
Stewart had some of his customers' tax refunds issued in the form of refund anticipation loan debit cards. Stewart spent all or part of the value of the debit cards for his own use. Stewart also gave cash or checks to other customers in amounts significantly less than they should have received for their tax refunds and then kept the customer's refund. [4]
Stewart stole approximately $38,000 of the tax refunds that should have been provided to his customers. [5]
This case was worked jointly with the IRS's Criminal Investigation Division.
- [1] Source: Western District of Wisconsin Information filed September 2, 2009.
- [2] Ibid.
- [3] Ibid.
- [4] Ibid.
- [5] Ibid.
IRS Employee Charged With Theft
On September 3, 2009, Vickie McGrue was charged in California with theft of government money. Beginning in May 2004 and continuing until or about October 2006, McGrue failed to report wages earned to the Department of Housing and Urban Development in order to receive housing assistance payments. McGrue received $13,408 in housing assistance payments to which she knew she was not entitled. [1]
- [1] Source: Eastern District of California Indictment filed September 3, 2009.
IRS Employee Charged With Theft of Government Property
On August 28, 2009, in California, Carl Smith, an Internal Revenue Service (IRS) employee, was charged with theft of Government property for stealing and converting to his own use a $300 remittance payment. The remittance payment was payable to the IRS. [1]
- [1] Source: EEastern District of California Information filed August 28, 2009.
Woman Charged in Florida With Impeding the Due Administration of the Internal Revenue Laws
On August 17, 2009, Martha Warshaw was charged in Florida with impeding the due administration of the Internal Revenue laws. [1]
On June 26, 2007, an Internal Revenue Service (IRS) Revenue Officer issued a levy for $654,131.85 to Park Electrochemical Corporation regarding Warshaw's and another person's outstanding tax liability. On July 25, 2007, the Revenue Officer received a telephone call from Park Electrochemical Corporation regarding what appeared to be an IRS Release of Levy faxed from Warshaw's home. The Revenue Officer requested that Park Electrochemical Corporation fax to the IRS a copy of the levy release. The Revenue Officer had not issued any levy releases. [2]
The Revenue Officer contacted Bear Sterns Securities Corporation (Bear Sterns) to follow-up on an IRS levy issued to them on June 26, 2007, regarding the Warshaw account. The Revenue Officer was told that Bear Sterns received what they perceived to be a levy release for the Warshaw account. Bear Sterns advised the Revenue Officer that because of the purported release, the Warshaw's account was no longer frozen. The Revenue Officer did not issue the levy release. [3]
On July 31, 2007, the Revenue Officer spoke with Warshaw who stated that she had spoken with several people at the IRS and received the levy release. Warshaw also stated that they (the Warshaws) did not owe the IRS money; the money was paid to the IRS a long time ago. [4]
On August 6, 2007, Warshaw and another person met with the Revenue Officer. At that meeting, the Revenue Officer received two letters each with what appeared to be copies of cancelled checks paid to and cashed by the United States Treasury. [5]
On September 24, 2007, the Revenue Officer received a telephone call from an attorney representing the second person at the August 6, 2007, meeting who stated that the cancelled checks previously presented were false. [6]
On March 30, 2009, Warshaw was interviewed. Warshaw admitted that she fabricated the IRS Release of Levy documents and the letters and cancelled checks. [7]
- [1] Source: Southern District of Florida Information filed August 17, 2009.
- [2] Source: Southern District of Florida Affidavit in Support of a Criminal Complaint filed May 13, 2009.
- [3] Ibid.
- [4] Ibid.
- [5] Ibid.
- [6] Ibid.
- [7] Ibid.
IRS Employee Sentenced for Defrauding HUD
On July 31, 2009, Dora Fry was sentenced to five years probation and ordered to pay $25,424 in restitution along with a $100 special assessment. [1]
Pursuant to a plea agreement, Fry had admitted that between January 1, 2000, and December 21, 2004, she received Section 8 payments from the Department of Housing and Urban Development (HUD) to which she was not entitled. Fry received these payments while living in a Housing Authority of Kansas City (HAKC) property. During the time frame noted, while living in a HAKC property, Fry was an IRS employee. Fry neglected to provide this fact on numerous applications for financial aid that she submitted to HAKC. As a result of Fry's fraudulent applications, she received $25,424 in Federal housing assistance which she otherwise would not have been entitled to receive. [2]
This case was worked jointly with the U.S. HUD, Office of Inspector General, and the Missouri Department of Social Services.
- [1] Source: Western District of Missouri Judgment in a Criminal Case filed July 31, 2009.
- [2] Source: Western District of Missouri Plea Agreement filed March 10, 2009.
Man Sentenced for Mailing a Threatening Communication to the IRS
On August 11, 2009, John Barker was sentenced in Kansas to one year and one day in prison, and two years supervised release. [1] On May 11, 2009, Barker pled guilty to mailing a threatening communication to the Internal Revenue Service (IRS). [2]
On Sunday, June 22, 2008, an envelope containing a white powder and a threatening letter was opened at the IRS processing center in Austin, Texas. The letter inside the envelope stated, "YOU HAVE BEEN EXPOSED TO ANTRAX DIE!" The local fire department HAZMAT team was contacted. They retrieved the letter and transported it to the Laboratory Response Network laboratory. The laboratory found no anthrax in their initial test of the powder. [3]
The postage used to mail the threat letter was purchased at an Automated Postal Center located in Shawnee, Kansas. The U.S. Postal Inspection Service identified the credit card number used to purchase the postage, and Barker was identified. [4]
On July 21, 2008, Barker provided fingerprints and handwriting exemplars pursuant to a subpoena. In addition, Barker provided a written statement admitting that he mailed the anthrax threat letter. He explained that the white substance was baby powder. [5]
An examination of the handwriting exemplar, threat letter and envelope, and fingerprints provided by Barker revealed that Barker prepared the envelope and threat letter and that the print on the envelope was made by Barker. [6]
This case was worked jointly with the Federal Bureau of Investigation and the U.S. Postal Inspection Service.
- [1] Source: District of Kansas Judgment in a Criminal Case filed August 11, 2009.
- [2] Source: District of Kansas Plea Agreement filed May 11, 2009.
- [3] Ibid.
- [4] Ibid.
- [5] Ibid.
- [6] Ibid.
Individual Sentenced for Bribing an IRS Employee
On August 12, 2009, Dan Kalman Baciu was sentenced in North Carolina to one year probation. He was ordered to pay a $100 special assessment and he forfeited $10,000 after pleading guilty to directly and indirectly offering a thing of value to a public official with the intent to influence an official act. [1]
Kalman Baciu was the President of DNK Trucking in Hickory, North Carolina. DNK Trucking was a sole proprietorship and its income was reported on Kalman Baciu's individual Federal tax returns. [2]
Beginning in or about September 2007, Kalman Baciu was the subject of a civil tax audit by the IRS. On or about September 11, 2007, an IRS Revenue Agent met with Kalman Baciu to discuss the civil audit. During the meeting, Kalman Baciu handed the Revenue Agent an envelope, which the Revenue Agent immediately returned without opening. [3]
On October 17, 2007, the Revenue Agent again met with Kalman Baciu to discuss the civil audit. During the meeting, which was recorded, Kalman Baciu gave the Revenue Agent an envelope containing $10,000 in cash. Kalman Baciu stated that this cash was provided to the Revenue Agent "because" of the Revenue Agent's agreement to forestall any audit of DNK Trucking for the 2006 tax year, and to reduce the tax liability of DNK Trucking for the 2005 tax year from approximately $60,000 to approximately $5,000. [4]
- [1] Source: Western District of North Carolina Judgment in a Criminal Case filed August 12, 2009.
