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August 15, 2017

Washington Man Arrested and Charged with Mailing Fake Pipe Bomb to the IRS

On July 7, 2017, in the Western District of Washington, Normand Lariviere was charged in a criminal complaint for mailing threatening communications to the Internal Revenue Service (IRS). [1] Agents of the Treasury Inspector General for Tax Administration and the Federal Protective Service arrested Lariviere for the offense on the same date. [2]

According to the court documents, on or about June 30, 2017, Lariviere knowingly and willingly deposited a communication addressed to the IRS in Ogden, Utah, and containing a threat to injure Federal employees, into a U.S. Postal Service depository for mailing. [3]

On July 6, 2017, the IRS office in Ogden received a package from Olympia, Washington, containing a metal pipe approximately six inches long with end caps on both sides. The explosive ordinance team of the Davis County Sheriff’s Office responded to the facility, the building was evacuated, and through the use of a robot, the ordinance team deemed the package to be safe. Within the package were several letters sent from the IRS to Lariviere and a photograph of Lariviere. The galvanized pipe was approximately two inches in diameter and had a fuse coming out of one end with a whistle attached. Blue tape was visible on the exterior of the pipe with the words, “Kilroy was here” written on it. “MKIIMod9” was also written on the exterior of the pipe. [4]

When agents interviewed Lariviere, he admitted to sending the device to the IRS office in Ogden and said he hoped it caused a lot of concern, as he intended it to look like a “pipe bomb.” Lariviere described how he made the device, where he purchased the components, and where he mailed the package. Lariviere said, “Good, I knew they would be concerned, that wasn’t my concern, I wasn’t going to let that hold me back.” He said that the U.S. Government is turning him into a “jihadi” and that he feels as though he is self-radicalized. [5]

When asked what his response would be if he did not get the desired result from the Federal Government, Lariviere said, “I don’t have a choice if I don’t get an answer. Many things I could do. I’m not going to say…I’m not going to tip my hand.” He further indicated that at some point in the future he will use the mail system to send another device because letters do not work. [6]

Lariviere has sent several mailings to the IRS in the past. In 2016, one mailing included Lariviere’s severed finger and a bullet. In another 2016 mailing, Lariviere included a marijuana cigarette and previous documentation from the IRS. Other mailings have included frivolous documents regarding the legality of the tax code. Lariviere admitted to severing his own finger and also said he does not believe he should be paying taxes, since the Government is not paying attention to his claims. [7]

Lariviere previously served in the U.S. Navy for eight years and was subsequently employed as a civilian electrician for the Navy until it had a Reduction in Force action in the early 1990s. Lariviere has grievances against a number of agencies that are associated with the Reduction in Force, including the IRS, the Department of Veterans Affairs, the Office of Personnel Management, the Department of Defense, the Office of Special Counsel, and the Merit Service Protection Board. [8]

Lariviere is detained pending trial, as the court deemed him to be a danger to the community and himself. [9] Additional legal actions are anticipated.

  • [1] W.D. Wash. Crim. Compl. filed July 7, 2017.
  • [2] W.D. Wash. Crim. Docket filed July 7, 2017.
  • [3] W.D. Wash. Crim. Compl. filed July 7, 2017.
  • [4] Id.
  • [5] Id.
  • [6] Id.
  • [7] Id.
  • [8] Id.
  • [9] W.D. Wash. Detention Order filed July 12, 2017.


  • Florida Man Sentenced for His Role in IRS Impersonation Scam

    On June 15, 2017, in the Southern District of Florida, Abhijeetsinh Jadeja was sentenced for conspiracy to commit wire fraud and aggravated identity theft [1] for his role in a telephone fraud scheme. Jadeja was initially indicted, along with coconspirator Rachel Jean Roragen, for these and other offenses in January 2017, [2] and both were subsequently arrested by special agents from the Treasury Inspector General for Tax Administration (TIGTA) and the Department of Homeland Security Investigations (HSI). Jadeja pled guilty in March 2017. [3]

    According to the court documents, from approximately January 2014 through May 2016, [4] Jadeja knowingly and willfully conspired with others to defraud victims and obtain money through false and fraudulent representations. [5] Specifically, Jadeja participated in a conspiracy, along with coconspirators Roragen and Anandkumar Jayantila Nayee, in connection with which victims were contacted by telephone and told they owed income tax payments to the Internal Revenue Service (IRS) or owed fees for grants or loans that they had purportedly received. The victims were instructed to deposit payments related to the taxes or fees onto debit cards and into bank accounts controlled by Jadeja, Roragen, Nayee, and other coconspirators. [6]

    In February 2014, law enforcement had found Jadeja to be in possession of over 90 Green Dot® prepaid debit cards, more than $6,000 in money orders purchased on one specific date, and sales receipts for the purchase of money orders in the prior two months totaling approximately $98,000. Many of the debit cards were subsequently determined to have been funded by victims of the IRS impersonation scam and other telephone scams. [7] During the 2014 contact with law enforcement, Jadeja admitted his involvement in the telephone fraud scheme, said that he was working with Nayee, and admitted that he had received financial compensation for his participation. [8] Jadeja stated that Nayee was linked to call centers in India and was his point of contact in India. Jadeja indicated that he provided the prepaid debit card information to Nayee and that Nayee then specified the subsequent transactions he was to conduct with the funds. [9]

    When Jadeja was arrested on January 30, 2017, he said that he had continued to work with Nayee following the 2014 encounter with law enforcement and that Nayee was now living in Pembroke Pines, Florida. Until a few days prior to his arrest, Jadeja had continued to pick up wire transfers for Nayee and to deposit funds into bank accounts specified by Nayee. [10]

    Nayee was arrested on February 6, 2017, [11] by TIGTA and HSI agents and pled guilty to conspiracy to commit wire fraud and aggravated identity theft on June 1, 2017. [12] His sentencing is scheduled for August 11, 2017. [13]

    Roragen pled guilty to wire fraud in March 2017, [14] and on June 16, 2017, was sentenced to three years of supervised probation. Roragen was also ordered to perform 40 hours of community service per month as directed by the probation office, [15] and a forfeiture money judgment was entered against her in the amount of $28,400 [16] for victims’ funds that had been deposited into bank accounts belonging to her. [17]

    Jadeja was sentenced to 36 months’ imprisonment, followed by three years of supervised release. He was ordered to pay restitution in the amount of $15,395, $13,600 of which is joint and several with coconspirator Roragen. [18] Additionally, a forfeiture money judgment was entered against Jadeja in the amount of $167,400. [19] Upon completion of his term of imprisonment, Jadeja shall be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings consistent with the Immigration and Nationality Act. [20]

    • [1] S.D. Fla. Amended Judgment filed June 29, 2017.
    • [2] S.D. Fla. Indict. filed Jan. 30, 2017.
    • [3] S.D. Fla. Plea Agr. filed Mar. 24, 2017.
    • [4] S.D. Fla. Factual Proffer filed Mar. 24, 2017.
    • [5] S.D. Fla. Indict. filed Jan. 30, 2017.
    • [6] S.D. Fla. Factual Proffer filed Mar. 24, 2017.
    • [7] S.D. Fla. Crim. Compl. filed Feb. 8, 2017.
    • [8] S.D. Fla. Factual Proffer filed Mar. 24, 2017.
    • [9] S.D. Fla. Crim. Compl. filed Feb. 8, 2017.
    • [10] Id.
    • [11] S.D. Fla. Crim. Docket filed Mar. 14, 2017.
    • [12] S.D. Fla. Plea Agr. filed June 1, 2017.
    • [13] S.D. Fla. Crim. Docket as of July 14, 2017.
    • [14] S.D. Fla. Plea Agr. filed Mar. 24, 2017.
    • [15] S.D. Fla. Judgment filed June 21, 2017.
    • [16] S.D. Fla. Order of Forfeiture filed June 14, 2017.
    • [17] S.D. Fla. Factual Proffer filed Mar. 24, 2017.
    • [18] S.D. Fla. Amended Judgment filed June 29, 2017.
    • [19] S.D. Fla. Order of Forfeiture filed June 14, 2017.
    • [20] S.D. Fla. Amended Judgment filed June 29, 2017.


    • IRS Employee Charged for Making False Statements

      On June 13, 2017, in the District of New Jersey, Internal Revenue Service (IRS) employee Chandra Porter was charged via a criminal complaint for making materially false, fictitious, and fraudulent statements and representations, and for making and using false documents, in order to defer the repayment of student loans provided by the United States. [1] This matter was investigated jointly by special agents of the Treasury Inspector General for Tax Administration and the U.S. Department of Education’s (ED) Office of the Inspector General.

      According to the court documents, Porter, a resident of Brunswick, New Jersey, while employed full-time by the IRS as a revenue officer earning approximately $87,021 in gross salary each year, knowingly and willfully signed and submitted false Federal Family Education Loan Program (FFELP) Unemployment Deferment Request Forms in 2012, 2013, and 2016, representing that she was unemployed and was diligently seeking but unable to find full-time employment, in order to defer the repayment of student loans. [2]

      Porter's child was enrolled as a student in a college education program located in Los Angeles, California, between about 2008 and about 2010. During this time, ED was administering the FFELP to assist families with students at colleges and graduate schools in obtaining financial aid for their educational expenses. [3]

      In connection with the program, ED offered families several options for borrowing money for college tuition. One such program was the Direct Plus Loan (DPL), which enabled eligible parents of dependent students to borrow up to the cost of the child's education, minus any other financial aid received. Federal regulations required that DPL borrowers complete an Application and Master Promissory Note (AMPN) which included, among other information, a description of the terms and conditions of the FFELP loan for which the borrower applied, including an explicit promise to pay to the lender all loan amounts disbursed under the terms of the AMPN. [4]

      A borrower could apply for deferments based upon certain conditions, such as unemployment and economic hardship, but had to complete, sign, and submit to the loan holder an application requesting the deferment. Each deferment application contained a header with a warning to the borrower that advised of possible criminal penalties under the U.S. Criminal Code, among other laws, for persons who knowingly made a false statement or misrepresentation on the form or on any accompanying document. [5]

      Porter signed and dated a completed DPL AMPN on or about June 16, 2008, for her child’s college tuition. A total of approximately $49,179 in FFELP funds was disbursed in tuition payments between about July 2008 and about March 2009. The repayment of the loan was deferred while Porter’s child was enrolled in college. [6]

      Following her child’s completion of the college program, the loan reverted to repayment status, and on or about December 17, 2010, Porter was required to pay approximately $303.61 per month to the loan holder. However, Porter began submitting deferment applications on or about April 28, 2011, falsely representing that she was unemployed or was working less than full time, when, in fact, Porter was gainfully employed full time at the IRS. Porter further fraudulently represented, by checking off a box on these applications, that, among other things, she was diligently seeking but unable to find full-time employment in any field or at any salary or responsibility level. In some instances, Porter faxed, or caused to be faxed, the deferment applications containing the false representations to the loan handler from a fax machine at Porter's place of work at the IRS. To date, the aggregate outstanding balance on the DPL loans owed by Porter is approximately $86,348. [7]

      Additional legal actions are anticipated.

      • [1] D.N.J. Crim. Compl. filed June 13, 2017.
      • [2] Id.
      • [3] Id.
      • [4] Id.
      • [5] Id.
      • [6] Id.
      • [7] Id.


      • California Tax Return Preparer Sentenced for Defrauding Clients

        On June 12, 2017, in the Central District of California, Hollywood Hills resident Michael J. Calalang Cabuhat was sentenced for wire fraud and subscribing to file a false tax return. [1] Cabuhat was arrested by special agents from the Treasury Inspector General for Tax Administration (TIGTA) and Internal Revenue Service Criminal Investigation (IRS-CI) in April 2016 [2] and pled guilty to these offenses in June 2016. [3]

        According to court documents, Cabuhat was the Executive Vice President and 50 percent owner of VisionQwest Resource Group, Inc., which operated VisionQwest Accountancy Group (VAG), located in Glendale, California, and later also did business as Icon Tax Group. From 2010 to April 2016, Cabuhat knowingly devised and participated in a scheme to defraud VAG’s clients and obtain money by means of false and fraudulent representations. [4]

        In furtherance of the scheme, Cabuhat defrauded customers of his tax preparation business in at least two ways. In some instances, Cabuhat would show a small refund on the copy of the tax return that he had prepared for his client, whereas he would claim a larger refund on the return that Cabuhat actually filed with the Internal Revenue Service (IRS). Without the client’s knowledge, Cabuhat would attach a form to the filed tax return directing the larger refund into a bank account he controlled. [5]

        In other cases, Cabuhat would falsely show a tax liability due on the client's copy of the tax return, whereas he would claim a refund on the return that he would file with the IRS. In these instances, Cabuhat would tell the client-taxpayer to make the "tax payment" directly to him so he could send the payment to the IRS. In fact, Cabuhat would keep the "tax payment" made by the client and direct the IRS to deposit the refund that Cabuhat claimed on the filed tax return into a bank account that he controlled. [6]

        Between 2010 and 2015, Cabuhat allegedly used this scheme to obtain or attempt to obtain more than $1.2 million in tax refunds that should have gone to 144 clients. [7]

        Cabuhat claimed to be an enrolled agent; however, the investigation confirmed that he is not, and has never been, an enrolled agent. As defined by the IRS, an enrolled agent is a person who has earned the privilege of representing taxpayers before the IRS, either by passing a three- part comprehensive test covering individual and business tax returns or as a result of experience as a former IRS employee. This credential is the highest that the IRS awards. Cabuhat also stated that he was a licensed Certified Public Accountant (CPA) in the Philippines, but he does not hold a CPA license issued in the United States. [8]

        In addition to the tax refund scheme, in September 2014, Cabuhat structured cash deposits to avoid Federal bank reporting requirements. Specifically, Cabuhat made three separate cash deposits of $9,900, totaling $29,700, over seven days. On the day after these structured transactions were completed, Cabuhat wrote a $24,500 check to purchase a Ferrari. [9]

        As part of his plea agreement, Cabuhat agreed to forfeit his 2001 Ferrari 360 Spider vehicle. Cabuhat admitted that he received at least $957,822 in unreported income and agreed to cooperate with the IRS to determine his tax liability and to pay additional taxes, penalties, and interest, including fraud penalties. [10]

        Cabuhat was sentenced to 46 months in prison, followed by three years of supervised release. He was ordered to truthfully file and pay taxes owed for Tax Years 2010-2015 and is forbidden from engaging in any aspect of preparing Federal or State tax returns other than for himself and his legal spouse, as well as from owning, operating, or managing a tax preparation business. Additionally, Cabuhat was ordered to pay restitution in the total amount of $1,496,416.65. [11] The investigation was conducted jointly by agents of TIGTA and IRS-CI . [12]

        • [1] C.D. Cal. Judgment filed June 12, 2017.
        • [2] C.D. Cal. Docket filed June 16, 2016.
        • [3] C.D. Cal. Plea Agreement filed June 15, 2016.
        • [4] C.D. Cal. Information filed June 15, 2016.
        • [5] C.D. Cal. Criminal Complaint filed April 5, 2016.
        • [6] Id.
        • [7] Id.
        • [8] Id.
        • [9] Id.
        • [10] C.D. Cal. Plea Agreement filed June 15, 2016.
        • [11] C.D. Cal. Judgment filed June 12, 2017.
        • [12] C.D. Cal. Criminal Complaint filed April 5, 2016.


