Middle District of North Carolina
Press releases recorded for this federal judicial district.
North Carolina Return Preparer Convicted for Filing Fraudulent ReturnsRead the Press Release
A jury sitting in Greensboro, North Carolina, convicted a Durham, North Carolina, tax return preparer of conspiring to defraud the United States and preparing fraudulent tax returns for herself and her clients, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew G.T. Martin for the Middle District of North Carolina.
According to public documents and information presented during the trial, Keesha Frye, 43, owned and operated KEF Professional Tax Services, a Durham tax preparation business. From 2012 through 2014, Frye and other KEF employees falsified their clients’ tax returns by including fake and inflated sources of income to qualify for and maximize the earned income tax credit and increase the refunds claimed on the returns. Frye also filed personal income tax returns that claimed bogus childcare expenses and business losses.
U.S. District Court Judge William L. Osteen Jr. scheduled sentencing for April 11. Frye faces a statutory maximum sentence of five years in prison for conspiracy and three years in prison for each charge of filing fraudulent returns. Frye also faces a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Martin commended special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Anand Ramaswamy and Trial Attorney Nathan Brooks of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Return Preparer Convicted for Filing Fraudulent ReturnsRead the Press Release
WASHINGTON – A jury sitting in Greensboro, North Carolina, convicted a Durham, North Carolina, tax return preparer of conspiring to defraud the United States and preparing fraudulent tax returns for herself and her clients, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Matthew G.T. Martin for the Middle District of North Carolina.
According to public documents and information presented during the trial, Keesha Frye, 43, owned and operated KEF Professional Tax Services, a Durham tax preparation business. From 2012 through 2014, Frye and other KEF employees falsified their clients’ tax returns by including fake and inflated sources of income to qualify for and maximize the earned income tax credit and increase the refunds claimed on the returns. Frye also filed personal income tax returns that claimed bogus childcare expenses and business losses.
U.S. District Court Judge William L. Osteen, Jr. scheduled sentencing for April 11. Frye faces a statutory maximum sentence of five years in prison for conspiracy and three years in prison for each charge of filing fraudulent returns. Frye also faces a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Martin commended special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Anand Ramaswamy and Trial Attorney Nathan Brooks of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
# # #
Moore County Man Pleads Guilty in Multi-State Dog Fighting ProsecutionRead the Press Release
Greensboro, N.C. – A Moore County man pled guilty to federal dog fighting and conspiracy charges yesterday, announced United States Attorney Matthew G.T. Martin and Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division.
Brexton Redell LLOYD, 54, of Eagle Springs, North Carolina, pled guilty to one felony count of conspiracy and two felony counts of possession and training a dog intended for use in an animal fighting venture, contrary to the animal fighting provisions of the federal Animal Welfare Act. Each count carries a maximum sentence of five years in prison and a $250,000 fine.
According to documents filed with the court, LLOYD participated with Justin “Jay” Love and others in a multi-state dog fighting conspiracy. These documents describe Lloyd and Love’s attempt to set up a dog fight between Lloyd and an unknown opponent in October 2015 and LLOYD’s breeding and training activities. Court documents further note that earlier this year, agents seized thirteen pit bull-type dogs from LLOYD’s residence. Ten of the dogs were secured outdoors by excessive chains, wearing thick collars, and positioned so that each dog was out of reach of any other dog. The other dogs were housed individually in pens. The water in the dogs’ bowls was frozen. Two of the four adult dogs seized exhibited scars consistent with dog fighting, and a third adult dog had four fractured teeth. In addition to the dogs, agents seized items related to training dogs for dog fighting purposes, including: a spring pole, a dog harness, and a hanging scale. Agents also seized veterinary supplies, including: intravenous fluids, intravenous administration sets stated for “Veterinary Use Only,” injectable and other antibiotics, a 100-count package of syringes, blood clotting medications such as Blood Stop Powder, and a skin stapler.
“Organized crime has no place in North Carolina or the United States – and dog fighting of this sort is nothing short of organized crime. Our law enforcement partners at the Department of Agriculture, the Federal Bureau of Investigation, the Moore County Sheriff’s Office, and the N.C. State Highway Patrol demonstrated exceptional coordination in bringing this defendant to justice,” said United States Attorney Martin.
“Ending animal fighting ventures is a priority of our Division. We dispatch prosecutors who focus in this area to districts across the country, to join with our partners in the U.S. Attorneys’ Offices in aggressively pursuing illegal animal fighting,” said Acting Assistant Attorney General Wood. “Today’s sentence sends a message that our justice system will not tolerate the torment and death of animals in the fighting ring, all for the sake of illegal gambling.”
“The provisions of the Animal Welfare Act were designed to protect animals from being used in illegal fighting ventures, which often entail other forms of criminal activity involving drugs, firearms and gambling,” said Department of Agriculture – Office of Inspector General Special Agent-in-Charge Bethanne M. Dinkins. “Together with the Department of Justice, animal fighting is an investigative priority for USDA-OIG, and we will work with our law enforcement partners to investigate and assist in the criminal prosecution of those who participate in animal fighting ventures.”
This case is part of Operation Grand Champion, a coordinated effort across numerous federal judicial districts to combat organized dog fighting. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog fighting “victories.” To date, over one hundred dogs have been rescued as part of Operation Grand Champion, and either surrendered or forfeited to the government. The Humane Society of the United States assisted with the care of the dogs seized by federal law enforcement.
This case was investigated by USDA-OIG and FBI, with assistance from the Moore County Sheriff’s Office and the North Carolina Highway Patrol, and is being prosecuted by Assistant U.S. Attorney JoAnna G. McFadden and Trial Attorney Erica H. Pencak of the Justice Department’s Environmental Crimes Section Environmental Crimes Section.
###
Washington Man Sentenced to Federal Prison for Threatening to Damage ComputersRead the Press Release
GREENSBORO, N.C. – A Wenatchee, Washington man was sentenced to 37 months in federal prison after pleading guilty to threatening to damage computers at a Chapel Hill business, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
Todd Michael GORI, Jr., 28, was sentenced on December 19, 2017, by the Honorable William L. Osteen, Jr., United States District Judge for the Middle District of North Carolina. GORI pleaded guilty on September 6, 2017, to one count of threatening to damage protected computers, in violation of Title 18, United States Code, Section 1030(a)(7)(A). GORI had sent an email message to a Chapel Hill healthcare corporation on April 18, 2016, threatening a cyber attack unless that business fired one employee and hired GORI instead. GORI sent that email from his Wenatchee, Washington residence to the business in Chapel Hill, North Carolina.
In addition to a 37-month term of imprisonment, Judge Osteen, Jr., sentenced GORI to 3 years of supervised release.
The Federal Bureau of Investigation’s Raleigh Cyber Squad investigated the case, which was prosecuted by Assistant United States Attorney Anand Ramaswamy, Cybercrime prosecutor for the Middle District of North Carolina.
###
Charlotte Man Sentenced for Child Pornography Offense Committed in High PointRead the Press Release
GREENSBORO, N.C. – An individual who pleaded guilty to production of child pornography was sentenced today, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
STEPHEN PAUL AYDELOTTE, 48, of Charlotte, North Carolina, pleaded guilty on September 14, 2017, to one count of production of child pornography. He was sentenced by United States District Judge William L. Osteen, Jr. to 25 years imprisonment followed by lifetime supervised release. AYDELOTTE was previously convicted in Utah of attempted sexual exploitation of a minor and twice failing to register as a sex offender, and in North Carolina of failing to register as a sex offender.
In February 2017, AYDELOTTE alerted authorities that, while living in High Point, North Carolina in 2012, he took photographs of himself sexually exploiting a prepubescent minor. Investigators where then able to recover the photographs from AYDELOTTE’s phone.
AYDELOTTE also admitted to sexually molesting two minor girls in Utah in 1989.
The United States recommended, and AYDELOTTE received, a degree of leniency in his sentence because AYDELOTTE voluntarily disclosed his criminal conduct, which otherwise would have not likely come to light.
This case was investigated by Homeland Security Investigations and Rowan County Sheriff’s Office. Both agencies are members of the North Carolina Internet Crimes Against Children (ICAC) Task Force.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of online child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
###
High Point Man Sentenced on Child Pornography ChargeRead the Press Release
GREENSBORO, N.C. – An individual who pleaded guilty to receipt of child pornography was sentenced yesterday, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
ROBERT EDWARD ABELL III, 35, of High Point, North Carolina, pleaded guilty on August 14, 2017, to one count of receipt of child pornography. He was sentenced by United States District Judge Catherine C. Eagles to 262 months imprisonment followed by lifetime supervised release. ABELL was previously convicted of taking Indecent Liberties with a Child in Guilford County in 2005.
Investigators searched ABELL’s apartment on March 8, 2016, after observing that someone using ABELL’s IP address was sharing child pornography via a peer-to-peer network. They found child pornography files depicting prepubescent children being sexually molested and peer-to-peer software on ABELL’s computer.
This case was investigated by members of the North Carolina Internet Crimes Against Children (ICAC) Task Force, including the North Carolina State Bureau of Investigation, Homeland Security Investigations, and the High Point Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of online child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
###
Kernersville Man Sentenced to Federal Prison for Bank FraudRead the Press Release
GREENSBORO, N.C. – A Kernersville man was recently sentenced to 70 months in federal prison after pleading guilty to bank fraud, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
Kevin Lee MYERS, Jr., 33, of Kernersville, North Carolina, was sentenced on December 4, 2017, by the Honorable Loretta C. Biggs, United States District Judge for the Middle District of North Carolina. MYERS pleaded guilty in March 2017 to two counts of bank fraud in violation of Title 18, United States Code, Section 1344(2). One count to which MYERS pleaded guilty alleged he misrepresented himself to Ally Bank as an agent of Myers Enterprises, Inc., a corporation to which he in fact had no relationship, in an application for credit in order to purchase a Dodge Ram Truck valued at over $45,000. The other count to which MYERS pleaded guilty alleged he misrepresented himself to the First National Bank of Omaha using the information of another person in order to acquire services valued at $46,256.30.
In addition to a 70-month term of imprisonment, Judge Biggs sentenced MYERS to five years of supervised release and ordered him to pay over $150,000 in restitution.
The United States Department of Treasury Office of Inspector General Financial Crimes Task Force, the Randolph County Sheriff’s Office, the Durham Police Department, and the Forsyth County Sheriff’s Office participated in the investigation. Assistant United States Attorney Anand Ramaswamy prosecuted the case.
###
Chapel Hill Man Sentenced to Federal Prison for Defrauding UNC Newman Center Catholic Student Parish to Fund Lavish LifestyleRead the Press Release
GREENSBORO, N.C. – A Chapel Hill man was recently sentenced to 57 months in federal prison on charges of bank fraud, access device fraud, and aggravated identity theft, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
Brian Lee CANSLER, 27, of Chapel Hill, North Carolina, was sentenced on November 27, 2017, by the Honorable Catherine C. Eagles, United States District Judge for the Middle District of North Carolina. CANSLER previously pleaded guilty to charges relating to his tenure as Financial Director of the UNC Newman Center Catholic Student Parish, a Catholic student ministry and parish located at the University of North Carolina at Chapel Hill. The UNC Student Parish ministers to both the UNC student body and the Chapel Hill community. CANSLER worked for the UNC Student Parish in various roles from February 2014 to July of 2016. From September 2014 to his termination, CANSLER served as Financial Director of the UNC Student Parish. CANSLER pleaded guilty to bank fraud in violation of Title 18, United States Code, Section 1344(2) for counterfeiting UNC Student Parish checks, aggravated identity theft in violation of Title 28, United States Code, Section 1028A for forging the signature of the then Pastor of the parish on counterfeit checks and to access device fraud in violation of Title 18, United States Code, Section 1029(a)(2) for misuse of the UNC Student Parish Bank of America card issued to him for use for parish business.