- [2] Source: Western District of North Carolina Indictment filed January 24, 2008.
- [3] Ibid.
- [4] Ibid.
Individuals Charged in Scheme to Defraud a Bank Using Stolen Income Tax Refund Checks
On July 29, 2009, in Georgia, Cynthia Elliott and Shawn Jarrett were charged with bank fraud and other crimes. Elliott, using the business name Geometrical Services, Inc., was engaged in the business of preparing tax returns. Elliott acquired more than 100 U.S. Treasury checks belonging to others. These checks included income tax refund checks and economic stimulus checks. The checks had a total face value of more than $350,000. [1]
Elliott told Shawn Jarrett, an Assistant Branch Manager of a bank, that many of Elliott's customers did not have a bank account or necessary identification to cash a check. It was the policy of the bank to reject the deposit of third-party government checks unless the person to whom the check was made payable appeared in person and produced proper identification. However, a supervisor, such as Jarrett, could waive those requirements. [2]
Elliott offered to give Jarrett money if he would approve the deposit of third-party government checks to Elliott's business accounts and waive the requirement of having the payees appear in person. Jarrett accepted Elliott's offer. [3]
Elliott paid Jarrett a total of approximately $3,000 to $4,000 in cash bribes. [4]
This case was worked jointly with the U.S. Secret Service.
- [1] Source: Northern district of Georgia Indictment filed July 29, 2009.
- [2] Ibid.
- [3] Ibid.
- [4] Ibid.
Man Sentenced for Theft of Government Property
On July 20, 2009, Robert Stockton was sentenced to 18 months in prison and three years supervised release for theft of government property. [1]
Stockton formed a company, The Business Office, in 1985. The Business Office provided payroll services to its clients. In August 2003, Online Business Services, Inc., purchased The Business Office. Stockton became an employee of Online Business Services and continued to be responsible for former clients of [2] The Business Office.
The Business Office and Online Business Services promised their clients that they would process their payroll each payroll period, pay all Federal and State payroll taxes accurately and consistently, prepare and file quarterly payroll tax returns, and prepare all Internal Revenue Service (IRS) Forms W-2, W-3, and 1099. [3]
In or about December 2003, Stockton intentionally filed false IRS Forms 941 that indicated that the victims were responsible for paying only a fraction of the tax actually due. Online Business Services did not forward to the IRS the actual amount of payroll tax for each victim, and instead kept the money in an Online Business Services account to be used for improper purposes. [4]
The total amount of money improperly withheld from payment to the IRS was $1.8 million.
- [1] Source: District of New Jersey Judgment in a Criminal Case filed July 21, 2009.
- [2] Source: District of New Jersey Information filed November 20, 2008.
- [3] Ibid.
- [4] Ibid.
IRS Employee Charged With Fraud
On August 4, 2009, Internal Revenue Service (IRS) employee Audrey Wu was charged in California with fraud and related activity in connection with computers as a result of intentionally exceeding her authorized access to a computer and inspecting the tax return information of seven people. [1]
- [1] Source: Eastern District of California Information filed August 4, 2009.
IRS Employee Charged With Disclosure of Confidential Information
On July 31, 2009, IRS employee Willie Wilcox was charged in California with Disclosure of Confidential Information. Wilcox was an IRS Revenue Officer. He had an inventory of individuals and businesses assigned to him, with whom he needed to resolve outstanding tax delinquencies. [1]
In August 2006, Wilcox knowingly disclosed to a third party the identity and personal information of an individual that he had obtained in the course of his official duties. [2]
- [1] Source: Northern District of California Information filed July 31, 2009.
- [2] Ibid.
Individual Charged With Threatening to Assault and Murder Federal Law Enforcement Officers
On July 28, 2009, in California, Albert Bront was charged with Threatening to Assault and Murder Federal Officers. [1] Bront, an IRS Revenue Agent, was being investigated for filing false tax returns. The investigating agent obtained information that Bront was "bi-polar" and had a "temper." The investigating agent also learned that Bront had three firearms registered to him. [2]
During the execution of a search warrant at Bront's residence, witnesses reported that Bront said something to the effect of "I'm going to kill you" to the agents. Bront later admitted to making the threats to kill the agents and to knowing the agents were the police. [3]
Bront threatened to assault and murder two Treasury Inspector General for Tax Administration Special Agents and one IRS Criminal Investigation Division Special Agent. Bront's threat was made with the intent to intimidate the Special Agents and retaliate against them for the performance of their official duties. [4]
This case was worked jointly with IRS's Criminal Investigation Division.
- [1] Source: Central District of California Indictment filed July 28, 2009.
- [2] Source: Central District of California Affidavit in Support of a Criminal Complaint.
- [3] Ibid.
- [4] Source: Central District of California Indictment filed July 28, 2009.
Four People Charged in Conspiracy to Cash Fraudulent Tax Return Checks
On July 9, 2009, a Criminal Complaint was filed in New Jersey alleging that Joel Diaz, Diana Nunez, Roberto Rivera, and David Roman conspired to steal
United States (U.S.) money in the form of U.S. Treasury checks. [1]
The investigation revealed that 28 U.S. Treasury checks that had been cashed at the Valley National Bank were a result of false income tax returns filed with the Internal Revenue Service (IRS). The false income tax returns were filed either for individuals residing outside the U.S. who were not required to file tax returns or individuals who were never employed by the employers listed on their purported W-2s. The false returns caused the IRS to issue fraudulent refund checks. [2]
The investigation also revealed that approximately 10 of the 28 checks were directed to fictitious recipients at real addresses within the Garden Spires apartment complex in Newark, New Jersey, and the surrounding neighborhood. Those checks were among approximately 1,000 fraudulent Treasury refund checks directed to the Garden Spires apartment complex and the surrounding neighborhood. Roberto Rivera was a U.S. Postal Service letter carrier assigned to the route encompassing the Garden Spires apartment complex and the neighborhood immediately surrounding it. [3]
Rivera stated to investigators that he was approached by an individual named "Nico" who told him that U.S. Treasury checks would be sent to fictitious recipients at real addresses on his route. "Nico" offered to pay Rivera between $50 and $100 for each U.S. Treasury check that Rivera collected from his route and delivered to "Nico." Rivera stated that he delivered between 80 and 90 U.S. Treasury checks to "Nico." [4]
Rivera's roommate, David Roman, was also a U.S. Postal Service letter carrier. Roman told investigators that he delivered approximately five U.S. Treasury checks that he believed to be fraudulent to Rivera who in turn delivered them to "Nico." [5]
Diana Nunez cashed many of the fraudulent checks. Nunez was observed by a witness delivering an envelope containing proceeds from the U.S. Treasury checks to Joel Diaz. [6]
This case was worked jointly with the IRS's Criminal Investigation Division, the Postal Inspection Service, and the Postal Service Office of Inspector General.
