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October 14, 2014

IRS Employee Indicted in Connection with the Electronic Filing of a Fraudulent Tax Return.

On September 18, 2014, in the Middle District of Florida, Internal Revenue Service (IRS) employee Charles Corbitt was indicted for wire fraud in connection with a false Federal tax return. [1] Corbitt was arrested for the offense on August 29, 2014, in Palm Beach, Florida. [2]

According to the court documents, Corbitt knowingly devised a scheme to defraud the Government and to obtain money by use of materially false representations. [3] As part of his scheme, Corbitt prepared and electronically filed, or caused to be filed, a fraudulent tax return for an acquaintance without the individual’s knowledge of its false claims. The individual met Corbitt through a friend and trusted him to accurately prepare the return because he was an IRS employee. [4] Corbitt made multiple false claims for expenses and tax credits on the return in order to maximize the refund amount. The false claims included charitable contributions, Ad Valorem taxes, false business expenses, and a false Residential Energy Credit. [5]

Corbitt did not review the completed return with the individual and did not provide her with a copy of the return. The taxpayer indicated that she did not make any energy improvements to her home during the applicable tax year as indicated on the return, did not tell Corbitt to list the purchases on her return, and did not provide him with any supporting documentation for the claim. Corbitt was not listed as the paid preparer on the tax return; however, he received $300 for its preparation via a split disbursement refund, with Corbitt’s $300 fee deposited into his former girlfriend’s bank account. [6]

Additional judicial action is pending. A trial date has been set for November 3, 2014. [7]

  • [1] M.D. Fla. Indict. filed Sept. 18, 2014.
  • [2] M.D. Fla. Exec. Arrest Warrant filed Sept. 3, 2014.
  • [3] M.D. Fla. Indict. filed Sept. 18, 2014.
  • [4] M.D. Fla. Crim. Compl. filed Aug. 27, 2014.
  • [5] M.D. Fla. Indict. filed Sept. 18, 2014.
  • [6] M.D. Fla. Crim. Compl. filed Aug. 27, 2014.
  • [7] M.D. Fla. Crim. Docket filed Sept. 18, 2014.


  • Former Teacher Sentenced for Interference With the Administration of Internal Revenue Laws and Mail Fraud

    On September 4, 2014, Timothy Forrest Edgar was sentenced in the District of Vermont for interference with the administration of Internal Revenue Laws and mail fraud. [1] Edgar pled guilty to the offenses in May 2014. [2]

    According to court documents, Edgar, a resident of Wolcott, Vermont, was previously employed as a teacher in Rhode Island and in Vermont, earning reportable income as such. From 2002 through 2010, Edgar corruptly endeavored to obstruct and impede the Internal Revenue laws through a number of actions:

  • Filing documents with his employers claiming he was exempt from Federal income tax withholding;
  • Submitting, on six occasions, checks to the Internal Revenue Service (IRS) drawn on accounts where Edgar knew the funds would not be covered;
  • Knowingly filing three false Federal income tax returns, stating he had earned no wages on each and claiming refunds totaling $49,397.37;
  • Sending a series of $1.00 payments to the IRS; and
  • Filing false notices of liens under the Uniform Commercial Code (UCC),in which he claimed that IRS employees involved in the effort to collect his outstanding tax debt personally owed him money.

  • Additionally, between 2008 and 2010, Edgar repeatedly filed fraudulent documents with the Washington County Family Court and the Office of Child Support in an attempt to avoid his monthly child support obligations, and repeatedly sent fraudulent lien notices to the Lamoille County Sheriff’s deputies who attempted to serve him with official notices of on-going Family Court proceedings. Continuing with his intent to defraud, Edgar presented several false and fictitious documents and instruments purporting to be actual financial instruments [3] to the Office of Child Support and to the Sheriff’s office.

    Edgar also devised a scheme to defraud and obtain money by means of false representation, pursuant to which he routinely returned documents served on him by the Family Court with a stamp stating the obligation should be paid by the U.S. Treasury and charged to the judge who issued the child support order. Edgar created documents, including a Notice of Lien, Certificate of Non-Performance, and Notary Certificate of Service, claiming the judge owed him over $50 million and had failed to pay the outstanding debt. In furtherance of his scheme, Edgar prepared a UCC Financing Statement for the State of New Hampshire, purporting to record the over $50 million debt, and mailed a letter to an investment and securities firm offering to sell the lien against the judge. [4]

    After Edgar was indicted in June 2013, the Government presented information indicating that many of Edgar’s beliefs were consistent with “sovereign citizens” ideology. In part, Edgar did not claim ownership to his given name, denied being subject to Internal Revenue laws, stated the Court lacked jurisdiction, and claimed he could not abide by or obey any conditions of release that the Court set because the Court had not proven it had jurisdiction over his biological property or conduct. [5]

    In association with his plea agreement, Edgar agreed to contact the states in which he filed fraudulent liens to seek removal of those liens. He also agreed to file corrected tax returns for tax years 2002 through 2012, and cooperate with the IRS in addressing any outstanding balance due. [6]

    Edgar was sentenced to 13 months in prison, followed by three years of supervised release. [7]

  • [1] D. Vt. Judg. filed Sept. 8, 2014.
  • [2] D. Vt. Plea Agr. filed May 29, 2014.
  • [3] D. Vt. Superseding Indict. filed Jun. 25, 2013.
  • [4] D. Vt. Superseding Indict. filed June 25, 2013 .
  • [5] D. Vt. Stmt. of Reasons filed June 14, 2013.
  • [6] D. Vt. Plea Agr. filed May 29, 2014.
  • [7] D. Vt. Judg. filed Sept. 8, 2014.


  • New Jersey Business Owner Pleads Guilty to Immigration Fraud Scheme.

    On August 28, 2014, in the District of New Jersey, Maxwell Poku pled guilty to a three-count Information charging him with Immigration Fraud, Wire Fraud, and Money Laundering. [1]

    According to the court documents, Poku, a native of Ghana and a naturalized United States (U.S.) citizen, was the President and Chief Executive Officer of Max $ Max Finance and Travel, LLC (Max $ Max). Max $ Max held itself out as a business that provided services in the field of income tax, travel, and immigration consultation to the African community, among other things. [2]

    In exchange for payment, Poku assisted a number of individuals, whom he knew to be residing in the United States illegally, in filing fraudulent immigration documents falsely reflecting that they were married to U.S. citizens. Poku knew the documents contained false representations, and included in the immigration filings false and fraudulent letters of employment, utility bills, credit card statements, and Internal Revenue Service (IRS) Forms W-2, Wage and Tax Statement. [3]

    Poku abused his position of trust as a tax preparer and falsely portrayed himself as a licensed Certified Public Accountant (CPA) in the State of New Jersey on IRS Power of Attorney notices. [4] In furtherance of his scheme to defraud the United States and obtain money under false pretenses, Poku obtained IRS tax return transcripts, which he then manipulated and altered to falsely indicate that immigration filers were married. In some instances, Poku also inflated the amount of income in order to derive certain immigration benefits. After downloading and altering the IRS tax return transcripts, Poku included the fraudulent transcripts in immigration filings, which he then transmitted by means of wire communications. [5]

    Poku used sophisticated means in his scheme to engage in money laundering, including the use of fictitious corporate entities and fake identities. [6] Specifically, Poku obtained an Employer Identification Number (EIN) from the IRS for a business entity named Brian Robinson Equipment Sales, LLC. He incorporated the business in the State of New Jersey and opened a bank account in the business name. Subsequently, Poku deposited a U.S. Treasury tax-refund check in the amount of $115,137.78 into the Brian Robinson Equipment Sales bank account. While the refund check was issued by the U.S. Treasury, the tax return that caused it to be issued was fraudulently filed in the name of a convicted sex offender from Indiana who had not filed a return and was not entitled to the $115,137.78 refund. Poku received the fraudulent refund and converted the funds for his personal use, knowing the funds were embezzled, and knowing the transaction was designed to conceal the nature and source of the proceeds. [7]

    The Government will seek forfeiture of all property used, or intended to be used, in the commission of the offenses, including currency and a number of computers and computer media. Poku could face a maximum of 20-years imprisonment. [8] His sentencing is scheduled for December 9, 2014. [9]

  • [1] D.N.J. Plea Agr. filed Aug. 28, 2014.
  • [2] D.N.J. Info. filed Aug. 28, 2014.
  • [3] Id.
  • [4] D.N.J. Plea Agr. filed Aug. 28, 2014.
  • [5] D.N.J. Info. filed Aug. 28, 2014.
  • [6] D.N.J. Plea Agr. filed Aug. 28, 2014.
  • [7] D.N.J. Info. filed Aug. 28, 2014.
  • [8] D.N.J. Plea Agr. filed Aug. 28, 2014.
  • [9] D.N.J. Crim. Docket filed Aug. 28, 2014.


  • September 16, 2014


    Illinois Man Pleads Guilty to Obstruction of Justice and Retaliating Against Federal Officials


    On July 18, 2014, in the Northern District of Illinois, Tyree Davis, Sr. entered a plea of guilty to two counts of obstruction of justice and two counts of retaliation against Government officials. [1] Davis was indicted for the offenses in July 2013. [2]

    According to the court documents, Davis’s actions were in retaliation for the conviction and imprisonment of LaShawn Yvonne Littrice. Davis and Littrice lived together and he often referred to her as his wife. In 2010, Littrice was convicted for aiding and assisting in the preparation of false tax returns and was sentenced to 42 months in prison. Littrice appealed her conviction and sentence; actions which were ongoing at all times relevant to Davis’s conduct.

    During 2010 and 2011, Davis corruptly endeavored to influence, obstruct, and impede the administration of justice in the matter of United States v. Littrice, by sending correspondence to the Chief Judge in the Northern District of Illinois and the judge presiding over Littrice’s conviction, threatening them with arrest if the Common Law Demand of Release for Littrice was not honored.

    Davis also retaliated against the judges and other Federal officials involved in the proceedings by filing false liens against their personal property. Davis filed liens in the amount of one hundred billion dollars against the two judges, the Assistant United States Attorney responsible for the prosecution of Littrice, and the IRS Special Agent responsible for investigating Littrice. Davis did so on account of the performance of their official duties, knowing the encumbrances were false. Davis listed Littrice as the claimant and referenced her criminal case number. Additionally, Davis sent notices of the liens filed against the judges to other individuals and entities, including the Secretary of State, the Secretary of the Treasury, Members of Congress, Chief Justice John Roberts, and the credit bureaus.

    Davis was arrested for the offenses on July 25, 2013, and was initially released on bond. Less than one week later, Davis engaged in a scheme to obtain and use fraudulent vehicle titles, continuing a pattern of using false documents for personal gain. [6] Davis’s bond was revoked on October 31, 2013, and he was remanded into custody. [7] Davis could face a maximum of ten-years imprisonment. [8] Sentencing is scheduled for November 5, 2014. [9]

    [1] N.D. Ill. Plea Agr. filed Jul. 18, 2014.
    [2] N.D. Ill. Indict. filed Jul. 24, 2013.
    [3] N.D. Ill. Plea Agr. filed Jul. 18, 2014.
    [4] Id.
    [5] Id.
    [6] N.D. Ill. Motion to Revoke Bond filed Oct. 10, 2013.
    [7] N.D. Ill. Criminal Docket filed Jul. 24, 2013.
    [8] N.D. Ill. Plea Agr. filed Jul. 18, 2014.
    [9] N.D. Ill. Criminal Docket filed Jul. 24, 2013.