CANSLER exploited his position as finance director to defraud the UNC Parish. First, he fraudulently obtained approximately $8,000 by making two parish checks payable to himself in the amounts of $4,500 and $3,500. CANSLER forged the signature of then serving pastor onto both fraudulent checks and presented them for payment from the UNC Parish’s account at PNC Bank.
Second, CANSLER fraudulently misused a Bank of America card and a PNC Bank credit card issued to the UNC Student Parish for official parish use. CANSLER was authorized to use these credit cards only for parish expenses such as liturgical and office supplies. However, from October 2014 to July 2016, CANSLER made over $146,000 in unauthorized purchases with the credit cards and paid the bill with UNC Student Parish funds. These purchases included fine dining, clothing, computer products and travel. CANSLER used UNC Parish credit cards to pay for trips to London, Brussels, and Disney World and to Las Vegas to see Celine Dion in concert. CANSLER or his girlfriend posted photos from these parish-funded trips on Facebook. CANSLER used his position as Finance Director at the Student Parish to pay for these charges with Parish funds.
In addition to a 57-month term of imprisonment, Judge Eagles sentenced CANSLER to five years of supervised release and ordered him to pay over $171,000 in restitution.
The United States Postal Inspection Service and the United States Department of Treasury Officer of Inspector General Task Force participated in the investigation. Assistant United States Attorney Frank Joseph Chut, Jr. prosecuted the case.
###
Durham Man Sentenced in Scheme to Defraud Area BusinessesRead the Press Release
GREENSBORO, N.C. – A Durham resident was sentenced on November 28, 2017, for carrying out a scheme to defraud Durham businesses and aggravated identity theft, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
GARY PATTERSON, 31, was sentenced to 94 months in federal prison on November 28, 2017, by the Honorable Loretta C. Biggs, United States District Judge for the Middle District of North Carolina. PATTERSON had previously pleaded guilty to charges of wire fraud in violation of Title 18, United States Code, Section 1343, and aggravated identity theft in violation of Title 18, United States Code, Section 1028A(a)(1), in relation to a scheme to defraud Durham businesses by portraying himself as a local clergyman.
Court documents reveal that PATTERSON victimized dozens of small businesses by making numerous fraudulent credit card purchases. PATTERSON made these transactions by convincing merchants to “force” the sale after the worthless and unauthorized credit card presented by PATTERSON was rejected by the bank. A merchant can “force” a transaction where the bank issuing the credit card has rejected the credit card purchase. Normally, the merchant contacts the bank and requests a code to authorize the transaction despite the bank’s rejection of the card.
PATTERSON convinced numerous merchants to force transactions that had been rejected by the card issuer. PATTERSON often presented himself as being a pastor or bishop associated with a Durham church including “Bishop Gary Johnson” and “Pastor Ed Johnson.” Using the “forced” transaction scheme and a variety of stolen credit cards, PATTERSON obtained money, goods and services from the defrauded merchants. In his assumed role as a clergyman, PATTERSON presented merchants with a debit card issued on a closed Bank of America Account in the name of “Second Chance Outreach Ministry.”
As part of his scheme, PATTERSON also represented to auto care businesses that the business had recently repaired a van from the church at which he claimed to serve as a bishop or pastor. He further represented to the auto care shop that the repair work on the church van had been paid for with a personal credit card and that he needed to pay for the work with a church credit card and receive a refund check for the work paid for on the personal credit card. PATTERSON then presented the auto care business with the “Second Chance Outreach Ministry” debit card to pay for the repair of the church van and instructed the auto care business to “force” the transaction when the sale was declined. After the transaction was forced, PATTERSON then instructed the auto care business to provide him with a check in the amount of the refund, when in fact, as PATTERSON then well knew, no repair work had been performed, the forced credit card transaction would be rejected by Bank of America, N.A., and he was not entitled to receive any refund from the auto care merchant. He then converted the refund check to his own use leaving the auto car business to bear the loss.
In addition to a 94-month term of imprisonment, Judge Biggs sentenced PATTERSON to three years of supervised release and ordered him to pay $72,730.66 in restitution.
The United States Department of Treasury Office of Inspector General and the Durham Police Department participated in the investigation of this case. Special Assistant United States Attorney Kennedy Gates and Assistant United States Attorney Frank Joseph Chut, Jr., prosecuted the case.
###
Richmond County Man Sentenced on Federal Methamphetamine ChargesRead the Press Release
GREENSBORO, N.C. – Christopher Lee Huckabee, 36, and formerly of 311 Hickory Street, Rockingham, was sentenced today for conspiracy to manufacture methamphetamine, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina. Huckabee had pleaded guilty to the charge on July 10, 2017, before the Honorable William L. Osteen, Jr., United States District Judge.
Huckabee was sentenced to 230 months in the Federal Bureau of Prisons, to be followed by a ten-year term of supervised release. Huckabee was also ordered to pay restitution of $270.23 to the North Carolina State Bureau of Investigation for clean-up costs related to a meth lab located at his home on February 4, 2017. A $100 special assessment was also ordered.
Huckabee still has state charges pending in Richmond County wherein he is charged with the felony offenses of throwing acid or an alkili and assault inflicting serious bodily injury, alleged to have occurred on or about January 18, 2017. Trial on these charges is currently scheduled for January 8, 2018, in Richmond County Superior Court. Huckabee is presumed innocent of the charges pending in state court unless and until proven guilty in a court of law.
This case was jointly investigated by the Richmond County Sheriff’s Office and the North Carolina State Bureau of Investigation.
###
North Carolina Tax Return Preparer Sentenced to Prison for Filing Fraudulent Tax ReturnsRead the Press Release
A former Durham, North Carolina, tax return preparer was sentenced to 24 months in prison today for aiding and assisting in the preparation of fraudulent income tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, Maria Streater worked for KEF Professional Tax Services, a tax preparation business located in Durham. From 2012 through 2014, Streater prepared fraudulent income tax returns for clients by creating false sources of income in order to maximize the earned income tax credit and obtain refunds to which her clients were not entitled. Streater agreed that she caused a tax loss of $274,090.
In addition to the term of prison imposed, U.S. District Court Judge Catherine C. Eagles ordered Streater to serve one year of supervised release and to pay $83,083 in restitution to the Internal Revenue Service (IRS).
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Anand Ramaswamy and Trial Attorney Nathan Brooks of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
North Carolina Tax Return Preparer Sentenced to Prison for Tax and Bankruptcy FraudRead the Press Release
A Greensboro, North Carolina, resident was sentenced today to 37 months in prison for corruptly endeavoring to obstruct the Internal Revenue Service (IRS), filing a fraudulent tax return, and bankruptcy fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents and information provided to the court, during 2008 and 2009, Hassie Demond Nowlin, aka Demond Nowlin and Brilliant Knowlin, 44, filed several fraudulent tax returns with the IRS that included fake income and withholding taxes and sought more than $750,000 in fraudulent refunds. Nowlin also filed documents with the Guilford County Register of Deeds purporting to renounce his United States citizenship and proclaiming to be a sovereign citizen. Between 2008 and 2010, the IRS assessed taxes, penalties and interest against Nowlin related to the fraudulent returns. After being notified of the assessments, Nowlin began concealing his assets and placing them in the names of nominee entities.
Nowlin also admitted that between 2011 and 2017, he earned hundreds of thousands of dollars operating a tax preparation business. Nowlin filed hundreds of tax returns for clients that claimed phony business and education expenses, sought refunds to which the clients were not entitled and did not identify him as the paid preparer. Nowlin caused the fees he earned to be deposited into nominee bank accounts that he controlled. Nowlin also admitted that he made false statements to IRS agents, including that he did not prepare tax returns for clients.
In addition to the tax-related charges, Nowlin also admitted to attempting to cheat his creditors by filing fraudulent personal bankruptcy petitions. Along with these petitions, Nowlin also submitted false financial statements on which he did not fully disclose his income and assets.
In addition to his term of imprisonment, U.S. District Court Judge Catherine C. Eagles ordered Nowlin to serve three years of supervised release and to pay restitution to the IRS in the amount of $188,001.89. Nowlin pleaded guilty in August to obstructing the internal revenue laws, filing a fraudulent tax return, and bankruptcy fraud.
Acting Deputy Assistant Attorney General Stuart M. Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Anand P. Ramaswamy of the Middle District of North Carolina, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
North Carolina Tax Return Preparer Sentenced to Prison for Tax and Bankruptcy FraudRead the Press Release
WASHINGTON – A Greensboro, North Carolina, resident was sentenced today to 37 months in prison for corruptly endeavoring to obstruct the Internal Revenue Service (IRS), filing a fraudulent tax return, and bankruptcy fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents and information provided to the court, during 2008 and 2009, Hassie Demond Nowlin, aka Demond Nowlin and Brilliant Knowlin, 44, filed several fraudulent tax returns with the IRS that included fake income and withholding taxes and sought more than $750,000 in fraudulent refunds. Nowlin also filed documents with the Guilford County Register of Deeds purporting to renounce his United States citizenship and proclaiming to be a sovereign citizen. Between 2008 and 2010, the IRS assessed taxes, penalties and interest against Nowlin related to the fraudulent returns. After being notified of the assessments, Nowlin began concealing his assets and placing them in the names of nominee entities.
Nowlin also admitted that between 2011 and 2017, he earned hundreds of thousands of dollars operating a tax preparation business. Nowlin filed hundreds of tax returns for clients that claimed phony business and education expenses, sought refunds to which the clients were not entitled and did not identify him as the paid preparer. Nowlin caused the fees he earned to be deposited into nominee bank accounts that he controlled. Nowlin also admitted that he made false statements to IRS agents, including that he did not prepare tax returns for clients.
In addition to the tax-related charges, Nowlin also admitted to attempting to cheat his creditors by filing fraudulent personal bankruptcy petitions. Along with these petitions, Nowlin also submitted false financial statements on which he did not fully disclose his income and assets.
In addition to his term of imprisonment, U.S. District Court Judge Catherine C. Eagles ordered Nowlin to serve three years of supervised release and to pay restitution to the IRS in the amount of $188,001.89. Nowlin pleaded guilty in August to obstructing the internal revenue laws, filing a fraudulent tax return, and bankruptcy fraud.
Acting Deputy Assistant Attorney General Stuart M. Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the
investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Anand P. Ramaswamy of the Middle District of North Carolina, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
# # #
North Carolina Tax Return Preparer Sentenced to Prison for Filing Fraudulent Tax ReturnsRead the Press Release
WASHINGTON – A former Durham, North Carolina, tax return preparer was sentenced to 24 months in prison today for aiding and assisting in the preparation of fraudulent income tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, Maria Streater worked for KEF Professional Tax Services, a tax preparation business located in Durham. From 2012 through 2014, Streater prepared fraudulent income tax returns for clients by creating false sources of income in order to maximize the earned income tax credit and obtain refunds to which her clients were not entitled. Streater agreed that she caused a tax loss of $274,090.
In addition to the term of prison imposed, U.S. District Court Judge Catherine C. Eagles ordered Streater to serve one year of supervised release and to pay $83,083 in restitution to the Internal Revenue Service (IRS).
