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May 21, 2019

Indian National Extradited to the United States to Face Charges for His Role in a Complex Impersonation Scam [1]

According to a Department of Justice (DOJ) press release, Hitesh Madhubhai Patel has been extradited to the United States to face charges of conspiracy to defraud the United States, conspiracy to commit wire fraud, and money laundering conspiracy, in connection with his leadership role in a multimillion-dollar India-based call center scam which targeted U.S. victims. A Treasury Inspector General for Tax Administration (TIGTA) special agent was part of the team that extradited Patel from Singapore to the Southern District of Texas, where his initial appearance was held on April 19, 2019. Patel was previously indicted for the offenses in October 2016, along with 55 other individuals and five call centers, in what was at that time the largest single domestic law enforcement action involving the Internal Revenue Service (IRS) impersonation scam.

TIGTA Inspector General J. Russell George stated, “TIGTA’s investigations, often conducted with other Federal agencies, have identified 140 scammers, including Patel, who have preyed upon taxpayers. Today’s extradition and arraignment are proof that TIGTA and its law enforcement partners will be equally relentless in rooting out individuals who fraudulently identify themselves as IRS employees in order to extort money from taxpayers. We especially appreciate the cooperation of the Government of Singapore for its role in the extradition.”

According to the court documents, Patel was identified as an operator of the India-based call center HGlobal. From about January 2012 and continuing until about October 2016, Patel and his coconspirators participated in a complex scheme to defraud U.S. residents by misleading them into sending money in connection with several different scams. In one of the scams, the coconspirators impersonated IRS officers to defraud U.S. residents by misleading them into believing that they owed money to the IRS and that they would be arrested and fined if they did not pay the alleged back taxes immediately. In another one of the scams, the coconspirators impersonated U.S. Citizenship and Immigration Services (USCIS) officers to defraud U.S. residents by misleading them into believing that they would be deported unless they immediately paid a fine for alleged problems with their USCIS paperwork

These complex fraud schemes resulted in hundreds of millions of dollars in losses by the victims. More than 15,000 known victims have incurred losses attributable to scam calls, and upwards of 50,000 individuals have had their identities misappropriated based on the unauthorized use of their Personally Identifiable Information to register general purpose reloadable cards

Previously, between July 18, 2018 and July 20, 2018, in the Southern District of Texas, 21 defendants were sentenced for their roles in connection with this complex scam, with three others having been sentenced earlier in 2018. The cumulative total of the prison sentences for the 21 defendants sentenced in July 2018 exceeded 174 years.

Pending a detention hearing, Patel has been temporarily remanded to custody of the court.

  • [1] The facts in this case narrative come from the following publicly available documents: S.D. Tex. DOJ Press Release dated April 19, 2019; S.D. Tex. Superseding Indict. filed Oct. 19, 2016; S.D. Tex. Crim. Docket as of April 19, 2019; TIGTA Press Release dated Oct. 27, 2016; TIGTA Report for Aug. 20, 2018; and S.D. Tex. Order Scheduling Detention Hearing filed Apr. 19, 2019.


  • California Man Sentenced for His Role in an Impersonation Scam [1]

    On March 13, 2019, in the District of Minnesota, Yu Zhang was sentenced for conspiracy to commit wire fraud in connection with an interstate scheme to defraud by falsely impersonating IRS employees. Zhang was indicted for the offense in July 2018, and pled guilty in October 2018.

    According to the court documents, from at least March 12, 2018 to June 8, 2018, Zhang conspired with others to participate in a scheme to defraud and to obtain money by material false and fraudulent pretenses. Zhang’s coconspirators contacted victims in numerous States throughout the country by telephone, falsely claimed to be IRS agents or other Government officials, and threatened the victims with arrest unless they made immediate payment for delinquent taxes.

    The caller instructed the victims to purchase Target™ gift cards and to provide the caller with the gift card numbers and activation codes over the phone. Zhang, at the direction of his coconspirators, traveled to Target stores in multiple States, including Minnesota, Illinois, and Colorado, to redeem the Target gift cards by purchasing third-party gift cards. In order to redeem the Target gift cards, a coconspirator would send Zhang a message on his cell phone containing the gift card numbers and redemption codes immediately after the victims had purchased them. Zhang would then redeem the cards within minutes of receiving the message by scanning a bar code displayed on his cell phone. To avoid detection by Target personnel, Zhang would use the self-checkout registers for his transactions and would travel to multiple Target stores each day.