    Virginia Tax Preparer Sentenced for Preparing False Tax Returns and Falsely Claiming to be a CPA


    On August 21, 2014, Virginia tax preparer Daniel L. Jones was sentenced in the Eastern District of Virginia for aiding in the preparation of false Federal tax returns and making false statements. [1] Jones pled guilty to the offenses in April 2014. [2]

    According to the court documents, Jones, a resident of Stafford, Virginia, owned and operated a tax preparation business in Fredericksburg, Virginia, known as Tax Doctor Plus. In his capacity as a tax preparer, Jones willfully aided in the preparation and filing of fraudulent Federal tax returns presented to the IRS. The returns contained multiple false claims and representations. One return falsely claimed income for an individual who did not work and included a fictitious Form W-2, Wage and Tax Statement, to corroborate the income. Additionally, the returns included fraudulent representations regarding expenses and authorized tax credits for programs such as the Earned Income Tax Credit, the Making Work Pay Credit, the American Opportunity Credit, and the Additional Child Tax Credit.
    [3]

    Furthermore, Jones knowingly, willfully, and unlawfully made a false statement and representation on IRS Form 2848, Power of Attorney and Declaration of Representative, which he submitted to the IRS for a client. Jones falsely declared that he was a Certified Public Accountant (CPA) in the State of Maryland. Form 2848 allows a taxpayer to authorize an individual to represent the taxpayer before the IRS, but the individual must be eligible to practice before the IRS. CPAs are among the categories of representatives eligible to do so. Form 2848 provides for the representative to declare, under penalty of perjury, the appropriate designation authorizing practice before the IRS, thereby allowing the representative to receive and inspect the taxpayer’s confidential tax information and represent the taxpayer before the IRS.
    [4]

    Jones was sentenced to 37-months imprisonment followed by three years of supervised release, and was ordered to pay $598,207 in restitution to the IRS. While on supervised release, Jones is prohibited from engaging in any aspect of the tax preparation business or any similar occupation. He is scheduled to surrender for service of his sentence on October 21, 2014.
    The investigation was worked jointly with IRS Criminal Investigation.

    [1] E.D. Va. Judgment filed Aug. 26, 2014.
    [2] E.D. Va. Plea Agr. filed Apr. 29, 2014.
    [3] E.D. Va Crim. Info. filed Apr. 3, 2014.
    [4] Id.
    [5] E.D. Va. Judgment filed Aug. 26, 2014.



    Former IRS Employee Pleads Guilty to Identity Theft Conspiracy Using Taxpayer Information



    On July 25, 2014, in the Western District of Missouri, former IRS employee Taylor Knight pled guilty to conspiracy to defraud the United States Government. [1] Co-defendant Michael Moore (no relation to the actor) also pled guilty on August 6, 2014, to the same offense. [2] Knight, Moore, and a third defendant, Michael Stalcup, were indicted in March 2014 for conspiracy, aggravated identity theft, theft of Government funds, mail fraud, and misuse of a Social Security Number. [3]

    According to court documents, the charges stemmed from an elaborate scheme in which Knight abused her position of trust as an IRS employee to access taxpayer information in furtherance of various Federal offenses. Between approximately March 2009 and January 2012, Knight worked for the IRS in Kansas City, Missouri.
    [4]

    Knight inappropriately accessed information maintained by the IRS for three taxpayers, in each case for her personal reasons and not for official Government business. The defendants then used the identifications of these three taxpayers to fraudulently induce the IRS into issuing tax refund payments. The defendants assumed the identities of the taxpayers in order to fraudulently obtain refunds and then converted and/or attempted to convert those payments for their personal use.
    [5]

    As part of the conspiracy, Knight accessed the records of one of the taxpayers and then submitted a false online application for a prepaid debit card. The card was approved and mailed to an address in Missouri. Knight submitted this false online application to test whether her scheme was viable.
    [6]

    In furtherance of the scheme, in September 2011, Knight accessed the tax accounts of the other two victims and then submitted a bogus online application for three prepaid debit cards in the names of the taxpayers, a married couple. These cards were mailed to a Missouri address belonging to co-defendant Michael Moore’s grandmother. Knight and Moore were romantically involved at the time and agreed to use this address to conceal Knight’s role in the conspiracy. Moore monitored the mail sent to his grandmother’s address and retrieved the three prepaid debit cards.
    [7]

    The conspirators then filed a fraudulent tax return via the Internet using the victims’ names and seeking a refund of $21,163. Because the bogus tax return underreported the true tax payments of the victims, the IRS approved a refund in the amount of $46,572. The IRS deposited $5,000 onto one of the debit cards Knight had obtained in the victim’s name. The IRS attempted to deposit the remaining $41,572 refund on the other debit cards, but the receiving banks rejected the deposits. In early December 2011, at Knight’s request and with her assistance, Moore telephoned the IRS and falsely claimed to be the victim taxpayer in order to change the address of record. Moore requested that the outstanding refund amount be mailed to a new address in Missouri. Moore had previously resided at the address and knew it was unoccupied at the time.
    [8]

    The victims filed legitimate amended returns for previous tax years, and the IRS issued the couple a refund check in the amount of $46,734.20 around December 30, 2011. However, since the IRS had already processed Moore’s address change request, the Treasury check was mailed to the address provided by Moore, where Moore retrieved the check.
    [9]

    In order to assume the identity of the female victim, Knight obtained false identification documents, including a Social Security card, Visa® debit card, MasterCard® debit card, and fraudulent Missouri and New York driver’s licenses bearing the name of the victim but a photograph of Knight. Additionally, Knight obtained counterfeit documents in the name of the male victim that displayed a photograph of Moore.
    [10]

    Knight then requested the assistance of her acquaintance, Michael Stalcup, in getting the fraudulent $46,734.20 Treasury check cashed. She offered to pay Stalcup $500 for his assistance. Stalcup, who knew the check was payable to the victim taxpayers and was aware Knight had fraudulently obtained the check, agreed to assist her.
    [11]

    In January 2012, Knight and Stalcup attempted to cash the Treasury check at an Express Mart using the fraudulent identification items in the victims’ names. Stalcup even encouraged the clerk to cash the check by making a statement to the effect that, “We only need $40,000 out of it. Yes, we’ll give you $6,000.”

    Express Mart refused to cash the check and reported the incident to law enforcement.
    [12]

    Additional legal actions are pending against the defendants. Knight has been in custody since April 2014, when her bond was revoked for reported violations.
    [13] Knight and Moore could face up to five years in prison for the conspiracy. [14] A sentencing date has not been set.

    [1] W.D. Mo. Plea Agr. Taylor Knight filed July 28, 2014.
    [2] W.D. Mo. Plea Agr. Michael Moore filed Aug. 7, 2014.
    [3] W.D. Mo. Indict. filed Mar. 19, 2014.
    [4] Id.
    [5] Id.
    [6] Id.
    [7] W.D. Mo. Plea Agr. Taylor Knight filed July 28, 2014.
    [8] W.D. Mo. Indict. filed Mar. 19, 2014.
    [9] Id.
    [10] Id.
    [11] Id.
    [12] Id.
    [13] W.D. Mo. Bond Hearing filed Apr. 17, 2014.
    [14] W.D. Mo. Plea Agr. Taylor Knight filed July 28, 2014; W.D. Mo. Plea Agr. Michael Moore filed Aug. 7, 2014.

     

    August 18, 2014

    IRS Employee Sentenced for Orchestrating Identity-Theft Refund Scheme Using Taxpayer Records

    On June 5, 2014, in the Northern District of Georgia, Internal Revenue Service (IRS) Tax Examining Technician [1] Missy Sledge was sentenced for aggravated identity theft and mail fraud. Sledge pled guilty to the offenses in February 2014. [2]

    According to court documents, as part of her official IRS duties, Sledge had access to taxpayers’ personal identifiers, including names, Social Security Numbers (SSN), dates of birth, and addresses, as well as information about tax professionals. Sledge used this access in furtherance of an identity theft scheme which included the filing of fraudulent tax returns and the subsequent theft of refunds. [3] With information from IRS computer systems, Sledge provided taxpayers’ personal information to her coconspirators. [4]

    It was part of the scheme that others would file fraudulent tax returns with the IRS using the stolen identities of various taxpayers. Sledge used her IRS computer to review the fraudulent returns submitted to determine if she could release fraudulent tax refunds from those returns. When identified, Sledge would release the fraudulent refund for payment. Sledge further assisted those involved in the scheme to impersonate either the taxpayers or their authorized representatives, so that the taxpayers’ addresses of record could be changed to a fictitious address accessible to Sledge or others involved in the scheme. Sledge then caused the IRS to mail refunds in the taxpayers’ names to the fictitious address to be intercepted or stolen. [5]

    On May 21, 2013, an individual was arrested in Texas and found to be in possession of an IRS refund check in the amount of $595,901.97, along with three pages of internal IRS documents containing tax information for one of the identity-theft victims. A review of IRS systems revealed Sledge made accesses to this taxpayer’s account, as well as to the taxpayer’s accountant’s information, on seven dates between February 2013 and May 2013. The victim was due a large refund because she had overpaid her estimated taxes. One of the perpetrators used the accountant’s information and Government-issued representative number to impersonate the tax practitioner in a telephone communication with the IRS on March 5, 2013, to change the address on record from a North Carolina address to an address in Atlanta, Georgia. Sledge then released the $595,901.97 refund to the fictitious address. [6]

    On May 23, 2013, an e-mail was sent from Sledge’s IRS e-mail account containing the personal information for two other taxpayers, a married couple. The e-mail included the taxpayers’ names, SSNs, dates of birth, address, and tax preparer’s information. A subsequent telephonic address change was made, changing the address of record from the taxpayers’ Massachusetts address to a Georgia address, and a refund in the amount of $961,779.33 was paid on or about May 31, 2013. Review of the IRS systems identified accesses to the taxpayers’ accounts by Sledge on May 23, 2013 and again in June 2013. [7]

    Multiple communications were identified to and from Sledge’s IRS e-mail account on dates between May 2013 and September 2013, relaying taxpayer information and/or internal IRS documents for up to 56 taxpayers to Sledge’s coconspirators. Text messages containing taxpayer information and discussing the theft of Government funds were also identified. In one message she sent to an individual she was trying to recruit as a coconspirator, Sledge told the recipient she had a business proposition for him and indicated she had a plan to change the addresses so checks would come to him. Sledge offered to split the scheme proceeds three or four ways, depending on the number of people involved. Sledge said she would give him all the information needed to get the address changed without any problems or questions and said, “All of this money is just sitting here for the taking.” [8]

    Sledge was sentenced to 57-months imprisonment, followed by five years of supervised release. Sledge was also ordered to pay restitution to the IRS in the amount of $501,048.40. [9]

  • [1] N.D. Ga. Crim. filed Nov. 25, 2013.
  • [2] N.D. Ga. Judgment filed June 5, 2014.
  • [3] N.D. Ga. Indict. filed Dec. 10, 2013.
  • [4] N.D. Ga. Crim. Compl. filed Nov. 25, 2013.
  • [5] N.D. Ga. Indict. filed Dec. 10, 2013.
  • [6] N.D. Ga. Crim. Compl. filed Nov. 25, 2013.
  • [7] Id.
  • [8] Id.
  • [9] N.D. Ga. Docket filed Dec. 10, 2013.




  • IRS Data-Entry Clerk Sentenced for Identity-Theft Scheme Using IRS Documents

    On July 7, 2014, in the Eastern District of California, IRS employee Monica Hernandez was sentenced for Making and Subscribing a False Income Tax Return, Wire Fraud, and Aggravated Identity Theft. [1] Hernandez pled guilty to the offenses in January 2014. [2]

    According to court documents, at all times relevant to the offenses Hernandez was employed as a part-time data entry clerk at the IRS Fresno Service Center in Fresno, California. As part of her duties, Hernandez regularly handled and processed tax returns on behalf of the IRS by entering taxpayers’ tax information into the IRS computer system. During the course of her IRS employment, Hernandez stole tax information in order to file fraudulent tax returns and claim large tax refunds.

    Specifically, Hernandez stole taxpayers’ Forms 1099-B, which list income received and moneys withheld from interest and dividend earnings. Hernandez then falsified and forged the Forms 1099 to reflect her personal information and filed her own tax returns claiming the information from the forged 1099s in the form of excessive withholdings. [3]Between 2007 and 2009, Hernandez filed three false tax returns for herself using this method and obtained refunds from the IRS in the amount of $175,144. [4]

    Starting on or around February 2010, Hernandez began to file a new series of fraudulent tax returns, falsely claiming excessive withholdings. However, this time she used the personal information belonging to other individuals, rather than her own, to obtain the large refunds. Hernandez initially acquired the identification information of some of the individuals, including deceased persons, from sites on the Internet. She also used the identity of a relative to file one false return and subsequently opened a bank account in the relative’s name in order to deposit the fraudulently obtained refund check. [5]

    In continuance of her scheme, Hernandez illegally acquired and removed 68 separate tax returns from the IRS Service Center in Fresno, California. These returns had been received by the IRS, but had not yet been entered into the IRS computer system. The stolen tax returns contained the names, Social Security Numbers, addresses, and other pertinent data associated with the taxpayers. Hernandez then proceeded to file fraudulent tax returns electronically for her own benefit, using the identification of some of these taxpayers, and claimed excessive withholdings from dividends and interest income in order to increase the amount of the refunds. Hernandez filed approximately ten tax returns in which she attempted to claim refunds totaling $1,745,013. [6]

    Hernandez was sentenced to 53-months imprisonment, followed by three years of supervised probation. Additionally, Hernandez was ordered to pay restitution to the IRS in the amount of $175,144. [7]

  • [1] E.D. Cal. Judgment filed July 8, 2014.
  • [2] E.D. Cal. Plea Agr. filed Jan. 3, 2014.
  • [3] Id.
  • [4] E.D. Cal. Indict. filed Apr. 14, 2011.
  • [5] E.D. Cal. Plea Agr. filed Jan. 3, 2014.
  • [6] E.D. Cal. Plea Agr. filed Jan. 3, 2014.
  • [7] E.D. Cal. Judgment filed July 8, 2014.