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Anand Ramaswamy and Trial Attorney Nathan Brooks of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
# # #
North Carolina Resident Pleads Guilty to Preparing Fraudulent Tax ReturnRead the Press Release
A Winston-Salem, North Carolina resident, who is also licensed as an attorney in Georgia, pleaded guilty today to aiding and assisting in the preparation of a fraudulent tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents and information provided to the court, between 2006 and 2016, Shannon DeWayne Patterson was an attorney licensed to practice in Georgia. Between January and May 2015, Patterson co-owned and operated tax preparation businesses named “Fast Tax” in the cities of Salisbury and Kannapolis, North Carolina. Patterson employed several individuals to prepare clients’ tax returns. Patterson instructed his employees to fabricate information on their clients’ tax returns to maximize their refunds. Patterson admitted to aiding and assisting in the preparation of fraudulent tax returns that sought more than $60,000 in fraudulent tax refunds.
Patterson also admitted filing false personal tax returns for 2014 and 2015, on which he underreported his income.
Sentencing is scheduled for April 12, 2018 before U.S. District Court Judge William L. Osteen, Jr. Patterson faces a statutory maximum sentence of three years in prison, a period of supervised release, restitution, and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Criminal Division Chief Clifton T. Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
North Carolina Resident Pleads Guilty to Preparing Fraudulent Tax ReturnRead the Press Release
WASHINGTON – A Winston-Salem, North Carolina resident, who is also licensed as an attorney in Georgia, pleaded guilty today to aiding and assisting in the preparation of a fraudulent tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents and information provided to the court, between 2006 and 2016, Shannon DeWayne Patterson was an attorney licensed to practice in Georgia. Between January and May 2015, Patterson co-owned and operated tax preparation businesses named “Fast Tax” in the cities of Salisbury and Kannapolis, North Carolina. Patterson employed several individuals to prepare clients’ tax returns. Patterson instructed his employees to fabricate information on their clients’ tax returns to maximize their refunds. Patterson admitted to aiding and assisting in the preparation of fraudulent tax returns that sought more than $60,000 in fraudulent tax refunds.
Patterson also admitted filing false personal tax returns for 2014 and 2015, on which he underreported his income.
Sentencing is scheduled for April 12, 2018 before U.S. District Court Judge William L. Osteen, Jr. Patterson faces a statutory maximum sentence of three years in prison, a period of supervised release, restitution, and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Criminal Division Chief Clifton T. Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
# # #
Woman Pleads Guilty to Fraudulently Obtaining More Than 8,000 Hydrocodone PillsRead the Press Release
GREENSBORO, N.C. – A Burlington resident pleaded guilty on October 4, 2017, in United States District Court before the Honorable N. Carlton Tilley, Jr., to controlled substance offenses and other crimes, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
HEATHER SMITH ELLIOTT, 41, of Burlington, North Carolina, pleaded guilty to charges in relation to a scheme to fraudulently obtain over 8,000 10-325 mg hydrocodone pills from CVS pharmacies in Alamance and Guilford Counties through use of forged and fraudulent prescriptions appearing to be issued by a Duke University Medical Center neurosurgeon. ELLIOTT pleaded guilty to two counts of obtaining hydrocodone pills, a Schedule II controlled substance, by use of forged and fraudulent prescriptions, in violation of Title 21, United States Code, Section 843, one count of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
Documents filed with the Court show that ELLIOTT forged and counterfeited approximately 132 prescriptions for hydrocodone. Each of these forged and counterfeit prescriptions bore the name and DEA number of a neurosurgeon at Duke University Medical Center in Durham, North Carolina. ELLIOTT made use of altered actual Duke University Medical Center prescription forms to create fraudulent prescriptions for hydrocodone appearing to be issued by the Duke neurosurgeon for herself, as well as for friends and family members of ELLIOTT including an ex-boyfriend, a former employee, her former husband, her son, and a neighbor. Neither ELLIOTT nor any of these persons were patients of the Duke neurosurgeon, nor had he prescribed any medications to them. ELLIOTT retained and converted the hydrocodone pills to her own use and purpose. ELLIOTT also made use of a fraudulently obtained Bank of America credit card in the name of her former boyfriend to pay for at least one of the false prescriptions.
Obtaining a controlled substance through use of a fraudulent prescription is punishable by up to four years in federal prison. Wire fraud is punishable by up to twenty years in federal prison. Aggravated identity theft is punishable by two years in federal prison consecutive to any other prison sentences imposed by the court. ELLIOTT also faces a fine of up to $250,000 and a term of supervised release of not less than three years. Sentencing is scheduled for January 18, 2018, at 9:30 a.m. in Greensboro, Courtroom #2.
The United States Postal Inspection Service, United States Treasury Office of Inspector General Task Force, and the City of Burlington Police Department participated in the investigation. Special Assistant United States Attorney Kennedy Gates and Assistant United States Attorney Frank Joseph Chut, Jr. prosecuted the case.
###
Moore County Man Charged in Fourteen-Count Dogfighting IndictmentRead the Press Release
WASHINGTON -- Today a federal magistrate judge unsealed a superseding indictment charging Brexton Redell Lloyd, 54, of Eagle Springs, with one count of conspiracy and thirteen counts of violating the animal fighting prohibitions of the federal Animal Welfare Act, announced Acting United States Attorney Sandra J. Hairston for the Middle District of North Carolina, and Acting Assistant Attorney General Jeffrey H. Wood for the Department of Justice’s Environment and Natural Resources Division.
The charges returned today pertain to pit bull-type dogs allegedly kept by Lloyd at his residence in Eagle Springs. The Defendant allegedly possessed and trained the dogs for fighting ventures and conspiring to commit these acts in the Middle District of North Carolina and elsewhere throughout the United States. The dogs were seized by federal authorities in a search warrant executed in March 2017.
This case is part of Operation Grand Champion, a coordinated effort across numerous federal judicial districts to combat organized dog fighting. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog-fighting “victories.” To date, approximately one hundred dogs have been rescued as part of Operation Grand Champion, and either surrendered or forfeited to the government.
The federal Animal Welfare Act makes it a felony punishable by up to five years in prison to knowingly sell, buy, possess, train, transport, deliver, or receive any animal, including dogs, for purposes of having the animal participate in an animal fighting venture. Under federal law, an animal fighting venture means “any event, in or affecting interstate or foreign commerce, that involves a fight conducted or to be conducted between at least two animals for purposes of sport, wagering, or entertainment.”
This part of Operation Grand Champion was investigated by the United States Department of Agriculture, Office of the Inspector General and the Federal Bureau of Investigation, in coordination with the Department of Justice, with assistance from the North Carolina State Highway Patrol and the Moore County Sheriff’s Office.
The government is represented by Assistant United States Attorney JoAnna G. McFadden of the Middle District of North Carolina and Trial Attorney Erica Pencak of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division. The Humane Society of the United States assisted with the care of the dogs seized by federal law enforcement.
An indictment is an allegation based upon a finding of probable cause by a grand jury. A defendant is presumed innocent unless and until convicted.
If convicted, the defendant faces up to five years in prison and a $250,000 fine per count. The investigation is ongoing.
# # #
Lexington Men Sentenced for Burglary of Firearms DealerRead the Press Release
Greensboro, N.C. – A Lexington man and two codefendants were sentenced on September 26, 2017, for the theft of firearms from a registered firearms dealer, announced Acting United States Attorney Sandra J. Hairston.
Anthony Derek STEELE, 25, of Salisbury, N.C., was sentenced by the Honorable Catherine C. Eagles, United States District Judge, to imprisonment for 120 months, followed by three years of supervised release and restitution in excess of $15,000.00. On May 11, 2017, STEELE pleaded guilty to a violation of 18 U.S.C. § 922(u) and 924(i)(1) and (2), theft of firearms from a registered firearms dealer.
On December 7, 2016, law enforcement officers responded to Mimi’s Mini Mart located on NC Highway 8, Lexington, North Carolina, after receiving a report that it had been burglarized during the early morning hours. Upon questioning the owner and reviewing surveillance video from the store, investigators determined that two suspects entered the store at approximately 3:49 a.m. and stole 18 firearms after breaking a glass display case. Further investigation lead to the arrests of STEELE and three others involved in the burglary.
STEELE’s codefendants include Shemar Marquise ANDERSON, 21, Jalen Caldwell HAIRSTON (no relation to Acting U.S. Attorney Hairston), 20, and Marcus Davonta MCINTOSH, 22, all of Lexington. All three pleaded guilty to the theft of firearms from a registered firearms dealer. ANDERSON and HAIRSTON were also sentenced yesterday. MCINTOSH is scheduled to be sentenced on November 2, 2017, in Greensboro.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Davidson County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Terry Meinecke.
###
Durham Man Sentenced to Prison on Money Laundering ChargeRead the Press Release
GREENSBORO, N.C. – A Durham resident was sentenced on August 30, 2017, for money laundering, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
DAGLISH OMARI OSORO, 30, of Durham, North Carolina, pleaded guilty on May 1, 2017, to one count of engaging in a monetary transaction involving funds derived from the filing of a fraudulent tax return in the name of a third party. He was sentenced by United States District Judge Thomas D. Schroeder to 17 months imprisonment followed by 3 years supervised release. OSORO was also ordered to pay restitution in the amount of $184,445.00.
According to court documents and proceedings, OSORO orchestrated a scheme using others to have eleven (11) to fourteen (14) false individual income tax returns filed with the Internal Revenue Service requesting tax refunds be deposited into a Wachovia/Wells Fargo bank account in the name of OSORO and other members of the conspiracy. Of these false tax returns, only one passed the inspection of the IRS so that a tax refund in the amount of $184,495.00 was authorized and wired to the Wachovia/Wells Fargo bank account on November 18, 2011. OSORO contacted his co-conspirators to inform them of the deposit and they then began to withdraw the funds from ATM’s, in-person branch withdrawals in the amounts of $25,000.00 to $48,000.00 and transfers to other accounts. By December 2011, at least $100,000.00 of the tax refund was withdrawn before the bank accounts were closed for fraud and thereby freezing the remaining balance.
This case was investigated by Internal Revenue Service-Criminal Investigation and prosecuted by AUSA Frank Chut and SAUSA Kennedy Gates.
###
Greensboro Man Sentenced on Child Pornography ChargeRead the Press Release
GREENSBORO, N.C. – An individual who pleaded guilty to receipt of child pornography was sentenced today, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
DANTRE DAVIS, 28, of Greensboro, North Carolina, pleaded guilty on June 5, 2017, to one count of receipt of child pornography occurring from February 2016 to April 2016. He was sentenced by United States District Judge Loretta C. Biggs to 72 months imprisonment followed by 15 years supervised release. DAVIS was also ordered to forfeit a laptop computer and two external storage drives containing child pornography.
Investigators searched DAVIS’ home on April 5, 2016, after observing child pornography being shared online from DAVIS’ IP address. They found thousands of images and videos of child pornography on the computer and storage devices in DAVIS’ home. At the time, Davis was a licensed physician assistant in North Carolina.
The investigation was led by the Guilford County Sheriff’s Office, a member of the North Carolina Internet Crimes Against Children (ICAC) Task Force.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
###
Burlington Man Sentenced on Child Pornography ChargeRead the Press Release
GREENSBORO, N.C. – An individual who pleaded guilty to receipt of child pornography was sentenced today, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
HAROLD WAYNE LAIL, 75, of Burlington, North Carolina, pleaded guilty on June 5, 2017, to one count of receipt of child pornography. He was sentenced by United States District Judge Loretta C. Biggs to 60 months imprisonment followed by 10 years supervised release. LAIL was also ordered to pay $30,500 in restitution and forfeit an Apple iMac and several storage devices containing child pornography.