- [1] Source: District of New Jersey Criminal Complaint filed July 9, 2009.
- [2] Ibid.
- [3] Ibid.
- [4] Ibid.
- [5] Ibid.
- [6] Ibid.
Woman Agrees to Plead Guilty to Unauthorized Inspection of Tax Returns or Return Information
On July 17, 2009, in California, Brenda Jurado agreed to plead guilty to Unauthorized Inspection of Tax Returns or Return Information. Jurado, while an IRS employee, made numerous unauthorized accesses to inspect tax return information of two private individuals without the authorization of the IRS or the private individuals. [1]
- [1] Source: Eastern District of California Plea Agreement filed July 17, 2009.
Man Charged With Assaulting an IRS Employee
On July 17, 2009, Glenn Braly was charged in California with intentionally using force to assault an IRS employee while the employee was engaged in the performance of his official duties. [1]
- [1] Source: Central District of California Information filed July 17, 2009.
IRS Employee Charged in California With Acts Affecting a Personal Financial Interest and Fraud and Related Activity in Connection With Computers
On July 22, 2009, Mark Claybrooks was charged in California with Acts Affecting a Personal Financial Interest and Fraud and Related Activity in Connection with Computers. Claybrooks, an IRS Revenue Officer (RO), had an inventory of individuals and businesses assigned to him with whom he needed to resolve outstanding tax delinquencies. Claybrooks also had a real estate license issued through the California Department of Real Estate. In addition, Claybrooks had worked in the past for Faith Mortgage Group, and Alpha Loans and Omega Realty while working for the IRS. [1]
As a RO, Claybrooks met with individuals and recommended they pay off delinquent Federal income tax obligations by refinancing with Faith Mortgage Group. He had a financial interest in Faith Mortgage Group, and he received money for referrals. Claybrooks received checks from Faith Mortgage Group for $7,560, $7,340 and $5,983. [2]
In addition, on two occasions, Claybrooks accessed an IRS computer and without authorization obtained individual taxpayer information. [3]
- [1] Source: Northern District of California Indictment filed July 22, 2009.
- [2] Ibid
- [3] Ibid
Woman Charged With Unauthorized Access to an IRS Computer
On June 19, 2009, Andrea Schreindl was charged in California with Unauthorized Access to a Computer and Unauthorized Inspection of Return or Return Information. Ms. Schreindl, while an employee of the California Franchise Tax Board (FTB), accessed and inspected, without authorization, the Federal tax information of twenty-one people that had been provided to the FTB by the Internal Revenue Service (IRS). [1]
- [1] Source: Eastern District of California Information filed June 19, 2009.
Woman Sentenced in Representation and Tax Fraud Scheme
Tu Ky Huynh, also known as Tiffany Huynh, was sentenced in California on
June 11, 2009, to sixteen months in prison to be followed by three years supervised release. She was also ordered to pay $100,545 in restitution and a $2,100 special assessment. [1]
Ms. Huynh made a false and fraudulent representation on Form 2848, Power of Attorney and Declaration of Representation, that she was qualified to practice as a Certified Public Accountant when, in fact, she was not. [2]
Ms. Huynh also prepared Federal tax returns listing various deductions, losses, and credits that she knew the taxpayers were not entitled to. In doing so, Ms. Huynh willfully assisted each of the taxpayers in the preparation of a false income tax return. The tax loss attributable to Ms. Huynh's actions was $106,292. [3]
This case was worked jointly with the IRS's Criminal Investigation Division.
- [1] Source: District of California Judgment and Probation/Commitment Order filed June 11, 2009.
- [2] Source: District of California Plea Agreement filed March 13, 2009.
- [3] Ibid.
Individual Sentenced for Making False Statements to the IRS
On June 26, 2009, in California, Vendel Matis was sentenced to three years probation and ordered to pay a special assessment of $100. [1]
Mr. Matis was disbarred from the Virginia State Bar on or about May 24, 2001, and since that time had not become a member of any other bar. Mr. Matis was suspended from representing taxpayers before the IRS by its Office of Professional Responsibility on March 31, 2003. [2]
After Mr. Matis was disbarred in Virginia in 2001, and continuing through May 2004, Mr. Matis submitted to the IRS some ninety Forms 2848 in which he falsely claimed to be a licensed attorney authorized to represent taxpayers before the IRS. Mr. Matis pled guilty to one count of making a false statement. [3]
- [1] Source: Central District of California Judgment and Probation/Commitment Order filed June 26, 2009.
- [2] Source: District of California Plea Agreement filed November 18, 2008.
- [3] Ibid.
Individuals Indicted for Conspiring to Defraud the United States
On July 9, 2009, Shannon Ford and Michael Ford were indicted in California. These individuals conspired to defraud the United States and the Internal Revenue Service (IRS) by filing false income tax returns that claimed a false loss on Schedule C, Profit or Loss from Business, and created a fraudulent claim to the Earned Income Tax Credit. The fraudulent returns sought more than $159,308 in refunds to which these individuals and their clients were not entitled. [1]
As part of the scheme, Shannon and Michael Ford submitted five false claims to the IRS. Shannon Ford submitted an additional twenty-nine false claims to the IRS. These two individuals arranged for fifteen refunds to be deposited into accounts that they controlled. On two occasions, Shannon Ford unlawfully used another person's identification in furtherance of the conspiracy. [2]
This case was worked jointly with the IRS's Criminal Investigation Division.
- [1] Source: Eastern District of California Indictment filed July 9, 2009.
- [2] Ibid.
Woman Charged with Attempted Extortion
On July 8, 2009, IRS employee Edith Squillace was charged with attempted extortion. Squillace was involved in a private-party small claims court civil case in the amount of approximately $3,750. Squillace attempted to commit an act of extortion by demanding that her victim abandon repayment of approximately $3,750 of personal loans made to Squillace under the threat of an IRS audit. [1]
- [1] Source: Northern District of California Indictment filed July 8, 2009.
Man Indicted for Corruptly Endeavoring to Impede the Administration of the Internal Revenue Code and Making a False Writing
On July 8, 2009, James Harris was indicted in Michigan on charges of corruptly endeavoring to impede the administration of the Internal Revenue Code and filing a false document. Harris impeded the administration of the Internal Revenue Code by making and filing a false IRS Form 1099-INT that stated he paid the victim $6,000,000 in interest and by making and filing a false IRS Form 1099-OID that stated he had paid $6,000,000 in "original issue discount" to the victim. [1]
- [1] Source: Western District of Michigan Superseding Indictment filed July 8, 2009.
Individual Pleads Guilty to Conversion of Funds Belonging to the IRS
On June 25, 2009, in Puerto Rico, Jose Toro-Mendez pled guilty [1] to two counts of Conversion of Funds Belonging to the Internal Revenue Service (IRS). [2] On two occasions, Toro-Mendez converted to his own use taxes paid by another and belonging to the IRS. Toro-Mendez stole approximately $180,000. [3]
- [1] Source: District of Puerto Rico Plea Agreement filed June 25, 2009.