  • IRS Employee Arrested in $1 Million Identity Theft Conspiracy

    On July 18, 2014, IRS employee Viririana Hernandez and coconspirators Roberto Martinez, Jr. and Lilliana Gonzales were arrested in Fresno, California. [1] The three, along with co-defendant Daniel Miranda, Jr., were indicted in the Eastern District of California on July 17, 2014, for conspiracy, wire fraud, bank fraud, and aggravated identity theft. Miranda was also charged with mail fraud. [2]

    According to court documents, the four engaged in an identity-theft conspiracy using the personal information of victims obtained through various methods, including IRS personnel records. Hernandez has been employed by the IRS in Fresno since 2006, working in a variety of administrative positions, some of which allowed her access to human resource files on other IRS employees. From at least June 2012 through at least January 2014, Hernandez, Miranda, Martinez, and Gonzales conspired to defraud retail merchants, cardholders, and banks to obtain money, services, and property under fraudulent pretenses. As part of the conspiracy, Hernandez mined IRS databases for personal information, such as dates of birth and Social Security Numbers belonging to current and former IRS workers, and made such information available for use by the other conspirators. By October 2012, defendant Miranda possessed the personal information of approximately 288 current and former IRS employees. The defendants also obtained personal information through a number of employment applications for a franchise restaurant. [3]

    Once in possession of some initial personal information, the conspirators sought to obtain additional information, including details of credit cards and other financial accounts. They then used the personal information to fraudulently open new financial accounts in the victims’ names or to fraudulently gain access to the victims’ existing financial accounts, often by adding themselves as authorized users. The conspirators made a myriad of fraudulent purchases using this method of access to their victims’ bank and store credit accounts. The defendants also used their wrongful access to get cash advances from ATMs and in-person bank transactions. On at least two occasions, the victim’s personal data, including name, date of birth, address, and specific store-credit account information was sent via text to IRS employee Hernandez. On one such occasion, the same day that she received the victim’s account information by text, Hernandez subsequently used it to purchase three Gucci watches at Macy’s totaling $3,348.89. [4] 

    To avoid detection and maximize the amount of money, goods, and services they could obtain, the conspirators often made numerous purchases on the accounts in a short amount of time before their fraud was discovered and the accounts were suspended. They also used the victims’ accounts to purchase gift cards or to purchase merchandise and then return the merchandise for store credit. This allowed the defendants to continue to use gift cards or store credit even if a victim had cancelled access to the credit card. [5] 

    In total, the conspiracy involved at least 160 victims and fraudulent attempts to obtain over $1 million in goods and services. The defendants, if convicted, could face a maximum sentence of 30 years in prison. [6]

  • [1] E.D. Cal. Executed Arrest Warrants for Viririana Hernandez, Roberto Martinez, Jr., and Lilliana Gonzales filed July 23, 2014.
  • [2] E.D. Cal. Indictment filed July 17, 2014.
  • [3] Id.
  • [4] Id.
  • [5] Id.
  • [6] Id.


  • July 21, 2014


    Rhode Island Man Found Guilty for Threatening to Murder an IRS Employee and Family Member

    On May 23, 2014, in the District of Rhode Island, Andrew Calcione was found guilty in a bench trial [1] for retaliating against a Federal official with threats and for threatening the official’s family member. [2]

    According to court documents, Calcione knowingly and intentionally threatened to assault and murder an Internal Revenue Service (IRS) Revenue Agent, as well as the Revenue Agent’s immediate family member. Calcione made such threats with the intent to impede, intimidate, and interfere with the official duties of the IRS employee and to retaliate against the employee on account of the employee’s performance of official IRS business. [3]

    An IRS examination of Calcione’s 2008-2010 Federal tax returns had resulted in an estimated tax liability of $300,000. Calcione previously operated his own insurance and financial services business in Rhode Island, but the Rhode Island Department of Business Regulation had taken action against his Insurance Producer’s License. A few days after Calcione was contacted by the IRS Revenue Agent regarding the ongoing examination of his tax returns, Calcione left a voice mail message that contained threatening statements on the Revenue Agent’s business telephone. The threat was clear, unambiguous, and frighteningly detailed. In summary, Calcione said he was going to show up where the Revenue Agent lives the next time he called. The message further contained a threat to torture the Revenue Agent, rape and kill his wife, then murder his child in front of him, all before ultimately killing the Revenue Agent. [4]

    Calcione’s sentencing is scheduled for September 11, 2014. [5]

  • [1] D R.I. Docket filed Jan. 15, 2014.
  • [2] D R.I. Indict. filed Jan. 15, 2014.
  • [3] Id.
  • [4] D R.I. Government’s Pretrial Memorandum filed Apr. 30, 2014.
  • [5] D R.I. Docket filed Jan. 15, 2014.


  • Ohio Accountant Pleads Guilty to Impeding the Internal Revenue Laws and Schemes to Defraud His Clients

    On June 10, 2014, in the Eastern District of Pennsylvania, accountant Andrew Zelenkofske entered a guilty plea for interfering with the administration of the Internal Revenue laws, wire fraud, mail fraud, and engaging in monetary transactions in property derived from specified unlawful activity. [1] Zelenkofske was charged with the offenses on January 9, 2014, [2] and June 3, 2014, [3] in associated cases.

    According to court documents, from approximately 2009 through 2013, Zelenkofske engaged in various schemes to defraud individuals to obtain money by means of false and fraudulent pretenses and representations, and to obstruct the due administration of the Internal Revenue laws. [4]

    Zelenkofske, a resident of Ohio, provided tax and accounting services to individuals, including the preparation of Federal and State income tax returns. Some of Zelenkofske’s clients were Pennsylvania residents. In November 2013, Zelenkofske had a power of attorney to represent a Pennsylvania couple before the IRS. After the IRS issued a levy to a financial firm in the amount of $91,193.53 for taxes owed by the couple, Zelenkofske corruptly endeavored to impede the Internal Revenue laws by transmitting, via e-mail, a falsified IRS Form 668-D, Release of Levy, purportedly removing the levy from the couple’s account. Zelenkofske did so knowing the IRS had not authorized the release of the levy.

    Prior to this, around April 2011, Zelenkofske devised a scheme to defraud another Pennsylvania client, a senior citizen with little experience managing financial matters. Zelenkofske falsely represented that the client owed the IRS a substantial amount of taxes, and directed the client to send him multiple payments for the purported taxes. Zelenkofske kept all of the money received from the victim and used it for his own personal and business expenses, defrauding the client of approximately $237,050.

    Zelenkofske also identified start-up businesses as investments for his clients and business associates. In 2003, Zelenkofske recruited four individuals to invest in a start-up retailer in Philadelphia, Pennsylvania called Five Below, Inc. Zelenkofske and the other four individuals each contributed $40,000 towards the investment. In 2010, when Five Below issued a dividend check in the amount of $704,556.58 to the investors, Zelenkofske received and deposited the check as the managing member of the holding company, but concealed the payment from the other investors, misrepresenting he did not receive it. When confronted about the dividend payment, Zelenkofske admitted its receipt and entered into an agreement to repay the four victims approximately $563,520. He repaid a portion of the debt; leaving approximately $137,254 the victims were defrauded. [5]

    In another scheme, Zelenkofske solicited, and received, $650,000 from individuals for a purported investment opportunity in a biotechnology company. Rather than using the funds as he represented, Zelenkofske used the money to finance his own personal and business expenses, as well as using $200,000 of the funds for an investment in the start-up company in his own name. [6]

    Zelenkofske’s sentencing is scheduled for September 26, 2014. [7]

  • [1] E.D. Pa. Crim. Docket filed June 3, 2014; E.D. Pa. Crim. Docket filed Jan 9. 2014.
  • [2] E.D. Pa. Indict. filed Jan. 9, 2014.
  • [3] E.D. Pa. Info. filed June 3, 2014.
  • [4] E.D. Pa. Indict. filed Jan. 9, 2014; E.D. Pa. Info. filed June 3, 2014.
  • [5] E.D. Pa. Info. filed June 3, 2014.
  • [6] E.D. Pa. Indict. filed Jan. 9, 2014.
  • [7] E.D. Pa. Crim. Docket filed June 3, 2014.


  • IRS Employee Pleads Guilty to Filing a False Federal Tax Return

    On June 17, 2014, in the Eastern District of Pennsylvania, IRS employee Lora Lewis pled guilty to filing false Federal tax returns. [1] Lewis was charged with the offense on April 15, 2014.

    According to court documents, Lewis, while employed as an IRS contact representative in Philadelphia, Pennsylvania, made various false claims on her tax returns for tax years 2007 through 2011. During tax years 2007 through 2011, Lewis received unemployment compensation while employed full time at the IRS, but did not report such compensation on her tax returns. During the same tax years, Lewis filed her returns claiming “Head of Household” status, thereby increasing her standard and other deductions by $16,059 in total. She also claimed Earned Income Tax Credits each year to which she was not entitled in the amount of $11,961. Other facts related to the offense include the following:

    Tax Year 2008, Lewis claimed the $7,500 First Time Homebuyers Credit; even though she did not purchase a home.

    tax years 2009 through 2011, Lewis claimed education credits to which she was not entitled totaling $5,600.

    tax years 2008, 2010, and 2011, Lewis received distributions from her Thrift Savings Plan in the amount of $8,144, but did not report the distributions as income and repay such funds.

    tax years 2008 through 2011, Lewis claimed Individual Retirement Account (IRA) deductions in the amount of $5,000, thereby lowering her taxable income each year, knowing that she did not have an IRA.

    2009, Lewis claimed on her income tax return that she purchased an automobile, although she did not purchase a vehicle. [2]

    Lewis’ sentencing is scheduled for October 2, 2014. [3]

  • [1] E.D. Pa. Criminal Docket filed Apr. 15, 2014.
  • [2] E.D. Pa. Information filed Apr. 15, 2014.
  • [3] E.D. Pa. Criminal Docket filed Apr. 15, 2014.


  • Virginia Business Owner Sentenced for Corrupt Interference with Internal Revenue laws

    On June 12, 2014, in the Eastern District of Virginia, business owner Leslie Davis was sentenced for corrupt interference with Internal Revenue laws. [1] Davis pled guilty to the offense in March 2014. [2]

    According to court documents, Davis owns and operates James River Concrete, Inc., (“JRC”) in Henrico, Virginia. From about 2008 through 2012, JRC failed to file Form 940, Employer’s Annual Federal Unemployment Tax Return, and Form 941, Employer’s Quarterly Federal Tax Return, and did not pay approximately $400,000 owed in Federal employment taxes.

    Consequently, the IRS placed liens on some of JRC’s assets and issued levies on its bank accounts and accounts receivable from numerous customers. After the IRS issued levies to three companies owing money to JRC, all three subsequently received IRS Form 668D, Release of Levy, via facsimile. Two of the companies believed the IRS had released its levy and paid the funds due directly to JRC.

    Another company contacted the IRS to verify the release. When Davis found out the company called the IRS, he admitted the levy release was forged. By virtue of the forged levy releases, Davis obtained $25,482.64 that was rightfully subject to a tax levy to be paid to the IRS. [3]

    Davis was sentenced to three years of supervised probation and ordered to pay full restitution to the IRS in the amount of $25,482.64.

  • [1] E.D. Va. Judgment filed June 12, 2014.
  • [2] E.D. Va. Plea Agr. filed Mar. 5, 2014.
  • [3] E.D. Va. Stat. of Facts filed Mar. 5, 2014.