Investigators searched LAIL’s home on June 30, 2016, after discovering that someone tried to access child pornography using LAIL’s IP address. They found thousands of images and videos of child pornography on a computer and storage devices in LAIL’s home.
This case was investigated by members of the North Carolina Internet Crimes Against Children (ICAC) Task Force, including Homeland Security Investigations and the Burlington Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
###
North Carolina Resident Pleads Guilty to Tax and Bankruptcy FraudRead the Press Release
A Greensboro, North Carolina, resident pleaded guilty to corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), filing a fraudulent tax return and bankruptcy fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents and information provided to the court, during 2008 and 2009, Hassie Demond Nowlin, aka Demond Nowlin and Brilliant Knowlin, 44, filed several fraudulent tax returns with the IRS that included fake income and withholding taxes and sought more than $750,000 in fraudulent refunds. Nowlin also filed documents with the Guilford County Register of Deeds purporting to renounce his United States citizenship and proclaiming to be a sovereign citizen. Between 2008 and 2010, the IRS assessed taxes, penalties and interest against Nowlin related to the fraudulent returns. After being notified of the assessments, Nowlin began concealing his assets and placing them in the names of nominee entities.
Nowlin also admitted that between 2011 and 2017, he earned hundreds of thousands of dollars operating a tax preparation business. Nowlin filed hundreds of tax returns for clients that claimed phony business and education expenses, sought refunds to which the clients were not entitled and did not identify him as the paid preparer. Nowlin caused the fees to be deposited into nominee bank accounts that he controlled. Nowlin also admitted that he made false statements to IRS agents, including that he did not prepare tax returns for clients.
In addition to the tax-related charges, Nowlin also admitted to attempting to cheat his creditors by filing fraudulent personal bankruptcy petitions. Along with these petitions, Nowlin also submitted false financial statements on which he did not fully disclose his income and assets.
Nowlin is scheduled to be sentenced on Nov. 16, 2017 before U.S. District Court Judge Catherine C. Eagles. He faces a statutory maximum sentence of three years in prison for impeding the IRS and filing a fraudulent return and five years in prison for bankruptcy fraud. In addition, Nowlin faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Stuart M. Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Anand P. Ramaswamy of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
North Carolina Resident Pleads Guilty to Tax and Bankruptcy FraudRead the Press Release
WASHINGTON – A Greensboro, North Carolina, resident pleaded guilty to corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), filing a fraudulent tax return and bankruptcy fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents and information provided to the court, during 2008 and 2009, Hassie Demond Nowlin, aka Demond Nowlin and Brilliant Knowlin, 44, filed several fraudulent tax returns with the IRS that included fake income and withholding taxes and sought more than $750,000 in fraudulent refunds. Nowlin also filed documents with the Guilford County Register of Deeds purporting to renounce his United States citizenship and proclaiming to be a sovereign citizen. Between 2008 and 2010, the IRS assessed taxes, penalties and interest against Nowlin related to the fraudulent returns. After being notified of the assessments, Nowlin began concealing his assets and placing them in the names of nominee entities.
Nowlin also admitted that between 2011 and 2017, he earned hundreds of thousands of dollars operating a tax preparation business. Nowlin filed hundreds of tax returns for clients that claimed phony business and education expenses, sought refunds to which the clients were not entitled and did not identify him as the paid preparer. Nowlin caused the fees to be deposited into nominee bank accounts that he controlled. Nowlin also admitted that he made false statements to IRS agents, including that he did not prepare tax returns for clients.
In addition to the tax-related charges, Nowlin also admitted to attempting to cheat his creditors by filing fraudulent personal bankruptcy petitions. Along with these petitions, Nowlin also submitted false financial statements on which he did not fully disclose his income and assets.
Nowlin is scheduled to be sentenced on Nov. 16, 2017 before U.S. District Court Judge Catherine C. Eagles. He faces a statutory maximum sentence of three years in prison for impeding the IRS and filing a fraudulent return and five years in prison for bankruptcy fraud. In addition, Nowlin faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Stuart M. Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Anand P. Ramaswamy of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
# # #
Former Bank Vice President Pleads Guilty to Employment Tax ConspiracyRead the Press Release
A former bank vice president pleaded guilty today to conspiring to defraud the United States, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, Douglas Corriher, 68, was the Vice President at a South Carolina-based bank. From 2009 through 2010, Corriher extended several factoring loans, through nominee entities, to a bank customer who operated staffing companies in North Carolina. Through the use of nominees, he was able to circumvent federal regulations limiting the amount of money that can be loaned to a single entity.
The staffing company promised its clients that it would pay the payroll taxes for thousands of low-wage temporary workers that it supplied to its clients. The company issued Forms W-2 and filed employment tax returns showing that the funds had been withheld from the wages of the workers. In fact, the payroll taxes were not paid over to the Internal Revenue Service (IRS). Corriher was aware that the company owed more than $1 million in payroll taxes. Notwithstanding this, Corriher continued to make advances on the loans knowing that the fund of unpaid payroll taxes would enable the staffing company to repay the loan and allow the bank to continue collecting high rates of interest on the loan advances along with lucrative fees.
Corriher’s sentencing hearing is scheduled for Oct. 6 before U.S. District Judge N. Carlton Tilley. He faces a statutory maximum sentence of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston thanked special agents of IRS Criminal Investigation, FBI and Federal Deposit Insurance Corporation Office of Inspector General, who conducted the investigation, and Assistant U.S. Attorney Frank Chut and Trial Attorneys Nathan Brooks and Jeffrey A. McLellan of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Former Bank Vice President Pleads Guilty to Employment Tax ConspiracyRead the Press Release
WASHINGTON – A former bank vice president pleaded guilty today to conspiring to defraud the United States, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, Douglas Corriher, 68, was the Vice President at a South Carolina-based bank. From 2009 through 2010, Corriher extended several factoring loans, through nominee entities, to a bank customer who operated staffing companies in North Carolina. Through the use of nominees, he was able to circumvent federal regulations limiting the amount of money that can be loaned to a single entity.
The staffing company promised its clients that it would pay the payroll taxes for thousands of low-wage temporary workers that it supplied to its clients. The company issued Forms W-2 and filed employment tax returns showing that the funds had been withheld from the wages of the workers. In fact, the payroll taxes were not paid over to the Internal Revenue Service (IRS). Corriher was aware that the company owed more than $1 million in payroll taxes. Notwithstanding this, Corriher continued to make advances on the loans knowing that the fund of unpaid payroll taxes would enable the staffing company to repay the loan and allow the bank to continue collecting high rates of interest on the loan advances along with lucrative fees.
Corriher’s sentencing hearing is scheduled for Oct. 6 before U.S. District Judge N. Carlton Tilley. He faces a statutory maximum sentence of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston thanked special agents of IRS Criminal Investigation, FBI and Federal Deposit Insurance Corporation Office of Inspector General, who conducted the investigation, and Assistant U.S. Attorney Frank Chut and Trial Attorneys Nathan Brooks and Jeffrey A. McLellan of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
# # #
North Carolina Woman Sentenced to Prison for Tax EvasionRead the Press Release
GREENSBORO, N.C. – A Greensboro resident was sentenced to prison on July 19, 2017, for tax crimes, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
CHERYL ARRINGTON WHITE, 55, of Greensboro, North Carolina, was sentenced to 33 months in prison, followed by three years of supervised release, and ordered to pay $289,172 in restitution to the Internal Revenue Service for tax evasion.According to court documents and court proceedings, WHITE operated White’s Accounting, PA, from her house in Greensboro, North Carolina. WHITE earned money for providing bookkeeping and payroll services to multiple clients located throughout the Middle District of North Carolina. One such client who operated a restaurant and hospitality facility in Surry County, North Carolina received information that WHITE had embezzled from another client, and based on this information, started reviewing their bank statements and cancelled checks online. In doing so, the client found that WHITE was also embezzling from their company. WHITE utilized three separate methods to embezzle funds. WHTIE would write herself additional payroll check and paid personal expenses in her name and spouse’s name using the clients business checking account, forging the business owners’ signatures on those checks. White also paid her children as employees of the client. WHITE was found to have embezzled from at least two other companies. WHITE cashed and/or deposited these fraudulent checks into her or her children’s personal checking accounts.
WHITE admitted to investigators the above conducted and estimated embezzling approximately $1,000,000.00 from her clients. WHITE told investigators that she only calculated her Schedule C income by using figures derived from printing the vendor reports for her accounting business. For the calendar years 2010 through 2014, it was found that WHITE failed to report to the Internal Revenue Service $969,157.91 of income. The total tax loss in this case is $289,172.
The case was investigated by Internal Revenue Service-Criminal Investigation and prosecuted by Assistant United States Attorney Anand Ramaswamy.
###Two Plead Guilty to Conspiracy to Distribute Controlled SubstancesRead the Press Release
GREENSBORO, N.C. – Two defendants pleaded guilty on July 14, 2017, to conspiracy to distribute controlled substances in Orange County, North Carolina, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
AGUSTIN GUDINO AGUILAR pleaded guilty to conspiracy to distribute cocaine hydrochloride and fentanyl, in violation of Title 21, United States Code, Section 841(a)(1). LUIS EDER ORTEGA LOPEZ pleaded guilty to conspiracy to distribute cocaine hydrochloride, also in violation of Title 21, United States Code, Section 841(a)(1).
During the investigation, the defendants agreed to sell four kilograms of cocaine hydrochloride and two kilograms of heroin to a confidential informant operating under the supervision of law enforcement officers. Incident to the arrest of the defendants, investigators recovered approximately four kilograms of cocaine hydrochloride and two kilograms of fentanyl. A search warrant executed following the arrests resulted in seizure of an additional 300 grams of cocaine hydrochloride and $43,580 in U.S. currency.
Fentanyl is commonly laced in heroin and is causing significant problems across the country, according to a United States Drug Enforcement Administration (DEA) public safety warning issued in 2015. Fentanyl is extremely dangerous to law enforcement and others who come in contact with it, and ingestion of even very small doses can be fatal.
Each defendant faces from five to 40 years imprisonment, a fine of up to $5,000,000, and a term of supervised release of not less than four years. Sentencings for both defendants are scheduled for November 1, 2017, at 9:30 p.m. in Greensboro, Courtroom #1.
The DEA, the Orange County Sheriff’s Office, and the Alamance Narcotics Enforcement Team, a multi-agency task force, participated in the investigation.
###
North Carolina Man Indicted for Obstructing the IRS, Preparing Fraudulent Tax Returns and Bankruptcy FraudRead the Press Release
A grand jury sitting in the Middle District of North Carolina returned an indictment charging a Greensboro, North Carolina resident with corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), preparing and filing fraudulent tax returns, bankruptcy fraud and making false bankruptcy declarations, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
The indictment alleges that, between July 2008 and July 2009, Hassie Demond Nowlin aka Demond Nowlin and Brilliant Knowlin, filed personal tax returns with the IRS reporting fake income and income taxes withheld and seeking more than $700,000 in fraudulent refunds. According to the indictment, between 2008 and 2010, the IRS assessed taxes, penalties and interest against Nowlin related to his 2005 through 2008 income tax returns. After being notified of the assessments, Nowlin allegedly began concealing his assets and placing them in the names of nominee entities. The indictment also alleges that Nowlin made false statements to IRS agents, including that he did not prepare tax returns for clients.