- [2] Source: District of Puerto Rico Information filed June 25, 2009.
- [3] Source: District of Puerto Rico Plea Agreement filed June 25, 2009.
Man Sentenced for Misusing the Words "Department of the Treasury"
On June 19, 2009, Robert Damiano was sentenced in New Jersey to one year probation and ordered to pay a $5,000 fine and a $25 special assessment. [1] Damiano had previously been charged with using the words "Department of the Treasury" in connection with and as part of a business activity in a manner that could reasonably be interpreted as conveying a false impression that such business activity was approved or endorsed by the Department of the Treasury. [2]
- [1] Source: District of New Jersey Courtroom Minutes filed June 19, 2009.
- [2] Source: District of New Jersey Plea Agreement filed February 18, 2009.
Pennsylvania Man Pleads Guilty to Delivering a Fraudulent Document to the Internal Revenue Service
On June 25, 2009, in Pennsylvania, Terry Chisholm was sentenced to 12 months probation and ordered to pay a $25 assessment and a $1,000 fine for submitting false documents to the Internal Revenue Service (IRS). [1]
The sentencing resulted from a signed plea agreement [2] and information filed on March 24, 2009, which charged Chisholm with delivering a fraudulent document to the IRS. [3] From approximately January 2004 until January 2006, Chisholm submitted false Power of Attorney and Declaration of Representative forms declaring that he was a Certified Public Accountant even though he was not licensed during that time
- [1] Source: Middle District of Pennsylvania Judgment filed June 25, 2009.
- [2] Source: Middle District of Pennsylvania Plea Agreement filed March 24, 2009.
- [3] Source: Middle District of Pennsylvania Information Document filed March 24, 2009.
IRS Employee Pleads Guilty to Theft
On May 14, 2009, in Tennessee, Lekeisha McKinney pled guilty to theft of public money. [1] McKinney stole and converted to her own use approximately $9,034 from an overpayment by the U.S. Department of Housing and Urban Development Housing Choice Voucher Program. [2]
The Housing Choice Voucher Program was created for the purpose of aiding low income families in obtaining places to live. Housing Choice Vouchers are administered locally by public housing agencies. In this case, the voucher program was administered by the Memphis Housing Authority. Eligibility for a housing voucher is determined by the Memphis Housing Authority based on total annual gross income and family size. Participants are required to notify the Memphis Housing Authority of any changes in income and are required annually to complete an Application for Continued Occupancy, in which they are required to verify all income and employment in the last 12 months. [3]
According to the counts in the Indictment in which McKinney was charged but were not part of the plea agreement, she made material false statements on three occasions during annual re-certifications in that she failed to report her income from the IRS and the U.S. Department of Agriculture. [4]
This case was worked jointly with the U.S. Department of Housing and Urban Development, Office of Inspector General, and the U.S. Department of Agriculture, Office of Inspector General.
- [1] Source: Western District of Tennessee Plea Agreement dated May 14, 2009.
- [2] Source: Western District of Tennessee Indictment dated October 23, 2008
- [3] Ibid.
- [4] Ibid.
Man Charged With Making False Statements to the IRS When Claiming to Be a CPA
On June 2, 2009, in Delaware, Ronald Bright was charged with making false statements and other violations. On seven occasions Bright falsely claimed on Internal Revenue Service Form 2848, Power of Attorney and Declaration of Representation, that he was a Certified Public Accountant. In addition, Bright is charged with preparing 28 false tax returns and two counts of failing to file his own tax return. [1]
This case was worked jointly with IRS Criminal Investigation Division.
- [1] Source: District of Delaware Indictment dated June 2, 2009.
Man Charged With Making a False Statement and Other Violations
On June 5, 2009, Timmothy Williams was charged in Indiana with making a false statement to the Internal Revenue Service (IRS) and other violations. Williams told an IRS employee that he was "Andrew Mitchell Lieb" during a request for a tax transcript. Williams also visited an Indiana Bureau of Motor Vehicles branch on six occasions and obtained an official State of Indiana photo identification card in the name of another real person. To support each application, Williams presented a birth certificate, information from the Social Security Administration and other information. Williams used three identification cards to commit fraud and steal money from others. [1]
This case was worked jointly with the U.S. Postal Inspection Service.
- [1] Source: Northern District of Indiana Indictment dated June 5, 2009.
Woman Sentenced to Prison for Conspiracy and Interference With the Internal Revenue Service
On June 2, 2009, Jeanne Herrington was sentenced in Ohio to ninety six months in prison and three years supervised release. She also was ordered to pay a $200 special assessment. [1]
Herrington had been found guilty of conspiracy and interfering with the Internal Revenue Service (IRS). She conspired with others to defraud the United States by impeding the lawful governmental functions of the IRS, including the ascertainment, evaluation, assessment and collection of income taxes. Among other things, Herrington promoted and sold abusive trusts, prepared and advocated the preparation of false Federal income tax returns, submitted and/or assisted in the submission of false and fraudulent documentation to the IRS in an effort to eliminate tax liabilities and harass IRS employees, and organized and/or attended meetings to discuss methods of tax evasion and evading the payment of tax liabilities with fictitious financial instruments. [2]
In addition, Herrington corruptly endeavored to obstruct or impede the due administration of the Internal Revenue laws by preparing and submitting to the IRS fraudulent Forms 1099 which falsely reported that individuals associated with the Federal criminal tax investigation of Herrington had engaged in reportable transactions. Herrington submitted fraudulent Forms 1099 for three different people. Two of the fraudulent Forms 1099 were for $1,000,000 each, and one fraudulent Form 1099 was for $300. [3]
This case was worked jointly with IRS's Criminal Investigation Division.
- [1] Source: Northern District of Ohio Judgment in a Criminal Case dated June 2, 2009.
- [2] Source: Northern District of Ohio Superseding Indictment dated April 7, 2008.
- [3] Ibid.
Woman Charged With Corrupt Endeavor to Impede the Internal Revenue Laws
On June 5, 2009, Sharon Butler was charged in Ohio with corruptly endeavoring to impede a U.S. employee who was acting in an official capacity under the authority of the Internal Revenue laws. [1]
Butler fabricated a false IRS Release of Levy and forged the signature of an IRS Revenue Officer while serving as a bookkeeper for a drywall business. The fraudulent Release of Levy notified a construction company that all property, rights to property, money, credits and bank deposits of the drywall company were released from IRS levy. [2]
- [1] Source: Southern District of Ohio Information dated June 5, 2009.
- [2] Ibid. refund deposited into an account he controlled.
Man Pleads Guilty to Conversion of Government Property
On May 20, 2009, in Arizona, Victor Vasquez pleaded guilty to conversion of government property. Vasquez agreed that in March 2006, the victim paid him to file her 2005 Federal tax return. The victim provided Vasquez with her bank account information so that her refund could be direct deposited. Vasquez filed the victim's return but arranged to have the victim's refund deposited into an account he controlled. [1]
- [1] Source: District of Arizona Plea Agreement filed May 20, 2009.