  • Indiana Man Pleads Guilty to Impersonation of an IRS Official and Wire Fraud in Investment Scheme

    In the Eastern District of Virginia, Timothy Coughlin pled guilty to a two-count Criminal Information on June 25, 2014, for impersonation of a Federal official and wire fraud. [1]

    According to court documents, Coughlin, who was a resident of Indianapolis, Indiana, created Oxford International Credit Union and Oxford International Cooperative Union [2] for purported online investments and devised a scheme to obtain money from investors by means of false representations. [3] Through website postings and audio recordings, Coughlin fabricated, or caused others to fabricate, information related to the businesses, the investments, and even his background. Coughlin was touted by his associates as a decorated United States Navy pilot with an extensive military background, when in fact, he never served in any military branch of the United States.

    By 2009, approximately $12.8 million had been invested in Oxford International Credit Union. Coughlin initially told investors they could withdraw money whenever they wanted to do so, but later, as the sole approving authority, Coughlin ceased withdrawals and began telling his associates and investors that the taxing authorities in the United States and Canada were freezing the assets related to both of the businesses. [4]

    In continuation of his scheme, in early 2012, Coughlin knowingly and falsely pretended to be an IRS employee. In a document in the form of a private letter memorandum purportedly between the IRS and Oxford International Credit Union, Coughlin indicated that an agreement had been reached with the taxing authorities. [5] The agreement presented was a fictitious document that Coughlin had drafted containing the forged signature of an actual IRS employee in Washington, D.C. [6]

    As part of his plea, Coughlin agreed to make full restitution to the victims, who currently consist of approximately 5,000 people with losses estimated between $8 million and $11 million.

    Coughlin could face a maximum of 20-years imprisonment. [7] His sentencing is scheduled for September 26, 2014. [8]

  • [1] E.D. Va. Plea Agr. filed June 25, 2014.
  • [2] E.D. Va. Stat. of Facts filed June 25, 2014.
  • [3] E.D. Va. Crim. Info. filed June 25, 2014.
  • [4] E.D. Va. Stat. of Facts filed June 25, 2014.
  • [5] E.D. Va. Crim. Info. filed June 25, 2014.
  • [6] E.D. Va. Stat. of Facts filed June 25, 2014.
  • [7] E.D. Va. Plea Agr. filed June 25, 2014.
  • [8] E.D. Va. Crim. Docket filed June 17, 2014.


  • June 30, 2014


    Oakland Woman Indicted for Claiming to be an IRS Special Agent in Connection with Her Scheme

    On May 16, 2014, in the Northern District of California, an indictment was unsealed [1] charging Leah Shelbourne-Turner with Impersonation of an Officer of the United States, Aggravated Identity Theft, Mail Fraud, and Wire Fraud.

    According to the indictment, Shelbourne-Turner, a resident of Oakland, devised a scheme to obtain money by means of fraudulent representations and demands, and used the identities of others to file false tax returns for refunds. As part of her scheme, Shelbourne-Turner pretended to be an IRS Special Agent working at the Ronald V. Dellums Federal Building in Oakland, California, and used such representation to obtain means of identification, demand fees, and file fraudulent income tax refunds. Shelbourne-Turner presented herself to be “licensed” and claimed to run a tax return business out of her apartment.

    Using her alias as an IRS Special Agent, Shelbourne-Turner obtained clients at her apartment complex and a laundromat, and through referrals. She charged her preparation fees directly from the tax refund or by wire transfer, or directed the IRS to deposit the refunds into her account, so she would receive the funds instead of her clients.

    Shelbourne-Turner further used identification obtained from clients to file false Federal income tax returns with the IRS. In February 2011 and February 2012, Shelbourne-Turner filed, electronically and by mail, three such false tax returns claiming over $14,300 in fraudulent refunds. When one of the individuals confronted Shelbourne-Turner about her missing tax refund, Shelbourne-Turner pretended to be a United States Marshal, stating that she had a gun, and took the victim to the Federal building to show her where her refund was paid.

    Shelbourne-Turner could face a maximum of 20 years in prison for the offenses. [2] Additional legal actions are pending.

  • [1] N.D. Cal. Docket filed Apr. 15, 2014.
  • [2] N.D. Cal. Indict. filed Apr. 15, 2014.


  • California Man Found Guilty for Retaliating Against IRS Employees

    On May 27, 2014, in the Eastern District of California, James O. Molen was found guilty on all counts of a 2012 Indictment. [1] The five-count Indictment charged Molen with retaliating against Federal officers, corruptly impeding the due administration of the Internal Revenue laws, and contempt of court. [2]

    According to court documents, from 2003 to 2010, Molen, a resident of Chico, California, corruptly endeavored to impede the due administration of the Internal Revenue laws by recording liens against Federal judges and Executive Branch employees, making false and frivolous statements to the IRS, and offering a fictitious instrument as payment to the IRS, among other things.

    Molen retaliated against two IRS Revenue Officers by filing false liens and encumbrances against their personal property in public records. Molen did so because of the Revenue Officers’ performance of their official duties, knowing the liens and encumbrances were false and fictitious. Additionally, Molen filed Uniform Commercial Code Financing Statements with the California Secretary of State, purporting to secure debts owed by the same two IRS Revenue Officers. [3]

    The contempt of court charges against Molen stemmed from a 2007 civil judgment, wherein he was permanently forbidden from filing any documents or instruments that purported to create a nonconsensual encumbrance against a Government employee. [4] Molen knowingly and willfully disobeyed this order by filing documents against the IRS Revenue Officers in February 2010. [5]

    Molen was remanded to custody upon the conclusion of trial. His sentencing is scheduled for August 21, 2014. [6]

  • [1] E.D. Cal. Verdict filed May 27, 2014.
  • [2] E.D. Cal. Indictment filed Jul. 12, 2012.
  • [3] Id.
  • [4] E.D. Cal. Order filed Feb. 26, 2007 Re: 2:06-cv-00a614-LKK-KJM.
  • [5] E.D. Cal. Indictment filed Jul. 12, 2012.
  • [6] E.D. Cal. Verdict filed May 27, 2014.


  • June 16, 2014


    Former IRS Employee Sentenced for Conspiracy to Commit Passport Fraud

    On April 11, 2014, in the Southern District of Texas, former IRS employee Temi Russell was sentenced for conspiracy to commit passport fraud. [1] Russell pled guilty to the offense in April 2013. [2]

    From October 11, 2007 through September 2, 2010, Russell and a coconspirator, Nyle Churchwell, worked at a Federal building in Houston, Texas. [3] Russell was an IRS Tax Examiner and Churchwell was a Senior Fraud Adjudication Manager for the Houston Passport Agency. [4] Russell introduced another coconspirator, Lorna Brown, to Churchwell. [5]

    As part of the scheme, Brown, who was found guilty of aiding and abetting in this matter, [6] brought non-U.S. citizens to the passport office to get false U.S. passports. [7] Russell and Churchwell assisted applicants with false passport applications. Churchwell then approved false passports knowing that the documents and witness information submitted was false. [8] After the passports were processed, Russell would pick up and deliver them to the subjects. [9]

    Russell was sentenced to five years of probation, including six months of home detention, and was fined $1,000. [10]

  • [1] S.D. Tex. Judgment filed Apr. 11, 2014.
  • [2] S.D. Tex. Plea Agr. filed Apr.5, 2013.
  • [3] S.D. Tex. Plea Agr. filed Apr. 5, 2013; S.D. Tex. Superseding Indict. filed Sept. 5, 2012.
  • [4] S.D. Tex. Superseding Crim. Indict. filed Sept. 5, 2012.
  • [5] S.D. Tex. Plea Agr. filed Apr. 5, 2013.
  • [6] S.D. Tex. Order for Presentence Investigation and Disclosure & Sentencing Dates filed Sept. 5, 2012; S.D. Tex. Superseding Crim. Info. filed Aug. 23, 2012.
  • [7] S.D. Tex. Plea Agr. filed Apr.5, 2013.
  • [8] S.D. Tex. Superseding Crim. Indict. filed Sept. 5, 2012.
  • [9] S.D. Tex. Plea Agr. filed Apr. 5, 2013.
  • [10] S.D. Tex. Judgment filed Apr. 11, 2014.


  • Former Orthodontist Sentenced for Interference with the IRS and False Claims for Refunds

    On April 21, 2014, in the Northern District of New York, Glenn R. Unger was sentenced for obstructing and impeding the IRS by submitting false claims for refunds, tax evasion, and submitting fictitious obligations. [1] A jury found Unger guilty of the offenses on October 21, 2013. [2]

    According to court documents, Unger, a former orthodontist, corruptly obstructed and impeded the due administration of Internal Revenue laws through fraudulent and obstructive acts from at least 2007 through 2011. Unger filed 14 false and fraudulent claims with the IRS requesting refunds totaling approximately $36 million. One of the primary tax schemes Unger used was the 1099-Original Issue Discount scheme. The IRS notified Unger in several letters that his returns were frivolous and subject to a $5,000 penalty per frivolous return. Subsequently, the IRS assessed multiple frivolous filing penalties against Unger. Additionally, the IRS assessed Unger for taxes he owed on income for tax years 2005 and 2006. [3]

    When Unger was contacted by the IRS revenue officer assigned to collect the taxes due and owing, he submitted documentation with constitutional arguments meant to impede and impair the IRS from collecting his taxes due. After unsuccessful attempts to collect the taxes, penalties, and interest from Unger, the IRS filed a tax lien against him in the amount of $116,410.43. [4] Unger subsequently filed false documentation with the Saratoga County Clerk’s Office, specifically a “Presentment by Notary Public of Certificate for Filing,” attempting to release the Federal tax lien, indicating it had been resolved. [5]

    From the late 1990's through at least the middle of 2006, Unger practiced as an orthodontist at Columbia County Orthodontics in Chatham, New York. In the spring of 2006, Unger approached a nearby orthodontist and requested that he complete the orthodontic care for approximately 80 of Unger’s patients. Unger failed to reveal that all of those patients had already prepaid for their services. After the orthodontist requested payment for the work, Unger attempted to pay off the debt with a false “Secured Promissory Note.” The note was for the amount of $200,000 and claimed it would pay the Secretary of the Treasury the full amount, and that the same amount would then be paid to the orthodontist as the “fiduciary” on the note. When the orthodontist attempted to deposit the note at his bank, he found it was worthless. Unger also filed the fictitious promissory note, along with other documents, with the Albany County Clerk’s Office in an apparent attempt to have a public filing which reflected the purported payment to the other orthodontist. [6]

    Unger was sentenced to a total term of imprisonment of 97 months, followed by three years of supervised release. Unger was ordered to pay $200,000 in restitution and all taxes, penalties, and interest due to the IRS.

  • [1] N.D.N.Y. Judgment filed Apr. 24, 2014.
  • [2] N.D.N.Y. Verdict filed Oct. 21, 2013.
  • [3] N.D.N.Y. United States Trial Memorandum filed Oct. 2, 2013.
  • [4] Id.
  • [5] N.D.N.Y. Indict. filed Dec. 19, 2012.
  • [6] N.D.N.Y. United States Trial Memorandum filed Oct. 2, 2013.


  • Oregon Man Sentenced for Making False Claims and Retaliating Against Federal Officials

    On April 16, 2014, in the District of Oregon, Mark Ellis was sentenced for making false claims to the IRS and retaliating against a Federal law enforcement office. [1] Ellis pled guilty to the offenses in August 2013. [2]

    According to court documents, Ellis, a resident of Bend, Oregon, used and promoted illegal debt termination programs in an attempt to fraudulently cancel his and others’ debts, including home mortgages and credit card bills, and to falsely obtain tax refunds to which he and others were not entitled. Specifically, Ellis purchased and used trusts to illegally hide income and assets from the IRS, and filed false Forms 1099-OID (known as IRS Original Issue Discount forms) and false Federal tax returns, causing the IRS to issue him a tax refund in the amount of $311,459.56. [3]

    In retaliation against Federal officials, Ellis filed several false liens in public records against the real and personal property of former Secretary of the Treasury Timothy Geithner and two other Federal employees, on account of the performance of their official duties, knowing such liens contained false and fictitious representations. [4]

    Ellis was sentenced to 12-months and one-day imprisonment and was ordered to pay restitution to the IRS in the amount of $311,459.56. He was further ordered to submit true and accurate returns for tax years 2004 through 2013 and pay all associated taxes due. Ellis is scheduled to surrender to the Bureau of Prisons on June 16, 2014. [5]

  • [1] D. Or. Judgment filed Apr. 18, 2014.
  • [2] D. Or. Plea Agreement filed Sep. 11, 2013.
  • [3] D. Or. Indictment filed Feb. 20, 2013.
  • [4] Id.
  • [5] D. Or. Judgment filed Apr. 18, 2014.


