District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Attorney General Sessions Announces Continuing Litigation in Sanctuary City CaseRead the Press Release
Tonight Attorney General Jeff Sessions issued the following statement:
“The American people demand a lawful system of immigration. Congress has established a lawful system of immigration. At the heart of this immigration debate is disagreement over whether illegally entering this country is a crime. Our duly enacted laws answer that question.
“Nevertheless, actions that have always been understood to be squarely within the powers of the President, regardless of the Administration, have now been enjoined. The Department of Justice cannot accept such a result, and as the President has made clear, we will continue to litigate this case to vindicate the rule of law.
“Make no mistake – our national interest also requires criminal aliens to be deported. The Bureau of Justice Statistics just released a report showing that 42 percent of defendants charged in U.S. district court were non-U.S. citizens. And according to the U.S. Sentencing Commission, in 2013, 48 percent of all deported aliens who were convicted for coming back to the United States illegally were also convicted of a non-immigration related crime.
“This is the Trump era. Progress is being made daily, and it will continue. This will be the Administration that fully enforces our nation’s immigration laws.”
Statement by Attorney General Jeff Sessions Following Meeting with Representatives from the U.S. Conference of MayorsRead the Press Release
Today, Attorney General Sessions issued the following statement following his meeting with representatives from the U.S. Conference of Mayors:
“The Department of Justice will fulfill our responsibility to uphold and enforce our nation’s immigration laws, including 8 U.S.C. 1373. Under the Obama administration, the Department of Justice required certain grantees to certify compliance with federal law, including 8 U.S.C. 1373, as a condition for receiving grant funding. Last year, the Department of Justice’s Inspector General reported that 10 jurisdictions were potentially in violation of 8 U.S.C. 1373, including because they had policies that restricted local law enforcement from sharing information about criminal aliens in their custody.
“My letter has required those jurisdictions to submit a response by June 30 certifying they are in compliance. To date, only one has replied and we await the responses of the others. We will evaluate those responses to ensure the requirements of these grants are met. I once again urge these cities and jurisdictions to reevaluate their policies, protect their citizens and comply with the law.
“We are pleased that the mayors who met with us today assured us they want to be in compliance with the law. The vast majority of state and local jurisdictions are in compliance and want to work with federal law enforcement to keep their communities safe. Of course, compliance with 8 U.S.C. 1373 is the minimum the American people should expect. We want all jurisdictions to enthusiastically support the laws of the United States that require the removal of criminal aliens, as many jurisdictions already do.”Southern California Residents Sentenced to Prison for Hiding Millions of Dollars in Secret Foreign Bank AccountsRead the Press Release
Three Orange County, California residents were sentenced to prison today for willfully failing to report their foreign bank accounts in Switzerland and Israel, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
Dan Farhad Kalili, 55, a resident of Irvine, California, was sentenced to serve 12 months and one day in prison; his brother, David Ramin Kalili, 52, a resident of Newport Coast, was sentenced to serve eight months in prison; and his brother-in-law, David Shahrokh Azarian, 67, also a resident of Newport Coast, was sentenced to serve eight months in prison.
According to documents and information provided to the court, Dan Kalili, David Kalili and Azarian willfully failed to file with the Department of Treasury Reports of Foreign Bank and Financial Accounts (FBARs) regarding secret bank accounts in Switzerland and Israel that each maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.
“For more than a decade, Dan Kalili, David Kalili and David Azarian hid millions in secret offshore accounts,” said Acting Deputy Assistant Attorney General Goldberg. “They moved their funds from bank to bank and country to country in an effort to escape scrutiny. Today, each was sentenced to prison. The clear message is: the days when a U.S. citizen can safely stash money in an undeclared foreign account are over.”
“Today’s sentencing should reassure every honest, hardworking American taxpayer that schemes designed to conceal income in offshore accounts will not be tolerated,” said Chief Richard Weber of Internal Revenue Service Criminal Investigation (IRS-CI). “IRS-CI will continue to devote resources to investigate individuals who engage in these types of schemes for the purpose of personal gain by defrauding the U.S. Treasury and the American taxpayer.”