Man Pleads Guilty to Mailing a Threatening Communication
On May 11, 2009, John Barker pleaded guilty in Kansas to mailing a threatening communication to the Internal Revenue Service (IRS). [1]
On Sunday, June 22, 2008, an envelope containing a white power and a threatening letter was opened at the IRS processing center in Austin, Texas. The letter inside the envelope stated "YOU HAVE BEEN EXPOSED TO ANTHRAX DIE!" The local fire department HAZMAT team was contacted, retrieved the letter and transported it to the Laboratory Response Network laboratory. The laboratory found no anthrax in their initial test of the powder. [2]
The postage used to mail the threat letter was purchased at an Automated Postal Center located in Shawnee, Kansas. The U.S. Postal Inspection Service identified the credit card number used to purchase the postage and Barker was identified. [3]
On July 21, 2008, Barker provided fingerprints and handwriting exemplars pursuant to a subpoena. In addition, Barker provided a written statement admitting he mailed the anthrax threat letter and explained the white substance was baby powder. [4]
An examination of the handwriting exemplar, threat letter and envelope, and fingerprints provided by Barker revealed that Barker prepared the envelope and threat letter and that the print on the envelope was made by Barker. [5]
- [1] Source: District of Kansas Plea Agreement filed May 11, 2009.
- [2] Ibid.
- [3] Ibid.
- [4] Ibid.
- [5] Ibid.
IRS Employee Indicted for Theft, False Statements, and False Claims
On May 27, 2009, in Nevada, Internal Revenue Service (IRS) employee Aleesha Rosemond was charged with theft of government funds, false statements, and false claims. Rosemond fraudulently obtained approximately $9,209 in Section 8 rent subsidies by failing to report her marriage, her full household income, and her household composition to the City of Las Vegas Housing Authority. She failed to disclose that she married her husband in 2004, that her husband lived with her and her children, and that her husband earned income in a Continued Occupancy Form, as required. In addition, Rosemond filed five inflated claims for tax refunds totaling $13,695 to which she was not entitled. [1]
- [1] Source: District of Nevada Superseding Indictment dated May 27, 2009.
IRS Employee Charged With Injuring Government Property
On May 26, 2009, IRS employee Michael Hicks was charged with injuring government property. After having received a complaint that someone had urinated in a freight elevator at the Detroit Enterprise Computing Center, an investigator for the Treasury Inspector General for Tax Administration (TIGTA) reviewed the images stored in a surveillance camera that monitored the elevator from which the complaint emanated. The images revealed that a man, later identified as Hicks, urinated in the freight elevator numerous times between October 10, 2007, and October 31, 2007. [1]
During an interview with a TIGTA special agent, Hicks admitted to urinating in the elevator and stated that he did so because he felt he could get away with it. Due to Hick's urination, the IRS incurred a deep cleaning expense of $4,626.25. [2]
- [1] Source: Eastern District of Michigan Affidavit in Support of a Criminal Complaint dated May 26, 2009.
- [2] Ibid.
California Franchise Tax Board Employee Charged with Unauthorized Access to a Computer
On April 29, 2009, Nancy Hudak was charged in the United States District Court for the Eastern District of California with unauthorized access to confidential taxpayer information on a California Franchise Tax Board (FTB) computer. As a Compliance Representative for the FTB, Hudak intentionally exceeded her authorized access on 45 occasions to electronically stored Federal tax information provided to the California Franchise Tax Board by the Internal Revenue Service. [1]
- [1] Source: Eastern District of California Information dated April 29, 2009.
Man Arrested Upon Arrival at Los Angeles Airport
On April 29, 2009, Maxim Maltsev of Novosibirsk, Russia, was arrested upon his arrival in the United States at the Los Angeles International Airport [1]. Maltsev was charged in an indictment by a Federal Grand Jury on April 16, 2009. [2]
Maltsev was charged with conspiracy to defraud the U.S. regarding claims, in which he participated with co-conspirators in a scheme to defraud the Internal Revenue Service (IRS) and U.S. taxpayers by fraudulently obtaining Federal income tax returns before they were filed electronically with the IRS. Without the permission of the taxpayers, Maltsev and the co-conspirators fraudulently changed the income tax returns to re-direct the tax refund payments to bank accounts controlled by him and other co-conspirators. [3]
The IRS sponsors a program known as "Free File," which is a free Federal tax preparation and electronic filing program for eligible taxpayers. The IRS has approved 19 Free File Affiliates who provide online return preparation and electronic filing with the IRS. [4] Maltsev and his co-conspirators engaged in phishing; that is, members of the conspiracy created fake web-sites that misrepresented themselves as accredited and authorized to electronically file Federal tax returns. Then Maltsev and his co-conspirators advertised these bogus web-sites on the-internet through various search engines and through unsolicited electronic mail. [5]
Maltsev and his co-conspirators received Federal income tax returns prepared for electronic filing by taxpayers who were misled by the fraudulent web sites or electronic mail. The information was changed so that any refunds issued by the IRS would be sent to bank accounts opened by Maltsev and his co-conspirators. [6]
Approximately 65 Federal income tax refunds, representing approximately $105,000, were illegally diverted to accounts opened by Maltsev. Those funds were withdrawn by debit and check cards and by automatic teller machine [7] cash withdrawals in the U.S. and overseas. [8]
This case was worked jointly with the IRS's Criminal Investigation Division.
- [1] Source: Southern District of California News Release dated April 30, 2009.
- [2] Ibid.
- [3] Source: Southern District of California Indictment dated April 16, 2009.
- [4] Ibid.
- [5] Ibid.
- [6] Ibid.
- [7] Ibid.
- [8] Source: Southern District of California News Release dated April 30, 2009.
Individual Charged with Unauthorized Inspection of Tax Return Information
On April 29, 2009, Frank Auerbach, an Internal Revenue Service employee, was charged in California with intentionally exceeding his authorized access to a computer and obtaining information of 21 individuals. Auerbach was also charged with inspecting a private individual's tax return information without authorization. [1]
- [1] Source: Eastern District of California Information dated April 29, 2009.
Man Pleads Guilty to Theft of a Tax Refund Payment
On April 8, 2009, Horace Butler pled guilty in Florida to stealing money from a U.S. Government agency. [1] Butler stole a Department of the Treasury tax refund payment of $3,811, to which he was not entitled. [2]
- [1] Source: Southern District of Florida Plea Agreement dated April 8, 2009, and Notice of Sentencing dated
April 8, 2009.
- [2] Source: Southern District of Florida Indictment dated February 3, 2009.
Man Pleads Guilty in Scheme that Included the False Use of Treasury Symbols
On April 8, 2009, in Hawaii, Bryan Revell pled guilty to 3 counts of a 10 count indictment charging him with misuse of a Department of the Treasury name or symbol, impersonation of a United States officer, passing fictitious obligations, wire fraud, and mail fraud. [1]
As part of Revell's scheme to defraud, he told potential investors that he would purchase
U.S. Government bonds with their funds on their behalf, and that he was authorized by the U.S. Department of the Treasury to sell United States bonds and securities. Revell provided a victim with a false and fictitious document bearing the name, emblem, and symbols of the Internal Revenue Service (IRS). He provided another victim a fictitious application for a Treasury bond and a subsequent fictitious Treasury bond that falsely bore the name of the United States Department of the Treasury. Revell took money from his victims without the intent of purchasing the bonds on their behalf. [2]
Revell pled guilty in a Plea Agreement to wire fraud, mail fraud, and false personating of a United States officer and employee.