    For example, according to the indictment, on May 31, 2018, an individual claiming to be an IRS employee contacted a victim in Iowa, said the victim owed more than $4,000 in taxes, and threatened the victim with arrest. The IRS impersonator then demanded that the victim go to the nearest Target store and purchase two $2,000 gift cards, which the scammer claimed that the IRS used as “Taxpayer Identification Forms.” The victim complied, used cash to purchase the gift cards, and provided the card numbers and activation codes to the IRS impersonator. The impersonator then instructed the victim to purchase an additional gift card for $2,000 to have the “arrest warrant” removed. The victim purchased a third $2,000 gift card

    Target surveillance cameras showed the victim leaving the Target store in Iowa after purchasing the third gift card. Thirty minutes later, Zhang used that same gift card at a Target store in Minnesota to purchase $1,000 worth of prepaid third-party gift cards issued by Google Play™ and Steam™. He then traveled to another Target store in Minnesota and used the remaining $1,000 to purchase additional Google Play and Steam cards. Zhang was arrested at a Target store in Andover, Minnesota, and at the time of his arrest had in his possession several hundred third-party gift cards worth tens of thousands of dollars.

    Zhang knew the funds he was handling were obtained through criminal activities and admitted that between May 28, 2018 and June 8, 2018, he had redeemed approximately $240,000 worth of Target gift cards by conducting hundreds of transactions. He further admitted that between March 1, 2018 and May 28, 2018, he had traveled to Colorado and conducted more than $10,000 in similar transactions.

    Zhang was sentenced to 11 months’ imprisonment, with credit for time served, plus two years of supervised release and up to 20 hours of community service per week until employed. Zhang was further ordered to pay $133,800.52 in restitution to the victims.

    • [1] The facts in this case narrative come from the following publicly available documents: D. Minn. Crim. Compl. filed June 8, 2018; D. Minn. Indict. filed July 10, 2018; D. Minn. Plea Agr. filed Oct.23, 2018; D. Minn. Judgment filed Mar. 14, 2019.


    • Indictment Unsealed - Three More Individuals Plus a Business Charged in IRS Impersonation Scam [1]

      On March 8, 2019, in the Northern District of Georgia, an indictment was unsealed revealing charges against three individuals and a business who allegedly engaged in a scheme to impersonate U.S. Government officials in order to extort money from victims. Defendants Mohit Devendrabhai Sharma, Julliette Belle Carter, Kunal Jagdishbhai Sharma, and Skyz International Outsourcing and BPO were charged with wire fraud conspiracy and wire fraud. Mohit Sharma and Carter each were charged with conspiracy to commit money laundering as well.

      The indictment alleges that from about February 2014 through about November 2017, the four defendants knowingly and willfully conspired with each other and others to unjustly enrich themselves by impersonating Federal officials and inducing victims to pay fictitious back taxes, fines, and penalties.

      Specifically, the defendants allegedly contacted victims located across the United States by telephone and purported to be an official from the Internal Revenue Service (IRS) seeking to collect outstanding taxes, penalties, or fines. They would also routinely leave voicemail messages threatening the victims with an “enforcement action” if they did not immediately return the call and would threaten the victims with prosecution or arrest if the alleged debts were not paid immediately. The conspirators obtained the victims’ personally identifiable information, used purchased “Lead Lists,” and followed IRS impersonation call scripts that included fraudulent IRS employees’ names and Internal Revenue Code sections.

      The callers instructed the victims to go to banks or ATMs to withdraw money and then send the money electronically using banks or money service businesses such as MoneyGram®. Mohit Sharma, Carter, and others would then retrieve the fraudulent proceeds from various MoneyGram locations.

      If convicted, the defendants could face a maximum statutory sentence of 20 years’ imprisonment for wire fraud.

      • [1] The facts in this case narrative come from the following publicly available documents: N.D. Ga. Indict. filed May 15, 2018; N.D. Ga. Crim. Docket as of Apr. 4, 2019.