  • Joint Investigations

    The following information are joint investigations conducted by TIGTA and the U.S. Attorneys Offices.

    Cranston Man Convicted of Threatening to Assault and Kill IRS Agent and Family

    (May 26, 2014)

    The following information was released by the United States Attorney's Office for the District of Rhode Island:

    U.S. District Court Chief Judge William E. Smith on Friday found Andrew A. Calcione, 49, of Cranston, guilty of one count each of threatening to assault and murder an IRS revenue agent and threatening to assault and murder the agent's family, announced United States Attorney Peter F. Neronha; J. Russell George,

    Treasury Inspector General for Tax Administration; and Robert E. O'Malley, Special Agent in Charge, Treasury Inspector General for Tax Administration, New York Field Division.

    Chief Judge Smith delivered his verdict after taking under advisement testimony presented in a jury waived trial on May 21, 2014.  Calcione faces a sentence of up to 20 years in federal prison when he is sentenced on September 11, 2014.

    "The vast majority of Americans understand the payment of their federal taxes is part of their civic responsibilities.  A very small number do not, and an even smaller number not only refuse to pay their taxes, but engage in the kind of outrageous, threatening, and frankly bizarre behavior involved here," commented United States Attorney Peter F. Neronha.  "This Office will continue to protect and seek justice for Government officials simply trying to do their jobs on behalf of the people of the United States.  Suffice it to say that we will be seeking the toughest, appropriate sentence in this case."

    "The Treasury Inspector General for Tax Administration works aggressively to protect IRS employees from individuals who seek to impair the integrity of tax administration by threatening harm or committing violent acts," said J. Russell George, the Treasury Inspector General for Tax Administration.

    "Threats and assaults directed against IRS employees are investigated and pursued to the fullest extent of the law," said Special Agent in Charge O'Malley.  "We will continue to place a priority on ensuring the safety of IRS employees by working towards the arrest, conviction, and sentencing of the perpetrators," he added.

    According to the Government's evidence presented to the court, an IRS Revenue Agent was assigned to examine Calcione's personal Federal tax returns for years 2008, 2009 and 2010.  As a result of the examination, the agent estimated that a $330,000 tax liability would be assessed against Calcione.

    In April 2013, while continuing to work on the audit, the IRS revenue agent requested that Calcione and an ex-wife of Calcione sign a Consent to Extend Time to Assess Tax form.  Calcione signed the form but his ex-wife had not.  On July 12, 2013, the Revenue Agent left a voicemail message for Andrew Calcione inquiring as to the status of the executed form.

    According to the Government's evidence and court documents, on July 15, 2013, an IRS revenue agent assigned to the Warwick office received two voicemail messages from Calcione.  One of the messages contained a threat made by Andrew Calcione that if the agent called him again he would show up at the agent's home and torture the agent, then rape and kill his wife and injure his daughter while the agent watched, before killing the agent.  A second message left by Calcione requested that Calcione disregard the first message, which Calcione said was left in error.

    The case is being prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.

    Knowingly and intentionally threatening to assault and murder a Revenue Agent of the IRS with intent to interfere with the official in the performance of official duties and knowingly and intentionally threatening to assault and murder a member of the immediate family of a Revenue Agent of the IRS are each punishable by statutory penalties of up to 10 years in Federal prison and a fine of up to $250,000.

    Federal Court Jury Convicts North Providence Resident of Threatening to Assault and Murder Internal Revenue Service Agents

    The following information was released by the United States Attorney's Office for the District of Rhode Island:

    Kenneth M. Delashmutt, 70, of North Providence, R.I., faces up to 10 years in federal prison when he is sentenced in July, having being convicted today by a federal court jury in Providence of threatening to assault and murder two Internal Revenue Service agents, announced United States Attorney Peter F. Neronha and Robert E. O'Malley, Special Agent in Charge, Treasury Inspector General for Tax Administration, New York Field Division.

    According to the Government's evidence presented at trial, an IRS agent from the agency's Warwick, R.I., office had several telephone conversations with Delashmutt in April 2013 in an effort to resolve the defendant's status as a "non-filer," someone who had failed to file Federal tax returns from at least 2005 through 2010.  Delashmutt insisted that he believed he was not subject to the jurisdiction of the IRS.

    According to the Government's evidence, on April 11, 2013, an agent interviewed Delashmutt at the IRS Warwick office, the first time the agent met face-to-face with the defendant.  A supervisor sat in on the interview because of safety.  During the meeting, Delashmutt stated that he intended to go to the agents' homes to take their photographs and he threatened to file lawsuits against both agents after he was prohibited from taking their photographs while in the IRS office.

    The next day, based on a report of the incident at the IRS office, TIGTA agents attempted to interview Delashmutt at his North Providence residence.  Delashmutt slammed the door closed, refusing to be interviewed.

    According to the Government's evidence, on May 2, 2013, the supervising agent at the Warwick office of the IRS received a certified letter from Delashmutt.  Included in the letter was a statement from Delashmutt that he did not believe that IRS agents had the authority to act upon anyone, or deprive anyone of liberty or property, and if they were to attempt to act outside their specific authority and make an arrest or take property, they would be committing a felony.  He further stated that a citizen has the duty "to prevent the commission of a felony if he can, by whatever means which may be required, including the use of deadly force."

    According to information presented to the court, at the time of Delashmutt's arrest in September 2013, agents seized a loaded pistol-grip shotgun located immediately inside of the front door of Delashmutt's residence.

    Delashmutt, who remains free on a $3,000 bond, is scheduled to be sentenced by U.S. District Court Judge Mary M. Lisi on July 31, 2014.  Delashmutt has been ordered by the court to have no contact with the IRS agents from the Warwick office whom he threatened.

    The case is being prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.

    May 12, 2014


    Individual Pretends to be IRS Employee Helping Senior Citizens

    On April 14, 2014, in the Eastern District of Texas, Myra Jones pled guilty to an Information charging her with falsely pretending to be an employee of the United States Department of the Treasury. [1] The charges were filed against Jones on March 13, 2014. [2]

    According to court documents, on or about July 25, 2012, Jones falsely pretended to be an employee of the IRS Jones stated she was an IRS employee who was helping senior citizens receive stimulus payments through tax refunds. Jones made such statements with the intention of promoting the filing of individual income tax returns. [3]

    Additional legal actions are pending.

  • [1] E.D. Tex. Order Adopting Findings of Fact filed Apr.14, 2014.
  • [2] E.D. Tex. Information filed Mar. 13, 2014
  • [3] E.D. Tex. Findings of Fact filed Mar. 27, 2014.


  • IRS Contact Representative Charged with Filing False Tax Returns

    On April 15, 2014, in the Eastern District of Pennsylvania, IRS contact representative Lora Lewis was charged with filing false tax returns based on the following facts contained in the criminal Information: [1]

    During tax years 2007 through 2011, Lewis received unemployment compensation even though she was employed full-time by the IRS during those years. She did not report this compensation on her tax returns.

    During tax years 2007 through 2011, Lewis filed income tax returns claiming to be "head of household" which increased her standard deduction and other deductions.

    In 2008, Lewis took a $7,500 First-Time Home Buyers Credit, though she did not purchase a home, thereby receiving a tax credit to which she was not entitled.

    In 2008, 2010, and 2011, Lewis received distributions from her Thrift Savings Plan and did not report it as income.

    In tax years 2007 through 2011, Lewis claimed the Earned Income Tax Credit knowing that she was not entitled to it, thereby reducing the amount of tax due and owing for those years.

    During tax years 2009 through 2011, Lewis took an education credit knowing that she was not entitled to it, thereby reducing the amount of tax due and owing for those years.

    In 2009, knowing that she did not purchase a vehicle, Lewis claimed on her income tax return that she purchased an automobile, paid $4,100 in taxes and took an additional $500 deduction, thereby increasing her standard deduction by $4,600 and lowering her taxable income.

    During tax years 2008 and 2011, Lewis filed income tax returns claiming Individual Retirement Account (IRA) deductions in the amount of $5,000 for each year, knowing that she did not have an IRA, thereby lowering her taxable income for each of those years.

    In or about April 2009, Lewis willfully made and subscribed a United States income tax return, Form 1040, for Tax Year 2009, which was verified by a written declaration that it was made under the penalty or perjury and filed with the IRS, which Lewis did not believe to be true and correct as to every material matter in those returns. [2]

  • [1] E.D. Pa. Crim. Info. filed Apr. 15, 2014.
  • [2] Id.


  • Joint Investigations and USAO Prosecutions

    On May 5, the United States Attorney’s Office for the Southern District of California announced that Laura Ortuondo pleaded guilty to one count of making false statements to federal agents. In the announcement, TIGTA Special Agent in Charge Rod Ammari stated, “Individuals that use fraudulently created IRS documents to further their schemes and then actively obstruct the government’s investigation will be investigated to the fullest extent. This investigation is a great example of collaboration by all agencies involved to hold the perpetrators of this scheme responsible for their actions.” OI assisted in the investigation that led to the defendant’s prosecution. Click here to read more.

    On April 29, the United States Attorney's Office for the Eastern District of Virginia, announced that Daniel L. Jones, 56, of Stafford, Virginia, pled guilty to two counts of aiding in the preparation of fraudulent tax returns for his clients and one count of making a false statement to the Internal Revenue Service that he was a certified public accountant. OI assisted in the investigation that led to the defendant’s prosecution. Click here to read more.

    On April 28, the United States Attorney's Office for the Eastern District of California announced the sentencing of Herman Graves, a defendant in a marijuana case: OI assisted in the investigation that led to the defendant’s prosecution . Click here for more information.

    April 28, 2014


    Baton Rouge Man Sentenced for Threatening to Retaliate Against a Federal Witness

    On March 21, 2014, in the Middle District of Louisiana, Anthony Williams was sentenced for threatening to retaliate against a witness in a Federal trial. [1] Williams pled guilty to the offense in October 2013. [2]

    According to court records, Williams threatened to cause physical injury to a person in order to obstruct the administration of justice. On or about March 7, 2013, Williams sent a threatening statement via the social media platform Instagram to a Federal witness. The witness had testified in a Federal criminal case against Williams’ mother, Angela Myers, the previous day. Myers was subsequently convicted by a jury for 21 Federal felonies. [3]

    Williams knowingly and intentionally sent the threatening message to the witness with the intent to retaliate against the witness because of the trial testimony. In the message, Williams stated, “Boy yea this ms. Angie son boy u let me know u a rat outcha but u got your day coming myboy we will see u in the streets soon.” [4]

    Williams was sentenced to 24 months of imprisonment, followed by two years of supervised release. [5] Williams was ordered to surrender to the Bureau of Prisons on April 21, 2014. [6]

  • [1] M.D. La. Judgment filed Apr. 3, 2014.
  • [2] M.D. La. Plea Agr. filed Oct. 30, 2013.
  • [3] Id.
  • [4] Id.
  • [5] M.D. La. Judgment filed Apr. 3, 2014.
  • [6] M.D. La. Order to Surrender filed Mar. 21, 2014.