- [1] Source: District of Hawaii Indictment dated August 27, 2008.
- [2] Source: District of Hawaii Indictment dated August 27, 2008.
Individual Sentenced for Falsely Representing Herself as an IRS Employee
On April 6, 2009, Lourdes Salazar-Velazquez was sentenced in Arizona to five years probation. She was also ordered to pay a $1,000 fine and a $100 special assessment. [1] Salazar-Velazquez mailed a letter and represented that she was an IRS Agent acting with the authority of the United States, and was authorized to collect debt owed to her, garnish wages, and levy property. [2]
- [1] Source: District of Arizona Judgment in a Criminal case dated April 6, 2009.
- [2] Source: District of Arizona Indictment dated December 2, 2008, and Plea Agreement dated April 6, 2009.
IRS Dallas Lockbox Employee Sentenced for Theft and Embezzlement of Over $485,000 in Taxpayer Remittance Checks
On April 9, 2009, Emmanuel Ekwuruke was sentenced in Texas to 66 months in prison and four years of supervised release. He was also ordered to pay a $300 assessment for theft by a bank employee, theft of public money and aggravated identity theft. [1]
Mr. Ekwuruke was initially stopped by Mesquite, Texas, police officers who were responding to a 911 call from a bank regarding a possible forged check. After arresting him, the police officers impounded and inventoried a vehicle located in the bank parking lot that was registered to Mr. Ekwuruke. There was an identification card hanging from the rear view mirror identifying him. There were 21 checks found in the vehicle, totaling approximately $485,539 that had been sent to the Internal Revenue Service (IRS) Dallas Lockbox. [2]
Mr. Ekwuruke was subsequently indicted by a Federal grand jury and convicted at trial.
- [1] Source: Northern District of Texas Judgment in Criminal Case dated April 9, 2009.
- [2] Source: Affidavit in support of criminal complaint dated June 6, 2008.
Man Indicted for Misuse of Department of the Treasury Name and False Statements
On March 12, 2009, Keith Towns was indicted for misusing the IRS name and making false statements. The web site for Towns' business, Emerge Financial Group, stated that Towns was an "Internal Revenue Service Certified Enrolled Agent." This statement, by using the IRS name, could reasonably be interpreted as conveying the false impression that the business activity was approved, endorsed, sponsored, authorized and associated with the IRS. [1]
In addition, on 16 occasions, Towns represented to the IRS that he was an Enrolled Agent when he was not. [2]
- [1] Source: Eastern District of California Indictment dated March 12, 2009.
- [2] Source: Eastern District of California Indictment dated March 12, 2009.
Man Agrees to Plead Guilty to Illegal Gratuity to a Public Official
On March 5, 2009, in California, Victor John agreed to plead guilty to illegal gratuity to a public official. According to the plea agreement, on or about March 24, 2008, Victor John had a telephone conversation with an individual he knew to be an Internal Revenue Service (IRS) revenue agent. The telephone conversation was regarding an audit of John's taxes in which he owed approximately $33,052 in back taxes. During the telephone conversation, John offered to give gifts and pay the revenue agent $5,000 to close out the audit report with no money owed to the United States.
On or about April 3, 2008, John met the revenue agent in person and gave the revenue agent an envelope that contained $4,900 in cash in return for the revenue agent's closing out of his audit with no money owed and deleting the assessment of tax due. During the meeting, John stated to the revenue agent that the $4,900 was for the revenue agent personally, and not for the money he owed in back taxes.
Man Sentenced for Interfering with the Administration of Internal Revenue Laws
On March 23, 2009, Laurence Wolff was sentenced to 27 months in prison and three years supervised release. He was also ordered to pay $450 in assessments and a $400 fine.
On September 24, 2008, Wolff was indicted by a grand jury in Wyoming for interference with the administration of Internal Revenue laws and mailing a threatening communication. According to court documents, Wolff mailed a communication to numerous government employees, including Internal Revenue Service (IRS) employees, which stated that he would defend property that was the subject of an Order of Foreclosure and Decree of Sale. It further threatened to kill any person who attempted to enforce the Order. Wolff also refused to vacate property that had been foreclosed as ordered in the Order of Foreclosure and Decree of Sale. He posted notices on the foreclosed property threatening to use force against law enforcement officers and barricaded entry doors to the foreclosed property. Additionally, Wolff caused to be delivered a communication addressed to a U.S. judge containing a threat to injure government agents and officials.
This case was worked jointly with the IRS's Criminal Investigation Division and the U.S. Postal Inspection Service.
IRS Revenue Agent Agrees to Plead Guilty to Tax Fraud
On March 30, 2009, Jim H. Liu agreed to plead guilty to count one of the indictment: submitting a false tax return.
On November 13, 2008, Liu, an IRS Revenue Agent, was indicted in the U.S. District Court for the Central District of California on one count of submitting a false tax return and two counts of obstructing the IRS audit of his 2002 tax return.
According to court documents, in 2001, Liu purchased property in Pomona, California. In 2002, Liu sold the property. On or about April 15, 2003, Liu falsely claimed a $4,236 loss from the sale of the property on his 2002 tax return, when he knew that he had actually sold the property for a substantial gain.
On or about June 18, 2004, while the IRS was conducting an audit of Liu's 2002 tax return, he mailed and faxed to the IRS documents that falsely listed Liu's purchase price of the Pomona, California, property as $231,250, when the purchase price was approximately $185,000. Also in June 2004, Liu falsely stated on the documents listing the purchase price of the property that his wife provided money for a $47,550 additional deposit when there had not been an additional deposit.
U.S. Awarded a Final Judgment Against RGI, CSM, and John Rachel
According to a January 29, 2009, U.S. Department of Justice press release, the U.S. Government was awarded $428,532 for the submission of false or fraudulent claims by RGI, Inc. (RGI), Computer Specialties of Maryland, Inc. (CSM), and John Rachel.
According to the evidence presented at the trial, in 1995 the Internal Revenue Service (IRS) entered into a contract with a company to repair laptop computers used by the IRS throughout the country. The contract called for the company to charge the IRS a fixed hourly rate, plus the actual cost of parts used in the repairs. The contractor subcontracted most of the work to RGI.
Testimony showed that RGI contracted with a third party to perform certain repairs to the IRS laptops. Instead of billing the actual cost of the third party's work, Rachel and RGI artificially inflated these costs by claiming that a shell company, CSM, had actually performed the work. When questioned about these transactions, Rachel and RGI provided the IRS with phony invoices reflecting that the work had been done by CSM at prices much higher than was actually charged by the true vendor. Trial testimony showed that the IRS paid an additional $428,532 under the contract as a direct result of the fraudulently inflated invoices.