      • Las Vegas Tax Business Owner Indicted in Scheme to Defraud Using Stolen Client Information and Fraudulent Financial Information [1]

        On March 20, 2019, in the District of Nevada, North Las Vegas resident King Umoren was indicted for wire fraud, aggravated identity theft, and money laundering, in connection with a scheme to defraud the buyer of his tax preparation businesses.

        According to the indictment, Umoren operated tax preparation businesses known as Universal Tax Services and Prudential Tax Solutions, collectively referred to as UTS. Around May 2016, Umoren began attempting to sell UTS. In about August 2017, a buyer and Umoren entered into negotiations for the sale of UTS. The buyer agreed to purchase UTS for a total price of $6.7 million, with a guaranteed $4.05 million to be paid to Umoren upon the closing of escrow, which occurred in November 2017.

        From about May 2016 through about May 2018, Umoren allegedly devised and participated in a scheme to defraud and to obtain money through false representations by misrepresenting that UTS had a vastly greater client base and annual revenue than it actually did.

        As part of his scheme, Umoren allegedly provided client lists and a client database containing approximately 12,700 clients to the buyer purporting to show that the clients were UTS clients, when, in fact, only about 700-800 of the individuals were actually UTS clients. Umoren stole most of the client information from unrelated companies, including the client names, Social Security Numbers, and confidential taxpayer information of those companies. Additionally, Umoren provided the buyer with fraudulent bank statements, deposit reports, personal income tax returns, Forms 1099-MISC purporting to reflect millions of dollars paid to contractors for preparing tax returns for UTS clients, and other false financial reports.

        If convicted, Umoren could face a maximum statutory sentence of 20 years’ imprisonment for wire fraud, plus a mandatory two-year sentence for aggravated identity theft. Additionally, upon conviction of any of the felony offenses charged in the indictment, Umoren may be ordered to forfeit at least $4.05 million and real property. A jury trial is scheduled to begin on May 20, 2019.

        • [1] The facts in this case narrative come from the following publicly available documents: D. Nev. Indict. filed Mar. 20, 2019; D. Nev. Crim. Docket as of Mar. 27, 2019.


        • Tax Preparer Charged for Using Customer Information in Scheme to Defraud [1]

          On March 13, 2019, in the District of Utah, Liberty Tax Service® employee Brittany Schalk was charged with wire fraud and aggravated identity theft in a scheme to defraud the Internal Revenue Service (IRS) and financial institutions.

          According to the court document, Schalk was employed by Liberty Tax Service as a tax preparer and eventually as an office manager. Her employment granted her access to large amounts of personally identifiable information (PII), including, but not limited to, names, addresses, Social Security Numbers (SSN), dates of birth, and bank account information. Records containing such PII were maintained within the normal course of Liberty Tax Service’s business.

          From about December 2013 through about February 2016, Schalk allegedly engaged in a scheme to defraud the IRS and financial institutions by seeking to obtain the payment and allowance of fraudulent claims. Schalk allegedly obtained the PII of customers and potential customers of Liberty Tax Service, as well as PII that had been stolen from individuals in burglaries, and used this information to create and file false tax returns, to alter and cash fraudulent checks, and to apply for fraudulent credit accounts.

          For example, in furtherance of her scheme, Schalk is alleged to have changed the disbursement method for a tax refund that was to be issued to an actual Liberty Tax customer from a check to a prepaid debit card under her (Schalk’s) control. She also used the PII of another customer whose Federal income tax return she had completed in order to cash a fraudulent check. Another victim had started a tax return at Liberty Tax, but did not have the money to pay, so she never finished her return. Schalk subsequently added a fraudulent dependent to the unfinished tax return and filed it, claiming a refund of $5,316. Additionally, Schalk filed a fraudulent tax return and applied for two separate credit cards using the identity and PII of an individual whose wallet had been stolen approximately three months earlier.

          If convicted, Schalk could face a maximum statutory sentence of 20 years’ imprisonment for wire fraud, plus a mandatory two-year sentence for aggravated identity theft.