        • Russian Man Sentenced in Stolen Identify Refund Fraud Scheme

          On June 9, 2017, in the Southern District of Florida, Russian citizen [1] Alexey Petrov was sentenced for access device fraud and aggravated identity theft [2] for his role in a sophisticated, large-scale stolen identity refund fraud (SIRF) scheme. [3] Petrov was initially charged for these and other offenses, arrested by agents of the Treasury Inspector General for Tax Administration (TIGTA) in November 2016, [4] and pled guilty in February 2017. [5]

          According to the court documents, in early 2015, several Federal agencies began investigating a large-scale SIRF scheme. Agencies involved in investigating this complex scheme included TIGTA, the Internal Revenue Service-Criminal Investigation (IRS-CI), the Federal Bureau of Investigation (FBI), and the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). [6] During the investigation, agents discovered that cybercriminals had accessed a computerized IRS database, stolen genuine taxpayers’ personal identifying information, and filed false and fraudulent tax returns using the stolen taxpayer information, thus causing the IRS to issue refunds to individuals not entitled to receive them. [7]

          The criminal complaint charged that Petrov, a resident of the Miami, Florida, area, knowingly transferred, possessed, and used the means of identification of another, transferred a false identification document, used a counterfeit access device, and willfully conspired with others to conduct financial transactions involving the proceeds of specific unlawful activities, in connection with the filing of fraudulent tax returns. [8]

          Petrov was born in Russia and is a Russian citizen. He entered the United States on a short-term, non-immigrant visa that expired on or about September 28, 2005. Petrov resides in the Miami area with a Russian female who also entered the United States on a short-term, non-immigrant visa that expired in 2010. [9]

          Petrov was identified by two coconspirators as the person who recruited them and directed them to create bank accounts using the names of individuals from Russia, Kazakhstan, and other Eastern European and Central Asian countries. At Petrov’s direction, coconspirators Sergey Kovalenko and Laziz Eraliyev used these bank accounts to receive and further transfer fraudulently obtained tax refund money. [10]

          As part of the scheme, Petrov created and provided counterfeit driver’s licenses using the names of real individuals to Kovalenko and Eraliyev to allow them to open bank accounts. Petrov then directed cybercriminals to send the fraudulently obtained tax refunds to various accounts opened in these names. [11]

          Many of the individuals whose names were used had previously come to the United States on short-term, non-immigrant work visas. At Petrov’s direction, Kovalenko paid individuals who were visiting the United States on short-term, non-immigrant visas in exchange for their bank account debit cards and online banking information and then provided the information to Petrov. One such individual, who was lawfully present in the United States during the summer of 2008, had entered the United States on the same flight from Moscow, Russia, as Kovalenko. Kovalenko subsequently used a fake driver’s license in the individual’s name to rent an apartment and open bank accounts to receive and further transfer money at Petrov’s direction. [12]

          Kovalenko is a Russian citizen, and Eraliyev is a Kazakhstan citizen. Both entered the United States on short-term, non-immigrant visas and lived in or around Virginia Beach, Virginia. Kovalenko first met Petrov in Miami around 2012. Petrov offered to provide Kovalenko with a fake driver’s license if he would send money to Russia on Petrov’s behalf. Kovalenko subsequently sent funds to Russia at Petrov’s direction. Petrov paid Kovalenko approximately $40 to $50 each time he sent funds to Russia. [13]

          In or around March 2015, Kovalenko and Eraliyev traveled to Miami to attend an electronic music festival. At the event, Petrov met with Eraliyev and said if he would like to earn extra money, he could do the same thing Kovalenko was doing. Petrov provided Eraliyev with a fake driver’s license that bore Eraliyev’s picture, but listed the PII of another individual born in Kazakhstan. Eraliyev subsequently used the fake license to open bank accounts at Petrov’s direction and would then withdraw the funds. [14]

          Kovalenko and Eraliyev were arrested for offenses related to the refund fraud scheme in March 2016. [15] Kovalenko pled guilty to bank fraud in May 2016, and Eraliyev pled guilty to theft of Government property in June 2016. [16]

          After Petrov was arrested on November 16, 2016, agents conducting a search of his residence discovered a photocopy of a Social Security card, work authorization permit, and a Florida driver’s license, all belonging to a Russian citizen, as well as debit cards issued to others. Agents also found evidence of Petrov’s activities on several online cybercrime forums, where he offered to partner with cybercriminals engaged in stolen identify refund fraud and other crimes. A review of bank accounts controlled by Petrov revealed that he had received over $183,000 in deposits from 2014 to 2016; however, he has not filed an income tax return since 2011. [17]

          Petrov was sentenced to 57 months’ imprisonment, plus three years of supervised release. [18] As part of his plea agreement, Petrov agreed to forfeit at least $183,000 in U.S. currency; [19] however, his restitution hearing has been deferred until August 12, 2017. At the completion of his term of imprisonment, Petrov will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings. [20]

          • [1] S.D. Fla. Crim. Compl. filed Nov. 17, 2016.
          • [2] S.D. Fla. Judgment filed June 12, 2017.
          • [3] S.D. Fla. Crim. Compl. filed Nov. 17, 2016.
          • [4] S.D. Fla. Crim. Compl. filed Nov. 17, 2016; S.D. Fla. Executed Arrest Warrant filed Dec. 6, 2016; S.D. Fla. Crim. Docket iled Dec. 29, 2016.
          • [5] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
          • [6] S.D. Fla. Crim. Compl. filed Nov.17, 2016.
          • [7] S.D. Fla. Plea Agr. filed Feb. 28, 017.
          • [8] S.D. Fla. Crim. Compl. filed Nov. 17, 016.
          • [9] Id.
          • [10] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
          • [11] Id.
          • [12] S.D. Fla. Crim. Compl. filed Nov. 7, 2016.
          • [13] Id.
          • [14] Id.
          • [15] Id.
          • [16] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
          • [17] Id.
          • [18] S.D. Fla. Judgment filed June 12, 2017.
          • [19] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
          • [20] S.D. Fla. Judgment filed June 12, 2017.


          • July 25, 2017

            Two Individuals Plead Guilty in Connecticut for Roles in IRS Impersonation Scam

            On June 12, 2017, in the District of Connecticut, Nancy J. Frye pled guilty to conspiracy to commit wire fraud for her role in a scheme involving the impersonation of Internal Revenue Service (IRS) employees. [1] Coconspirator Douglas Martin pled guilty to the same offense on May 18, 2017. [2] Both were initially arrested by Treasury Inspector General for Tax Administration (TIGTA) special agents on September 15, 2016, in Bristol, Connecticut. [3]

            According to the court documents, both Frye and Martin have prior criminal convictions. In 2012, Frye was convicted of first degree larceny for stealing more than $185,000 from her father as his conservator. Martin is a multi- convicted felon whose convictions include assault, burglary, and larceny, among other offenses. [4]

            From about October 2015 until about June 2016, [5] Frye, Martin, and others knowingly and willfully conspired to devise a scheme to defraud others and obtain money through false representations. The scheme to defraud in this matter involved individuals representing themselves as employees of the IRS in order to use the IRS's administrative and criminal authority to obtain money from others. [6]

            Frye, Martin, and their coconspirators made unsolicited telephone calls to people and falsely represented themselves as IRS agents or officers calling on behalf of the IRS. During the calls, the impersonator would tell the call recipient that the recipient had an outstanding debt with the IRS that must be paid immediately. The impersonator would then threaten the individual with either arrest or a lawsuit if he/she did not immediately settle the non-existent IRS debt. At times, the scheme participants provided identification information, including badge numbers, department and work titles, and telephone numbers, that appeared to be legitimately associated with the IRS. [7]

            Victims were directed to wire money to individuals they believed were employees of the IRS to avoid the threatened action. [8] In furtherance of the conspiracy, Frye would receive telephone calls and text messages from individuals who had successfully recruited her to pick up money that was wired through MoneyGram® and Western Union® and to deposit the money into specific bank accounts. Frye, in turn, recruited Martin and others to assist her in picking up the wired funds from locations in Connecticut. Frye then deposited the money that she collected into the bank accounts. [9]

            One New York victim was told that failure to make immediate payment would result in arrest. The victim then travelled to three separate locations to make the payments as directed. Another victim, from Connecticut, received two voicemail messages from someone claiming to be an IRS investigator and instructing the victim to contact Officer Ryan Wilson of the IRS Criminal and Investigative Department. The victim called as directed and was told he/she owed more than $6,300 in taxes. The victim wrote a check and deposited it into a Bank of America account as instructed. Another impersonator then told the victim that an additional amount of more than $4,600 was owed to cover the fees for the sheriff and the court. The victim wired an additional $2,900 via Western Union® before discovering he/she had been scammed. [10]

            Frye and others working at her direction received approximately $583,391 [11] from as many as 527 victims. [12] Frye received approximately $40 per transaction and made approximately $500 per day . [13]

            Frye and Martin each could face a maximum sentence of 20 years’ imprisonment. [14] Martin’s sentencing is scheduled for August 24, 2017, and Frye is scheduled for sentencing on September 20, 2017. [15]

            • [1] D. Conn. Plea Agr. filed June 12, 2017.
            • [2] D. Conn. Plea Agr. filed May 18, 2017.
            • [3] D. Conn. Executed Arrest Warrant filed Sep. 23, 2016; D. Conn. Executed Arrest Warrant filed Sep. 23, 2016.
            • [4] D. Conn. Crim. Compl. filed Sep. 13, 2016.
            • [5] D. Conn. Plea Agr. filed June 12, 2017.
            • [6] D. Conn. Info. filed May 18, 2017.
            • [7] D. Conn. Plea Agr. filed June 12, 2017.
            • [8] Id.
            • [9] D. Conn. Crim. Compl. filed Sep. 13, 2016.
            • [10] D. Conn. Plea Agr. filed June 12, 2017.
            • [11] Id.
            • [12] D. Conn. Info. filed May 18, 2017.
            • [13] D. Conn. Crim. Compl. filed Sep. 13, 2016.
            • [14] D. Conn. Plea Agr. filed June 12, 2017; D. Conn. Plea Agr. filed May 18, 2017.
            • [15] D. Conn. Crim. Docket as of June 15, 2017.


            • Two Individuals Indicted in Houston for Their Role in an IRS Impersonation Scam

              On May 25, 2017, in the Southern District of Texas, Vedas Engineer and Bhavdip Sanghavi were indicted for conspiracy to commit wire fraud and wire fraud in connection with a scheme involving the impersonation of Internal Revenue Service (IRS) employees. Engineer was also charged with mail fraud. [1]

              According to the court documents, from about June 2015 until May 2017, Engineer, Sanghavi, and others knowingly conspired to intentionally devise a scheme to defraud and to obtain money by means of false and fraudulent representations. The purpose of the conspiracy was to fraudulently obtain payments for fictional taxes owed to the IRS. The defendants posed as IRS agents and unlawfully pressured victims to send purported delinquent taxes to persons in the Houston area via wire or mail. They then utilized runners to acquire the money. [2]

              Specifically, taxpayers received telephone calls from persons falsely representing themselves to be employees of the IRS. The caller told the victim that he/she owed money to the IRS and would then use various methods of intimidation and threats to convince the victim to pay money in order to resolve the tax debt immediately. [3]

              The victim would generally be directed to a MoneyGram® or Western Union® location to immediately wire the funds. Sometimes the victim was directed to deposit the money into a particular bank account so the funds could be transferred electronically, or to wire the money in several installments, to several different recipients, breaking up the transactions so as not to be detected as easily. Based on the instructions given by the conspirator, the victim would comply. [4]

              Engineer and Sanghavi would take the specific runner, who had been identified as the recipient of the money in the conversation with the victim, to the location where the funds were being sent. The runner would then pick up the money and provide it to Engineer and Sanghavi, receiving a small payment for his/her participation. Some runners were encouraged to open bank accounts for the purpose of having victims’ funds wired into them. Engineer and Sanghavi used at least 17 different runners in the scheme and transitioned them frequently in an effort to divert attention from the fraud. [5]

              On about May 2, 2017, a small business owner in Shreveport, Louisiana, reported that he had fallen victim to the IRS impersonation scam. He had been contacted by individuals claiming to be IRS employees and directed to send a $25,000 cashier’s check via United Parcel Service (UPS) overnight mail to an address in Houston, Texas. The victim believed that the funds were to satisfy a purported tax liability and that the recipient was an IRS attorney. Agents of the Treasury Inspector General for Tax Administration (TIGTA) witnessed the delivery of the UPS package to the specified address and observed a male, identified as Engineer, sitting in a vehicle parked one to two houses away. Agents made contact with Engineer and he agreed to meet with TIGTA agents on May 8, 2017, with his attorney. Approximately two hours before the scheduled meeting, TIGTA received information indicating that Engineer was attempting to leave the country via a flight from Chicago O’Hare airport for his native country of India. [6] TIGTA agents subsequently arrested Engineer on the same date in Chicago, Illinois, [7] and he has been ordered detained pending trial. [8]

              Based on criminal complaints filed on May 9, 2017, alleged participants Sanghavi and Kautilya Vyas were also arrested by TIGTA agents. [9] Additional legal actions are anticipated for all.