On March 16, 2009, a final judgment against RGI, CSM, and John Rachel awarded the U.S. Government $1,285,597 in treble damages and a civil penalty of $385,000.
Woman Charged with Attempting to Interfere with Administration of Internal Revenue Laws
On March 5, 2009, Gwendolyn Schenk was charged in Michigan with attempting to interfere with the administration of Internal Revenue laws by threatening Internal Revenue Service (IRS) employees. According to the criminal complaint, Schenk was apparently upset that she had not received her $300 economic stimulus payment. Schenk left a voice mail for an IRS Lead Contact Representative that threatened to cut an IRS employee's head off. She also spoke to an IRS Contact Representative and threatened to be in the parking lot waiting to cut the head off of the first person to leave the building.
Man Indicted for Bribery of a Public Official
On March 11, 2009, Danny Means II, also known as Butch Cassidy, was indicted in California for bribery of a public official. According to the indictment, Means promised $8,000, and gave a $300 deposit, to an IRS Revenue Officer in return for receiving favorable treatment regarding the outstanding tax liability that he owed the IRS.
Man Sentenced for Bribery of a Public Official for the Purpose of Lowering his Tax Liability
On March 9, 2009, Ashok Patel was sentenced in the U.S. District Court for the Southern District of Illinois to ten months in prison and two years supervised release. He was also ordered to pay $89,221 in restitution and a $100 assessment. Patel previously pled guilty to a charge of bribery of a public official.
According to the indictment, Patel had intentionally and corruptly acted to influence an official act by promising or giving $5,000 to a public official for the purpose of accomplishing a lower tax liability.
Man Sentenced in Murder for Hire Plot of IRS Revenue Officer
On March 5, 2009, U.S. District Court Judge James S. Moody, Jr., imposed a sentence of 30 years imprisonment on Florida businessman Randy Nowak. He noted that, after having listened to Nowak's recorded conversations with an undercover agent posing as a hit man, he had concluded that Nowak had "no conscience."
Nowak was convicted by a Federal jury in December 2008 of attempting to murder a U.S. officer or employee and for using a facility of interstate commerce with the intent that a murder-for-hire be committed.
According to court documents, in June 2008, Nowak, owner of RJ Nowak Enterprises, Inc., had been looking for someone to kill an Internal Revenue Service (IRS) employee who was auditing him because he stood to lose $4,000,000 that he had hidden offshore.
Nowak met with an undercover Federal Bureau of Investigation (FBI) Task Force agent who was posing as a hit man in July 2008. Nowak paid him $10,000 as a down payment to kill the IRS Revenue Officer. Nowak also asked the undercover agent if he would be willing to burn down the IRS's office in Lakeland.
Nowak was charged in a criminal complaint filed in July 2008 with attempting to kill an IRS Revenue Officer who was engaged in the performance of official duties. At that time, Nowak had an outstanding IRS liability of approximately $300,000 related to his personal income tax obligations, and he had four years of outstanding corporate tax returns for his business that he had not filed.
The case was worked jointly with the FBI.
Man Sentenced for Impersonating an Agent of the IRS
On January 9, 2009, Michael J. Sabo was sentenced in the U.S. District Court, District of Nevada, to one year and one day imprisonment, followed by three years of supervised release. He was also ordered to pay criminal monetary penalties totaling $95,109.79. Sabo pleaded guilty to one count of false impersonation of an officer or employee of the U.S., aiding and abetting; and one count of tax evasion.
The Treasury Inspector General for Tax Administration (TIGTA) received information that Sabo filed a questioned document purporting to be an Internal Revenue Service (IRS) Release of Notice of Federal Tax Lien with the Clark County, Nevada, Office of the County Recorder on or about September 8, 2004.
The investigation established that three fraudulent documents were filed with the Clark County Office of the County Recorder during 2004 and 2005. Each of the fraudulent documents was notarized and bore Sabo's name and signature as an "Authorized Agent" of the IRS. The fraudulent documents referenced Notices of Federal Tax Liens that were filed by the IRS on April 18, 1997; April 5, 2001; and December 13, 2002. The investigation further established that Sabo was not an IRS employee.
The Treasury Inspector General for Tax Administration (TIGTA) worked jointly with the IRS's Criminal Investigation Division on this investigation.
Tax Preparer Pled Guilty in Connection with Tax Payment Theft
On January 12, 2009, Abdul Wahid pled guilty in California to 10 charges, including mail fraud, theft of government property, and aggravated identity theft. Wahid was sentenced to 132 months in prison and three years supervised release. He was also ordered to pay a $1,000 special assessment.
According to court documents, Wahid owned and operated a tax return business in Los Angeles, called Global Accounting and Tax Service. Wahid prepared personal and corporate tax returns for his clients. These returns showed significant amounts of tax due to various taxing authorities.
Wahid directed his clients to give him checks in the amounts of the taxes due, as reflected on the return. In cases where the clients made the checks payable to Wahid, he deposited them into his accounts and did not pay the taxes. In cases where the clients made the checks payable to the relevant taxing authority, Wahid also deposited the checks into his own accounts and converted them to his own use. In order to avoid detection, Wahid prepared a different return showing little or no tax due and submitted them to the taxing authorities.
This case was worked jointly with the Internal Revenue Service's (IRS) Criminal Investigation Division and the Federal Bureau of Investigation.
United States Awarded Over $400,000 in Damages
According to a U.S. Department of Justice press release, the United States Federal government has been awarded $428,532 for the submission of false or fraudulent claims submitted by RGI, Inc. (RGI), Computer Specialties of Maryland, Inc. (CSM), and John Rachel.
According to the evidence presented at the trial, in 1995, the Internal Revenue Service (IRS) entered into a contract with a company to repair laptop computers used by the IRS throughout the country. The contract called for the company to charge the IRS a fixed hourly rate, plus the actual cost of parts used in the repairs. The contractor subcontracted much of the work to RGI.
Testimony showed that RGI contracted with a third party to perform certain repairs to the IRS laptops. Instead of billing the actual cost of the third party's work, Rachel and RGI artificially inflated these costs by claiming that a shell company, CSM, had actually performed this work. When questioned about these transactions, Rachel and RGI provided the IRS with phony invoices reflecting that the work had been done by CSM at prices much higher than was actually charged by the true vendor. Trial testimony showed that the IRS paid an additional $428,532 under the contract as a direct result of the fraudulently inflated invoices.
United States To Be Paid More Than $1 Million
According to a January 2009 Department of Justice (DOJ) press release, Barrday Inc. and two related companies agreed to pay more than $1 million dollars to the United States in connection with their role in the weaving of Zylon fabric used in the manufacture and sale of defective bullet-proof vests.
The complaint alleged that Barrday's woven Zylon fabric was used in the manufacture of bullet-proof vests sold by various companies and that the Zylon in the vests lost its ballistic capability quickly. Barrday was reportedly aware of the defective nature of the Zylon by at least December 2001, but continued to sell Zylon for use in ballistic armor until approximately 2003. These vests were purchased by the Federal Government.