          • [1] The facts in this case narrative come from the following publicly available documents: D. Utah Felony Information filed Mar. 13, 2019.


          • April 25, 2019

            IRS Employee Indicted For Wire Fraud, Theft of Government Property, and Aggravated Identity Theft [1]

            On March 6, 2019, in the Middle District of Tennessee, Internal Revenue Service (IRS) employee Tracey Allison was indicted for wire fraud, theft of Government property, and aggravated identity theft, in a scheme to fraudulently obtain paid military leave and benefits from the IRS.

            According to the indictment, Allison has been employed with the IRS in Franklin, Tennessee, since October 2007. From about November 2013 through about October 2018, Allison allegedly knowingly devised a scheme to defraud and to obtain money by means of materially false and fraudulent pretenses, willingly stole property belonging to the United States, and used one or more means of identification of another without authority.

            Specifically, between 2013 and 2018, Allison regularly submitted false Department of the Army Forms 1380 (DA 1380) to the IRS payroll unit seeking payment for military duties. Allison, however, was discharged from the U.S. Army Reserve in August 2012 and enlisted in the Tennessee National Guard until July 2018. Consequently, she had no military duties for the dates listed on the forms. In furtherance of Allison’s scheme, she forged the name, title, and Department of Defense identification number of her former station commander on the Forms DA 1380. Yet, her former station commander was a military retiree who ceased supervising Allison’s military duties around July 2013. Allison was not authorized to use his or her personal identifiers.

            In all, Allison submitted approximately 70 false, fraudulent, and forged Forms DA 1380 to the IRS. As a result of the false submissions, Allison collected payments and benefits totaling approximately $22,846.

            If convicted, Allison could face a maximum statutory sentence of 20 years’ imprisonment for wire fraud, plus a mandatory two-year sentence for aggravated identity theft.

            • [1] The facts in this case narrative come from the following publicly available documents: M.D. Tenn. Indict. filed Mar. 6, 2019.


            • IRS Employee Indicted for the Unauthorized Disclosure of Suspicious Activity Reports [1]

              On February 28, 2019, in the Northern District of California, Internal Revenue Service (IRS) employee John C. Fry was indicted for the unauthorized disclosure of Suspicious Activity Reports (SARs), misuse of a Government computer, and misuse of a Social Security Number (SSN) in violation of the law.

              According to the court documents, Fry is an investigative analyst for IRS Criminal Investigation (IRS-CI) in San Francisco, California, and has worked for the IRS since 2008. In this position, he had access to various law enforcement databases, including the Financial Crimes Enforcement Network (FinCEN) and Palantir, which is analytic software used by IRS-CI. FinCEN manages the collection and maintenance of SARs, which financial institutions are required to generate under the Bank Secrecy Act to report potentially suspicious financial transactions. The disclosure of a SAR or its contents is unlawful, and employees or agents of Government authorities are prohibited from disclosing a SAR, or any information that would even reveal the existence of a SAR, except as necessary to fulfill official duties.

              By virtue of his position as an investigative analyst, Fry intentionally exceeded authorized access to a computer and obtained information regarding SARs that was not necessary to fulfill his official duties. Further, between about May 4, 2018 and May 14, 2018, Fry knowingly disclosed the SARs by verbally describing and electronically sending images of the SARs to Newport Beach, California, attorney Michael Avenatti.

              Specifically, on May 4, 2018, Fry conducted numerous searches from his work computer in the Palantir database that related to Michael Cohen and his business, Essential Consultants, LLC. During this access, Fry obtained and downloaded five SARs. Immediately after downloading the five SARs, Fry placed two outgoing phone calls to a number associated with Avenatti. Fry then logged into the FinCEN database from his work computer and conducted additional searches related to Michael Cohen, including searches using Cohen’s driver’s license and personal bank account numbers, as well as several business bank account numbers. On May 7, 2018, Fry again conducted searches in the FinCEN database, this time using Cohen’s SSN and the term Essential Consultants, among other things, and later that day, placed another call to Avenatti.