              • [1] S.D. Tex. Indict. filed May 25, 2017.
              • [2] Id.
              • [3] Id.
              • [4] Id.
              • [5] Id.
              • [6] S.D. Tex. Crim. Compl. filed May 8, 2017.
              • [7] S.D. Tex. Executed Arrest Warrant filed May 23, 2017.
              • [8] S.D. Tex. Crim. Docket as of June 8, 2017.
              • [9] S.D. Tex. Crim. Docket filed May 23, 2017; S.D. Tex. Crim. Docket filed May 9, 2017.


              • IRS Employee Arrested in a Stolen Identity Refund Fraud Scheme

                On May 11, 2017, in the Northern District of Georgia, Internal Revenue Service (IRS) employee Stephanie Parker was arrested [1] for her role in a stolen identity refund fraud scheme. Parker was indicted on April 25, 2017, for wire fraud and aggravated identity theft related to the scheme. [2]

                According to the court documents, Parker has been employed by the IRS since November 2010 at the Chamblee, Georgia office. Through her employment, Parker had access to the means of identification of others, which could include any information used to identify a specific individual, such as name, Social Security Number (SSN), date of birth, and address. [3]

                From at least September 2012 through at least April 2013, Parker knowingly devised a scheme to defraud the IRS and to obtain money by means of materially false pretenses and representations. Parker also knowingly possessed and used the means of identification of others without lawful authority in relation to the scheme. [4]

                Specifically, through her IRS employment, Parker accessed taxpayer information, including the names and SSNs of five individuals, and used this information for her own benefit. Parker and others prepared and electronically filed fraudulent income tax returns in the names of those five individuals and directed the anticipated tax refunds to bank accounts held in the names of others. Some of the tax refunds were subsequently used to purchase money orders. The fraudulent returns all were electronically filed from Parker’s residence in Atlanta, Georgia. [5]

                Wire fraud carries a maximum statutory sentence of 20 years’ imprisonment and aggravated identity theft requires an additional two- year term of imprisonment to any other sentence imposed. Additional legal actions are anticipated.

                • [1] N.D. Ga. Executed Arrest Warrant filed May 16, 2017.
                • [2] N.D. Ga. Indict. filed Apr. 25, 2017.
                • [3] Id.
                • [4] Id.
                • [5] Id.


                • North Carolina Tax Preparer Sentenced for Corruptly Endeavoring to Impede the IRS and Tax Evasion

                  On May 9, 2017, in the Middle District of North Carolina, tax preparer Henti Lucian Baird was sentenced for corruptly endeavoring to impede the IRS and tax evasion. [1] Baird pled guilty to the offenses in October 2016. [2]

                  According to the court documents, Baird, a resident of Greensboro, North Carolina, owned and operated HL Baird Tax Consultants. For nearly forty years, Baird had worked extensively with the IRS, serving for 12 years as a revenue officer for the Collection Division for the IRS in the 1970s and 1980s.[3] The business advertised that it provided various tax services, including tax preparation and representing clients in matters before the IRS, [4] and specialized in IRS problems. [5] From July 1998 until April 2009, the IRS authorized Baird as an enrolled agent, which allowed him to represent taxpayers before the IRS and required him to complete continuing education courses. [6]

                  From about January 2008 through about October 2013, Baird corruptly endeavored to obstruct and impede the due administration of the Internal Revenue laws by various acts. These included filing Forms 2848 on behalf of taxpayers after the IRS had terminated his enrolled agent status, using another person’s name and SSN to apply for and use a Preparer Tax Identification Number (PTIN) to file returns for taxpayers, and hiding his income and assets to evade the payment of individual taxes owed. [7]

                  Specifically, the IRS Form 2848, Power of Attorney and Declaration of Representative, authorizes an individual to represent a taxpayer before the IRS. The representative must be eligible to practice before the IRS. Baird filed at least 120 Forms 2848, where he signed, under penalties of perjury, that he was an enrolled agent, but in 2009 the IRS revoked Baird’s status as an enrolled agent. [8] Additionally, in 2011 and 2012, Baird filed a renewal application for a PTIN using the SSN and name of his stepson without his knowledge. A PTIN is the number the IRS assigns to those who prepare or assist in the preparation of Federal tax returns for compensation. [9] Baird then prepared and filed over 900 tax returns for clients using the PTIN. [10]

                  Despite Baird’s knowledge of his tax obligations, he failed to pay the taxes that he self- assessed, and as of September 2016, owed income taxes of approximately $477,028.80 for TYs 1998 through 2013. The IRS attempted several times to levy Baird’s bank accounts, but those attempts have resulted in minimal recovery. [11] Baird responded to the liens and levies by using his knowledge of the IRS collection process to delay and impede the IRS’s efforts. Baird willfully attempted to evade and defeat the payment of an income tax due and owing by him by engaging in numerous ploys, including telling the investigating revenue officer that he did not have an account at a specific bank, when in reality he controlled multiple accounts at this bank; by sending two estimated tax payments to the IRS for $18,000 each, both of which were returned for insufficient funds; and by making substantial cash deposits into various bank accounts in the names of his adult children. [12]

                  Baird was sentenced to 43 months in prison, followed by one year of supervised release. He was further ordered to pay $573,422.74 in restitution to the IRS. Baird is scheduled to begin serving his sentence on July 5, 2017. [13]

                  • [1] M.D. N.C. Judgment filed May 24, 2017.
                  • [2] M.D. N.C. Crim. Docket filed Sept. 27, 2016; M.D. N.C. Plea Agr. filed Sept. 29, 2016.
                  • [3] M.D. N.C. Factual Basis filed Sept. 29, 2016.
                  • [4] M.D. N.C. Info. filed Sept. 27, 2016.
                  • [5] M.D. N.C. Factual Basis filed Sept. 29, 2016.
                  • [6] Id.
                  • [7] M.D. N.C. Info. filed Sept. 27, 2016.
                  • [8] M.D. N.C. Factual Basis filed Sept. 29, 2016.
                  • [9] M.D. N.C. Info. filed Sept. 27, 2016.
                  • [10] M.D. N.C. Factual Basis filed Sept. 29, 2016.
                  • [11] M.D. N.C. Info. filed Sept. 27, 2016.
                  • [12] M.D. N.C. Factual Basis filed Sept. 29, 2016; M.D. N.C. Info. filed Sept. 27, 2016.
                  • [13] M.D. N.C. Judgment filed May 24, 2017.


                  • IRS Employee Sentenced in a Scheme to Defraud His Employer

                    On May 12 2017, in the Eastern District of New York, former Internal Revenue Service (IRS) employee James Brewer was sentenced for filing false tax returns, aiding and assisting in the preparation of false tax returns, wire fraud, mail fraud, and perjury. [1] Brewer pled guilty to the offenses in September 2016. [2]

                    According to the court documents, Brewer was an IRS revenue officer assigned to the Edison, New Jersey, IRS office. As a Revenue Officer, Brewer was responsible for collecting money owed to the IRS and securing Federal tax returns from taxpayers who failed to file them. In connection with their employment, IRS employees are prohibited from preparing tax returns for profit and are prohibited from operating an outside business without prior written approval from IRS management. In addition to the criminal charges, Brewer violated these regulations by preparing fraudulent Federal tax returns for taxpayers in exchange for a fee and by operating a personal business selling items through eBay without proper approval. [3]

                    Between 2010 and 2015, Brewer prepared nine fraudulent tax returns for others that contained false statements relating to dependents, filing status, itemized deductions, business profits or losses, and residential energy credits. These false statements on the tax returns either caused the clients to receive a refund when they otherwise would not have or caused inflated refunds. Brewer earned money preparing the returns by diverting a portion of the taxpayers’ refunds to bank accounts within his control. In some cases, the taxpayers believed Brewer had prepared their tax returns as a favor and were unaware Brewer had diverted or attempted to divert a portion of their refunds to his bank accounts. [4]

                    In furtherance of his scheme, for Tax Years 2011, 2012, and 2013, Brewer made fraudulent claims on his own tax returns, filed jointly with his current wife, claiming fraudulent dependents, underreporting the gross receipts of his eBay business, claiming false deductions, and failing to report money earned preparing tax returns for others. By making these false claims, Brewer fraudulently reduced his taxable income and increased the amount of his tax refunds. Between January 2012 and February 2015, Brewer electronically filed 11 of the 12 fraudulent returns from Staten Island, New York, including two of his own. [5]

                    According to the Government’s Sentencing Memorandum, although Brewer was not required to plead guilty to aggravated identity theft, he committed the offense on a number of occasions. Brewer used at least nine different victims’ names and Social Security Numbers in order to falsely claim them as dependents on his own tax returns and returns he filed for others. The victims were people with whom Brewer or his family had previous interactions, and they had entrusted Brewer or his family members with their personal identifying information. Two victims worked for Brewer’s aunt, another victim previously dated Brewer’s mother and Brewer had prepared the individual’s taxes, and yet another victim was the minor child of Brewer’s best friend. [6]

                    Further, Brewer perjured himself by knowingly making false declarations to the U.S. Tax Court in 2012, while under oath. Brewer had falsely claimed the First-Time Homebuyer Credit on his 2008 Federal return. This credit was established for taxpayers who purchased a new home in 2008, 2009, or 2010; however, taxpayers who owned a principal residence during the three years prior to the date of purchase of the new home were not eligible for the $7,500 tax credit. Brewer did not meet the eligibility conditions for the credit because he owned and used his Staten Island property as his principal residence until he and his wife at the time purchased a home in Avenel, New Jersey in 2008. After Brewer was notified that the IRS had disallowed the credit, he appealed the decision and a trial was held in U.S. Tax Court. During the trial, Brewer lied, testifying under oath that he did not live in his Staten Island residence for any part of the three years prior to his purchase of the Avenel home. [7]

                    Brewer was sentenced to six months’ imprisonment, followed by one year of supervised release and was ordered to pay restitution to the IRS in the amount of $73,548.00. Further, Brewer is to refrain from engaging in any employment which involves the preparation or filing of income tax returns for anyone other than himself and must fully cooperate with the IRS regarding his returns, reporting all correct taxable income and claiming only allowable expenses. Brewer is scheduled to begin his sentence on June 26, 2017. [8]

                    • [1] E.D. N.Y. Judgment filed May 22, 2017.
                    • [2] E.D. N.Y. Criminal Docket as of Sep. 30, 2016.
                    • [3] E.D. N.Y. Indict. filed Apr. 24, 2015.
                    • [4] E.D. N.Y. Superseding Indict. filed Aug. 4, 2016.
                    • [5] Id.
                    • [6] E.D. N.Y. Government’s Sentencing Memorandum filed May 5, 2017.
                    • [7] E.D. N.Y. Indict. filed Apr. 24, 2015.
                    • [8] E.D. N.Y. Judgment filed May 22, 2017.


                    • June 28, 2017

                      Florida Man Pleads Guilty for Role in IRS Impersonation Scam

                      On May 5, 2017, in the Southern District of Florida, Andre Oakley Wellington pled guilty to conspiracy to commit mail fraud. [1] Wellington was initially arrested for the offense on January 12, 2017, and indicted on January 27, 2017. [2]

                      According to the court documents, from at least July 2016 through January 12, 2017, Wellington knowingly conspired with others to devise a scheme to defraud and obtain money by means of materially false and fraudulent representations. The purpose of the conspiracy was for Wellington and his coconspirators to unjustly enrich themselves by posing as employees of the Internal Revenue Service (IRS) and the Federal Bureau of Investigation (FBI) in order to induce a victim to send payments to them. [3]

                      As part of their scheme, Wellington’s coconspirators impersonated employees of the IRS and the FBI during telephone conversations with the victim and falsely represented that the victim had made an error on her tax documents and owed money to the IRS. The coconspirators threatened to initiate a lawsuit against the victim if she did not make payments to satisfy her alleged IRS debt. [4]

                      The victim sent money on numerous occasions to various addresses in order to satisfy her non-existent IRS debt. The bulk of the money was sent in cash, but the victim was also instructed to send money in other forms, including Apple iTunes® gift cards, MoneyGram®, Western Union®, and cashier’s checks. From July 2016 until about November 2016, the victim was induced to send a total of $550,000 pursuant to the instructions of the conspirators. [5]

                      During the week of January 2, 2017, Wellington was contacted by one of the individuals who was participating in the scheme and advised he would be receiving a package the following week at his residence in Coral Springs, Florida. Wellington agreed to receive it, understood the package would contain money, and believed the package was part of an illegal scheme to defraud. [6]

                      On January 10, 2017, one of Wellington’s coconspirators advised the victim to send $25,000 in cash via Federal Express to “Martha Calhoun” at the address of Wellington’s residence in Florida. [7]

                      On January 12, 2017, the Federal Express package was delivered to Wellington’s residence. Law enforcement observed delivery of the package. Wellington’s wife admitted taking receipt of the package, which law enforcement recovered. Wellington subsequently agreed to speak with law enforcement and admitted he had planned to receive the package and then wait for a telephone call telling him where to deliver it. [8] He further admitted that he knew the package contained the proceeds of what he referred to as a “Jamaican Lottery” and acknowledged he had participated in a similar scheme in December 2016. Wellington also admitted that prior to meeting with law enforcement, he deleted the call log history on his personal cellular phone in order to conceal his phone activity. [9]

                      Wellington could face a maximum sentence of 20 years’ imprisonment for his role in the conspiracy. [10] His sentencing is scheduled for July 14, 2017. [11]

                      • [1] S.D. Fla. Plea Agr. filed May 5, 2017.
                      • [2] S.D. Fla. Crim. Docket filed Jan. 27, 2017.
                      • [3] S.D. Fla. Indict. filed Jan. 30, 2017.
                      • [4] Id.
                      • [5] S.D. Fla. Crim. Compl. filed Jan. 13, 2017.
                      • [6] S.D. Fla. Factual Proffer filed May 5, 2017.
                      • [7] Id.
                      • [8] Id.
                      • [9] S.D. Fla. Crim. Compl. filed Jan. 13, 2017.
                      • [10] S.D. Fla. Plea Agr. filed May 5, 2017.
                      • [11] S.D. Fla. Crim. Docket as of May 17, 2017.


