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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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