This case was worked jointly with the General Services Administration Office of the Inspector General, the Department of Homeland Security Office of the Inspector General, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Department of Energy Office of the Inspector General, the U.S. Agency for International Development Office of the Inspector General, and the Defense Contracting Audit Agency.
Former IRS Employee Sentenced in D.C. Tax Scam
According to a DOJ press release, in December 2008, former Internal Revenue Service (IRS) employee Robert Steven was sentenced to 46 months in prison and 3 years supervised release, for receipt of stolen property and conspiracy to commit money laundering in connection with a property tax refund scheme in which over $48 million were stolen from the District of Columbia (D.C.). His wife, Patricia Steven, was sentenced to 70 months in prison and 3 years supervised release.
Robert Steven had been an IRS employee since 1975. At the time of his arrest, Steven was Division Director, Modernization Information Technology Systems.
The release stated that Steven's wife, Patricia Steven, first met Harriette Walters, a former manager within the D.C. Office of Tax and Revenue, in the mid-1970s. By the late 1980's, Harriette Walters proposed that Patricia Steven deposit a check drawn on a D.C. Government bank account made payable to Patricia Steven. Walters explained that Steven would be allowed to keep a portion of the proceeds from the check, but would have to return a substantial portion to Walters. Despite knowing that Walters obtained the check fraudulently, Patricia Steven agreed and deposited the first check.
Robert and Patricia Steven opened a business that eventually developed into a clothing design business called "Bellarmine Design." Bellarmine Design never grossed more than $15,000 in a single year. From 1990 to 2007, Patricia Steven and Harriette Walters made 67 deposits of fraudulently obtained D.C. Government checks or cash proceeds from the scheme into a Bellarmine Design checking account maintained by Robert and Patricia Steven. The individual checks ranged in amounts from a handful of initial deposits over $4,000 each, to subsequent deposits of up to $490,000. Patricia Steven also transferred at least $344,700 to Harriette Walters.
The Stevens transferred at least $1,709,500 of these funds into another bank account used primarily by Robert Steven. Using these funds, Robert and Patricia Steven purchased at least four Jaguar cars, a townhouse located in Edgewater, Maryland, and took multiple vacations to the Bahamas.
This case was worked jointly with the Federal Bureau of Investigation; the IRS's Criminal Investigation Division; the Inspector General's Office for the District of Columbia; the D.C. Office of Tax and Revenue, Criminal Investigation Division; and the D.C. Office of the Chief Financial Officer, Office of Integrity and Oversight.
Man Sentenced for False Impersonation of an IRS Agent and Tax Evasion
On September 29, 2008, Michael J. Sabo pled guilty in Nevada to false impersonation of an officer, or employee of the United States and tax evasion. According to court documents, Sabo, under false authority while pretending to be an agent of the Internal Revenue Service (IRS), affirmatively signed and filed three forms which fraudulently purported to release Federal tax liens that the IRS lawfully imposed against his property. Sabo then sold the property, thereby avoiding payment of taxes, and transferred most of the proceeds of the sale to a third party to further evade the payment of his taxes.
On January 9, 2009, Sabo was sentenced to one year and one day in prison and three years of supervised release. He was also ordered to pay $94,909 in restitution.
This case was worked jointly with the IRS's Criminal Investigation division.
Individual Charged With Impersonating an IRS Employee
On December 2, 2008, Lourdes Salazar-Velazquez was indicted in Arizona for one count of False Personation of Employee of the United States. According to the indictment, Salazar-Velazquez pretended to be an Internal Revenue Service (IRS) employee and falsely represented that she was authorized to collect a debt owed to her by garnishing wages and levying property.
Man Convicted in Murder for Hire Plot of IRS Revenue Officer
In July 2008, Randy Nowak was charged in a criminal complaint in Florida, with attempting to kill an IRS Revenue Officer who was engaged in the performance of official duties. According to court documents, in June 2008, Nowak, owner of RJ Nowak Enterprises, Inc., had been asking around to find someone to kill an IRS employee. Nowak sought to kill the IRS employee because she was auditing Nowak and he stood to lose $4,000,000 that he had hidden offshore. Nowak had an outstanding liability to the IRS of approximately $300,000 related to his personal income tax obligations and had four years of outstanding corporate tax returns for his business that he had not filed.
In July 2008, Nowak met with an undercover Federal Bureau of Investigation (FBI) Task Force agent posing as a hit man and paid him $10,000 as a down payment for killing the IRS Revenue Officer. Nowak also asked the undercover agent if he would be willing to burn down the IRS's office in Lakeland.
After a trail by jury, Nowak was convicted in December 2008, of attempting to murder an officer or employee of the United States and using a facility of interstate commerce with the intent that a murder-for-hire be committed.
This case was worked jointly with the FBI.
Individual Sentenced for Conspiracy
On December 18, 2008, Merlinhg Alcantara was sentenced in New Jersey to 5 years imprisonment and 3 years supervised release. Alcantara was also ordered to pay $1,160,865.94 in restitution jointly and severally with other defendants after pleading guilty to one count of conspiracy.
According to court documents and a U.S. Department of Justice press release, Alcantara worked with a number of individuals to acquire mail containing U.S. Treasury checks. Alcantara paid baggage handlers working at Newark Liberty International Airport to steal the mail as it was being transported in the luggage compartment of commercial airliners. To avoid detection, on days in which airport security was conducting inspections, the baggage handlers communicated with each other to advise of the inspections. Baggage handlers hid stolen mail in their clothing and backpacks as they were unloading luggage. They would subsequently remove it from the airport undetected. Alcantara would receive the stolen mail from the baggage handlers. After the Treasury checks were acquired, counterfeit Treasury checks were created, copying five specific characteristics of authentic Treasury checks. Other members of the conspiracy were then given the counterfeit Treasury checks to be negotiated at banks. More than $1 million in counterfeit Treasury checks were negotiated.
As part of the ongoing investigation, Alex Torres and Kenneth Robinson, both baggage handlers working at Newark Liberty International Airport, pled guilty to conspiracy charges. Elaine Acevedo, of the Dominican Republic, who cashed the counterfeit U.S. Treasury checks, pled guilty in Federal court in Orlando, Florida, to one count of bank fraud. She was sentenced to 13 months in prison, 5 years of supervised release, and ordered to perform
150 hours of community service. She was also ordered to pay $76,997 in restitution. Juan Castillo has been charged by complaint and remains at large.
This case was worked jointly with the U.S. Secret Service and the U.S. Postal Inspection Service.
Man Pleads Guilty to Interference with a Federal Employee
On December 12, 2008, Anthony Blasi pleaded guilty in Colorado to interference with a Federal employee. He was sentenced to six months probation and was ordered to pay a $25 special assessment.
According to the sworn affidavit supporting the criminal complaint, Blasi was being interviewed at his residence on August 11, 2008, by two Internal Revenue Service (IRS) agents. During the interview, Blasi became angry and said, "I should have killed you when I first met you." The IRS agents decided to end the meeting. Prior to the IRS agents departing, Blasi said to one of the agents, "If you show up again, I'll start shooting." During a telephone call with one of the IRS agents the next day, Blasi again made a threatening statement.
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