                      • California Tax Preparer Sentenced in a Conspiracy to Defraud the Government and Retaliate against Federal Employees

                        On April 26, 2017, in the Eastern District of California, Teresa Marty was sentenced for conspiracy to commit false claims against the United States and conspiracy to defraud the United States. [1] Marty was initially indicted, along with coconspirators Rebecca Bandera-Marty and Pamela Ann Harris, in June 2013 for filing false claims with the Internal Revenue Service (IRS). [2] Two superseding indictments were subsequently filed in August 2013 and December 2015 adding coconspirators Charles Tingler and Victoria Tingler, as well as additional charges related to retaliation against Federal employees and unauthorized disclosure and use of a Social Security Number (SSN). [3] Marty pled guilty in August 2016 to conspiracy to defraud the United States and retaliate against Government officials. [4]

                        According to the court documents, Marty was an IRS enrolled agent and California licensed tax preparer, as well as the owner/operator of Advanced Financial Services in Placerville, California. Marty, along with Harris and Bandera-Marty, filed at least 250 false income tax returns on behalf of individuals residing in 26 different States, fraudulently claiming more than $60 million in Federal income tax refunds. The returns falsely reported on IRS Forms 1099-OID that a client’s total outstanding debt was actually interest income that had been withheld by the IRS, rather than paid to the client, thus entitling the client to a tax refund of that amount. Based on the false returns filed, the IRS erroneously issued over 40 tax refunds totaling approximately $9 million. [5]

                        Charles and Victoria Tingler, also of Placerville, California, were clients of Marty’s tax preparation business. They too, along with Marty and other individuals, knowingly filed a false tax return with the IRS claiming a refund of $358,415. [6]

                        When the IRS assessed Marty with a tax due and owing in the approximate amount of $388,735.08, and the Tinglers with an amount of approximately $363,843.39 related to the fraudulent refunds, [7] Marty, Harris, and Charles Tingler intentionally and knowingly conspired to impede and obstruct the lawful functions of the IRS. On multiple dates, both Charles Tingler and Victoria Tingler sent correspondence to the IRS revenue officer assigned to the collection of their debt alleging that the revenue officer owed them $6 million and demanding payment of such. In furtherance of the conspiracy, Marty hired a collection agency to collect the false debt allegedly owed. Harris subsequently provided the collection agency with the home address, SSN, and telephone number of the revenue officer. [8]

                        Marty, Charles Tingler, and Victoria Tingler also filed retaliatory liens in public records against the properties of multiple Federal employees on account of the performance of their official duties involving the collection and litigation of their respective cases, knowing that the liens contained materially fraudulent representations. The targeted officials included IRS employees and Department of Justice attorneys. The liens, filed with the Office of the California Secretary of State, falsely claimed encumbrances ranging from at least $500,000 to $84 million. [9] Additionally, in filing such false liens, Marty and the Tinglers used and disclosed publicly the SSNs, dates of birth, and home addresses of the targeted Federal employees. [10]

                        Harris, Bandera- Marty, Charles Tingler, and Victoria Tingler all entered guilty pleas for their respective roles in the conspiracy. Bandera-Marty and Harris were each sentenced in February 2017. Bandera-Marty was sentenced to 36 months’ probation, which includes 12 months of home detention and monitoring. Additionally, she was ordered to complete 100 hours of community service. Harris was sentenced to 60 months’ probation. Charles and Victoria Tingler are scheduled to be sentenced on May 31, 2017. [11]

                        Marty was sentenced to ten years in prison, followed by two years of supervised release. She was further ordered to pay restitution to the IRS totaling more than $9.5 million. [12] Harris and Bandera-Marty are jointly and severally liable with Marty for more than $6.1 million of the restitution. [13] Marty is scheduled to begin serving her sentence on June 5, 2017. [14]

                        • [1] E.D. Cal. Judgment filed Apr. 28, 2017.
                        • [2] E.D. Cal. Indict. filed June 20, 2013.
                        • [3] E.D. Cal. Superseding Indict. filed Aug. 15, 2013; E.D. Cal. Second Superseding Indict. filed Dec. 3, 2015.
                        • [4] E.D. Cal. Plea Agr. filed Aug. 31, 2016.
                        • [5] E.D. Cal. Plea Agr. filed Aug. 31, 2016.
                        • [6] E.D. Cal. Second Superseding Indict. filed Dec. 3, 2015.
                        • [7] E.D. Cal. Plea Agr. filed Aug. 31, 2016.
                        • [8] E.D. Cal. Second Superseding Indict. filed Dec. 3, 2015.
                        • [9] E.D. Cal. Second Superseding Indict. filed Dec. 3, 2015.
                        • [10] E.D. Cal. Plea Agr. filed Aug., 2016.
                        • [11] E.D. Cal. Crim. Docket as of May 12, 2017.
                        • [12] E.D. Cal. Judgment filed Apr. 28, 2017.
                        • [13] E.D. Cal. Restitution Order filed May 8, 2017.
                        • [14] E.D. Cal. Judgment filed Apr. 28, 2017.


                        • IRS Employee Arrested for Theft of Government Funds

                          On April 26, 2017, in the Eastern District of Pennsylvania, Internal Revenue Service (IRS) employee Tyrell Moncrief was arrested for the theft of Government money. [1] Moncrief was indicted for the offense on April 11, 2017. [2]

                          According to the court documents, Moncrief worked as a contact representative for the IRS in Philadelphia, Pennsylvania, from about October 2008 to the present. In October 2014 Moncrief was promoted from a seasonal employee to a permanent employee. [3]

                          From approximately January 31, 2010 to January 11, 2014, while employed in a seasonal status, Moncrief stole and knowingly converted to his own use money and property of the United States. Specifically, during this period Moncrief accessed by telephone on a weekly basis the Interactive Claims Response System at the Pennsylvania Department of Labor to determine his eligibility for unemployment compensation benefits. Moncrief answered a series of questions during the accesses in which he falsely stated that he was not working and that work was not available, when, in fact, he was working at the IRS and receiving pay for his work at the IRS. Moncrief fraudulently obtained a total of approximately $38,967 in unemployment compensation benefits to which he was not entitled. [4]

                          Moncrief could face a maximum sentence of ten years’ imprisonment. Additional legal actions are anticipated.

                          • [1] E.D. Penn. Executed Arrest Warrant filed May 8, 2017.
                          • [2] E.D. Penn. Indict. filed Apr. 11, 2017.
                          • [3] Id.
                          • [4] Id.


                          • Nevada Man Sentenced in a Telemarketing Fraud Scheme Targeting the Elderly

                            On April 18, 2017, in the District of Nevada, Willie J. Montgomery was sentenced for his role in a telemarketing fraud scheme. [1] Montgomery pled guilty in October 2016 to conspiracy to commit wire or mail fraud in connection with a telemarketing scheme that was intended to target victims over the age of 55. [2] Montgomery and two coconspirators, Reginald A. Lowe and Tanika Armstrong, were initially indicted and arrested in March 2016. [3]

                            According to the court documents, from November 2008 to September 2013, Montgomery, Lowe, and others devised a scheme to defraud and obtain money by means of false and fraudulent pretenses. In furtherance of the conspiracy, Montgomery, Lowe, and others obtained “lead sheets,” which identified persons who had previously entered sweepstakes, lotteries, or other prize-drawing contests, and who were thus thought to be susceptible to misrepresentations regarding potentially winning a prize, sweepstakes, or lottery. They knew that these leads typically consisted of contact information for elderly or retirement-age people or others who were particularly vulnerable or susceptible to schemes. [4]

                            Using the lead sheet information, the conspirators, in the role of "talkers," would contact potential victims by telephone and falsely represent to them that they had won prizes consisting of large amounts of cash or other high-value merchandise. In doing so, the talker would hold himself out as being an official or employee of a lottery/sweepstakes committee or a Government regulatory authority. The talker would frequently represent himself to be an official or employee of the IRS. The talker would tell the victim that, in order to receive the prize, he or she must first send money as payment for taxes on prize winnings or other fees. Montgomery, Lowe, and their coconspirators knew at all times that the victims had not actually won any prizes or things of value and that they would receive nothing for their payments. [5]

                            The talker would direct the victim to send payment in the form of checks, money orders, U.S. currency, or other negotiable instruments via Western Union® or MoneyGram® wire transfer, United States Postal Service, United Parcel Service (UPS), or FedEx. Montgomery and Lowe used individuals referred to as “runners” to retrieve the payments and deliver the money to them and their coconspirators. The runners were given a small percentage of the criminal proceeds. [6]

                            The defendants caused victims to send approximately $96,983 via MoneyGram and at least $366,238 via Western Union wire transfers. The defendants also fraudulently induced the victims to send a total of at least $389,924 through the U.S. mail, UPS, and FedEx. [7]

                            During the course of the scheme, Montgomery’s wife, Tanika Armstrong, was provided with money orders to deposit and convert to cash. Armstrong opened a bank account in the name of a limited liability company in order to launder the monetary instruments and conceal the criminally derived origins. Armstrong did so with full knowledge that the proceeds were fraudulently obtained. [8]

                            In total, the conspirators fraudulently obtained approximately $1,175,670 from the scheme, which claimed at least 66 victims from 22 different states. [9]

                            Armstrong pled guilty in October 2016 to conspiracy to commit money laundering for her role in the scheme [10] and was sentenced on April 10, 2017, to three years of probation plus restitution in the amount of $18,475.00. [11] Lowe also pled guilty in October 2016 and was scheduled for sentencing on January 25, 2017; [12] however, on or about January 14, 2017, Lowe passed away. [13]

                            Montgomery was sentenced to 88 months’ imprisonment, followed by three years of supervised release. He was further ordered to pay restitution in the amount of $1,163,220.21 and a forfeiture judgment was filed in the amount of $1,175,670.21. [14] Montgomery is appealing his sentence. [15]

                            • [1] D. Nev. Judgment filed Apr. 21, 2017.
                            • [2] D. Nev. Plea Agr. filed Oct. 25, 2016.
                            • [3] D. Nev. Indict. filed Mar. 16, 2016; D. Nev. Arrest Warrant filed March 23, 2016; D. Nev. Arrest Warrant filed March 24, 2016; D. Nev. Arrest Warrant filed March 25, 2016.
                            • [4] D. Nev. Plea Agr. filed Oct. 25, 2016.
                            • [5] Id.
                            • [6] Id.
                            • [7] Id.
                            • [8] D. Nev. Plea Agr. filed Oct. 25, 2016.
                            • [9] D. Nev. Plea Agr. filed Oct. 25, 2016.
                            • [10] D. Nev. Plea Agr. filed Oct. 25, 2016.
                            • [11] D. Nev. Judgment filed Apr. 12, 2017.
                            • [12] D. Nev. Crim. Docket as of Nov. 18, 2016.
                            • [13] D. Nev. Stipulation to Continue Sentencing Date filed Jan. 20, 2017.
                            • [14] D. Nev. Judgment filed Apr. 21, 2017.
                            • [15] D. Nev. Notice of Appeal filed Apr. 24, 2017.


                            • Eight Individuals Arrested for Fraud in IRS Phone Scams

                              On April 27, 2017, Inspector General J. Russell George announced the arrests of eight individuals based upon indictments that charged a total of eleven individuals. All of those indicted were allegedly involved in schemes to impersonate Internal Revenue Service agents in order to obtain money from victims by falsely representing that the victims owed back taxes or other fees. Two of the eleven individuals were charged in an indictment for their fraudulent conduct last year.


                              Ohio Woman Pleads Guilty to Participating in Bogus Sweepstakes Scheme

                              On April 4, 2017, Lashell Patton plead guilty in the Northern District of Ohio’s Eastern Division for conspiring to commit wire fraud as part of a bogus sweepstakes scheme. [1]

                              Patton was indicted on January 5, 2017, [2] for conspiring with others to defraud an individual by falsely telling the victim that he had won $3 million in a sweepstakes, but that he had to pay taxes and fees before the winnings would be distributed. [3] Between July 2015 and April 2016, the victim sent 15 Western Union money wires to Patton totaling $11,615 and 111 MoneyGram money wires totaling $90,090. [4]

                              Patton’s sentencing is scheduled for August 23, 2017. [5] She f aces a maximum of 20 years in prison, a maximum statutory fine of $250,000, and up to three years of supervised release. Patton also agreed to pay restitution in the amount of $101,705. [6] Additional legal actions are anticipated.

                              • [1] N.D. Ohio Plea Agr. Filed April 4, 2017.
                              • [2] N.D. Ohio Indict. Filed January 5, 2017.
                              • [3] N.D. Ohio Plea Agr. Filed April 4, 2017.
                              • [4] Id.
                              • [5] N.D. Ohio Crim. Docket as of April 26, 2017.
                              • [6] N.D. Ohio Plea Agr. Filed April 4, 2017.


                              • Michigan Man Threatened to Shoot IRS Employees

                                On April 4, 2017, a criminal complaint was filed in the Eastern District of Michigan charging Timothy Bradley Darling with assaulting, resisting, or impeding certain officers or employees of the United States. [1]

                                According to the court documents, on Friday, March 31, 2017, the Treasury Inspector General for Tax Administration (TIGTA) received information from the Internal Revenue Service (IRS) regarding a phone call from Darling made on that same date. Specifically, an IRS contact representative had received a phone call from Darling, during which he essentially stated he would go to the IRS on Monday and shoot employees. The contact representative who took the call indicated Darling sounded agitated, and the employee was scared. A review of the recorded conversation confirmed that Darling indeed said, “I’ll show up to the IRS downtown Monday morning with a gun. I’ll be shooting one employee for every $100 you owe me.” [2]

                                Agents made multiple attempts to contact Darling, both in person and by telephone. His mother said he no longer lived at a Carleton, Michigan residence. She did not know where he was, but thought he was living in his car. Darling’s mother explained that she had filed a Personal Protection Order against him because of threats he had recently made towards her. When agents attempted several times to contact Darling by phone, he either answered and hung up, told them to leave him alone and take the money, or ignored the call and subsequent voice mail. [3]

                                Darling had his initial appearance in court on April 5, 2017, and was temporarily detained, but was later released on a $10,000 unsecured bond on April 7, 2017. [4] He could face a maximum of one year in prison for the threats. Additional legal actions are anticipated.

                                • [1] E.D. Mich. Crim. Compl. filed Apr. 4, 2017.
                                • [2] Id.
                                • [3] Id.
                                • [4] E.D. Mich. Crim. Docket filed Apr. 4, 2017.