              On May 8, 2018, Avenatti circulated a dossier on his public Twitter account releasing the confidential banking information related to Cohen and his company, Essential Consultants. On May 8, 2018, The Washington Post published an article that discussed in detail claims about Cohen’s banking history made public in Avenatti’s dossier. On May 12, 2018, Fry placed an outgoing call to a number later identified as being associated with a reporter. On May 16, 2018, The New Yorker published an article written by this reporter titled, “Missing Files Motivated the Leak of Michael Cohen’s Financial Records.” The article reported that the source, identified only as a law enforcement officer, grew alarmed after being unable to find two important SARs regarding Cohen’s financial activity. In fact, access to the two SARs in question had been restricted and they were not available to all FinCEN users.

              Fry confessed to verbally providing SAR information to Avenatti and to sending Avenatti a screenshot of the narrative. Fry indicated the reporter had contacted him (Fry) to verify the information supplied to the reporter by Avenatti.

              If convicted, Fry could face a maximum of five years’ imprisonment for each violation.

              • [1] The facts in this case narrative come from the following publicly available documents: N.D. Cal. Crim. Compl. filed Feb. 4, 2019; N.D. Cal. Indict. filed Feb. 28, 2019.


              • New Jersey Accountant Pleads Guilty to Bribery of IRS Agent [1]

                On February 20, 2019, in the District of New Jersey, Certified Public Accountant Hamed Aref was charged with and pled guilty to bribery of an Internal Revenue Service (IRS) revenue agent. Specifically, Aref knowingly gave the revenue agent approximately $3,000 to influence the outcome of an audit by reducing his client’s tax liability.

                According to the court documents, Aref was the accountant and held power of attorney for an individual who was being audited by the IRS. In February 2012, an IRS revenue agent met with Aref, who offered payment to the revenue agent if the revenue agent could “help out” by reducing his client’s tax liability. The revenue agent reported this meeting to law enforcement. In a subsequent recorded meeting, the revenue agent produced a false audit report reflecting the reductions in income that Aref had requested. Aref then asked the revenue agent to leave the office and left an envelope containing $3,000 in cash on the revenue agent’s chair. Aref told the revenue agent that his client was aware of the cash payment, and that his client provided the cash to Aref for the payment.

                Aref could face a maximum sentence of two years’ imprisonment. Sentencing is scheduled for June 6, 2019.

                • [1] The facts in this case narrative come from the following publicly available documents: D.N.J. Crim. Docket as of Feb. 25, 2019; and D.N.J. Information filed Feb. 20, 2019.


                • Miami Tax Services Provider Pleads Guilty to Forcibly Assaulting and Threatening IRS Employee With Shotgun [1]

                  On February 13, 2019, in the Southern District of Florida, tax services provider Jimmy Sierra pled guilty to forcibly assaulting, impeding, and intimidating an Internal Revenue Service (IRS) revenue officer who was engaged in the performance of his official duties. Special agents of the Treasury Inspector General for Tax Administration arrested Sierra for the offense in May 2018, and he was subsequently indicted in June 2018.

                  According to the court documents, on or about May 21, 2018, the revenue officer conducted a field visit to collect a tax payment from a tax business in Miami, Florida, of which Sierra is a registered agent. Upon arrival, the revenue officer identified himself to Sierra as an IRS employee and presented his IRS credentials. Sierra subsequently invited the revenue officer inside. Once they were inside Sierra’s office, Sierra pushed a button on his phone and another male showed up in his office. Sierra opened a drawer in his desk and pulled out what appeared to be a shotgun, pointed it at the unarmed revenue officer, and stated in part, “You want money…? I’m going to shoot you. You want it in the balls or you want it in the chest?” The revenue officer believed that Sierra had a fully functioning firearm and intended to shoot him. At that time, the revenue officer backed away, again displayed his IRS-issued credentials, and called 911.

                  Sierra again stated aloud to the other male that he was going to shoot the revenue officer. The revenue officer, believing that he was in a fight for his life, grabbed the shotgun stock and wrestled with Sierra over the weapon. During the exchange, Sierra struck the revenue officer, who sustained injuries. The revenue agent was able to flee Sierra’s office and was later transported to a hospital for medical attention.

                  Sierra could face a maximum sentence of eight years’ imprisonment. Sentencing is set for April 26, 2019.