From May 1996 through at least 2009, Dan Kalili opened and maintained several undeclared offshore bank accounts at Credit Suisse Group (Credit Suisse) in Switzerland. He also opened and maintained several undeclared offshore bank accounts from at least 1998 through 2008 at UBS AG (UBS) in Switzerland. In July 2006, Dan Kalili opened an undeclared account at UBS in the name of the Colsa Foundation, an entity established under the laws of Liechtenstein. At the end of May 2008, the Colsa Foundation account held approximately $4,927,500 in assets. Similarly, David Kalili opened and maintained several undeclared accounts at Credit Suisse in Switzerland, from February 1999 through at least 2009, and at UBS in Switzerland, from October 1993 through at least 2008. Dan and David Kalili also maintained joint undeclared Swiss bank accounts at both UBS and Credit Suisse beginning in 2003 and 2004. Meanwhile, Azarian opened and maintained several of his own undeclared accounts at Credit Suisse in Switzerland from May 1994 through at least 2009, and at UBS in Switzerland from April 1997 through at least 2008.
Dan Kalili, David Kalili and Azarian took affirmative steps to prevent their assets in UBS and Credit Suisse from being discovered. Dan Kalili opened an undeclared account at Swiss Bank A in the name of the Colsa Foundation and in May 2008, transferred his assets from the UBS Colsa Foundation account to Swiss Bank A. By this time, Bradley Birkenfeld, an American banker who worked for UBS, had been indicted, Martin Liechti, a UBS executive, had been detained and UBS had announced that the Justice Department and the SEC were investigating whether it helped clients avoid paying taxes between 2000 and 2007. Dan Kalili later made a partial disclosure of the Swiss Bank A Colsa account on his individual income tax returns. In 2009, he opened undeclared accounts at Israeli Bank A and at Bank Leumi, both in Israel. In June 2009, he closed the joint undeclared account at Credit Suisse he held with David Kalili, as well as his own undeclared account, and transferred the funds. Shortly before its closure, the undeclared joint account at Credit Suisse held approximately $2,561,508 in assets. As of December 2009, Dan Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,569,973, and his undeclared account at Bank Leumi held assets valued at approximately $2,497,931.
Similarly, in August 2008, David Kalili opened an undeclared account at Israeli Bank A in Israel, into which he transferred funds from his UBS accounts. He later partially declared the Israeli Bank A account on his individual income tax returns. As of August 2009, David Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,369,489.
In August 2008, Azarian, also opened an undeclared account at Israeli Bank A in Israel, and in May 2009, he closed his undeclared account held at Credit Suisse and transferred the funds to Israeli Bank A. Azarian later partially declared this Israeli Bank A account on his individual income tax returns. At the time of its closure, Azarian’s undeclared account at Credit Suisse held assets valued at approximately $1,903,214.
In addition to the term of prison imposed, Dan Kalili was ordered to serve one year of supervised release and to pay $337,443 in restitution. He also agreed to pay a civil penalty of $2,674,329. David Kalili was ordered to serve one year of supervised release and to pay $243,019 in restitution. He also agreed to pay a civil penalty of $1,325.121. Azarian was ordered to serve one year of supervised release and to pay $197,840 in restitution. He also agreed to pay a civil penalty of $951,607.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Jason M. Scheff of the Tax Division, who prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Central District of California for its substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Justice Department Asks Federal Court to Shut Down Southern Florida Tax Return Preparer and Require Her to Give Her Fees to the United StatesRead the Press Release
Lena Cotton of Wellington, Florida, and her business, Professional Accounting Ldc LLC, located at 3676 Collin Drive in West Palm Beach, Florida, prepare false federal income tax returns for their customers, according to a new civil suit filed by the Department of Justice. The complaint, filed in federal court in West Palm Beach asks a federal judge to bar Cotton and her business, from preparing tax returns for others and order the defendants to disgorge the gross receipts they obtained from the preparation of federal tax returns that made improper claims.
The complaint alleges that the defendants prepare tax returns for customers that understate liabilities and overstate refunds by falsifying information, fabricating deductions, and claiming bogus credits. The complaint alleges that one of their signature schemes is manufacturing education credits for expenses that customers never incurred. For instance, the complaint alleges that the Internal Revenue Service (IRS) has uncovered at least 31 instances of the defendants claiming, for purposes of education credits, that customers attended Palm Beach State College, previously known as Palm Beach Community College, even though the school has no record of their attendance during the relevant time periods.