                                • May 17, 2017

                                  Real Estate Agent Sentenced for Fabricating an IRS Letter to Facilitate a Sale

                                  On March 31 2017, in the Western District of Texas, Austin Division, Russell Eric Spillers was sentenced for wire fraud [1] in connection with fraudulent representations in a real estate transaction. [2] Spillers was charged with the offense on January 18, 2017, and entered a guilty plea on January 23, 2017. [3]

                                  According to the court documents, from about December 18, 2015 until about December 28, 2015, Spillers devised a scheme to defraud the Internal Revenue Service (IRS) and Gracy Title. Specifically, Spillers, acting as a real estate agent, facilitated the sale of a property in Austin, Texas, that had four Federal tax liens filed against it for money owed by the property owners to the IRS. [4]

                                  The title company, Gracy Title, could not guarantee that the title on the property was free and clear unless the Federal tax liens were satisfied. Therefore, in order to facilitate the pending sale, Spiller knowingly created a fraudulent IRS letter titled “Conditional Commitment to Discharge Certain Property from Federal Tax Lien.” The fabricated letter appeared to be on IRS letterhead and contained the signature of an IRS employee. In the letter, it was falsely stated that the IRS had agreed to accept a $1,300 payment from the sale of the property to satisfy the tax liens and allow the sale to go through. Spiller sent the fraudulent letter to Gracy Title via e-mail and then, relying on the letter, Gracy Title guaranteed that the title on the property was clear. The real estate transaction was finalized and Spiller received a wire transfer to his business account at Wells Fargo Bank in the amount of $21,026.70 due to the sale. [5]

                                  Spiller was sentenced to 14 months’ imprisonment, followed by three years of supervised release. He was further ordered to pay restitution in the amount of $21,026.70 to the IRS and a fine of $7,200.00. [6]

                                  • [1] W.D. Tex. Judgment filed Apr. 3, 2017.
                                  • [2] W.D. Tex. Info. Filed Jan. 18, 2017.
                                  • [3] W.D. Tex. Crim. Docket as of Apr. 6, 2017.
                                  • [4] W.D. Tex. Info. Filed Jan. 18, 2017.
                                  • [5] Id.
                                  • [6] W.D. Tex. Judgment filed Apr. 3, 2017.


                                  • Former IRS Employee Indicted for Filing False Tax Returns

                                    On March 30, 2017, in the Eastern District of California, former Internal Revenue Service (IRS) employee Pamela Pringle was indicted for making opportunities for persons to defraud the United States and for making and subscribing false returns. [1]

                                    According to the court documents, Pringle was employed from 2000 to 2015 by the IRS in Fresno, California, in various positions, including as a contact representative. As a contact representative, she was responsible for responding to taxpayers’ inquiries regarding tax filings and making adjustments to taxpayers’ accounts. [2]

                                    At all times relevant to the charges, Pringle was an IRS employee and created opportunities for individuals to defraud the United States by offering to increase their tax refunds or offset their tax liabilities through the preparation and filing of Federal income tax returns that included false deductions. Pringle also filed fraudulent tax returns for herself, by falsely claiming deductions to which she was not entitled. [3]

                                    Around 2009, the IRS had informed Pringle that expenses reported on her tax return related to her photography work were not allowed as a deductible expense, because that work was considered to be a hobby for tax reporting purposes, not an activity engaged in for profit. Despite this, Pringle filed three subsequent tax returns between 2011 and 2013 claiming unauthorized and excessive business expenses related to her photography activities and received tax deductions and credits to which she was not authorized. [4]

                                    Specifically, as part of her scheme to defraud, Pringle willfully filed, under penalties of perjury, three Federal tax returns claiming Schedule C expenses for her photography activities in the approximate amounts of $39,507, $11,692, and $28,933 for Tax Years 2010, 2011, and 2012, respectively, knowing at the time that she had not incurred such expenses and was not authorized to claim such expenses. [5]

                                    Additionally, Pringle knowingly made and caused to be filed fraudulent tax returns for five other taxpayers, claiming false expenses such as child care expenses, tax preparation fees, medical expenses, and other Schedule A deductions. Pringle knew these taxpayers did not incur the claimed expenses and were not entitled to deduct them. [6]

                                    Pringle was arrested on April 3, 2017, [7] and released on a personal recognizance bond. [8] She could face a maximum of five years’ imprisonment. Additional legal actions are anticipated.

                                    • [1] E.D. Cal. Indict. filed Mar. 30, 2017.
                                    • [2] Id.
                                    • [3] Id.
                                    • [4] Id.
                                    • [5] Id.
                                    • [6] Id.
                                    • [7] E.D. Cal. Executed Arrest Warrant filed Apr. 5, 2017.
                                    • [8] E.D. Cal. Appearance and Compliance Bond filed Apr. 3, 2017.


                                    • Sovereign Citizen [1] Sentenced to More Than Six Years in Prison for False Claims and Retaliation Against Federal Officials

                                      On March 15, 2017, in the Central District of California, Taquan Gullett was sentenced for false claims and retaliation against a Federal officer. [2] Gullett was initially charged with the offenses in a four-count indictment in December 2014, [3] and was found guilty in August 2016. [4]

                                      According to the court documents, Gullett, an exercise physiologist with a master’s degree in kinesiology, [5] caused to be made and presented to the Internal Revenue Service (IRS) claims against the United States for payment of fraudulent tax refunds, knowing such claims were false, fictitious, and fraudulent. Additionally, Gullett filed, and attempted to file, in a public record, false liens and encumbrances against employees of the IRS and others on account of their performance of their official duties, knowing such liens and encumbrances were false. [6]

                                      Specifically, in or around March 2010, Gullett filed an individual tax return for Tax Year 2009 falsely representing his interest income and Federal tax withholdings and claiming he was due a tax refund of $149,296. The IRS determined that information on Gullett’s return was frivolous and advised him that he could be assessed with a financial penalty for filing a frivolous tax return. Gullett then mailed a number of items to the IRS Commissioner at the time, Douglas Shulman, and to the manager of the IRS’s Automated Collection System, including forms that purported to be Forms 1099-OID and 1099-A issued by three financial institutions. The financial institutions confirmed that they did not issue the Forms 1099-OID and 1099-A which Gullett sent to the IRS. The IRS issued Gullett a “Frivolous Return Response” and did not issue the tax refund he sought. [7]

                                      In retaliation for the IRS not paying his tax refund, Gullett filed a Uniform Commercial Code (UCC) Financing Statement with the California Secretary of State, falsely claiming that the Treasury Inspector General for Tax Administration (TIGTA), Inspector General J. Russell George, then-IRS Commissioner Shulman, two named IRS employees, and the IRS Employees Union were indebted to him. In the purported lien, Gullett falsely asserted that “judgment debtors” George, Shulman, and one of the IRS employees owed him over $20 million for, among other things, his tax refund and for hindering and impeding his rights and interests in the claim. He further asserted that the “surety for the value of this claim” consisted of George’s, Shulman’s, and the IRS employee’s “rents, wages, earnings, and income from every source,” their personal and real property, and all of their bank accounts, among other items of value. [8]

                                      Gullett was not deterred by the frivolous return responses received from the IRS and attempted the same scheme again in 2011, filing a false tax return for Tax Year 2010, this time claiming a tax refund due of $320,825. To support his refund claim, Gullett attached several Forms 1099-OID and 1099-A purporting to be issued by two financial institutions and TIGTA. Representatives from these entities confirmed that Gullett did not earn any interest income from them. The IRS again deemed Gullett’s return to be frivolous and assessed a frivolous return penalty. [9]

                                      Subsequently, in January 2012, Gullett filed a second lien against Inspector General George, then-Commissioner Shulman, and two IRS officials. This time, he claimed that the so-called “libelees,” George, Shulman, and the IRS officials, owed him over $21 million for, among other things, his claimed 2010 tax refund. [10]

                                      On August 4, 2016, a jury found Gullett guilty of two counts of false, fictitious, or fraudulent claims against the United States and two counts of attempting to file a false lien or encumbrance against Government employees and officials. [11]

                                      Gullett was sentenced to 77 months’ imprisonment followed by three years of supervised release. [12] Gullett is appealing his sentence. [13]

                                      • [1] C.D. Cal. Report Commencing Criminal Action filed Mar. 13, 2015; C.D. Cal. Government’s Second Amended Trial Memorandum filed Apr. 3, 2016.
                                      • [2] C.D. Cal. Judgment filed Mar. 15, 2017.
                                      • [3] C.D. Cal. Indict. filed Dec. 19, 2014.
                                      • [4] C.D. Cal. Verdict Form filed Aug. 4, 2016.
                                      • [5] C.D. Cal. Government’s Second Amended Trial Memorandum filed Apr. 3, 2016.
                                      • [6] C.D. Cal. Indict. filed Dec. 19, 2014.
                                      • [7] C.D. Cal. Government’s Second Amended Trial Memorandum filed Apr. 3, 2016.
                                      • [8] Id.
                                      • [9] Id.
                                      • [10] C.D. Cal. Government’s Amended Trial Memorandum filed Aug. 15, 2015.
                                      • [11] C.D. Cal. Verdict Form filed Aug. 4, 2016.
                                      • [12] C.D. Cal. Judgment filed Mar. 15, 2017.
                                      • [13] C.D. Cal. Crim. Docket as of Mar. 31, 2017.


                                      • Former IRS Revenue Agent Pleads Guilty to False Statement and Aggravated Identity Theft

                                        On March 13, 2017, in the District of New Mexico, former Internal Revenue Service (IRS) employee Joan Mobley pled guilty to false statements and aggravated identity theft. [1] Mobley was initially charged with the offenses in December 2014 in a 28-count indictment. [2]

                                        According to the court documents, Mobley was previously employed as a revenue agent for the IRS, and in that capacity was responsible for conducting audits of small businesses. [3] The indictment charges that between about December 2010 and December 2011, Mobley willfully and knowingly made materially false, fictitious, and fraudulent statements in matters within the jurisdiction of the IRS, and knowingly transferred, possessed, and used the means of identification of another person without lawful authority. [4]

                                        Specifically, the indictment alleged Mobley made false statements and representations to the IRS concerning eight taxpayers. She falsely stated and represented to the IRS that the taxpayers had consented to the extension of time to assess employment taxes and/or had agreed to the assessment and collection of additional tax when, in fact, the taxpayers had not consented or agreed. Additionally, Mobley unlawfully used the identification of these eight taxpayers in connection with her false statements to the IRS. [5]

                                        In her plea agreement, Mobley specifically admitted that, while she was a revenue agent, she was assigned to conduct an audit of a business based in Yuba City, California. She admitted that she did not complete the audit as assigned; instead, she falsified official records, incorrectly showing that she had completed the audit. Mobley signed the name of the company president to the records, knowing that she did not have permission from the president or any other company representative to do so, or to act on behalf of the business in any way, including with respect to taxes. [6]

                                        Mobley further admitted that she falsified a Form SS-10, Consent to Extend the Time to Assess Employment Taxes, to represent, incorrectly, that a representative of the business had agreed to an extension of time to assess employment taxes, knowing that no representative had consented. Mobley also falsified a Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment (Excise or Employment Tax), to state that the company agreed to the assessment and collection of additional tax. Again, Mobley knew when she falsified the form that no representative of the business had consented to the assessment and collection of additional tax. [7]

                                        Mobley could face a maximum of five years’ imprisonment for the false statements and two years for aggravated identity theft. As part of her plea agreement, Mobley agreed to pay restitution in the amount of $39,738.32. [8] A sentencing date has not been set.

                                        • [1] D. N.M. Plea Agr. filed Mar. 13, 2017.
                                        • [2] D. N.M. Indict. filed Dec. 3, 2014.
                                        • [3] D. N.M. Plea Agr. filed Mar. 13, 2017.
                                        • [4] D. N.M. Indict. filed Dec. 3, 2014.
                                        • [5] Id.
                                        • [6] D. N.M. Plea Agr. filed Mar. 13, 2017.
                                        • [7] Id.
                                        • [8] Id.


                                        • April 18, 2017

                                          Russian Man Pleads Guilty in Relation to A Stolen Identify Refund Fraud Scheme

                                          On February 27, 2017, in the Southern District of Florida, Alexey Petrov pled guilty to access device fraud and aggravated identity theft [1] for his role in a sophisticated, large-scale stolen identity refund fraud (SIRF) scheme. [2] Petrov was initially charged with these and other offenses in November 2016. [3]

                                          According to the court documents, in early 2015 several Federal agencies began investigating a large-scale SIRF scheme. Agencies involved in investigating this complex scheme included the Treasury Inspector General for Tax Administration (TIGTA), Internal Revenue Service-Criminal Investigation (IRS-CI), the Federal Bureau of Investigation (FBI), and the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). [4] During the investigation, agents discovered that cybercriminals had accessed a computerized IRS database, stolen genuine taxpayers’ personal identifying information (PII), and filed false and fraudulent tax returns using the stolen taxpayer information, thus causing the IRS to issue refunds to individuals not entitled to receive them. [5]

                                          The criminal complaint charged that Petrov, a resident of the Miami, Florida, area, knowingly transferred, possessed, and used the means of identification of another, transferred a false identification document, used a counterfeit access devise, and willfully conspired with others to conduct financial transactions involving the proceeds of specific unlawful activities, in connection with the filing of fraudulent tax returns. [6]

                                          Petrov was born in Russia and is a Russian citizen. He entered the United States on a short-term, non-immigrant visa that expired on or about September 28, 2005. Petrov resides in the Miami area with a Russian female who also entered the United States on a short-term, non-immigrant visa that expired in 2010. [7]

                                          Petrov was identified by two coconspirators as the person who recruited them and directed them to create bank accounts using the names of individuals from Russia, Kazakhstan, and other Eastern European and Central Asian countries. At Petrov’s direction, coconspirators Sergey Kovalenko and Laziz Eraliyev used these bank accounts to receive and further transfer fraudulently obtained tax refund money. [8]

                                          As part of the scheme, Petrov created and provided counterfeit driver’s licenses using the names of real individuals to Kovalenko and Eraliyev to allow them to open bank accounts. Petrov then directed cybercriminals to send the fraudulently obtained tax refunds to various accounts opened in these names. [9]

                                          Many of the individuals whose names were used had previously come to the United States on short-term, non-immigrant work visas. At Petrov’s direction, Kovalenko paid individuals who were visiting the United States on short-term, non-immigrant visas in exchange for their bank account debit cards, and online banking information and then provided the information to Petrov. One such individual, who was lawfully present in the United States during the summer of 2008, and entered the U.S. on the same flight from Moscow, Russia, as Kovalenko. Kovalenko subsequently used a fake driver license in the individual’s name to rent an apartment and open bank accounts to receive and further transfer money at Petrov’s direction. [10]