                  • [1] The facts in this case narrative come from the following publicly available documents: S.D. Fla. Crim. Compl. filed May 23, 2018; S.D. Fla. Indict. filed June 5, 2018; S.D. Fla. Plea Agr. filed Feb. 13, 2019; S.D. Fla. Factual Proffer filed Feb. 13, 2019; S.D. Fla. Crim. Docket as of Feb. 20, 2019.


                  • March 27, 2019

                    IRS Supervisor Pleads Guilty to Theft of Government Property [1]

                    On January 31, 2019, in the Central District of California, Internal Revenue Service (IRS) supervisor Leslie Williams pled guilty to two counts of theft of Government property. Williams was initially indicted for the offenses and arrested by special agents of the Treasury Inspector General for Tax Administration (TIGTA) in March 2018.

                    According to the court documents, at all times relevant to the charges, Williams was employed by the IRS as a supervisory individual tax advisory specialist in the Long Beach, California office. Beginning on or about February 12, 2016, Williams knowingly and willfully embezzled, stole, and converted for her own use Federal funds as the purported surviving spouse of her ex-husband, who had died on about January 22, 2016, and from whom she had been divorced since about November 15, 2013. Specifically, Williams claimed that, as the alleged surviving spouse, she was entitled to receive death benefit payments issued by the Office of Personnel Management (OPM), as well as retirement plan contributions issued by the Federal Retirement Thrift Investment Board (FRTIB). In total, Williams stole $34,204.50 from OPM and $36,861 from FRTIB.

                    Additionally, on February 14, 2017, when interviewed by TIGTA special agents, Williams allegedly made a materially false statement by continuing to claim that she was married to her ex-spouse until his death, when, in fact, Williams knew she had been divorced since about November 15, 2013.

                    Williams could face a maximum statutory sentence of 10 years’ imprisonment. Sentencing in this matter is scheduled for June 3, 2019.

                    • [1] The facts in this case narrative come from the following publicly available documents: C.D. Cal. Indict. filed Mar. 21, 2018; C.D. Cal. Executed Arrest Warrant filed. Mar. 22, 2018; C.D. Cal. Plea Agr. filed Jan. 31, 2019; C.D. Cal. Crim. Docket as of Feb. 5, 2019.


                    • Michigan Man Sentenced to More Than 13 Years in Prison for Scheme to Defraud the IRS [1]

                      On January 29, 2019, in the Western District of Michigan, Oghenevwakpo Igboba was sentenced for conspiracy to defraud the United States, wire fraud, false claims, and aggravated identity theft. Igboba was initially indicted for the offenses and arrested by special agents of the Treasury Inspector General for Tax Administration in February 2017.

                      According to the court documents, from at least December 2014 to about February 2016, Igboba conspired with others to defraud the Internal Revenue Service (IRS) by knowingly devising and participating in a scheme to obtain income tax refunds by means of fraudulent representations. Igboba coordinated the conspiracy, which involved at least five participants, including his father, his sister, codefendant Charles Aghogho Ejinyere, and other individuals

                      As part of the scheme, Igboba and his coconspirators obtained personally identifiable information (PII), including the names, dates of birth, addresses, telephone numbers, Social Security Numbers, and familial information of numerous unrelated individuals. Using that PII, Igboba and others illegally accessed online IRS systems, including eAuthentication and Get Transcript, to obtain additional tax-related information for the individuals. They then filed or caused to be filed without authorization fraudulent tax returns with the IRS in the names of the individuals. Igboba and coconspirator Ejinyere directed refunds from the fraudulent returns to be deposited into bank and credit union accounts belonging to Igboba, his businesses, his family members, associates, and unwitting accomplices.

                      In September 2018, a jury found Igboba guilty of 18 counts of the 22-count indictment. The intended loss for the fraudulent tax refunds totaled more than $4 million.

                      Igboba was sentenced to 162 months’ imprisonment followed by three years of supervised release. He was further ordered to pay $514,823 in restitution to the IRS and to forfeit $48,205.