The complaint further alleges that the defendants frequently selected incorrect filing statuses for their customers, claimed other false tax credits, and misrepresented the extent to which customers used their personal vehicles for work purposes. According to the complaint, a review of 1,034 returns prepared by the defendants for tax years 2012 through 2014 uncovered misstatements on 671 returns (64.9 percent) that cost the United States over $900,000 in tax revenue.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017, and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on its website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Construction Company Officer Sentenced to Prison for Conspiring to Defraud GovernmentRead the Press Release
Michelle Cho, an officer of Far East Construction Corporation (Far East) and other construction companies, was sentenced today to six months in prison and 24 months of supervised release on a federal charge of conspiring to commit wire fraud. Cho was also ordered to pay forfeiture in the amount of $169,166 and pay a criminal fine in the amount of $35,000.
The sentencing was announced by Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division, U.S. Attorney Channing D. Phillips of the U.S. Attorney’s Office for the District of Columbia, Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office, Acting Inspector General Hannibal “Mike” Ware for the U.S. Small Business Administration (SBA), Inspector General Carol Fortine Ochoa of the U.S. General Services Administration (GSA), Special Agent in Charge Brian J. Reihms of the Central Field Office of the Defense Criminal Investigative Service (DCIS) and Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
According to court documents, Cho was an initiator and mastermind of a scheme lasting more than five years to defraud a disadvantaged persons’ business assistance program of tens of millions of dollars. Cho utilized two straw companies, including Far East, to conspire with MCC Construction Company (MCC) and others to defraud the SBA. Cho’s two companies were eligible to receive federal government contracts that had been set asides for small, disadvantaged businesses under the SBA 8(a) program. Cho and MCC understood that MCC would illegally perform all of the work on these contracts and pay three percent of the proceeds to Cho’s companies rather than have Cho’s companies perform at least 15 percent of the work as required by the SBA 8(a) program. In so doing, MCC was able to win 27 government contracts worth over $70 million from 2008 to 2011. The scope and duration of the scheme resulted in a significant number of opportunities lost to legitimate small, disadvantaged businesses.
The court documents also state that Cho and MCC violated the provisions of the SBA 8(a) program, which is designed to award contracts to businesses that are owned by “one or more socially and economically disadvantaged individuals.” To qualify for the 8(a) program, a business must be at least 51 percent owned and controlled by a U.S. citizen (or citizens) of good character who meets the SBA’s definition of socially and economically disadvantaged. The firm must also be a small business (as defined by the SBA) and show a reasonable potential for success. Participants in the 8(a) program are subject to regulatory and contractual limits. Also, under the program, the disadvantaged business is required to perform a certain percentage of the work. For the types of contracts under investigation here, the SBA 8(a)-certified companies were required to perform 15 percent or more of the work with its own employees.
Cho, 45, of Downers Grove, Illinois, was charged on Oct.12, 2016, in the U.S. District Court for the District of Columbia with one count of conspiring to commit wire fraud. She pleaded guilty on Nov. 15, 2016, and was sentenced today by the Honorable Ketanji Brown Jackson.
MCC pleaded guilty on Feb. 2, 2016, to conspiring to commit fraud on the United States by illegally obtaining government contracts that were intended for small, disadvantaged businesses and agreed to pay $1,769,924 in criminal penalties and forfeiture. Thomas Harper, another former officer and owner of MCC, pleaded guilty on June 22, 2016, to conspiring to obstruct proceedings before a department or agency. He is to be sentenced on May 15, 2017. Walter Crummy, another former officer and owner of MCC, pleaded guilty on Aug. 23, 2016, to conspiring to commit wire fraud and was sentenced earlier this month to a year of probation, two months of which were home confinement, and forfeiture in the amount of $105,618.
The investigation was conducted by the FBI’s Washington Field Office, the Inspector General for the Small Business Administration (SBA), the Inspector General of the U.S. General Services Administration (GSA), the Central Field Office of the Defense Criminal Investigative Service (DCIS) and the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
The prosecution was handled by Assistant U.S. Attorney John Marston and Trial Attorney Justin P. Murphy of the Antitrust Division.
Michael V. Bamba Sentenced to Prison in Ice Trafficking CaseRead the Press Release
Today, SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant MICHAEL V. BAMBA, age 33, from Tamuning, was sentenced in District Court to a 57-month term of imprisonment, to be followed by three years of supervised release, and 100 hours of community service. The Court also ordered BAMBA to pay a mandatory $100 assessment fee. In addition, defendants who are convicted of a federal drug offense may no longer qualify for certain federal benefits.