The indictment further charges that between January 2011 and January 2017, Nowlin operated a tax preparation business, and filed tax returns for clients that claimed phony business and education expenses and sought refunds to which the clients were not entitled. According to the indictment, Nowlin did not identify himself as the paid preparer on these fraudulent returns. The indictment alleges that Nowlin caused more than $250,000 in clients’ tax refunds to be deposited into nominee bank accounts that he controlled.
In addition to the tax-related charges, the indictment alleges that Nowlin attempted to cheat his creditors by filing six fraudulent personal bankruptcy petitions between April 2013 and January 2017. Along with five of those petitions, Nowlin also allegedly submitted false financial statements on which he did not fully disclose his income and assets.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proved guilty beyond a reasonable doubt.
If convicted, Nowlin faces a statutory maximum sentence of three years in prison for obstructing the IRS and each count of preparing false tax returns and five years in prison for each count of bankruptcy fraud and making false bankruptcy declarations. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Anand Ramaswamy of the Middle District of North Carolina, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Man Indicted for Obstructing the IRS, Preparing Fraudulent Tax Returns and Bankruptcy FraudRead the Press Release
WASHINGTON – A grand jury sitting in the Middle District of North Carolina returned an indictment charging a Greensboro, North Carolina resident with corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), preparing and filing fraudulent tax returns, bankruptcy fraud and making false bankruptcy declarations, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
The indictment alleges that, between July 2008 and July 2009, Hassie Demond Nowlin aka Demond Nowlin and Brilliant Knowlin, filed personal tax returns with the IRS reporting fake income and income taxes withheld and seeking more than $700,000 in fraudulent refunds. According to the indictment, between 2008 and 2010, the IRS assessed taxes, penalties and interest against Nowlin related to his 2005 through 2008 income tax returns. After being notified of the assessments, Nowlin allegedly began concealing his assets and placing them in the names of nominee entities. The indictment also alleges that Nowlin made false statements to IRS agents, including that he did not prepare tax returns for clients.
The indictment further charges that between January 2011 and January 2017, Nowlin operated a tax preparation business, and filed tax returns for clients that claimed phony business and education expenses and sought refunds to which the clients were not entitled. According to the indictment, Nowlin did not identify himself as the paid preparer on these fraudulent returns. The indictment alleges that Nowlin caused more than $250,000 in clients’ tax refunds to be deposited into nominee bank accounts that he controlled.
In addition to the tax-related charges, the indictment alleges that Nowlin attempted to cheat his creditors by filing six fraudulent personal bankruptcy petitions between April 2013 and January 2017. Along with five of those petitions, Nowlin also allegedly submitted false financial statements on which he did not fully disclose his income and assets.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proved guilty beyond a reasonable doubt.
If convicted, Nowlin faces a statutory maximum sentence of three years in prison for obstructing the IRS and each count of preparing false tax returns and five years in prison for each count of bankruptcy fraud and making false bankruptcy declarations. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Anand Ramaswamy of the Middle District of North Carolina, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
# # #Former State Senator Sentenced to Eight Months for Mail and Tax FraudRead the Press Release
Winston-Salem, N.C. – A former North Carolina state senator was sentenced today to eight months in prison on federal fraud and tax charges, announced Acting United States Attorney Sandra J. Hairston.
Fletcher Lee Hartsell, Jr., who represented parts of Cabarrus and Union Counties as a State Senator from 1991 until 2016, previously pleaded guilty to one count of mail fraud and two counts of filing false tax returns before United States District Judge Thomas D. Schroeder. Hartsell admitted that he engaged in a scheme to defraud and to obtain money through false pretenses by soliciting funds through the mail for the Hartsell for NC State Senator Committee, using those funds for personal goods and services not authorized under state campaign finance laws, and then misrepresenting such expenditures on filed campaign disclosure reports. Hartsell further admitted that he made knowing and willful false statements in federal income tax returns filed both in his personal capacity and on behalf of a corporation he co-managed.
Hartsell agreed to pay full restitution to the Internal Revenue Service in the amount of $63,516 and to forfeit $184,059.88 in proceeds derived from his criminal conduct.
“Transparency, honesty, and integrity on the part of elected officials allows citizens to make informed decisions about their campaign contributions and at the ballot box. This sentence should serve as a reminder that those occupying positions of public trust will be held accountable under the same criminal laws as their constituents,” said Acting United States Attorney Hairston.
“Mr. Hartsell has learned first-hand what happens when you abuse the power granted to you as an elected official. He must pay back the American people; money that he used for his own expenses and prison time for degrading our democratic process,” said John Strong, Special Agent in Charge of the Federal Bureau of Investigation (“FBI”) in North Carolina.
“Today’s sentence sends a clear message that the laws of the land apply to everyone, regardless of their position,” said Internal Revenue Service – Criminal Investigations (“IRS-CI”) Special Agent in Charge Thomas J. Holloman, III. “If you commit a crime, status as a political leader will not protect you from federal prosecution. Hartsell made a conscious decision to deceive and benefit personally at the expense of the citizens of Cabarrus and Union counties.”
The investigation was investigated by the FBI and IRS-CI with assistance from the North Carolina State Bureau of Investigation, and was prosecuted by Assistant U.S. Attorney JoAnna G. McFadden.
###
North Carolina Owner of Tax Preparation Business Sentenced to More than Ten Years in Prison for Conspiracy to Defraud the IRSRead the Press Release
A North Carolina man, who owned a tax preparation business in Rockingham, North Carolina, was sentenced to serve 11 years in prison today for conspiring to defraud the Internal Revenue Service (IRS) and assisting in the preparation of fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, from at least January 2012 through April 2016, Herbert Lee Martin of Rockingham, North Carolina, owned and operated a tax preparation business known as “Herb’s Helping Hands,” where he prepared and filed federal income tax returns that fraudulently claimed refunds for clients. Martin also taught others how to prepare false returns and supervised their preparation of these returns. Martin and his co-conspirators reported fictitious or inflated income and dependency exemptions to generate false or inflated Earned Income Tax Credits, false business income and losses, and false deductions. On occasion, Martin and his co-conspirators purchased, and sometimes stole, personal identifying information of individuals, including minor children, and listed these individuals as false dependents on returns to generate larger fraudulent refunds for their clients. Martin would on occasion, direct some of the clients’ refunds into his own bank account or a bank account he controlled.
“Herbert Martin used his business – Herbs Helping Hands – to literally help himself to false and fraudulent deductions and tax credits, which he then sprinkled on his clients’ returns even though he knew they were not eligible to claim them,” said Acting Deputy Assistant Attorney General Goldberg. “The bogus returns his business created caused more than $10.6 million in losses for the U.S. Treasury. Martin’s 11-year sentence is a stern warning to those engaged in preparing fraudulent tax returns that they will be identified and held fully accountable for their criminal conduct.”
“Martin constructed an elaborate scheme to defraud the federal government that resulted in the loss of millions of dollars in tax revenue,” said Acting U.S. Attorney Hairston. “With the sentence that was imposed today, Martin has been brought to justice for his crimes.”
“Today’s substantial sentence for Herbert Martin for preparing and filing false tax returns is a triumph for all honest return preparers,” said Chief Richard Weber of IRS Criminal Investigations (CI). “The only “Helping Hands’ Herb offered were to himself and his co-conspirators by stealing from U.S. Treasury and the wallets of decent taxpayers. Let this be a reminder to others seeking to enrich themselves illegally—IRS CI Special Agents and their law enforcement partners will find you; we will uncover your fraudulent schemes.”
In addition to the term of prison imposed, Martin was ordered to serve three years of supervised release and to pay $10,605,420 in restitution to the IRS.
On May 9, Martin’s niece, Jessica Shanice Taylor, was sentenced to serve 24 months in prison for aggravated identity theft, which she committed as part of Martin’s scheme. She also was ordered to pay $36,569 in restitution to the IRS.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston thanked special agents of IRS–CI, who conducted the investigation, and Trial Attorney Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Clifton Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Owner of Tax Preparation Business Sentenced to More Than Ten Years in Prison for Conspiracy to Defraud the IRSRead the Press Release
WASHINGTON — A North Carolina man, who owned a tax preparation business in Rockingham, North Carolina, was sentenced to serve 11 years in prison today for conspiring to defraud the Internal Revenue Service (IRS) and assisting in the preparation of fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, from at least January 2012 through April 2016, Herbert Lee Martin of Rockingham, North Carolina, owned and operated a tax preparation business known as “Herb’s Helping Hands,” where he prepared and filed federal income tax returns that fraudulently claimed refunds for clients. Martin also taught others how to prepare false returns and supervised their preparation of these returns. Martin and his co-conspirators reported fictitious or inflated income and dependency exemptions to generate false or inflated Earned Income Tax Credits, false business income and losses, and false deductions. On occasion, Martin and his co-conspirators purchased, and sometimes stole, personal identifying information of individuals, including minor children, and listed these individuals as false dependents on returns to generate larger fraudulent refunds for their clients. Martin would on occasion, direct some of the clients’ refunds into his own bank account or a bank account he controlled.
“Herbert Martin used his business – Herbs Helping Hands – to literally help himself to false and fraudulent deductions and tax credits, which he then sprinkled on his clients’ returns even though he knew they were not eligible to claim them,” said Acting Deputy Assistant Attorney General Goldberg. “The bogus returns his business created caused more than $10.6 million in losses for the U.S. Treasury. Martin’s 11-year sentence is a stern warning to those engaged in preparing fraudulent tax returns that they will be identified and held fully accountable for their criminal conduct.”
“Martin constructed an elaborate scheme to defraud the federal government that resulted in the loss of millions of dollars in tax revenue,” said Acting U.S. Attorney Hairston. “With the sentence that was imposed today, Martin has been brought to justice for his crimes.”
“Today’s substantial sentence for Herbert Martin for preparing and filing false tax returns is a triumph for all honest return preparers,” said Chief Richard Weber of IRS Criminal Investigations (CI). “The only “Helping Hands’ Herb offered were to himself and his co-conspirators by stealing from U.S. Treasury and the wallets of decent taxpayers. Let this be a reminder to others seeking to enrich themselves illegally—IRS CI Special Agents and their law enforcement partners will find you; we will uncover your fraudulent schemes.”
In addition to the term of prison imposed, Martin was ordered to serve three years of supervised release and to pay $10,605,420 in restitution to the IRS.On May 9, Martin’s niece, Jessica Shanice Taylor, was sentenced to serve 24 months in prison for aggravated identity theft, which she committed as part of Martin’s scheme. She also was ordered to pay $36,569 in restitution to the IRS.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston thanked special agents of IRS–CI, who conducted the investigation, and Trial Attorney Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Clifton Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
# # #
Former Revenue Officer and Owner of Tax Consulting Business Sentenced to Prison for Tax Evasion and Impeding the Tax LawsRead the Press Release
WASHINGTON — A former Internal Revenue Service (IRS) revenue officer who is a resident of Greensboro, North Carolina, was sentenced to serve 43 months in prison today for tax evasion and corruptly endeavoring to impede the due administration of the internal revenue laws, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, from 1989 through 2014, Henti Lucian Baird operated HL Baird’s Tax Consultants. Baird had previously worked as an IRS revenue officer for 12 years. Although Baird filed tax returns every year, he has not paid taxes since at least 1998. He used his knowledge and experience as a revenue officer to evade paying his own taxes. He hid hundreds of thousands of dollars that he earned from his consulting business in bank accounts that he created in the names of his children and used money orders and cashier’s checks to pay his personal expenses. In response to IRS collection efforts, he submitted a false collection form on which he claimed to have only one bank account and concealed the existence of his nominee accounts. When Baird learned that the IRS had become aware of these accounts and intended to levy them, he withdrew the funds before the IRS could seize them. To stall impending liens and levies and evade paying the taxes he owed, Baird filed, in bad faith, a cash offer in compromise to settle his tax debt, a request to discharge the levies on the nominee accounts and an application to subordinate his federal tax lien. During this time when Baird was refusing to pay over to the IRS the taxes he duly owed, Baird continued to pay the mortgage on his 4,300 square-foot home, annual fees for his timeshare in Florida and car payments on his BMW.