                                          Kovalenko is a Russian citizen and Eraliyev is a Kazakhstan citizen. Both entered the United States on short-term, non-immigrant visas and lived in or around Virginia Beach, Virginia. Kovalenko first met Petrov in Miami around 2012. Petrov offered to provide Kovalenko with a fake driver’s license if he would send money to Russia on Petrov’s behalf. Kovalenko subsequently sent funds to Russia at Petrov’s direction. Petrov paid Kovalenko approximately $40 to $50 each time he sent funds to Russia. [11]

                                          In or around March 2015, Kovalenko and Eraliyev traveled to Miami to attend an electronic music festival. At the event, Petrov met with Eraliyev and said if he would like to earn extra money, he could do the same thing Kovalenko was doing. Petrov provided Eraliyev with a fake driver’s license that bore Eraliyev’s picture, but listed the PII of another individual born in Kazakhstan. Eraliyev subsequently used the fake license to open bank accounts at Petrov’s direction, and would then withdraw the funds. [12]

                                          Kovalenko and Eraliyev were arrested for offenses related to the refund fraud scheme in March 2016. [13] Kovalenko pled guilty to bank fraud in May 2016, and Eraliyev pled guilty to theft of Government property in June 2016. [14]

                                          After Petrov was arrested on November 16, 2016, agents conducting a search of his residence discovered a photocopy of a Social Security card, work authorization permit, and a Florida driver’s license, all belonging to a Russian citizen, as well as debit cards issued to others. Agents also found evidence of Petrov’s activities on several online cybercrime forums, where he offered to partner with cybercriminals engaged in stolen identify refund fraud and other crimes. A review of bank accounts controlled by Petrov revealed that he had received over $183,000 in deposits from 2014 to 2016; however, he has not filed an income tax return since 2011. [15]

                                          Petrov could face a maximum sentence of 10 years’ imprisonment for access device fraud, plus a mandatory two-year sentence to run consecutively for aggravated identity theft. As part of his plea agreement, Petrov agreed to forfeit at least $183,000 in U.S. currency.[16] His sentencing is scheduled for May 10, 2017. [17]

                                          • [1] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
                                          • [2] S.D. Fla. Crim. Compl. filed Nov. 17, 2016.
                                          • [3] Id.
                                          • [4] Id.
                                          • [5] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
                                          • [6] S.D. Fla. Crim. Compl. filed Nov. 17, 2016.
                                          • [7] Id.
                                          • [8] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
                                          • [9] Id.
                                          • [10] S.D. Fla. Crim. Compl. filed Nov. 17, 2016.
                                          • [11] Id.
                                          • [12] Id.
                                          • [13] Id.
                                          • [14] S.D. Fla. Plea Agr. filed Feb. 28, 2017.
                                          • [15] Id.
                                          • [16] Id.
                                          • [17] S.D. Fla. Crim. Docket as of Mar. 17, 2017.


                                          • Hawaiian Man Pleads Guilty to Impersonating an IRS Officer in a Scheme to Defraud Japanese Nationals

                                            On February 21, 2017, in the District of Hawaii, Rick Mikaele pled guilty to mail fraud and false personation of an officer or employee of the United States. [1] Mikaele was initially indicted and arrested for these offenses and wire fraud in July 2016. [2]

                                            According to the court documents, Mikaele knowingly devised a scheme to defraud and obtain money from others by means of false and fraudulent representations. Specifically, Mikaele, a resident of Waimanalo, Hawaii, traveled to Japan as an English language instructor, teaching English classes and offering private tutoring lessons. [3] Mikaele met the two victims, Japanese nationals, while serving as their English language teacher and falsely told them that he had become wealthy by investing in certificates of deposit (CDs) issued by First Hawaiian Bank (First Hawaiian). He said such CDs offered higher rates of return than those available in Japan. Mikaele told the victims that he would obtain CDs for them if they provided the money to him. [4]

                                            One of the victims provided Mikaele with $108,671.59, and the other provided him $127,630.74, to be invested in the CDs. Mikaele accepted the money, but did not invest it in the CDs. Instead, he deposited it in accounts he controlled and converted it to his own use. [5] He then prepared false First Hawaiian bank statements that made it appear as if the money had been invested in CDs. [6]

                                            In furtherance of his scheme, and in an attempt to obtain additional money from the victims, Mikaele produced false tax notices for payment due on a foreign account, purporting to come from the Internal Revenue Service (IRS). Mikaele prepared documents that appeared to be generated by the IRS, containing the official IRS logo, symbol, and title, [7] but bearing the return address of a private mailbox Mikaele had obtained at a UPS store in Kailua, Hawaii. [8] The documents purported to be from an IRS official and demanded payment of taxes and interest allegedly due as a result of the earnings from the CDs. [9] One victim received two such letters, each demanding over $7,000.00, for taxes and interest to the IRS. [10]

                                            Mikaele knew that the money given to him by the victims had not been invested in CDs, that taxes were not due, and that the IRS letters were fake. The net loss to the victims totaled approximately $236,302.33. [11]

                                            Mikaele could face a maximum of 20 years imprisonment. [12] His sentencing is scheduled for June 15, 2017. [13]

                                            • [1] D. Haw. Plea Agr. filed Feb. 21, 2017.
                                            • [2] D. Haw. Indict. filed July 20, 2016; D. Haw. Executed Arrest Warrant filed July 29, 2016.
                                            • [3] D. Haw. Indict. filed July 20, 2016.
                                            • [4] D. Haw. Plea Agr. filed Feb. 21, 2017.
                                            • [5] D. Haw. Indict. filed July 20, 2016.
                                            • [6] D. Haw. Plea Agr. filed Feb. 21, 2017.
                                            • [7] Id.
                                            • [8] D. Haw. Indict. filed July 20, 2016.
                                            • [9] D. Haw. Plea Agr. filed Feb. 21, 2017.
                                            • [10] D. Haw. Indict. filed July 20, 2016.
                                            • [11] D. Haw. Plea Agr. filed Feb. 21, 2017.
                                            • [12] Id.
                                            • [13] D. Haw. Crim. Docket as of Mar. 9, 2017.


                                            • Pennsylvania Man Sentenced to Eight Years in Prison in Fraud Scheme

                                              On February 15, 2017, in the Eastern District of Pennsylvania, Steven Hameed was convicted of and sentenced for conspiracy, corrupt interference with the Internal Revenue laws, fictitious obligations, conversion of Government property, and bank fraud. [1] Hameed and his coconspirators, Darnell Young and Damond Palmer, were indicted for the offenses in December 2015. [2] Young was convicted of the offenses on October 19, 2016, and Palmer was convicted of conspiracy and bank fraud on October 19, 2016. [3]

                                              According to the court documents, Hameed, Young, and Palmer were self-proclaimed members of a group of individuals who held themselves out as “sovereign” citizens. Hameed and Young purported to be a married couple, but were not legally married in the Commonwealth of Pennsylvania. The indictment charged that from about February 2010 until March 2013, Hameed, Young, and Palmer conspired together and with others to knowingly execute a scheme to convert property of the U.S. Department of Housing and Urban Development (HUD), devise a scheme to obtain bank-owned property, and to obstruct and impede the due administration of the Internal Revenue Service (IRS). [4]

                                              As part of their scheme, the conspirators created false and fraudulent deeds purporting to convey ownership of properties to Hameed, Young, Palmer, or others, and filed these false deeds with the Delaware County Recorder of Deeds. They did so in an attempt to obtain ownership and control over properties that were not legally owned by the conspirators in order to occupy, rent, and/or sell such properties for their own financial profit. [5]

                                              Specifically, the indictment charged that Hameed, Young, and Palmer caused to be delivered to the Delaware County Government Center in Media, Pennsylvania, false and fraudulent deeds for 54 properties, over which they attempted to assert ownership for their own personal gain. These properties were, in fact, owned by banks, HUD, and private citizens or businesses. After filing, or attempting to file, the false deeds, the conspirators attempted to convert the properties to their own use, falsely asserting ownership either by occupying the houses themselves or by attempting to rent or sell the properties. [6]

                                              Also, the indictment charged that, with intent to defraud, Hameed and Young presented a false and fictitious document appearing to be an actual security or financial instrument issued under the alleged authority of the Department of the Treasury to purchase a property in Chester, Pennsylvania. [7]

                                              According to court documents, Hameed and Young filed numerous tax forms, specifically 1099-DIV and 1099-INTforms, against state and local law enforcement, judges, and Government officials and employees whom they encountered throughout the indictment period and in those forms reported that money had been paid to the individuals named in the forms when no money had, in fact been paid. [8]

                                              Hameed also filed a frivolous lawsuit in U.S. District Court for the District of Columbia against 15 Delaware County judges and law enforcement individuals, in a further attempt to harass and intimate the individuals. [9]

                                              Hameed was sentenced to 96 months’ imprisonment, followed by five years of supervised release. [10] Young and Palmer were sentenced in October 2016, to 40 months in prison for Young and one day in prison for Palmer, followed by five years of supervised release. [11] Hameed was further ordered not to file any frivolous lawsuits, prepare and/or file any false financial documents and/or false tax documents and/or liens. [12]

                                              • [1] E.D. Pa. Judgment filed Feb. 17, 2017.
                                              • [2] E.D. Pa. Indict. filed Dec. 1, 2015.
                                              • [3] E.D. Pa. Judgment filed Oct. 21, 2016; E.D. Pa. Judgment filed Oct. 20, 2016.
                                              • [4] E.D. Pa. Indict. filed Dec. 1, 2015.
                                              • [5] Id.
                                              • [6] Id.
                                              • [7] Id.
                                              • [8] E.D. Pa. Govt. Plea Memorandum filed Oct. 18, 2016.
                                              • [9] E.D. Pa. Indict. filed Dec. 1, 2015.
                                              • [10] E.D. Pa. Judgment filed Feb. 17, 2017.
                                              • [11] E.D. Pa. Judgment filed Oct. 21, 2016; E.D. Pa. Judgment filed Oct. 20, 2016.
                                              • [12] E.D. Pa. Judgment filed Feb. 17, 2017.


                                              • New Jersey Tax Preparer Indicted for Aiding and Assisting in the Filing of False Tax Returns and Bank Fraud

                                                On February 1, 2017, in the U.S. District Court, District of New Jersey, tax preparer Brian A. Day was indicted for aiding and assisting in the filing false tax returns and bank fraud in connection with a scheme to defraud and to misappropriate his clients monies [1]

                                                According to the court documents, Day, a resident of Port Murray, New Jersey, was self-employed as a tax return preparer. Day was the sole owner and operator of various tax preparation businesses located in Essex County, New Jersey, including PTS, Tax Consultants, and Tax Consultants, LLC. Day met with taxpayers at his offices and collected information relating to the preparation of their individual income tax returns. [2]

                                                The Indictment charges that, from about December 2011 through April 2015, Day knowingly and intentionally executed a scheme to defraud and obtain money by means of false and fraudulent representations. The purpose of the scheme was for Day to misappropriate money from his taxpayer clients by falsely advising them that they owed tax payments to the IRS and directing them to give him checks made payable to the IRS to resolve the purported IRS liabilities. In fact, Day did not actually give the checks from his taxpayer clients to the IRS. Instead, he altered the checks from the “IRS” to names matching or resembling the name his tax preparation businesses and deposited the checks into his own business bank account. Using this means, Day accepted payments from three clients totaling at least $61,000 to settle tax liabilities. [3]

                                                When Day’s clients discovered that he had not paid the IRS with the checks they had given him, they attempted to contact him. Day either did not respond to their calls or he presented his clients with fraudulent documents purportedly issued by the IRS to conceal and further his fraud. Day presented one taxpayer with a fake letter, which purported to be from the IRS, that falsely confirmed that the IRS received a payment of $11,000from the taxpayer and falsely stated that $880 was still due and that the taxpayer owed an additional penalty payment of $6,286. Day presented another taxpayer with a fake letter, which purported to be from the IRS, that falsely stated that the IRS had received a payment of $5,000 from the taxpayer and that the taxpayer’s case was now closed. The IRS never issued the letters that Day gave to the taxpayers. [4]

                                                Additionally, the Indictment charges that between approximately April 2014 and April 2016, Day prepared false U.S. individual income tax returns for his clients by fabricating and inflating expenses and deductions and/or supplemental loss deductions in order to obtain refunds for his clients in amounts greater than those to which they were entitled. The amounts falsely claimed total $383,773. [5]

                                                Day had his initial appearance in court on February 2, 2017, [6] and his detention was ordered pending trial. [7] Additional legal actions are anticipated.

                                                • [1] D. N.J. Indict. filed Feb. 1, 2017.
                                                • [2] Id.
                                                • [3] Id.
                                                • [4] Id.
                                                • [5] Id.
                                                • [6] D. N.J. Crim. Docket filed Feb. 1, 2017.
                                                • [7] D. N.J. Order of Detention filed Feb. 2, 2017.


                                                • March 15, 2017

                                                  Former IRS Employee Indicted for Filing Fraudulent Tax Returns and Aggravated Identity Theft

                                                  On January 13, 2017, in the Western District of Missouri, former Internal Revenue Service (IRS) employee Carla Mitchell was indicted for filing false tax returns and aggravated identity theft. [1]

                                                  According to the court documents, at all times relevant to the 15-count indictment, Mitchell was a contact representative at the IRS Service Center in Kansas City, Missouri. Mitchell was employed by the IRS from 2006 until June 2015, when she resigned. From at least February 2012 and continuing to about February 2014, Mitchell intentionally devised a scheme for the purpose of obtaining funds for herself and others by preparing false tax returns using false or stolen information to pay her own personal expenses and expenses for family members. In doing so, she knowingly and willfully aided and assisted in the preparation and presentation of Federal income tax returns, Form 1040, containing false information, and used the identification of another without lawful authority. [2]

                                                  Specifically, Mitchell prepared false tax returns for Tax Years 2011, 2012, and 2013 for approximately 13 of her friends and family members, as well as for herself. As part of her scheme, Mitchell included false entries to lower the individual tax liability for her friends, family members, and herself or increase refunds. These false entries included false wages and occupations, fraudulent Federal income tax withholdings, false Schedule C entries, fraudulent dependents, and false education expenses and credits. [3]

                                                  Mitchell prepared the false returns from her residence, her boyfriend’s residence, and from the IRS Service Center, Kansas City, MO. She charged approximately $150 each for the preparation of some of the returns, but did not sign the returns as a “paid preparer” and did not provide copies of the completed returns to friends and family members. [4]

                                                  Mitchell has been linked to 27 fraudulent returns with a total tax loss to the Government of approximately $118,012.19. [5]

                                                  Mitchell could face a maximum of three years’ imprisonment as to each count of filing false tax returns, plus an additional mandatory two-year sentence for aggravated identity theft. Additional legal actions are anticipated. [6]

                                                  • [1] W.D. Mo. Indict. filed Jan. 13, 2017.
                                                  • [2] Id.
                                                  • [3] Id.
                                                  • [4] Id.
                                                  • [5] Id.
                                                  • [6] Id.