On April 29, 2015, BAMBA was charged by Indictment with Conspiracy to Distribute Methamphetamine Hydrochloride and Attempted Possession with Intent to Distribute Methamphetamine Hydrochloride. On August 13, 2015, BAMBA entered a guilty plea to Conspiracy to Distribute Methamphetamine Hydrochloride, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C). The investigation revealed that BAMBA, and other individuals, agreed to use the mail system to distribute large quantities of methamphetamine on Guam. Law enforcement seized over 137 grams of methamphetamine, with a 90 percent purity level.
The investigation was conducted by the U.S. Postal Service and the Drug Enforcement Administration, with assistance by the Guam Superior Court Probation Office, Guam Customs and Quarantine Agency, and the Guam Police Department. The case was prosecuted by Clyde Lemons, Jr., Assistant United States Attorney for the District of Guam.
Oregon Promoter Convicted for Making, Passing and Sending Bogus Financial Instruments to U.S. Treasury and Financial Institution and Failing to File Tax ReturnsRead the Press Release
A Hillsboro, Oregon promoter was convicted today following a jury trial of making, passing and submitting fake financial instruments to a financial institution and the U.S. Treasury and failing to file tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to the superseding indictment and the evidence presented at trial, from approximately 2008 through 2015, Winston Shrout, 69, formerly of St. George, Utah, created and submitted more than 1000 bogus financial instruments with the intent of defrauding financial institutions and the U.S. Treasury. Shrout held seminars and private meetings to promote and market the use of these fake financial instruments to pay off debts, including federal taxes. Shrout sold recordings of his seminars, templates for fake financial instruments and other materials through his website.
The evidence presented at trial also proved that Shrout failed to file his 2009 through 2014 tax returns despite earning $562,224 from presenting at seminars, licensing fees associated with the sale of his products and annual pension payments.
Sentencing is scheduled for Aug. 1. Shrout faces a statutory maximum sentence of 25 years in prison for each count of making a fake financial instrument and one year in prison for each count of failing to file a tax return. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Stuart Wexler and Lee Langston 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.
Guo Hua Lu Sentenced for False Statement to Federal OfficerRead the Press Release
SHAWN ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant GUO HUA LU (age 54) was sentenced on Thursday, April 20, 2017, in the U.S. District Court by Chief Judge Ramona V. Manglona, to six months incarceration, a $5,500.00 fine, $750.00 restitution, one year of supervised release after incarceration, and a $100 special assessment fee, for False Statement to a Federal Officer.
LU was a document preparer who obtained a fraudulent notarial certificate on behalf of a Chinese national seeking a passport for her U.S. citizen infant. When interviewed by an agent from the U.S. Department of State’s Diplomatic Security Service, LU denied his involvement in obtaining the fraudulent document. On October 28, 2016, LU was indicted by a federal grand jury for one count of False Statement to a Federal Officer. LU pled guilty on December 22, 2016.
This investigation was conducted by the Department of State’s Diplomatic Security Service (DSS) and the case was prosecuted by Assistant U.S. Attorney James J. Benedetto.
Department of Justice Sends Letter to Nine Jurisdictions Requiring Proof of Compliance with 8 U.S.C. § 1373Read the Press Release
Today, the Department of Justice sent the attached letters to nine jurisdictions which were identified in a May 2016 report by the Department of Justice’s Inspector General as having laws that potentially violate 8 U.S.C. § 1373.
Additionally, many of these jurisdictions are also crumbling under the weight of illegal immigration and violent crime. The number of murders in Chicago has skyrocketed, rising more than 50 percent from the 2015 levels. New York City continues to see gang murder after gang murder, the predictable consequence of the city's “soft on crime” stance. And just several weeks ago in California’s Bay Area, after a raid captured 11 MS-13 members on charges including murder, extortion and drug trafficking, city officials seemed more concerned with reassuring illegal immigrants that the raid was unrelated to immigration than with warning other MS-13 members that they were next.
The letters remind the recipient jurisdictions that, as a condition for receiving certain financial year 2016 funding from the Department of Justice, each of these jurisdictions agreed to provide documentation and an opinion from legal counsel validating that they are in compliance with Section 1373. The Department of Justice expects each of these jurisdictions to comply with this grant condition and to submit all documentation to the Office of Justice Programs by June 30, 2017, the deadline imposed by the grant agreement.