Baird also corruptly endeavored to impede the internal revenue laws by using his stepson’s identity, without his knowledge, to apply for a Preparer Tax Identification Number that Baird used to file over 900 tax returns for clients, as well as his own tax returns. Baird advertised himself to clients as specializing in “IRS problems, delinquent returns, offer-in-compromise, tax problems, delinquent employee taxes and release of liens and levies,” and submitted at least 120 power of attorney forms to the IRS on behalf of clients falsely claiming to be an enrolled agent, even though the IRS revoked his authorization to represent taxpayers in 2009.
“For well over a decade, Lucian Baird abused his prior experience with the IRS to evade paying the taxes he owed and stymie the IRS’s collection efforts, while spending the government’s money on personal luxuries,” said Acting Deputy Assistant Attorney General Goldberg. “Everyone is required to pay their fair share, and those, like Lucian Baird, who make every effort to dodge their legal obligation to pay what they owe, will face significant consequences including jail and monetary penalties.”
“Henti Lucian Baird engaged in an elaborate scheme to hide assets in nominee accounts for the sole purpose of evading the payment of taxes owed to the federal government,” said Acting U. S. Attorney Hairston. “Through the tireless efforts of dedicated prosecutors from the Tax Division and the United States Attorney’s Office, and special agents from the IRS, Baird has been brought to justice for his crimes.”“The criminal actions of Henti Lucian Baird not only cheated the Treasury Department and law-abiding citizens with his tax evasion efforts, he took advantage of family members to perpetrate additional fraud,” said Chief Richard Weber of IRS Criminal Investigation. “This sentence should send a clear message; It doesn’t matter who you are or where you worked, IRS Criminal Investigation, along with their law enforcement counterparts, will work diligently to uncover fraudulent tax schemes and bring you to justice.”
In addition to the term of prison imposed, Baird was ordered to serve one year of supervised release and to pay $573,422.74 in restitution to the IRS. Baird pleaded guilty in October 2016.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Clifton T. Barrett of the Middle District of North Carolina and Trial Attorney Kathryn A. Kimball of the Justice Department’s Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
# # #
Former IRS Revenue Officer and Owner of Tax Consulting Business Sentenced to Prison for Tax Evasion and Impeding the Tax LawsRead the Press Release
A former Internal Revenue Service (IRS) revenue officer who is a resident of Greensboro, North Carolina, was sentenced to serve 43 months in prison today for tax evasion and corruptly endeavoring to impede the due administration of the internal revenue laws, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, from 1989 through 2014, Henti Lucian Baird operated HL Baird’s Tax Consultants. Baird had previously worked as an IRS revenue officer for 12 years. Although Baird filed tax returns every year, he has not paid taxes since at least 1998. He used his knowledge and experience as a revenue officer to evade paying his own taxes. He hid hundreds of thousands of dollars that he earned from his consulting business in bank accounts that he created in the names of his children and used money orders and cashier’s checks to pay his personal expenses. In response to IRS collection efforts, he submitted a false collection form on which he claimed to have only one bank account and concealed the existence of his nominee accounts. When Baird learned that the IRS had become aware of these accounts and intended to levy them, he withdrew the funds before the IRS could seize them. To stall impending liens and levies and evade paying the taxes he owed, Baird filed, in bad faith, a cash offer in compromise to settle his tax debt, a request to discharge the levies on the nominee accounts and an application to subordinate his federal tax lien. During this time when Baird was refusing to pay over to the IRS the taxes he duly owed, Baird continued to pay the mortgage on his 4,300 square-foot home, annual fees for his timeshare in Florida and car payments on his BMW.
Baird also corruptly endeavored to impede the internal revenue laws by using his stepson’s identity, without his knowledge, to apply for a Preparer Tax Identification Number that Baird used to file over 900 tax returns for clients, as well as his own tax returns. Baird advertised himself to clients as specializing in “IRS problems, delinquent returns, offer-in-compromise, tax problems, delinquent employee taxes and release of liens and levies,” and submitted at least 120 power of attorney forms to the IRS on behalf of clients falsely claiming to be an enrolled agent, even though the IRS revoked his authorization to represent taxpayers in 2009.
“For well over a decade, Lucian Baird abused his prior experience with the IRS to evade paying the taxes he owed and stymie the IRS’s collection efforts, while spending the government’s money on personal luxuries,” said Acting Deputy Assistant Attorney General Goldberg. “Everyone is required to pay their fair share, and those, like Lucian Baird, who make every effort to dodge their legal obligation to pay what they owe, will face significant consequences including jail and monetary penalties.”
“Henti Lucian Baird engaged in an elaborate scheme to hide assets in nominee accounts for the sole purpose of evading the payment of taxes owed to the federal government,” said Acting U. S. Attorney Hairston. “Through the tireless efforts of dedicated prosecutors from the Tax Division and the United States Attorney’s Office, and special agents from the IRS, Baird has been brought to justice for his crimes.”
“The criminal actions of Henti Lucian Baird not only cheated the Treasury Department and law-abiding citizens with his tax evasion efforts, he took advantage of family members to perpetrate additional fraud,” said Chief Richard Weber of IRS Criminal Investigation. “This sentence should send a clear message; It doesn’t matter who you are or where you worked, IRS Criminal Investigation, along with their law enforcement counterparts, will work diligently to uncover fraudulent tax schemes and bring you to justice.”
In addition to the term of prison imposed, Baird was ordered to serve one year of supervised release and to pay $573,422.74 in restitution to the IRS. Baird pleaded guilty in October 2016.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Clifton T. Barrett of the Middle District of North Carolina and Trial Attorney Kathryn A. Kimball of the Justice Department’s Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Richmond County Defendants Plead Guilty to Federal Methamphetamine ChargesRead the Press Release
GREENSBORO, N.C. – Four Richmond County defendants pleaded guilty today to methamphetamine-related offenses, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
Robert Ray Brayboy and Gina Marie Chavis each pleaded guilty to conspiracy to possess pseudoephedrine, a List I chemical, knowing or having reasonable cause to believe it would be used to manufacture methamphetamine, in violation of Title 21, United States Code, Sections 846 and 841(c)(2). Brayboy and Chavis each face up to 20 years imprisonment for this offense, up to a $250,000 fine, a term of supervised release of up to three years, and a $100 special assessment. Sentencing is scheduled for August 2, 2017, at 2:00 p.m. in Greensboro, Courtroom #1.
Andrew Jennings Roscoe, II, pleaded guilty to manufacturing methamphetamine, in violation of Title 21, United States Code, Section 841(a)(1), and manufacturing methamphetamine on premises where children are present or reside, in violation of Title 21, United States Code, Section 860a. Dorothy Ann Joyner also pleaded guilty to manufacturing methamphetamine on premises where children are present or reside, in violation of Title 21, United States Code, Section 860a. Roscoe faces up to 20 years imprisonment for the manufacturing methamphetamine offense, and a consecutive sentence of up to 20 years for the manufacturing methamphetamine offense related to children. Joyner faces up to 20 years for the manufacturing methamphetamine offense related to children. Roscoe is subject to a fine of up to $1 million and Joyner is subject to a fine of up to $250,000. Each is also subject to a term of supervised release of up to three years, and a $100 special assessment as to each count of conviction. Sentencing is scheduled for August 2, 2017, at 9:30 a.m. in Greensboro Courtroom #1.
These cases were jointly investigated by the North Carolina State Bureau of Investigation, the Rockingham Police Department, and the Richmond County Sheriff’s Office.
###
North Carolina Businessman Sentenced to Prison for Stealing Approximately $2.9 Million from NFL PlayersRead the Press Release
A High Point, North Carolina businessman, who provided financial services to professional athletes, was sentenced today to 65 months in prison for wire fraud and filing a false 2011 tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to the documents filed with the court, Michael Rowan, 46, operated Capital Management Wealth Advisors Inc. (CMG) and APS Management LLC (APS), along with his business partner. Through CMG and APS, Rowan provided financial and investment services to professional athletes, including National Football League (NFL) players. Rowan, through CMG and APS, contacted prospective NFL players in college to offer them financial and wealth management services, including bill payment, investment services and financial guidance. Once players were drafted by the NFL, Rowan agreed to provide his services to them for an annual fee of between $15,000 and $50,000. Rowan directed his clients to sign an agreement that allowed Rowan to access their bank accounts. Rowan represented that he would only make transactions that his clients authorized and that were for their benefit.
However, Rowan misused his access and transferred more than $2.9 million into accounts he controlled for his own personal benefit and without his clients’ knowledge or consent. For 2009 through 2013, Rowan failed to report more than $1.4 million of the embezzled funds on his federal tax returns, causing a loss to the Internal Revenue Service (IRS) of more than $479,000.
“Michael Rowan betrayed his NFL football player clients by abusing the trust they placed in him as their financial advisor,” said Acting Deputy Assistant Attorney General Goldberg. “He diverted millions of their money to his personal benefit and then cheated the IRS by failing to pay $479,000 in taxes he owed on his illegal income.”
“Michael Rowan’s offer of financial services amounted to financial fraud,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “Rowan took advantage of his client’s financial naivety to steal from them and further compounded his greed by attempting to hide the ill-gotten gains from the IRS.”
In addition to the term of prison imposed, Rowan was ordered to serve one year of supervised release and to pay restitution in the total amount of more than $3.4 million including $2,960,295 to the victim clients and $479,352 to the IRS. Rowan pleaded guilty to wire fraud and filing a false tax return in October 2016.
Acting Deputy Assistant Attorney Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS–CI and U.S. Postal Inspection Service, who conducted the investigation, and Assistant U.S. Attorney Frank Chut and Trial Attorney Mara Strier of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Businessman Sentenced to Prison for Stealing Approximately $2.9 Million from NFL PlayersRead the Press Release
WASHINGTON – A High Point, North Carolina businessman, who provided financial services to professional athletes, was sentenced today to 65 months in prison for wire fraud and filing a false 2011 tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to the documents filed with the court, Michael Rowan, 46, operated Capital Management Wealth Advisors Inc. (CMG) and APS Management LLC (APS), along with his business partner. Through CMG and APS, Rowan provided financial and investment services to professional athletes, including National Football League (NFL) players. Rowan, through CMG and APS, contacted prospective NFL players in college to offer them financial and wealth management services, including bill payment, investment services and financial guidance. Once players were drafted by the NFL, Rowan agreed to provide his services to them for an annual fee of between $15,000 and $50,000. Rowan directed his clients to sign an agreement that allowed Rowan to access their bank accounts. Rowan represented that he would only make transactions that his clients authorized and that were for their benefit.