  • April 8, 2014


    Former IRS Employee Used Taxpayer Information for Conspiracy Involving Identity Theft, Theft of Government Funds, and Mail Fraud

    On March 25, 2014, in the Western District of Missouri, former IRS employee Taylor Knight and co-defendant Michael Moore were arrested [1] for conspiracy, aggravated identity theft, theft of Government funds, mail fraud, and misuse of a Social Security Number (SSN). Knight, Moore and a third defendant, Michael Stalcup, were charged with the offenses on March 18, 2014, in a six-count indictment. [2]

    According to court documents, the charges stemmed from an elaborate scheme wherein Knight abused her position of trust as an IRS employee to access taxpayer information in furtherance of various Federal offenses. Between approximately March 2009 and January 2012, Knight worked for the IRS in Kansas City, Missouri. [3]

    Knight inappropriately accessed information maintained by the IRS for three taxpayers. These accesses were for her personal reasons and not for official Government business. The defendants then used the identification of taxpayers obtained by Knight to fraudulently induce the IRS into issuing tax refund payments. The defendants assumed the identities of the taxpayers to fraudulently obtain refunds and then converted and/or attempted to convert those payments for their personal use. [4]

    As part of the conspiracy, Knight accessed the records of one of the taxpayers in June and then submitted a false online application for a prepaid debit card. The card was approved and mailed to an address in Missouri. Knight submitted this false online application to test whether her scheme was viable. [5]

    In furtherance of the scheme, in September 2011, Knight accessed the tax accounts of the other two victims and then submitted a bogus online application for three prepaid debit cards in the names of the taxpayers, a married couple. These cards were mailed to a Missouri address that was later determined to be the address of co-defendant Michael Moore’s grandmother. Moore monitored the mail sent to his grandmother’s address and retrieved the three prepaid debit cards. [6]

    The conspirators then filed a fraudulent tax return via the Internet using the victims’ names and seeking a refund of $21,163. Because the bogus tax return underreported the true tax payments of the victims, the IRS approved a refund in the amount of $46,572. The IRS deposited $5,000 onto one of the debit cards Knight had obtained in the victim’s name. The remaining deposit was rejected by the receiving banks. In early December 2011, at Knight’s request and with her assistance, Moore telephoned the IRS and falsely claimed to be the victim taxpayer in order to change the address of record. Moore requested that the outstanding refund amount be mailed to a new address in Missouri. Moore had previously resided at the address and knew it was unoccupied at the time. [7]

    The victims filed legitimate amended returns for previous tax years, and the IRS issued the couple a refund check in the amount of $46,734.20, around December 30, 2011. However, since the IRS had already processed Moore’s address change request, the Treasury check was mailed to the address provided by Moore. Moore retrieved the check. [8]

    Knight obtained false identification documents in order to assume the identity of the female victim, including a Social Security card, Visa® debit card, MasterCard® debit card, and fraudulent Missouri and New York driver’s licenses bearing the name of the victim but a photograph of Knight. Additionally, Knight obtained counterfeit documents in the name of the male victim displaying a photograph of Moore. [9]

    Knight then requested the assistance of her acquaintance, Stalcup, in getting the fraudulent $46,734.20 Treasury check cashed. She offered to pay Stalcup $500. Stalcup knew the check was payable to the victim taxpayers and he was aware Knight had fraudulently obtained the check, but agreed to assist her. [10]

    In January 2012, Knight and Stalcup attempted to cash the Treasury check at an Express Mart using the fraudulent identification items in the victims’ names. Stalcup even encouraged the clerk to cash the check by making a statement to the effect of, “We only need $40,000 out of it. Yes, we’ll give you $6,000.” Express Mart refused to cash the check and reported the incident to law enforcement. [11]

    Additional legal actions are pending for the three defendants.

  • [1] W.D. Mo. Crim. Docket filed Mar. 19, 2014.
  • [2] W.D. Mo. Indict. filed Mar. 19, 2014.
  • [3] Id.
  • [4] Id.
  • [5] Id.
  • [6] Id.
  • [7] W.D. Mo. Indict. filed Mar. 19, 2014.
  • [8] Id.
  • [9] Id.
  • [10] Id.
  • [11] Id.


  • Restaurant Owner Pleads Guilty to Offering Compensation to a Public Official

    On February 20, 2014, in the Western District of Michigan, the owner of the Asian House Restaurant, Jason Xiu, entered a guilty plea for offering compensation to an IRS employee. [1]

    According to court records, Xiu, his mother, and his restaurant were under audit by the IRS for approximately $85,000 in past due and delinquent Federal income taxes. As part of Xiu’s scheme to impede the IRS, Xiu purchased electronic merchandise from Best Buy® and sent it to the assigned IRS revenue officer at the revenue officer’s place of business, with the intent to divert the IRS and cast suspicion on the revenue officer. The merchandise delivered to the revenue officer included an LED television, a Sony PlayStation 3® game console, three PlayStation VITAs hand-held game consoles, and a Canon digital camera. Xiu purchased the electronics using fraudulently obtained credit card information taken from an Asian House customer without the knowledge or consent of the customer. [2]  Xiu’s sentencing is set for May 12, 2014. [3]

  • [1] W.D. Mich. Plea Agr. filed Feb. 20, 2014; W.D. Mich. Indict. filed Nov. 13, 2013; W.D. Mich. Superseding Info. filed Feb. 20, 2014.
  • [2] W.D. Mich. Indict. filed Nov. 13, 2013.
  • [3] W.D. Mich. Crim. Docket filed Nov. 13, 2013.


  • Guilty Plea Entered for the Filing of False Levy Releases

    On March 5, 2014, in the Eastern District of Virginia, business owner Leslie Davis pled guilty to corrupt interference with the Internal Revenue laws. [1] Davis was charged with the offense in February 2014. [2]

    According to court documents, Davis is the owner and operator of James River Concrete, Inc., in Henrico, Virginia. From about 2008 through 2012, James River Concrete failed to file Forms 940 and 941 and to pay Federal employment taxes totaling approximately $400,000. Consequently, the IRS placed liens on some of James River Concrete’s assets and levies on its bank accounts and accounts receivable from numerous customers. After the IRS issued levies to three companies owing money to James River Concrete, all three subsequently received IRS Forms 668D, Release of Levy, via facsimile. Two of the companies believed the IRS had released its levy and paid the funds due directly to James River Concrete. Another company contacted the IRS to verify the release. When Davis found out the company called the IRS, he admitted the levy release was forged. [3]

    By virtue of the forged levy releases, Davis obtained $25,482.64 that was rightfully subject to a tax levy to be paid to the IRS. [4] Davis agreed to pay full restitution to the IRS as part of his plea agreement. [5] Sentencing is set for June 13, 2014. [6]

  • [1] E.D. Va. Plea Agr. filed Mar. 5, 2014.
  • [2] E.D. Va. Crim. Info. filed Feb. 18, 2014.
  • [3] E.D. Va. Statement of Facts filed Mar. 5, 2014.
  • [4] Id.
  • [5] E.D. Va. Plea Agr. filed Mar. 5, 2014.
  • [6] E.D. Va. Crim. Docket filed Feb. 18, 2014.


  • IRS Employee Charged with Unauthorized Accesses and False Statements

    On March 5, 2014, in the Eastern District of Michigan, an 11-count superseding indictment was filed charging Cheryl Palmer with unauthorized inspection of taxpayer information and false statements. [1]

    According to court documents filed in April 2013 and March 2014, Palmer, while an employee of the United States, willfully inspected the tax return and return information of four individuals without authorization. Additionally, Palmer made materially false statements about these, as well as other, accesses. [2]

    In connection with her questioned accesses, Palmer falsely claimed she had completed the proper access forms, as required by IRS policy, for her accesses to six taxpayers’ accounts, when in fact, she knew no forms had been completed for any of them.

    Palmer also claimed to have recorded one of the accesses in the IRS accounts management history system, but had not done so, and falsely recorded in the history system that one of the taxpayers had been a walk-in customer in the Flint, Michigan IRS office. Palmer further stated she accessed the information of a seventh taxpayer as a cross-reference while providing customer service to a related taxpayer at the IRS office. In truth, Palmer had accessed the taxpayer’s information approximately three years prior to the customer’s visit to the IRS office. [3]

    Palmer’s trial is scheduled to begin June 23, 2014. [4]

  • 1] E.D. Mich. Second Superseding Indict. filed Mar. 5, 2014.
  • [2] E.D. Mich. Info. filed Apr. 24, 2013; E.D. Mich. Second Superseding Indict. filed Mar. 5, 2014.
  • [3] E.D. Mich. Second Superseding Indict. filed Mar. 5, 2014.
  • [4] E.D. Mich. Crim. Docket filed Apr. 24, 2013.


  • Taxpayer Sentenced for Bribing an IRS Official

    On February 28, 2014, in the District of New Jersey, Michael Kazmark was sentenced for bribing public officials. [1] Kazmark pled guilty to the offense in April 2013. [2] According to a Department of Justice press release issued after the sentencing, Kazmark is the former chairman of the Woodland Park, New Jersey Democratic Committee. [3]

    In late 2010, Kazmark corruptly gave money to individuals believed to be IRS employees with the intent to influence official acts. [4] Kazmark owed approximately $98,046 in unpaid Federal income taxes. [5] Kazmark made two bribe payments totaling $18,500 to the individuals. [6] In exchange for the bribe payments, Kazmark expected the public officials to place his Federal tax liability in a non-collectible status for two years and agreed to accept an offer in compromise on his outstanding $98,046 liability in the amount of $9,760, which he had already paid to the IRS. [7]

    Kazmark was sentenced to 24 months in prison, followed by two years of supervised release. As a special condition of his release, Kazmark was ordered to fully cooperate with the IRS in filing returns and paying all taxes, interest, and penalties. [8] The investigation was worked by agents of TIGTA and the Federal Bureau of Investigation. [9]

  • [1] D. N.J. Judg. filed Mar. 4, 2014.
  • [2] D. N.J. Plea Agr. filed June 21, 2013.
  • [3] Dept. of Justice Press Release, U.S. Attorney D. N.J., dated Feb. 28, 2014.
  • [4] D. N.J. Info. filed June 21, 2013.
  • [5] Id.
  • [6] D. N.J. Info. filed June 21, 2013; D. N.J. Plea Agr. filed June 21, 2013.
  • [7] D. N.J. Info. filed June 21, 2013.
  • [8] D. N.J. Judg. filed Mar. 4, 2014.
  • [9] Dept. of Justice Press Release, U.S. Attorney D. N.J., dated Feb. 28, 2014.


  • IRS Employee Pleads Guilty to Hiding and Destroying Tax Returns

    On February 10, 2014, in the Eastern District of Kentucky, IRS employee Brady James pled guilty to one count of Destruction of Tax Returns for Estates and Trusts. [1] James was indicted for the offense in May 2013. [2]

    According to court documents, between April 2, 2013 and April 30, 2013, James, an IRS tax examining technician, knowingly concealed and destroyed records and documents with the intent to impede the proper administration of matters within the jurisdiction of the IRS. Specifically, James concealed over 800 Forms 1041, U.S. Income Tax Return for Estates and Trusts, which had been submitted to the IRS in Covington, Kentucky for processing. [3]

    On April 23, 2013, approximately 383 Forms 1041 were found discarded in the men’s restroom at the IRS Service Center. This prompted the IRS Code and Edit Manager to conduct an unannounced search of all the employees’ desks. When the search began, James grabbed a personal bag from his work area. The bag ripped and numerous original, unprocessed Forms 1041 fell onto the ground. The forms had been stamped as received by the IRS five to six days earlier, but had not been processed. [4]

    James admitted that he initially devised a system to withhold numerous documents temporarily until he could re-introduce them (unprocessed) into the completed work area. James later admitted he had been destroying numerous Forms 1041 nightly for several weeks by discarding them in multiple recycling bins in the work area or taking them home, where he would dump them in his apartment complex trash compactor. He indicated he had done so because he was struggling to maintain his required production. [5]

    Searches of James’ personal possessions at work, several IRS recycling bins and trash containers near his work area, James’ home, and his apartment complex dumpster, identified a total of approximately 842 unprocessed tax returns that had been discarded. [6]

    James could face up to 20-years imprisonment and a fine up to $250,000. [7] His sentencing is scheduled for May 15, 2014. [8]

  • [1] E.D. Ky Plea Agr. filed Feb. 10, 2014.
  • [2] E.D. Ky Indict. filed May 9, 2013.
  • [3] Id.
  • [4] E.D. Ky Plea Agr. filed Feb. 10, 2014.
  • [5] Id.
  • [6] Id.
  • [7] E.D. Ky Plea Agr. filed Feb. 10, 2014.
  • [8] E.D. Ky Sentencing Order filed Feb 10, 2014.