                      • [1]The facts in this case narrative come from the following publicly available documents: W.D. Mich. Indict. filed Feb. 7, 2017; W.D. Mich. Govt. Trial Brief filed Apr. 6, 2018; W.D. Mich. Verdict Form filed Sep. 17, 2018; W.D. Mich. Govt. Sentencing Memorandum filed Jan. 23, 2019; W.D. Mich. Judgment filed Jan. 31, 2019; W.D. Mich. Crim. Docket as of Feb. 5, 2019.


                      • New Jersey Tax Preparer Sentenced in Scheme Involving Filing of False Tax Returns and Bank Fraud [1]

                        On December 21, 2018, in the District of New Jersey, tax preparer Brian A. Day was sentenced in connection with a scheme to defraud the Internal Revenue Service (IRS) and misappropriate his clients’ monies by the filing of false tax returns and bank fraud. Day previously pled guilty to the offenses in August 2018.

                        According to the court documents, Day, a resident of Port Murray, New Jersey, was self-employed as a tax return preparer. He 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 and collected information relating to the preparation of their individual income tax returns.

                        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 in order to resolve their purported IRS liabilities. In fact, Day did not actually give the checks from his taxpayer clients to the IRS. Instead, he altered the names of the payees on the checks from the “IRS” to names matching or resembling that of one of his tax preparation businesses and deposited the checks into his own business bank account. Day made false or fraudulent representations to at least five individuals, resulting in a total loss of approximately $124,289.

                        According to the indictment, when Day’s clients contacted him regarding their checks, he presented fraudulent documents purportedly issued by the IRS to two of the taxpayers in an attempt to conceal and further his fraud. However, the IRS never issued these documents. Additionally, Day prepared or presented at least 21 fraudulent and false tax returns to the IRS for Tax Years 2009 through 2015, resulting in a loss to the IRS of approximately $491,007.

                        Day was sentenced to 32 months’ imprisonment, followed by five years’ supervised release. He was further ordered to forfeit $61,000, pay $499,997.72 in restitution, and pay a special assessment fee of $800.

                        • [1]The facts in this case narrative come from the following publicly available documents: D.N.J. Indict. filed Feb. 1, 2017; D.N.J. Plea Agr. filed Aug. 1, 2018; D.N.J. Consent Judgment and Order of Forfeiture filed Aug. 1, 2018; and D.N.J. Judgment filed Dec. 21, 2018.


                        • February 28, 2019

                          California Man Pleads Guilty to Misuse of the Department of the Treasury Symbol [1]

                          On December 11, 2018, in the Central District of California, Cody Jannetti pled guilty to misusing a U.S. Treasury symbol in association with a false release of levy. Jannetti was initially charged with the offense on November 1, 2018. November 8, 2018, in the Middle District of Florida, former Internal Revenue Service (IRS) employee Dawn Avalle pled guilty to conspiracy to defraud the United States and making and subscribing to a false tax return. Avalle was initially charged with the offenses on October 24, 2018.

                          According to the court documents, Jannetti owed the Internal Revenue Service (IRS) approximately $107,000 in delinquent taxes. In late 2016, the IRS issued a levy on Jannetti’s income to his employer, Loan Depot.

                          Jannetti manipulated an IRS Release of Levy on his work computer and forged the signature of an IRS employee. Additionally, Jannetti changed the fax header to note that it had been sent from the IRS, when Jannetti had faxed it to himself from a Federal Express office. On or about January 5, 2017, Jannetti then faxed the false IRS levy release to Loan Depot in order to convey the impression that his tax lien was released and that he could have access to his income.

                          Jannetti could face a maximum statutory sentence of one year in prison, plus a fine of up to $10,000 for each use. Sentencing has been scheduled for February 25, 2019.

                          • [1] The facts in this case narrative come from the following publicly available documents: C.D. Cal. Information filed Nov. 1, 2018; C.D. Cal. Plea Agr. filed Nov. 1, 2018; C.D. Cal. Crim. Docket as of Dec. 12, 2018.


                          • Georgia Man Offers IRS Employee $30,000 to Falsify Audit Results [1]

                            On November 6, 2018, in the Northern District of Georgia, Magdaleno Garcia Alonso was indicted for corruptly offering a thing of value to an employee of the United States. Alonso was subsequently arrested for the offense on November 10, 2018, by special agents of the Treasury Inspector General for Tax Administration.