However, Rowan misused his access and transferred more than $2.9 million into accounts he controlled for his own personal benefit and without his clients’ knowledge or consent. For 2009 through 2013, Rowan failed to report more than $1.4 million of the embezzled funds on his federal tax returns, causing a loss to the Internal Revenue Service (IRS) of more than $479,000.
“Michael Rowan betrayed his NFL football player clients by abusing the trust they placed in him as their financial advisor,” said Acting Deputy Assistant Attorney General Goldberg. “He diverted millions of their money to his personal benefit and then cheated the IRS by failing to pay $479,000 in taxes he owed on his illegal income.”
“Michael Rowan’s offer of financial services amounted to financial fraud,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “Rowan took advantage of his client’s financial naivety to steal from them and further compounded his greed by attempting to hide the ill-gotten gains from the IRS.”
In addition to the term of prison imposed, Rowan was ordered to serve one year of supervised release and to pay restitution in the total amount of more than $3.4 million including $2,960,295 to the victim clients and $479,352 to the IRS. Rowan pleaded guilty to wire fraud and filing a false tax return in October 2016.
Acting Deputy Assistant Attorney Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS–CI and U.S. Postal Inspection Service, who conducted the investigation, and Assistant U.S. Attorney Frank Chut and Trial Attorney Mara Strier of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
# # #
Two High Point Women Plead Guilty to FraudRead the Press Release
Greensboro, N.C. – Acting United States Attorney Sandra Hairston announced today that two High Point, NC women pleaded guilty on a superseding Bill of Information to conspiracy to defraud the United States’ Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program.
Ingram and Mary Frances Ingram, both of High Point, NC, pleaded guilty in federal court in Winston-Salem before United States District Judge Thomas D. Schroeder. Sentencing has been set for August 22, 2017, at 2 p.m. Each defendant faces a term of imprisonment of up to five years, and a fine of up to $250,000.00. The court may also order restitution to victims of the offense.
The Ingrams are sisters who own and operate Becky’s and Mary’s Restaurant in High Point. The Ingrams used SNAP Electronic Benefit Transfer (EBT) cards belonging to other persons at local grocery stores to purchase food for their restaurant. The investigation revealed that between January 2015 and October 2016, the Ingrams, along with others, used more than 180 EBT cards to purchase food for the restaurant. On November 29, 2016, a federal search warrant was executed at the restaurant owned by the Ingrams. During the search, 21 EBT cards and a notebook containing names, card numbers, and PIN numbers were seized. None of the cards belonged to the Ingrams.
“USDA-OIG is dedicated to working with its federal, state, and local partners to investigate schemes that are devised by criminals to defraud our programs and the American taxpayer. These sisters utilized a supplying scheme to traffic in EBT benefits by illegally obtaining recipients’ EBT cards and purchasing supplies for their restaurant with those cards. In exchange, EBT recipients were paid a reduced amount in cash for use of their cards. The prosecution of these sisters should serve as a strong message that fraud in USDA programs will not be tolerated,” said Karen Citizen-Wilcox, Special Agent-in-Charge for USDA-OIG.
The High Point Police Department and the United States Department of Agriculture, Office of the Inspector General investigated the case. The case was prosecuted by Assistant United States Attorney Anand Ramaswamy.
###
North Carolina Return Preparer Pleads Guilty to Filing False Income Tax ReturnsRead the Press Release
A Durham, North Carolina return preparer pleaded guilty today in U.S. District Court for the Middle District of North Carolina to filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to documents filed with the court, from 2012 through 2014, Laurean S. Robinson, 31, worked as the office manager and a return preparer at Tax Breaks, a tax preparation business in Durham. Robinson admitted that she prepared returns for her clients that fraudulently claimed the earned income tax credit and sought inflated refunds. To qualify her clients for the earned income tax credit, Robinson falsely reported that they earned income providing household services, such as babysitting and caretaking. Robinson trained other Tax Breaks employees to prepare false returns in a similar fashion. In addition to fees charged by Tax Breaks, Robinson also often required her clients to pay her an additional fee in cash. Robinson’s criminal conduct caused a tax loss to the Internal Revenue Service (IRS) of approximately $600,737.
Sentencing is scheduled for Aug. 15. Robinson faces a statutory maximum sentence of three years in prison, a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney JoAnna McFadden and Trial Attorney Daniel McGraw of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Return Preparers Indicted for False Tax ReturnsRead the Press Release
A federal grand jury sitting in Greensboro, North Carolina returned an indictment yesterday charging two Durham tax return preparers with conspiring to defraud the United States and preparing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Sandra J. Hairston for the Middle District of North Carolina.
According to the indictment, Keesha Frye owned and operated KEF Professional Tax Services, a Durham tax preparation business, where Maria Streater also worked as a return preparer. From 2012 through 2014, Frye and Streater allegedly falsified their clients’ tax returns by including fake and inflated sources of income to qualify for and maximize the earned income tax credit, and thereby increase the refunds claimed on the returns. Frye and Streater also allegedly filed false personal tax returns. Streater did not report the income she earned from KEF and Frye claimed false child care expenses.
An indictment merely alleges that crimes have been committed. The defendant are presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Frye and Streater face a statutory maximum sentence of five years in prison for conspiracy and three years for each count of preparing false tax returns. They also face a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Hairston commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Anand Ramaswamy and Trial Attorney Nathan Brooks of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former North Carolina State Senator Pleads GuiltyRead the Press Release
Winston-Salem, N.C. – A former North Carolina State Senator pled guilty to federal fraud and tax charges today, announced Acting United States Attorney Sandra Hairston.
Fletcher Lee Hartsell, Jr., who represented parts of Cabarrus and Union Counties as a State Senator from 1991 until 2016, pled guilty today before United States District Judge Thomas D. Schroeder to one count of mail fraud and two counts of filing false tax returns. According to court documents, Hartsell engaged in a scheme to defraud and to obtain money through false pretenses by soliciting funds through the mail for the Hartsell for NC State Senator Committee, using those funds for personal goods and services not authorized under state campaign finance laws, and then misrepresenting such expenditures on filed campaign disclosure reports. Hartsell further made knowing and willful false statements in federal income tax returns filed both in his personal capacity and on behalf of a corporation he co-managed.
“Transparency, honesty, and integrity on the part of elected officials allow citizens to make informed decisions about their campaign contributions and at the ballot box. This case should serve as a reminder that those occupying positions of public trust will be held accountable under the same criminal laws as their constituents,” said Acting United States Attorney Hairston.
“By authorizing and directing campaign funds to pay for personal items and services, Hartsell caused false partnership and individual income tax returns to be filed,” said Michael C. Daniels, IRS-CI’s Acting Special Agent in Charge. “IRS-CI helps ensure that everyone, including public officials, comply with the same tax obligations as the citizens they serve.”
“Senator Fletcher Hartsell degraded our country's democratic process by spending campaign money as if it were from his own personal piggy bank. Hartsell paid for basic expenses including haircuts and lawn care with money that belonged to the American people. The FBI will work tirelessly to ensure any elected official who abuses their power is held accountable for their wrongdoing,” said John Strong, Special Agent-in-Charge of the FBI in North Carolina.
Hartsell faces a maximum penalty of 20 years confinement and a fine of up to $250,000.00. Sentencing is scheduled for May 16, 2017 in Winston-Salem.
The investigation is being handled by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigations with assistance from the North Carolina State Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney JoAnna G. McFadden.
###
North Carolina Man Sentenced for Threats Against Mosque Members in Raeford, North CarolinaRead the Press Release
A Fayetteville, North Carolina man was sentenced today in the Middle District of North Carolina to eight months of home confinement for threatening members of the Masjid Al Madina Mosque in Raeford, North Carolina, announced Acting Assistant Attorney General Tom Wheeler, head of the Justice Department’s Civil Rights Division, and Acting U.S. Attorney Sandra Hairston of the Middle District of North Carolina.
Russell Thomas Langford, 36, pleaded guilty on Nov. 7, 2016, to a one-count Information that charged him with a felony for threatening mosque members in order to obstruct their free exercise of religious beliefs.
As a result of his plea, Langford admitted that on June 9, 2016, he threatened several mosque members and used a dangerous weapon in doing so. On that date, Langford repeatedly drove past the Masjid Al Madina Mosque. Eventually, he saw a mosque member leaving the area. Langford followed the mosque member to his home before returning to the mosque. Back at the mosque, Langford approached another mosque member, identified by the initials M.K. Langford threatened to kill M.K. and bury M.K. on the mosque premises, before pointing a firearm in M.K.’s direction. Langford then drove away. When Langford returned to the mosque again that night, he was stopped by several mosque members, who called the local authorities.
During his multiple contacts with members of the Masjid Al Madina Mosque, Langford repeatedly referred to mosque members using derogatory anti-Muslim terms. Langford admitted that he knew Masjid Al Madina was a mosque and that the people he targeted with his threats were engaged in activities related to the mosque. Accordingly, in pleading guilty, Langford admitted that he acted intentionally to threaten the mosque’s members and obstruct their religious exercise.
“The free exercise of religion is a foundational principle of our society,” said Acting Assistant Attorney General Wheeler. “Hateful threats designed to obstruct this right to religious freedom and to intimidate members of a religion simply because of their beliefs have no place in our communities. An attack on one religion is an attack on all religions. The Justice Department will continue to vigorously prosecute crimes motivated by religious animus.”
The case was investigated by the FBI and the Hoke County, North Carolina Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Graham Green of the Middle District of North Carolina and Trial Attorney Julia Gegenheimer of the Civil Rights Division.North Carolina Man Sentenced for Threats Against Mosque Members in Raeford, North CarolinaRead the Press Release
WASHINGTON – A Fayetteville, North Carolina man was sentenced today in the Middle District of North Carolina to eight months of home confinement for threatening members of the Masjid Al Madina Mosque in Raeford, North Carolina, announced Acting Assistant Attorney General Tom Wheeler, head of the Justice Department’s Civil Rights Division, and Acting U.S. Attorney Sandra Hairston of the Middle District of North Carolina.
Russell Thomas Langford, 36, pleaded guilty on Nov. 7, 2016, to a one-count Information that charged him with a felony for threatening mosque members in order to obstruct their free exercise of religious beliefs.
As a result of his plea, Langford admitted that on June 9, 2016, he threatened several mosque members and used a dangerous weapon in doing so. On that date, Langford repeatedly drove past the Masjid Al Madina Mosque. Eventually, he saw a mosque member leaving the area. Langford followed the mosque member to his home before returning to the mosque. Back at the mosque, Langford approached another mosque member, identified by the initials M.K. Langford threatened to kill M.K. and bury M.K. on the mosque premises, before pointing a firearm in M.K.’s direction. Langford then drove away. When Langford returned to the mosque again that night, he was stopped by several mosque members, who called the local authorities.
During his multiple contacts with members of the Masjid Al Madina Mosque, Langford repeatedly referred to mosque members using derogatory anti-Muslim terms. Langford admitted that he knew Masjid Al Madina was a mosque and that the people he targeted with his threats were engaged in activities related to the mosque. Accordingly, in pleading guilty, Langford admitted that he acted intentionally to threaten the mosque’s members and obstruct their religious exercise.
“The free exercise of religion is a foundational principle of our society,” said Acting Assistant Attorney General Wheeler. “Hateful threats designed to obstruct this right to religious freedom and to intimidate members of a religion simply because of their beliefs have no place in our communities. An attack on one religion is an attack on all religions. The Justice Department will continue to vigorously prosecute crimes motivated by religious animus.”