  • March 19, 2014


    IRS Employee Pleads Guilty to Hiding and Destroying Tax Returns

    On February 10, 2014, in the Eastern District of Kentucky, Internal Revenue Service (IRS) employee Brady James pled guilty to one count of Destruction of Tax Returns for Estates and Trusts. [1] James was indicted for the offense in May 2013. [2]

    According to court documents, between April 2, 2013 and April 30, 2013, James, an IRS tax examining technician, knowingly concealed and destroyed records and documents with the intent to impede the proper administration of matters within the jurisdiction of the IRS. Specifically, James concealed over 800 Forms 1041, U.S. Income Tax Return for Estates and Trusts, which had been submitted to the IRS in Covington, Kentucky for processing. [3]

    On April 23, 2013, approximately 383 Forms 1041 were found discarded in the men’s restroom at the IRS Service Center. This prompted the IRS Code and Edit Manager to conduct an unannounced search of all the employees’ desks. When the search began, James grabbed a personal bag from his work area. The bag ripped and numerous original, unprocessed Forms 1041 fell onto the ground. The forms had been stamped as received by the IRS five to six days earlier, but had not been processed. [4]

    James admitted that he initially devised a system to withhold numerous documents temporarily until he could re-introduce them (unprocessed) into the completed work area. James later admitted he had been destroying numerous Forms 1041 nightly for several weeks by discarding them in multiple recycling bins in the work area or taking them home, where he would dump them in his apartment complex trash compactor. He indicated he had done so because he was struggling to maintain his required production. [5]

    Searches of James’ personal possessions at work, several IRS recycling bins and trash containers near his work area, James’ home, and his apartment complex dumpster, identified a total of approximately 842 unprocessed tax returns that had been discarded. [6]

    James could face up to 20-years imprisonment and a fine up to $250,000. [7] His sentencing is scheduled for May 15, 2014. [8]

  • [1] E.D. Ky Plea Agr. filed Feb. 10, 2014.
  • [2] E.D. Ky Indict. filed May 9, 2013.
  • [3] Id.
  • [4] E.D. Ky Plea Agr. filed Feb. 10, 2014.
  • [5] Id.
  • [6] Id.
  • [7] E.D. Ky Plea Agr. filed Feb. 10, 2014.
  • [8] E.D. Ky Sentencing Order filed Feb 10, 2014.


  • Massachusetts Chiropractor Charged with Bribing an IRS Employee

    On February 6, 2014, in the District of Massachusetts, a criminal complaint was filed against Stephen Jacobs for bribery of a public official [1] and a warrant was issued for his arrest. [2]

    According to court documents, the IRS began an examination of the Massachusetts chiropractor’s Federal income tax return in 2013. When the assigned Revenue Agent met with Jacobs, Jacobs admitted that he had made $5,000 payments to two different women because he touched them inappropriately during medical treatment sessions. The Revenue Agent told Jacobs that these payments were not allowable deductions. Jacobs became agitated and, in essence, asked if there was anything the Revenue Agent could do for him.

    In a subsequent meeting, Jacobs got upset when the Revenue Agent requested documentation for questioned expenses. Jacobs asked if the Revenue Agent wanted to be paid and offered the Revenue Agent $5,000 to terminate the examination. Later the same day, Jacobs paid the Revenue Agent $5,000 in cash for the purpose of terminating the examination and receiving a “no change” audit letter and examination reports reflecting no tax due for 2011 and a 13 cent refund for 2012. [3]

    Court records indicate Jacobs was arrested on February 13, 2014, [4] and later released on a $10,000 unsecured bond. [5]

  • [1] D. Mass. Crim. Compl. filed Feb. 6, 2014.
  • [2] D. Mass. Arrest Warrant filed Feb. 6, 2014.
  • [3] D. Mass. Crim. Compl. filed Feb. 6, 2014.
  • [4] D. Mass. Crim. Docket filed Feb. 6, 2014.
  • [5] D. Mass. Appearance Bond filed Feb. 13, 2014.


  • IRS Employee Arrested for Identity Theft, Theft of Government Funds, and False Tax Returns

    On February 11, 2014, in the Eastern District of Pennsylvania, a nine count indictment charged IRS employee Sherelle Pratt with filing false Federal income tax returns, assisting in the preparation of false returns, theft of Government funds, and aggravated identity theft. [1]

    According to court documents, Pratt has worked as an IRS contact representative since January 2008. After an individual reported Pratt had prepared a tax return for his son and the anticipated refund was not received, TIGTA discovered that Pratt had deposited the taxpayer’s refund and stimulus checks into her personal bank account. Subsequent investigation identified eight more individuals for whom Pratt had prepared tax returns and then deposited their refund and/or stimulus checks into her personal checking account. [2]

    Pratt also knowingly used the identification of another person in relation to the theft of Government funds. Specifically, Pratt used the name and Social Security Number of one individual, without that individual’s knowledge or authorization, to file a fraudulent return, which resulted in a tax refund check in the amount of $3,524. Pratt had the illegally obtained refund electronically deposited into her own personal checking account. Moreover, for Tax Years 2007, 2008, and 2009, Pratt failed to report approximately $28,767 in stolen funds as income. [3]

    Furthermore, Pratt knowingly and willfully assisted in the preparation and filing of tax returns for others, which she knew to be false. The returns included information such as false dependent care expenses, Schedule C income from a business not owned by the return filer, and deductions for dependents with whom the filer was not even acquainted and did not support. [4]

  • [1] E.D. Pa. Indict. filed Feb. 11, 2014.
  • [2] Id.
  • [3] Id.
  • [4] Id.


  • California Man Sentenced in Connection with Identity Theft Tax Scheme

    On January 22, 2014, in the Central District of California, Jerry Gregoire, Jr. was sentenced for making false claims against the United States and theft of Government funds. [1] Gregoire was found guilty by a jury on 13 counts of the October 1, 2013 substitute indictment. [2]

    According to court documents, as part of a stolen identity refund scheme, Gregoire submitted tax returns to the IRS using the true names and Social Security Numbers (SSNs) of other individuals without their knowledge or consent. The returns included false income, expenses, and deductions, thus inducing refunds to be issued. The refunds were directed to bank accounts that Gregoire controlled. [3]

    When Gregoire attempted to cash refund checks in the names of three victims, Money Mart (a check cashing business) notified TIGTA. Gregoire had claimed the individuals’ names on the checks were actually names of his businesses and his new clothing lines. He provided fabricated business documents and IRS Forms SS-4, purporting that the IRS had issued Employer Identification Numbers in these business names. [4]

    The investigation of Gregoire was conducted jointly with agents from TIGTA and IRS Criminal Investigation. A search warrant at Gregoire’s residence identified multiple fraudulent documents in the name of one of the victims, including a false IRS Form SS-4 and a fabricated Form W-2, along with a document containing the real name, SSN, date of birth, and occupation of the victim. [5]

    Gregoire was sentenced to a total of 65 months’ incarceration and was ordered to make restitution in the amount of $140,205 to the victim, the IRS. [6] He is appealing his conviction. [7]

  • [1] C.D. Cal. Judgment filed Jan. 22, 2014.
  • [2] C.D. Cal. Verdict filed Oct. 4, 2013; C.D. Cal. Substitute Indict. filed Oct. 1, 2013.
  • [3] C.D. Cal. First Superseding Indict. filed May 8, 2013.
  • [4] C.D. Cal. Crim. Compl. filed April 16, 2013.
  • [5] Id.
  • [6] C.D. Cal. Judgment filed Jan. 22, 2014.
  • [7] C.D. Cal. Notice of Appeal filed Jan. 22, 2014.


  • Former IRS Employee Sentenced in Identity Theft Scheme

    On January 23, 2014, in the Eastern District of Kentucky, former IRS employee Joy Fox was sentenced for her role in an identity theft scheme. [1] Fox pled guilty to aiding and abetting aggravated identity theft and aiding and abetting mail fraud on September 12, 2013. [2]

    According to court documents, on dates between January 2013 and March 2013, Fox and a coconspirator, Patrick Sharpe, carried out a scheme to defraud and obtain money by means of false pretense. [3] Sharpe pled guilty on October 3, 2013. [4]

    Fox was employed as a financial technician with the IRS in Florence, Kentucky. As part of her duties, Fox had access to an IRS computer system which maintains taxpayer information, including names, SSNs, and dates of birth. Fox’s authorized access to the IRS system was limited to official business only. [5]

    As part of the scheme, Fox agreed to access the IRS computer system without authority, obtain the identifying information of numerous taxpayers, and provide the information to Sharpe. Sharpe requested that Fox provide identifying information on individuals 65 years of age or older who were entitled to receive Social Security benefits. His plan was to apply online for Account Now debit cards using the stolen identities and fund the cards with the individuals’ Social Security benefits. [6]

    In addition to fraudulently obtaining debit cards, Fox and Sharpe agreed to defraud the IRS by submitting a false tax return in the name of an individual whose identity Fox unlawfully obtained. Fox and Sharpe had agreed to share the refund if they were successful. [7]

    Fox was sentenced to 28 months in prison, to begin on February 24, 2014, followed by one year of supervised probation. [8] Sharpe’s sentencing is scheduled for February 20, 2014. [9]

  • [1] E.D. Ky. Judgment filed Jan. 23, 2014.
  • [2] E.D. Ky. Plea Agr. for Joy Fox filed Sep. 12, 2013.
  • [3] E.D. Ky. Indict. filed Jul. 18, 2013.
  • [4] E.D. Ky. Plea Agr. for Patrick Sharpe filed Oct. 3, 2013.
  • [5] E.D. Ky. Plea Agr. for Joy Fox filed Sep. 12, 2013.
  • [6] Id.
  • [7] Id.
  • [8] E.D. Ky. Judgment filed Jan. 23, 2014.
  • [9] E.D. Ky. Crim. Docket filed Jul. 18, 2013.


  • February 11, 2014


    Pennsylvania Couple Sentenced for Bribery of a Public Official and Tax Evasion

    On January 21, 2014, in the Middle District of Pennsylvania, Ivan and Mayra Garces were sentenced for bribery of a public official and tax evasion. [1] Both pled guilty to the offenses in May 2013. [2]

    According to the November 2011 indictment charging the Garces with bribery of a public official, Ivan and Mayra Garces corruptly offered to pay an IRS agent $50,000 to aid in committing fraud against the United States. Specifically, the Garces offered to pay the $50,000 bribe in exchange for the IRS agent’s filing a false examination report reflecting an amount due that was substantially less than what the Garces owed in taxes. [3]

    Subsequently, a superseding information was filed in May 2013 against each of the Garces, adding the charge of tax evasion. According to the court documents, between 2008 and 2010 the Etters, Pennsylvania residents, willfully attempted to evade and defeat a large portion of their income tax due and owed. The Garces filed three fraudulent tax returns, significantly understating their joint taxable income and tax due. Collectively for the three tax years, the Garces understated their income by over $1 million, [4] resulting in a tax loss of $391,595. [5]

    Ivan Garces was sentenced to 18 months in prison and fined $7,700. [6] Mayra Garces was sentenced to 12-months and one-day imprisonment and was also fined $7,700. [7] Both will be required to complete one year of supervised release following their imprisonment. [8]

    The Garces will forfeit the $50,000 bribe, which will be relinquished to TIGTA’s Miscellaneous Receipts Fund. [9]

  • [1] M.D. Pa. Judgment Ivan Garces; M.D. Pa. Judgment Mayra Garces, both filed Jan. 22, 2014.
  • [2] M.D. Pa. Plea Agr. Ivan Garces; M.D. Plea Agr. Mayra Garces, both filed May 22, 2013.
  • [3] M.D. Pa. Indict. filed Nov. 16, 2011.
  • [4] M.D. Pa. Superseding Info. Ivan Garces; M.D. Pa. Superseding Info. Mayra Garces, both filed May 22, 2013.
  • [5] M.D. Pa. Plea Agr. Ivan Garces; M.D. Plea Agr.Mayra Garces, both filed May 22, 2013.
  • [6] M.D. Pa. Judgment Ivan Garces filed Jan. 22, 2014.
  • [7] M.D. Pa. Judgment Mayra Garces filed Jan. 22, 2014.
  • [8] M.D. Pa. Judgment Ivan Garces; M.D. Pa. Judgment Mayra Garces, both filed Jan. 22, 2014.
  • [9] Id.


  • IRS Data Entry Clerk Pleads Guilty to Filing False Returns from Stolen Identities and IRS Documents

    On January 21, 2014 [1] , in the Eastern District of California, IRS employee Monica Hernandez pled guilty to Making and Subscribing a False Income Tax Return, Wire Fraud, and Aggravated Identity Theft. [2] Hernandez was indicted for the offenses in April 2011. [3]

    According to court documents, at all times relevant to the offenses, Hernandez was employed as a part-time data entry clerk at the IRS Fresno Service Center in Fresno, California. As part of her duties, Hernandez regularly handled and processed tax returns on behalf of the IRS by entering taxpayers’ tax information into the IRS computer system. During the course of her IRS employment, Hernandez stole tax information in order to file fraudulent tax returns and claim large tax refunds.