                                                  • Individual Pleads Guilty in Wisconsin to Conspiracy to Commit Wire Fraud

                                                    On January 19, 2017, in the Eastern District of Wisconsin, Harshkumar Rajnikant Patel pled guilty to conspiracy to commit wire fraud. [1] He and coconspirator Sunil Jashubhai Patel were initially charged e in a 10-count indictment in July 2016. [2]

                                                    According to the court documents, beginning in approximately December 2015 and continuing through June 2016, the duo knowingly conspired with each other to commit wire fraud. [3]

                                                    In his plea agreement, Harshkumar Patel admitted that unknown members of the conspiracy located in India called victims and made misrepresentations causing the victims to send MoneyGram® transfers. The callers pretended to be law enforcement and informed the victims that they owed money to the IRS for unpaid taxes. The callers would tell the victim that they would be arrested and go to jail if the victims did not pay. The callers instructed the victim to send a certain amount of money to a specific location and to a specific fictitious name. [4]

                                                    Harshkumar Patel possessed fraudulent driver’s licenses in the fictitious names of the MoneyGram® recipients, but with a photo of himself. He used these fraudulent driver’s licenses to pick up MoneyGram® transfers, frequently several a day, from various locations. He knew where to pick up payments and which fraudulent driver’s license to use because members of the conspiracy located in India would communicate that information to him. Harshkumar Patel was allowed to keep a certain percentage of the fraud proceeds and deposited the remaining cash into various bank accounts. [5]

                                                    Harshkumar Patel used at least 12 different identities to receive over $650,000 in fraud proceeds from more than 600 transactions. [6] He could face a maximum of 20 years’ imprisonment. [7] His sentencing is scheduled for May 30, 2017. [8]

                                                    • [1] E.D. Wis. Plea Agr. filed Jan. 19, 2017.
                                                    • [2] E.D. Wis. Indict. filed July 26, 2016.
                                                    • [3] Id.; E.D. Wis. Plea Agr. filed Jan. 19, 2017.
                                                    • [4] Id.
                                                    • [5] Id.
                                                    • [6] Id.
                                                    • [7] Id.
                                                    • [8] E.D. Wis. Crim. Docket as of Feb. 3, 2017.


                                                    • Three Individuals Plead Guilty to the Theft of a $4.3 Million Treasury Check

                                                      On January 30, 2017, in the Northern District of Georgia, Renina Letricia Wortham, a/k/a Renina Simmons-Wortham, and Prentice Johnson each pled guilty to the theft of public money, to wit, a U.S. Department of the Treasury check in the amount of $4,368,869.30. [1] A third individual, Enobahkare Peterson, also pled guilty for his role in the offense on January 26, 2017. [2] All three had been initially charged in November 2016. [3]

                                                      According to the court documents, the check was confirmed to be a U.S. Treasury check that had been issued to a HR Outsourcing Associates, Inc. (HROA) on August 23, 2016. HROA is a payroll processor handling the IRS filings of corporate clients. It has over 400 corporate clients, most of which have many individual employees. The check was issued in association with payroll tax overpayments of HROA clients. [4]

                                                      HROA stated that only two people in the company would have access to such a Treasury check. Johnson, a former HROA Payroll Manager in Lawrenceville, GA, was identified as one of those people. Johnson had been employed with HROA for approximately 2 ½ years before he was let go on September 16, 2016, after the company consolidated payroll processing. Johnson knew he was being laid off from the company, but continued to work and had access to HROA records, tax notices, and Treasury checks in the mail during the time the $4.3 Treasury million check was mailed to. [5]

                                                      Johnson and Wortham are believed to be family members or close associates. Peterson said he met a lady, identified as Wortham at a car dealership who brought the Treasury check and asked him if he had some way to negotiate the $4.3 million check. She had an inside person who filed returns for corporations. Peterson then asked other individuals to help find a way to negotiate the stolen U.S. Treasury check. Peterson said that that there were actually $58 million in checks and the $4.3 million check was the smallest. [6]

                                                      The individuals met with Wortham who mentioned there were approximately 22 additional Treasury checks. The checks were stolen from an accounting firm that files taxes for other companies and the company appearing on the front of the check had no idea it was even missing. Wortham stated that this opportunity had presented itself because of a family member that she tried to help along the way. One of the individuals stated that Wortham passed him the Treasury check. [7]

                                                      Each of the defendants could face a maximum of 10 years in prison. Peterson is scheduled to be sentenced on April 5, 2017. [8] Johnson and Wortham are both scheduled for sentencing on May 1, 2017. [9]

                                                      • [1] N.D. Ga. Plea Agr. filed Jan. 30, 2017; N.D. Ga. Indict. filed Jan. 3, 2017; N.D. Ga. Crim. Info. filed Jan. 4, 2017.
                                                      • [2] N.D. Ga. Plea Agr. filed Jan. 26, 2017.
                                                      • [3] N.D. Ga. Crim. Compl. filed Nov. 10, 2016.
                                                      • [4] Id.
                                                      • [5] Id.
                                                      • [6] Id.
                                                      • [7] Id.
                                                      • [8] N.D. Ga. Crim. Docket as of Feb. 1, 2017.
                                                      • [9] N.D. Ga. Crim. Docket as of Feb. 1, 2017.


                                                      • Postal Employee and Spouse Indicted for Passing Forged Endorsements on U.S. Treasury Checks and Threatening a Federal Law Enforcement Officer

                                                        On February 7, 2017, in the Central District of California, Jill Louise Lewis and Darren Adrian Lewis were indicted for conspiracy, passing forged endorsements on U.S. Treasury checks, embezzlement of money orders, and threatening a Federal law enforcement officer. [1] The husband and wife [2] were both arrested on January 25, 2017 for the offenses. [3]

                                                        According to the court documents, Jill Lewis and her husband, Darren Lewis, and others conspired to defraud by passing U.S. Treasury checks with forged endorsements and by embezzling, stealing, and knowingly converting to their own use, without authority, money orders provided by the U.S. Postal Service. [4]

                                                        As part of the conspiracy, Jill Lewis would steal U.S. treasury checks payable to other persons from the mail at the U.S. Post Office in Littlerock, California, where she worked. She would then falsely endorse the stolen Treasury checks at her service window and exchange them for cash or postal money orders made payable to herself, her husband, and other coconspirators. Jill Lewis, Darren Lewis, and others would take these money orders and either cash them at post offices in Littlerock, Palmdale, or Lancaster, California, or deposit the money orders into Jill Lewis’s bank accounts. [5]

                                                        For instance, in July 2016 Jill Lewis falsely endorsed a U.S. Treasury check in the amount of $4,961 in the name of another person and exchanged it for five postal money orders in various amounts, all made payable to Darren Lewis. Darren Lewis then cashed the five money orders at two separate post office locations. Jill Lewis falsely endorsed Treasury checks totaling more than $14,300. [6] During an interview with law enforcement agents, she admitted that she stole approximately eight Treasury checks and a “handful” of gift cards from the mail at the post office where she worked. She further explained how her husband helped her deposit the stolen funds. [7]

                                                        During his interview with law enforcement agents, Darren Lewis admitted his complicity in Jill Lewis’s fraudulent use of Treasury checks, as well as his role in “washing” the checks that were stolen from the mail. [8] Darren Lewis also knowingly threatened to assault a Federal law enforcement officer with the intent to impede, intimidate, and interfere with the agent who was engaged in the performance of official duties, and with the intent to retaliate against the agent on account of the performance of official duties. [9] Specifically, Darren Lewis said he knew people who could harm the agent and the agent’s family. He divulged that he had purchased an iPad Mini the night before the interview in order to research the agent’s personal information using a new digital device so that the IP address would not be traced back to him. He admitted that he had looked up the agent’s home address so that he could ask others to cause harm to the agent and the agent’s family. [10]

                                                        Additional legal actions are anticipated for Jill and Darren Lewis.

                                                        • [1] C.D. Cal. Indict. filed Feb. 7, 2017.
                                                        • [2] C.D. Cal. Crim. Compl. filed Jan. 23, 2017.
                                                        • [3] C.D. Cal. Crim. Docket filed Feb. 7, 2017.
                                                        • [4] C.D. Cal. Indict. filed Feb. 7, 2017.
                                                        • [5] Id.
                                                        • [6] Id.
                                                        • [7] C.D. Cal. Crim. Compl. filed Jan. 23, 2017.
                                                        • [8] Id.
                                                        • [9] C.D. Cal. Indict. filed Feb. 7, 2017.
                                                        • [10] C.D. Cal. Crim. Compl. filed Jan. 23, 2017.


                                                        • January 20, 2017

                                                          IRS Employee Sentenced for Conspiracy to Commit Identity Theft and Unauthorized Disclosure of IRS Records

                                                          On November 21, 2016, in the Western District of Tennessee, Internal Revenue Service (IRS) employee Michael Anthony Jones was sentenced for conspiracy to commit identity theft and unauthorized disclosure of information. [1] Jones, was initially charged with, and pled guilty to, the offense on July 19, 2016. [2]

                                                          According to the court documents, Jones, a resident of Memphis, Tennessee, was employed by the IRS as a contact representative at the IRS Service Center in Memphis. Jones had a personal relationship with his coconspirator, identified only as “TFB.” Jones knowingly and willfully agreed and conspired with TFB and others to commit identity theft and unauthorized disclosure of information. The object of this conspiracy was for TFB to obtain IRS taxpayer information from Jones and use such information for unjust financial enrichment. [3]

                                                          As part of the conspiracy, Jones used his access to the IRS databases, specifically the Remittance Transaction Research (RTR) system, to obtain taxpayer information without authorization. [4] According to the Internal Revenue Manual, the RTR system provides access to remittance processing data and images, which generally include the front and back of a cancelled check or money order from a taxpayer, and a voucher, if submitted with the payment.

                                                          Jones obtained RTR printouts of cancelled checks made payable to the U.S. Treasury Department and other personal information submitted by taxpayers to the IRS. Jones then disclosed such information to his coconspirator, providing TFB with the printouts and Social Security Numbers (SSNs) of at least three taxpayers for use in fraudulent activities. TFB used the illegally obtained information to breach taxpayers’ bank accounts, obtain monies, and commit other financial fraud against the taxpayers and the IRS. Jones received a portion of the proceeds from TFB. [5]

                                                          He was sentenced to two months in prison, followed by two years of supervised release. His supervised release will include two months of home detention and Jones will participate in Moral Reconation Therapy. [6]

                                                          • [1] W.D. Tenn. Judgment filed Nov. 21, 2016.
                                                          • [2] W.D. Tenn. Info. filed July 19, 2016; W.D. Tenn. Plea Agr. filed July 19, 2016.
                                                          • [3] W.D. Tenn. Info. filed July 19, 2016.
                                                          • [4] Id.
                                                          • [5] Id.
                                                          • [6] W.D. Tenn. Judgment filed Nov. 21, 2016.


                                                          • Georgia Man Arrested for Wire Fraud

                                                            On December 1, 2016, in the Northern District of Georgia, Alphonso I. Waters, Jr. was arrested [1] for wire fraud related to his role in a scheme to defraud a financial institution. [2] Waters was indicted for wire fraud on November 21, 2016. [3]

                                                            According to the indictment, Waters and his wife, identified as “Dr. S.M.W.” owned and operated Family Practice of Atlanta Medical Group, LLC, a medical practice in Decatur, Georgia. Waters was the Chief Operating Officer, Chief Financial Officer, and manager of the medical practice. [4]

                                                            In 2011, Waters secured financing through JPMorgan Chase Bank to construct a commercial medical building in Decatur, and in July 2013, renewed two promissory notes with JPMorgan Chase. In about October 2013, Waters sought additional funding for the construction project in the amount of $6 million from Colony Capital Acquisitions, LLC, a private mortgage lending business. When seeking the loan from Colony, Waters falsely stated that neither he nor his wife had any unpaid taxes or liens, when, in fact, Waters and his spouse owed Federal taxes for tax years 2007 through 2012 and were the named taxpayers in two Federal tax liens filed in the Superior Court of Fulton County, Georgia. [5]

                                                            After Colony discovered the Federal tax liens, Waters caused his accountant to request the assistance of the IRS Taxpayer Advocate Service (TAS) to establish a payment plan to resolve his and his wife’s outstanding tax liability. He further caused a letter to be submitted to the IRS by his attorney in an attempt to expedite the approval of a payment plan for the unpaid federal tax liens, and contacted his local congressman to request assistance in expediting a payment plan with the IRS. [6]

                                                            When the IRS faxed to his accountant notice of an estimated resolution date of March 31, 2014, Waters knowingly caused a false and fraudulent letter to be faxed to Colony stating that Waters’ requested payment plan had been approved. The fraudulent letter was purportedly from the IRS Office of the Chief Counsel in Washington, D.C., bearing the signature of “Rebecca Langford, District Director.” In fact, the IRS did not have a current or former employee by this name and no IRS employee was assigned the title of “District Director.” [7]

                                                            In an attempt to conceal the scheme to defraud, Waters subsequently sent an e-mail to the congressman’s office thanking the office for its assistance in expediting approval for a payment plan with the IRS, knowing that the IRS letter was fake, and that the congressman’s office had not provided assistance in expediting the approval. [8]

                                                            Additionally, in a further attempt to conceal the scheme to defraud, Waters caused to be sent to Colony a letter signed by Waters stating that, to the best of his knowledge, the IRS letter was from Rebecca Langford, IRS District Director, well knowing the IRS letter was fake and fraudulent, all in an attempt to secure the $6 million Colony loan. [9]

                                                            Wire fraud carries a maximum statutory sentence of 20 years’ imprisonment. Additional legal proceedings are anticipated.