The case was investigated by the FBI and the Hoke County, North Carolina Sheriff’s Office. It is being prosecuted by Assistant U.S. Attorney Graham Green of the Middle District of North Carolina and Trial Attorney Julia Gegenheimer of the Civil Rights Division.
# # #
North Carolina Woman Indicted for Conspiracy to Defraud the IRS, Assisting in the Preparation of False Tax Returns, Wire Fraud and Aggravated Identity TheftRead the Press Release
A federal grand jury sitting in Greensboro, North Carolina, returned an indictment today charging Jessica Shanice Taylor, a Rockingham, North Carolina resident, with conspiracy to defraud the Internal Revenue Service (IRS), assisting in the preparation of false tax returns, wire fraud and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Ripley Rand for the Middle District of North Carolina.
According to the indictment, from at least January 2012 through April 2016, Taylor worked in a tax preparation business in Rockingham, preparing and filing income tax returns. The indictment alleges that Taylor conspired with the owner of the business and others to prepare and file fraudulent federal income tax returns that included false business income and losses, false wages, false dependents and false deductions. The indictment further alleges that Taylor and her co-conspirators purchased, and sometimes stole, the personal identifying information of individuals, including minor children, and listed these individuals as false dependents on returns in order to generate larger fraudulent refunds for her clients. According to the indictment, Taylor and her co-conspirators directed some of their clients’ refunds into their own bank accounts.
If convicted, Taylor faces a statutory maximum sentence of 5 years in prison for conspiring to defraud the IRS, a maximum sentence of 3 years in prison for each count of assisting in the preparation of false tax returns, a maximum sentence of 20 years in prison for each count of wire fraud, and a mandatory sentence of two years in prison for each count of aggravated identity theft. In addition, Taylor faces a term of supervised release, restitution and monetary penalties.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rand thanked agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Clifton Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Woman Indicted for Conspiracy to Defraud the IRS, Assisting in the Preparation of False Tax Returns, Wire Fraud and Aggravated Identity TheftRead the Press Release
WASHINGTON – A federal grand jury sitting in Greensboro, North Carolina, returned an indictment today charging Jessica Shanice Taylor, a Rockingham, North Carolina resident, with conspiracy to defraud the Internal Revenue Service (IRS), assisting in the preparation of false tax returns, wire fraud and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Ripley Rand for the Middle District of North Carolina.
According to the indictment, from at least January 2012 through April 2016, Taylor worked in a tax preparation business in Rockingham, preparing and filing income tax returns. The indictment alleges that Taylor conspired with the owner of the business and others to prepare and file fraudulent federal income tax returns that included false business income and losses, false wages, false dependents and false deductions. The indictment further alleges that Taylor and her co-conspirators purchased, and sometimes stole, the personal identifying information of individuals, including minor children, and listed these individuals as false dependents on returns in order to generate larger fraudulent refunds for her clients. According to the indictment, Taylor and her co-conspirators directed some of their clients’ refunds into their own bank accounts.
If convicted, Taylor faces a statutory maximum sentence of 5 years in prison for conspiring to defraud the IRS, a maximum sentence of 3 years in prison for each count of assisting in the preparation of false tax returns, a maximum sentence of 20 years in prison for each count of wire fraud, and a mandatory sentence of two years in prison for each count of aggravated identity theft. In addition, Taylor faces a term of supervised release, restitution and monetary penalties.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rand thanked agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Clifton Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
# # #
North Carolina Owner of Tax Preparation Business Pleads Guilty to Conspiracy to Defraud the IRSRead the Press Release
A North Carolina man, who owned a tax preparation business in Rockingham, North Carolina, pleaded guilty today in the U.S. District Court for the Middle District of North Carolina to one count of conspiracy to defraud the Internal Revenue Service (IRS) and two counts of assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Ripley Rand for the Middle District of North Carolina.
According to documents filed with the court, from at least January 2012 through April 2016, Herbert Lee Martin, 53, of Rockingham, North Carolina, owned and operated a tax preparation business known as “Herb’s Helping Hands,” where he prepared and filed false electronic federal income tax returns that claimed fraudulent refunds for clients. Martin also taught his three nieces how to prepare false tax returns and supervised their preparation of these returns. Martin and his co-conspirators reported fictitious or inflated income and dependency exemptions to generate false or inflated Earned Income Tax Credits, false business income and losses, and false deductions. On occasion, Martin and his co-conspirators purchased, and sometimes stole, personal identifying information of individuals, including minor children, and listed these individuals as false dependents on returns to generate larger fraudulent refunds for their clients. Martin would, on occasion, direct some of the clients’ refunds into his own bank account or a bank account he controlled.
Chief U.S. District Judge William L. Osteen, Jr., set sentencing for May 12, 2017. Pursuant to the terms of his plea agreement, Martin will be sentenced to 132 months in prison and ordered to pay restitution to the IRS of at least $10,705,968.00. He also faces a period of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rand thanked agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Clifton Barrett of the Middle District of North Carolina, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Couple Sentenced to Prison for Tax and Bank Fraud Related to Their Online BusinessRead the Press Release
A Greensboro, North Carolina couple, who operated an online sales business, was sentenced to prison today for tax fraud and bank fraud charges, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Ripley Rand for the Middle District of North Carolina.
Daniel Balson, 51, and Renee Balson, 53, were sentenced to serve 27 months and 16 months in prison, respectively, by U.S. District Court Judge Catherine C. Eagles of the Middle District of North Carolina. According to court documents, Daniel Balson owned and operated Southern Sales Online (SSO), an online retail business that sold a variety of merchandise through eBay and Amazon, including scrapbooking and art materials, books, inspirational DVDs, pet supplies and tools. Daniel Balson admitted selling stolen merchandise through SSO. Although SSO earned over $1 million in gross receipts during tax years 2005 through 2011, the Balsons failed to report the operation of SSO and its gross receipts on their individual income tax returns. The Balsons also failed to report the income from SSO on a bank application for a mortgage loan modification in 2011.
“Not only did Daniel Balson steal and sell merchandise, he failed to report this illegal income on his tax returns year after year, and he and his wife concealed the income when requesting that the bank forgive a portion of their mortgage debt,” said Principal Deputy Assistant Attorney General Ciraolo. “The clear message of today’s sentencings is that the price for such lies to the Internal Revenue Service (IRS) and a federally insured financial institution is time in jail.”
“While doing business from behind a computer may provide a sense of security or anonymity to individuals like Mr. and Mrs. Balson, it is inconsequential to us whether a criminal operates online or in a brick and mortar location,” said Chief Richard Weber of IRS-Criminal Investigation. “IRS special agents are skilled at investigating all types of tax and related financial crimes and today’s sentencing is a testament to that hard work and commitment.”
On Aug. 2, Daniel Balson pleaded guilty to one count of filing a false tax return for 2010 and one count of making a false statement on a loan application and Renee Balson pleaded guilty to one count of making a false statement on a loan application.
In addition to the term of prison imposed, Daniel Balson was ordered to serve five years of supervised release, to pay $244,128 in restitution to the IRS, and to pay, jointly and severally with Renee Balson $70,984 in restitution to Bank of America. Renee Balson was also ordered to serve five years of supervised release.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Todd A. Ellinwood and Trial Attorney Mara A. Strier of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Triad Residents Sentenced on Drug Trafficking and Money Laundering ChargesRead the Press Release
GREENSBORO, N.C. – Six members of a marijuana distribution and money laundering organization that operated in Alamance, Guilford, and Wake Counties were sentenced on drug trafficking and money laundering charges, announced Ripley Rand, United States Attorney for the Middle District of North Carolina.
As of November 28, 2016, five defendants - Nilanh Chanthaphavong, Davone Chanthaphavong, Marcus Emmanuel Parrish, Phadthin Sihavong, and Vanhasy Manhvong – had been sentenced by United States District Court Judge Catherine C. Eagles. A sixth defendant, Eugene Ari McAdoo, was sentenced by United States District Court Judge Thomas D. Schroeder on August 30, 2016.
According to court records, Phadthing Sihavong used the United States Postal Service to ship pounds of marijuana in overnight packages from Fresno, California, to co-conspirators in the Middle District of North Carolina. The packages were shipped with fictitious sender and receiver names and no signature was required for delivery. Once the marijuana was received in North Carolina, the co-conspirators distributed the marijuana to local customers and deposited the proceeds into a bank account in the name of Akilles Motorsports to promote the drug activity and to conceal the true nature of the proceeds. Over one million dollars was deposited into the Akilles Motorsports account between February 23, 2012, and July 3, 2013. Akilles Motorsports was a business front for the money laundering organization.
"The members of this drug and money laundering conspiracy were brought to justice through effective cooperation by law enforcement," said U.S. Attorney Rand. "We are pleased to have been part of the team to stop the influx of these drugs into North Carolina and to hold the offenders accountable."
"The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations. IRS Criminal Investigation is committed with taking the profit away from the drug traffickers and putting those individuals in jail," stated Acting Special Agent-in-Charge, Christopher J. Altemus, Jr.
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division stated, "Today is a victory, not only for the multitude of law enforcement agencies who dismantled this organization, but for the citizens in Alamance, Guilford and Wake Counties. Now that these criminals have been removed from the streets, the dangerous drugs that they would have sold will never reach the consumer. This effort would not have been successful without the mission-oriented cooperation between our federal, state and local law enforcement counterparts."
Davone Chanthaphavong, of Graham, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to a term of 3 years’ probation and a $200.00 special assessment.
Nilanh Chanthaphavong, of Raleigh, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 37 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
Vanhasy Manhvong, formerly of Whitsett, NC, pleaded guilty to conspiracy to commit money laundering. She was sentenced to 12 months in the Federal Bureau of Prisons, 2 years supervised release, and a $200.00 special assessment.
Eugene Ari McAdoo, of Whitsett, NC, pleaded guilty to conspiracy to commit money laundering. He was sentenced to six months in the Federal Bureau of Prisons, 3 years supervised release, a $100.00 special assessment, and a $2500.00 fine.
Marcus Emmanuel Parrish, of Graham, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 15 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
Phadthin Sihavong, of Fresno, CA, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 57 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
The case was investigated by the Internal Revenue Service-Criminal Investigation, United States Postal Inspection Service, and the Drug Enforcement Administration, and prosecuted by Assistant United States Attorney Randall S. Galyon.
###
North Carolina Tax Return Preparer Sentenced to Prison for Preparing and Filing False Tax Returns with the IRSRead the Press Release
WASHINGTON – A Guilford County, North Carolina resident was sentenced to serve 18 months in prison today for aiding and assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Ripley Rand of the Middle District of North Carolina.
Marvin Flythe admitted that he ran “TAXHOVA,” a tax preparation business in Greensboro, and maintained a YouTube video channel on which he advertised TAXHOVA. Between January 2012 and January 2015, Flythe prepared and filed numerous individual income tax returns for clients on which he reported false business losses and false unreimbursed employee business expenses. Flythe admitted to filing at least 36 false returns for clients, for which $130,949 in fraudulent refunds were paid. Flythe also admitted to filing false personal returns which underreported his income for tax years 2011, 2012 and 2013 and failing to file his 2014 return.
Flythe pleaded guilty in August to four counts of preparing false individual income tax returns for clients. In addition to the term of prison imposed, Flythe was ordered to serve one year of supervised release and to pay restitution in the amount of $105,128.04 to the Internal Revenue Service (IRS).
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who conducted the investigation and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Anand Ramaswamy of the Middle District of North Carolina, who prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
# # #