    Specifically, Hernandez stole taxpayers’ Forms 1099-B, which list income received and moneys withheld from interest and dividend earnings. Hernandez then falsified and forged the Forms 1099 to reflect her personal information and filed her own tax returns claiming the information from the forged 1099s in the form of excessive withholdings. [4] Between 2007 and 2009, Hernandez filed three false tax returns for herself using this method and obtained refunds from the IRS in the amount of $175,144. [5]

    Starting on or around February 2010, Hernandez began to file a new series of fraudulent tax returns, falsely claiming excessive withholdings. However, this time she used the personal information belonging to other individuals rather than her own to obtain the large refunds. Hernandez initially acquired the identification information of some of the individuals, including deceased persons, from sites on the Internet. She also used the identity of a relative to file one false return and subsequently open a bank account in the relative’s name in order to deposit the fraudulently obtained refund check. [6]

    In continuance of her scheme, Hernandez illegally acquired and removed 68 separate tax returns from the IRS Service Center in Fresno, California. These returns had been received by the IRS, but had not yet been entered into the IRS computer system. The stolen tax returns contained the names, Social Security Numbers, addresses, and other pertinent data associated with the taxpayers. Hernandez then proceeded to file fraudulent tax returns electronically for her own benefit using the identification of some of these taxpayers and claimed excessive withholdings from dividends and interest income in order to increase the amount of the refunds. Hernandez filed approximately ten tax returns in which she attempted to claim refunds totaling $1,745,013. [7]

    As part of the plea agreement, Hernandez agreed to pay restitution to the United States in the amount of approximately $200,000, plus restitution to all of the affected victims in an amount to be determined by the court at sentencing. [8] Hernandez’ sentencing is scheduled for April 14, 2014. [9] She could face up to 20 years of imprisonment. [10]

  • [1] E.D. Cal. Crim. Docket filed Apr. 14, 2011.
  • [2] E.D. Cal. Plea Agr. filed Jan. 3, 2014.
  • [3] E.D. Cal. Indict. filed Apr. 14, 2011.
  • [4] E.D. Cal. Plea Agr. filed Jan. 3, 2014.
  • [5] E.D. Cal. Indict. filed Apr. 14, 2011.
  • [6] E.D. Cal. Plea Agr. filed Jan. 3, 2014.
  • [7] E.D. Cal. Plea Agr. filed Jan. 3, 2014.
  • [8] Id.
  • [9] E.D. Cal. Crim. Docket filed Apr. 14, 2011.
  • [10] E.D. Cal. Plea Agr. filed Jan. 3, 2014.


  • Individual Indicted for Threatening IRS Employee and Family Member

    On January 15, 2014, Andrew Calcione was indicted in the District of Rhode Island on two counts of retaliating against a Federal official by threatening or injuring a family member. [1]

    According to court documents, Calcione knowingly and intentionally threatened to assault and murder an IRS Revenue Agent, as well as the Revenue Agent’s immediate family member. Calcione made such threats with the intent to impede, intimidate, and interfere with the official duties of the IRS employee, and to retaliate against the employee on account of the employee’s performance of official IRS business. [2]  Calcione’s arraignment is scheduled for January 27, 2014.

  • [1] D R.I. Indictment filed Jan. 15, 2014.
  • [2] Id.


  • Gary McDevitt Pleads Guilty for Threatening to Kill an IRS Employee

    On December 4, 2013, a plea agreement regarding Gary McDevitt was accepted and filed in the Middle District of Florida. McDevitt pled guilty to one count of using threats of force to intimidate and impede a Revenue Officer of the IRS. [1] He was indicted for the offense in June 2013. [2]

    According to the plea agreement, McDevitt used threats of force to try to impede an IRS Revenue Officer who was acting in an official capacity. After having his bank account garnished by the IRS, McDevitt, during a recorded telephone contact with a Community Tax Relief representative, made multiple statements indicating something bad was going to happen if his money was not released. McDevitt said, in part, “…you might be reading about me on the news because if this doesn’t get solved, that (expletive) ain’t going to be on this earth.” At least eight more times during the conversation McDevitt said, referring to the Revenue Officer, he was going to be “a dead man,” “going to die,” or something similarly threatening. McDevitt indicated he was serious and knew where the Revenue Officer was located. [3]

    McDevitt admitted he threatened to kill the IRS Revenue Officer because of the levy on his bank account. [4] Sentencing is scheduled for March 10, 2014. [5]

  • [1] M.D. Fla. Plea Agr. filed Dec. 4, 2013.
  • [2] M.D. Fla. Indict. filed Jun. 12, 2013.
  • [3] M.D. Fla. Plea Agr. filed Dec. 4, 2013.
  • [4] Id.
  • [5] M.D. Fla. Crim. Docket filed Jun. 12, 2013.


  • 10 Former IRS Employees Arrested for Unemployment Benefits Fraud

    Ten (10) former IRS employees were arrested in the Kansas City, Missouri area between December 11, 2013 and December 16, 2013 on charges stemming from a Federal indictment for benefits fraud. [1]

    The employees, Michelle Glavin, Priscillia Smith, Christopher Bair, Tiffani Harding, Christopher Castillo, Brenda Jones, Jesse Love, Leisa Hunsel, Shalonda Bradley, and Berneta Weedin, were indicted on December 10, 2013, in the Western District of Missouri, for theft of Government property and bank fraud related to an unemployment benefits scheme. [2]

    According to the indictment, the Missouri Division of Employment Security (MODES) administered the unemployment benefits in Missouri on behalf of the Federal Government, and the approved benefit funds for the individuals were then transferred to Central Bank. Between January 2008 and February 2013, the above-named defendants knowingly and willfully stole money belonging to the United States and executed a scheme to defraud Central Bank by fraudulently obtaining unemployment benefits. [3]

    The individuals were required to certify weekly, via the Internet or telephone, any work and earnings in order for MODES to determine the validity of continued benefits. All 10 of the defendants were employed at the IRS while claiming unemployment benefits through MODES, resulting in the fraudulent payment of benefits in amounts ranging from $6,127 to $21,348, with an aggregate total of $112,609. The false representations in connection with their weekly unemployment claims were further extended to obtain debit cards and/or financial deposits and negotiable instruments of funds transferred from MODES to Central Bank. [4]

  • [1] W.D. Mo. Crim. Docket filed Dec. 10, 2013; W.D. Mo. Indict. filed Dec. 10, 2013.
  • [2] W.D. Mo. Indict. filed Dec. 10, 2013.
  • [3] Id.
  • [4] Id.


    January 13, 2014

    IRS Employee Orchestrated Identity Theft Refund Scheme Using Taxpayer Records

    On December 10, 2013, in the Northern District of Georgia, IRS Tax Examining Technician Missy Sledge was indicted for aggravated identity theft and mail fraud. [1] According to court documents, as part of her official IRS duties, Sledge had access to taxpayers’ personal identifiers, including names, Social Security Numbers (SSN), dates of birth, and addresses, and information about tax professionals. Sledge used this access in furtherance of an identity theft scheme which included the filing of fraudulent tax returns and the subsequent theft of refunds. [2] With information from IRS computer systems, Sledge provided taxpayers’ personal information to her coconspirators. [3] It was part of the scheme that others would file fraudulent tax returns with the IRS using the stolen identities of various taxpayers. Sledge used her IRS computer to review the fraudulent returns submitted to determine if she could release fraudulent tax refunds from those returns. When identified, Sledge would release the fraudulent refund for payment. Sledge further assisted those involved in the scheme in impersonating either the taxpayers or their authorized representatives so the taxpayers’ addresses of record could be changed to a fictitious address accessible to Sledge or others involved in the scheme. Sledge then caused the IRS to mail refunds in the taxpayers’ names to the fictitious address to be intercepted or stolen. [4] On May 21, 2013, an individual was arrested in Texas and was found to be in possession of an IRS refund check in the amount of $595,901.97, along with three pages of internal IRS documents containing tax information for one of the identity theft victims. A review of IRS systems revealed Sledge made accesses to this taxpayer’s account, as well as to the taxpayer’s accountant’s information, on seven dates between February 2013 and May 2013. The victim was due a large refund because she had overpaid her estimated taxes. One of the perpetrators used the accountant’s information and Government-issued representative number to impersonate the tax practitioner in telephone communication with the IRS on March 5, 2013, to change the address on record from a North Carolina address to an address in Atlanta, Georgia. Sledge then released the $595,901.97 refund to the fictitious address. [5] On May 23, 2013, an e-mail was sent from Sledge’s IRS e-mail account containing the personal information for two other taxpayers, a married couple. The e-mail included the taxpayers’ names, SSNs, dates of birth, address, and tax preparer’s information. A subsequent telephonic address change was made, changing the address of record from the taxpayers’ Massachusetts address to a Georgia address, and a refund in the amount of $961,779.33 was paid on or about May 31, 2013. Review of the IRS systems identified accesses to the taxpayers’ accounts by Sledge on May 23, 2013 and again in June 2013. [6] Multiple communications were identified to and from Sledge’s IRS e-mail account on dates between May 2013 and September 2013, relaying taxpayer information and/or internal IRS documents for up to as many as 56 taxpayers to Sledge’s coconspirators. Text messages containing taxpayer information and discussing the theft of Government funds were also identified. In one message she sent to an individual she was trying to recruit as a coconspirator, Sledge told the recipient she had a business proposition for him and indicated she had a plan to change the addresses so checks would come to him. Sledge offered to split the scheme proceeds three or four ways, depending on the number of people involved. Sledge said she would give him all the information needed to get the address changed without any problems or questions and said, “All of this money is just sitting here for the taking.” [7]

    TIGTA special agents arrested Sledge in Chamblee, Georgia on November 26, 2013. [8] She entered a not guilty plea at her arraignment, held on December 19, 2013. [8]

  • [1] N.D. Ga. Indictment filed Dec. 10, 2013; N.D. Ga. Criminal Complaint filed Nov. 25, 2013.
  • [2] N.D. Ga. Indictment filed Dec. 10, 2013.
  • [3] N.D. Ga. Criminal Complaint filed Nov. 25, 2013.
  • [4] N.D. Ga. Indictment filed Dec. 10, 2013.
  • [5] N.D. Ga. Criminal Complaint filed Nov. 25, 2013.
  • [6] N.D. Ga. Criminal Complaint filed Nov. 25, 2013.
  • [7] Id.
  • [8] N.D. Ga. Arrest Warrant Return filed Dec. 5, 2013.
  • [9] N.D. Ga. Docket filed Dec. 10, 2013.
  • Nevada Defendant Found Guilty of Corrupt Interference, False Claims and Conspiracy, and Co-Defendant Found Guilty of Conspiracy

    On December 4, 2013, in the District of Nevada, Bret Ogilvie was found guilty of corrupt interference with tax administration and false claims against the Government. [1] Ogilvie and his co-defendant, Linwood Tracy, Jr., were each found guilty of conspiracy to defraud the United States. [2] Both were indicted for the violations in November 2012. [3]

    According to court documents, Ogilvie and Tracy knowingly and intentionally conspired with each other and others to obstruct the lawful functions of the IRS with threats of lawsuits against the IRS, its employees, and private businesses complying with IRS enforcement. Specifically, Tracy threatened to sue the IRS for $10 million if a tax lien on Ogilvie’s residence was not removed. Ogilvie called an IRS Revenue Officer on more than one occasion and threatened to file a lawsuit if funds levied from Ogilvie’s bank account were not returned. Tracy sued the Revenue Officer and other IRS officials for refusing his Power of Attorney, and requested $50 million in damages. Tracy and Ogilvie also threatened private businesses with lawsuits if they complied with IRS summonses. [4] Additionally, Ogilvie made claims for the payment of tax refunds which he knew to be false, fictitious, and fraudulent. Ogilvie filed refund claims for five tax years totaling $3,985,143, when, in fact, Ogilvie had paid no taxes in those five years and was not entitled to a refund in any amount. [5] Sentencing for Tracy is scheduled for March 3, 2014, and Ogilvie’s sentencing is scheduled for March 24, 2014. [6]

  • [1] D. Nev. Verdict Form Bret Ogilvie filed Dec. 4, 2013.
  • [2] D. Nev. Verdict Form Bret Ogilvie filed Dec. 4, 2013; D. Nev. Verdict Form Linwood Tracy, Jr. filed Dec. 4, 2013.
  • [3] D. Nev. Indictment filed Nov. 28, 2012.
  • [4] D. Nev. Indictment filed Nov. 28, 2012.
  • [5] Id.
  • [6] D. Nev. Criminal Docket filed Nov. 28, 2012.

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