                            According to the court documents, on or about September 19, 2018, Alonso offered an Internal Revenue Service (IRS) revenue agent $30,000, with the intent to induce the revenue agent to commit an act in violation of his or her lawful duties, that is, to falsify the results of audits of Alonso’s and Georgia Concrete, Incorporated’s Federal income tax returns for tax years 2015 and 2016.

                            Alonso is detained pending trial and could face a maximum statutory sentence of 15 years’ imprisonment.

                            • [1] The facts in this case narrative come from the following publicly available documents: N.D. Ga. Indict. filed Nov. 6, 2018; N.D. Ga. Order of Detention filed Nov. 13, 2018; N.D. Ga. Executed Arrest Warrant filed Nov. 19, 2018; N.D. Ga. Crim. Docket as of Nov. 28, 2018.


                            • California Man Pleads Guilty for His Role in an Impersonation Scam [1]

                              On October 23, 2018, in the District of Minnesota, Yu Zhang pled guilty to conspiracy to commit wire fraud in connection with an interstate scheme to defraud by falsely impersonating Internal Revenue Service (IRS) employees. Zhang was indicted for the offense in July 2018.

                              According to the court documents, from at least March 12, 2018 to June 8, 2018, Zhang conspired with others to participate in a scheme to defraud and to obtain money by material false and fraudulent pretenses. Zhang’s coconspirators contacted victims in numerous States throughout the country by telephone, falsely claimed to be IRS agents or other Government officials, and threatened the victims with arrest unless they made immediate payment for delinquent taxes.

                              The callers instructed the victims to go to Target™, purchase gift cards, and provide the gift card numbers and activation codes to the callers over the phone. Zhang, at the direction of his coconspirators, traveled to Target stores in multiple States, including Minnesota, Illinois, and Colorado, to redeem the Target gift cards by purchasing third-party gift cards. In order to redeem a Target gift card, a coconspirator would send Zhang a message on his cell phone containing the gift card number and redemption code immediately after the victim had purchased it. Zhang would then redeem the card within minutes of receiving the message by scanning a bar code displayed on his cell phone. To avoid detection by Target personnel, Zhang would use the self-checkout registers for his transactions and would travel to multiple Target stores each day.

                              For example, according to the indictment, on May 31, 2018, an individual claiming to be an IRS employee contacted a victim in Iowa, said the victim owed more than $4,000 in taxes, and threatened the victim with arrest. The IRS impersonator then demanded that the victim go to the nearest Target store and purchase two $2,000 gift cards, which the scammer claimed that the IRS used as “Taxpayer Identification Forms.” The victim complied, used cash to purchase the gift cards, and provided the card numbers and activation codes to the IRS impersonator. The impersonator then instructed the victim to purchase an additional gift card for $2,000, to have the “arrest warrant” removed. The victim purchased a third $2,000 gift card.

                              Target surveillance cameras showed the victim leaving the Target store in Iowa after purchasing the third gift card. Thirty minutes later, Zhang used that same gift card at a Target store in Minnesota to purchase $1,000 worth of prepaid third-party gift cards issued by Google Play™ and Steam™. He then traveled to another Target store in Minnesota and used the remaining $1,000 to purchase additional Google Play and Steam cards. Zhang was arrested at a Target store in Andover, Minnesota, and at the time of his arrest had in his possession several hundred third-party gift cards worth tens of thousands of dollars.

                              Zhang knew the funds he was handling were obtained through criminal activities and admitted that between May 28, 2018 and June 8, 2018, he had redeemed approximately $240,000 worth of Target gift cards by conducting hundreds of transactions. He further admitted that between March 1, 2018 and May 28, 2018, he had traveled to Colorado and conducted more than $10,000 in similar transactions.

                              Zhang could face a maximum statutory sentence of 5 years’ imprisonment. His sentencing is set for February 27, 2019.

                              • [1] The facts in this case narrative come from the following publicly available documents: D. Minn. Crim. Compl. filed June 8, 2018; D. Minn. Indict. filed July 10, 2018; D. Minn. Plea Agr. filed Oct.23, 2018; D. Minn. Crim. Docket as of Dec. 7, 2018.



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