                                                            • [1] N.D. Ga. Executed Arrest Warrant filed Dec. 8, 2016.
                                                            • [2] N.D. Ga. Indict. filed Nov. 21, 2016.
                                                            • [3] Id.
                                                            • [4] Id.
                                                            • [5] Id.
                                                            • [6] Id.
                                                            • [7] Id.
                                                            • [8] Id.
                                                            • [9] Id.


                                                            • Postal Employee Indicted for Theft of Government Money for Stealing U.S. Treasury Checks

                                                              On December 9, 2016, in the Southern District of Florida, Sammie Nathaniel Williams, Jr., a/k/a “Old School,” was indicted for the theft of Government money and mail theft by a Postal employee. [1] Williams had been arrested for the offenses on November 29, 2016. [2]

                                                              According to the court documents, Williams, an employee of the United States Postal Service, knowingly embezzled mail and an article contained therein, a United States (U.S.) Department of Treasury check, which had been entrusted to him and came into his possession intended to be delivered by the Postal Service. [3]

                                                              Williams was identified as a mail carrier in the Miami Gardens, Florida, area who pulled Treasury checks from his mail route and sold them for cash, and provided addresses along his route where individuals could have Treasury checks mailed. These checks were typically generated from fraudulently filed Federal tax returns using stolen personally identifiable information (PII). [4]

                                                              On or about November 29, 2016, Williams willfully stole money of the United States in the form of three U.S. Treasury checks totaling $3,122, to which he was not entitled. [5] Williams was subsequently arrested. [6]

                                                              Additional legal proceedings are anticipated. The maximum statutory sentence for the theft of Government money or property is 10 years’ imprisonment.

                                                              • [1] S.D. Fla. Indict. filed Dec. 12, 2016.
                                                              • [2] S.D. Fla. Crim. Docket as of Dec. 14, 2016.
                                                              • [3] S.D. Fla. Indict. filed Dec. 12, 2016.
                                                              • [4] S.D. Fla. Crim. Compl. Filed Nov. 30, 2016.
                                                              • [5] S.D. Fla. Indict. filed Dec. 12, 2016.
                                                              • [6] S.D. Fla. Crim. Docket as of Dec. 14, 2016.


                                                              • Florida Man Impersonates an IRS Employee In Attempt to Evade Income Tax

                                                                On November 28, 2016, in the Middle District of Florida, Steven Headden Young was sentenced for attempting to evade or defeat Federal tax. [1] Young was initially charged with, and pled guilty to, the offense in April 2016. [2]

                                                                According to the court documents, Young, who was a resident of Tampa, Florida, during the relevant time periods, knowingly and willfully attempted to evade and defeat the income tax due and owing by him to the United States. Young committed a number of affirmative acts of evasion, including: filing false Federal tax returns, concealing income, making false deductions for non-existent expenses, making false statements about his filing status, and making false claims to refunds. [3]

                                                                Additionally, Young interfered with an Internal Revenue Service (IRS) audit of his taxes by impersonating an IRS employee, in an attempt to intercept and take from the IRS summed third party records for the IRS audit and tax assessment of Young’s personal Federal income taxes. [4] Young sent s fraudulent letter to Bank of America purporting himself to be an IRS employee in an effort to intercept records related to his bank accounts that had been summoned by the IRS Revenue Agent, falsely stating that the address for the IRS Revenue had been changed to an address where Young had opened a post office box at a United Parcel Service (UPS) store in the name of the IRS employee. Young had presented a false Allstate Insurance Company card and voter’s registration card in the name of a separate IRS employee in order to open the post office box. [5]

                                                                Young was sentenced to 21 months in prison, followed by three years of supervised release. He was further ordered to pay restitution to the IRS in the amount of $509,444.18, to cooperate with the IRS by providing lawful tax returns for years 2007-2011, and to pay all outstanding tax, interest, and penalties. Young is scheduled to begin serving his sentence on January 9, 2017. [6]

                                                                • [1] M.D. Fla. Judg. filed Nov. 29, 2016.
                                                                • [2] M.D. Fla. Info. filed April 19, 2016; M.D. Fla. Plea Agr. filed Apr. 20, 2016.
                                                                • [3] Id.
                                                                • [4] M.D. Fla. Plea Agr. filed Apr. 20, 2016.
                                                                • [5] M.D. Fla. Plea Agr. filed Apr. 20, 2016.
                                                                • [6] M.D. Fla. Judg. filed Nov. 29, 2016.


                                                                • Ogden IRS Employee Pleads Guilty to Unauthorized Inspection of Returns or Return Information

                                                                  On November 17, 2016, in the District of Utah, Northern Division, Internal Revenue Service (IRS) employee Denise Wheelwright pled guilty to unauthorized inspection of returns or return information. [1] Wheelwright was initially charged with the offense in July 2016. [2]

                                                                  According to the court documents, Wheelwright was employed as a Tax Examining Technician with the IRS Accounts Management Operations in Ogden, Utah, at the time of the offense. [3] As an employee of the IRS, Wheelwright willfully and unlawfully inspected the tax returns and tax return information of individuals without authorization. [4]

                                                                  In her plea agreement, Wheelwright acknowledged that, while at work on two separate dates, she accessed the tax return information of 26 taxpayers named or similar to a name known to her. Wheelwright did so on purpose, using the same computer command code 38 separate times, knowing that she was not authorized to make these accesses. [5]

                                                                  Wheelwright could face a maximum sentence of up to one year in prison and, upon conviction, will be discharged from her employment with the Federal Government. [6] Wheelwright’s sentencing is scheduled for January 30, 2017. [7]

                                                                  • [1] D. Utah Plea Agr. filed Nov. 17, 2016.
                                                                  • [2] D. Utah Info. filed Jul. 13, 2016.
                                                                  • [3] D. Utah Plea Agr. filed Nov. 17, 2016.
                                                                  • [4] D. Utah Info. filed Jul. 13, 2016.
                                                                  • [5] D. Utah Plea Agr. filed Nov. 17, 2016.
                                                                  • [6] Id.
                                                                  • [7] D. Utah Crim. Docket as of Dec. 1, 2016.


                                                                  • Louisiana Man Indicted for Bank Fraud and Obstructing the Due Administration of the Internal Revenue Laws

                                                                    On November 16, 2016, in the Middle District of Louisiana, Adrian C. Hammond, Jr. was indicted for obstructing the due administration of the Internal Revenue laws, bank fraud, false statements to a bank, and money laundering. [1]

                                                                    According to the indictment, Hammond, a resident of Baton Rouge, Louisiana, owned and/or operated a number of businesses, including: 51/50 Productions, LLC; Northgate Investments, LLC; Black Gold Rush, LLC; and Best Boilers Seafood, LLC. From about August 2011 through June 2015, Hammond knowingly executed a scheme to defraud Fidelity Bank, later known as Red River Bank. Hammond did so by means of material false and fraudulent pretenses and representations, including providing the bank with a false financial statement and tax returns purportedly filed with the IRS, in order to obtain money, assets, and other property from the bank for his own unlawful enrichment. [2]

                                                                    In reality, Hammond had an unpaid balance due to the IRS for taxes owed dating back as far as Tax Years 2003 and 2006. The IRS had entered assessments against Hammond for his unpaid tax debt on various dates in 2007 and 2010. In 2011, Hammond owed an additional sum to the IRS, bringing the total amount of his unpaid tax debt to more than $105,000. When Hammond failed to pay any of his outstanding tax liability, the IRS filed a Notice of Tax Lien against him for $114,758.62 in the 19th Judicial District Court for East Baton Rouge Parish in September 2011. [3]

                                                                    From approximately October 2011 through August 2014, Hammond corruptly endeavored to impede and obstruct the due administration of the Internal Revenue laws by making false representations to the IRS and others regarding the status of his unpaid tax liability. This was done to unjustly enrich himself and gain an unjust advantage over honest businesspeople who paid their taxes. [4]

                                                                    Between October and December of 2011, Hammond made numerous false representations to the IRS about his ability and intent to pay his unpaid tax liability. Hammond represented that he was close to securing a loan for his business and would also pay off the IRS lien in full. Based on his representations, the IRS agreed to withdraw the tax lien. Hammond, however, did not pay his outstanding tax liability over the next two years. Furthermore, during 2012, Hammond contacted the IRS revenue officer assigned to his case and claimed to have on the phone with him an individual whom he identified as a “Vice President” at Fidelity Bank. The individual represented that Fidelity’s loan to Hammond’s was moving forward. The IRS once again agreed to postpone Hammond’s deadline for repaying his debt. In fact, the individual posing as a bank official during the call did not work for Fidelity. By March 2013, Hammond’s tax liability remained outstanding and the IRS filed another Notice of Tax Lien against him in the District Court. [5]

                                                                    In 2014, the IRS served a Notice of Levy on a tenant living on rental property that Hammond owned in effect instructing the tenant to mail any rental payments to the IRS instead of Hammond. Hammond then falsely represented to the tenant that IRS had released the levy and that he was paying the IRS. [6]

                                                                    Subsequently, around August 2014, Hammond created a fraudulent document, which appeared to be a second withdrawal of the Federal tax lien that had been filed against Hammond in 2013. Hammond caused the fraudulent document to be filed in the 19th Judicial District Court, thereby concealing the existence of the lien from public records checks. Hammond, in fact, knew the IRS had not prepared, approved, or executed this withdrawal and did not wish to remove the lien it had properly filed and recorded. [7]

                                                                    Additional legal proceedings are anticipated in the case.

                                                                    • [1] M.D. La. Indict. filed Nov. 16, 2016.
                                                                    • [2] Id.
                                                                    • [3] Id.
                                                                    • [4] Id.
                                                                    • [5] Id.
                                                                    • [6] Id.
                                                                    • [7] Id.


                                                                    • Nevada Trio Pleads Guilty in a Telemarketing Fraud Scheme Targeting the Elderly

                                                                      On October 25, 2016, in the District of Nevada, Reginald A. Lowe, Willie J. Montgomery, and Tanika Armstrong all pled guilty in connection with a telemarketing fraud scheme. [1] Lowe and Montgomery pled guilty to conspiracy to commit wire or mail fraud in connection with a telemarketing scheme that was intended to target victims over the age of 55. [2] Armstrong pled guilty to conspiracy to commit money laundering for her role in the scheme. [3] All three were initially indicted and arrested in March 2016. [4]

                                                                      According to the court documents, from November 2008 to September 2013, Lowe, Montgomery, and others devised a scheme to defraud and obtain money by means of false and fraudulent pretenses. As the means of the conspiracy, Montgomery, Lowe, and others obtained “lead sheets,” which identified persons who had previously entered sweepstakes, lotteries, or other prize-drawing contests, and who were thus thought to be susceptible to misrepresentations regarding potentially winning a prize, sweepstakes, or lottery. The defendants knew these leads typically consisted of contact information for elderly or retirement-age people or others who were particularly vulnerable or susceptible to schemes. [5]

                                                                      Using the lead sheet information, the conspirators, in the role of "talkers," would contact potential victims by telephone and falsely represent to them that they had won prizes consisting of large amounts of cash or other high-value merchandise. In doing so, the talker would hold himself out as being an official or employee of a lottery/sweepstakes committee or a government regulatory authority. The talker would frequently represent himself to be an official or employee of the Internal Revenue Service (IRS). The talker would tell the victim that in order to receive the prize, he or she must first send money as payment for taxes on prize winnings or other fees. Lowe, Montgomery, and their coconspirators knew at all times that the victims had not actually won any prizes or things of value and would receive nothing for their payments. [6]

                                                                      The talker would direct the victim to send payment in the form of checks, money orders, U.S. currency, or other negotiable instruments via Western Union or MoneyGram wire transfer, United States Postal Service, United Parcel Service (UPS), or FedEx. Lowe and Montgomery used individuals referred to as “runners” to retrieve the payments and deliver the money to them and their coconspirators. The runners were given a small percentage of the criminal proceeds. [7]

                                                                      The defendants caused victims to send approximately $96,983 via MoneyGram and at least $366,238 via Western Union wire transfers. The defendants also fraudulently induced the victims to send a total of at least $389,924 through the U.S. mail, UPS, and FedEx. [8]

                                                                      During the course of the scheme, Montgomery’s wife, Tanika Armstrong, was provided with money orders to deposit and convert to cash. Armstrong opened a bank account in the name of a limited liability company in order to launder the monetary instruments and conceal the criminally-derived origins. Armstrong did so with full knowledge that the proceeds were fraudulently obtained. [9]

                                                                      In total, the conspirators fraudulently obtained approximately $1,175,670 from the scheme, which claimed at least 66 victims from 22 different states. [10]

                                                                      Lowe and Montgomery both agreed to full restitution to victims of the scheme in the amount of $1,175,670.21. [11] As part of her plea agreement, Armstrong agreed to make restitution in the amount of $18,475 to victims. [12]

                                                                      The maximum penalty for each of the offenses is 20 years’ imprisonment. Lowe and Armstrong are scheduled to be sentenced on January 25, 2017. Montgomery’s sentencing is set for January 26, 2017. [13]

                                                                      • [1] D. Nev. Criminal Docket as of Nov. 18, 2016.
                                                                      • [2] D. Nev. Plea Agr. filed Oct. 25, 2016; D. Nev. Plea Agr. filed Oct. 25, 2016.
                                                                      • [3] D. Nev. Plea Agr. filed Oct. 25, 2016.
                                                                      • [4] D. Nev. Indict. filed Mar. 16, 2016; D. Nev. Arrest Warrant filed March 23, 2016; D. Nev. Arrest Warrant filed March 24, 2016; D. Nev. Arrest Warrant filed March 25, 2016.
                                                                      • [5] D. Nev. Plea Agr. filed Oct. 25, 2016.
                                                                      • [6] Id.
                                                                      • [7] Id.
                                                                      • [8] Id.
                                                                      • [9] D. Nev. Plea Agr. filed Oct. 25, 2016.
                                                                      • [10] D. Nev. Plea Agr. filed Oct. 25, 2016.
                                                                      • [11] D. Nev. Plea Agr. filed Oct. 25, 2016; D. Nev. Plea Agr. filed Oct. 25, 2016.
                                                                      • [12] D. Nev. Plea Agr. filed Oct. 25, 2016.
                                                                      • [13] D. Nev. Criminal Docket as of Nov. 18, 2016.



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