Proof of Compliance with 8 U.S.C. § 1373 LettersNew York Tax Preparer Indicted for Filing Fraudulent Tax ReturnsRead the Press Release
The owner of Brooklyn, New York return preparation businesses was indicted on April 14 and arrested today on 18 counts of aiding and assisting in the preparation of false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to the indictment unsealed today, Maria Munoz, owned and operated tax preparation businesses in Brooklyn including Munoz Multiservices Corp., Munoz Multiservices Inc. and United Tax Service. The indictment alleges that Munoz prepared fraudulent returns for clients that reported fictitious or inflated deductions for charitable donations, unreimbursed employee expenses, personal property taxes and other expenses. Munoz also fabricated education expenses in order to fraudulently claim education credits for her clients and cause the Internal Revenue Service (IRS) to pay them bogus or inflated refunds.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Munoz faces a statutory maximum sentence of three years in prison on each count, a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Carl F. Brooker 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.
Justice Department Secures the Denaturalization of a Senior Jihadist Operative Who Was Convicted of Terrorism in EgyptRead the Press Release
On April 19, Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia entered an order that revoked the naturalized U.S. citizenship of a confessed al-Qaeda operative, restrained and enjoined him from claiming any rights, privileges, or advantages of U.S. citizenship and ordered him to immediately surrender and deliver his Certificate of Naturalization and any other indicia of U.S. citizenship to federal authorities, the Justice Department announced.
“The Justice Department is committed to protecting our nation’s national security and will aggressively pursue denaturalization of known or suspected terrorists,” said Attorney General Jeff Sessions. “This case demonstrates the Department’s commitment to using all tools at its disposal, both criminally and civilly, to strategically enforce our nation’s immigration laws and to disrupt international terrorism. I congratulate the aggressive and effective investigation and prosecution by the Department of Justice team. We will protect our national security and our borders, and when we identify individuals tied to foreign terrorist organizations who procured their U.S. citizenship by fraud, we will initiate denaturalization proceedings - whether you reside here or abroad - and ensure you are denied entry into the United States.”
Khaled Abu al-Dahab, 57, an Egyptian-born naturalized U.S. citizen and former Silicon Valley car salesman is a confessed member of the Egyptian Islamic Jihad (EIJ) terrorist organization. Al-Dahab admitted to attending a training camp near Jalalabad, Afghanistan, where he received military-style training and taught foreign fighters to fly hang gliders in preparation for terrorist attacks. Moreover, al-Dahab told the FBI that, during the period in which he was supposed to establish the good moral character to naturalize under the Immigration and Nationality Act, he operated a communications hub for EIJ operatives out of his Santa Clara, California apartment. He facilitated the transfer of fraudulent passports, documents, money and other items by, between and among EIJ members, and researched communications devices and helicopter piloting at the direction of EIJ leadership. Al-Dahab’s communication hub materially assisted in the perpetration of terrorist attacks in Egypt and Pakistan.
Additionally, al-Dahab admitted to recruiting Islamic Americans into the al-Qaeda terrorist organization during his 12-year residence in California. Al-Dahab told the investigators that Osama bin Laden was eager to recruit American citizens of Middle Eastern descent because their U.S. passports could be used to facilitate international travel by al Qaeda terrorists, and that bin Laden personally congratulated him for this work. Al-Dahab was naturalized as a U.S. citizen on Feb. 7, 1997. Upon departing the United States sometime in 1998, al-Dahab was arrested by Egyptian authorities. He was tried, convicted and sentenced to 15 years in prison for terrorism related offenses.
On April 8, 2015, the United States filed a civil action seeking the revocation of al-Dahab’s naturalized U.S. citizenship on the grounds that he illegally procured his citizenship on account of his false written statements and testimony during his naturalization proceedings regarding his current and past addresses; employment history; travel outside the United States; marital history; prior false testimony; prior claims of U.S. citizenship; commission of crimes for which he had not been arrested; and membership in or association with EIJ, as well as his affiliation with an organization that advocated terrorism. The United States also alleged al-Dahab should also be denaturalized because he procured his citizenship by concealment of a material fact or by willful misrepresentation due his concealment of these matters. The United States obtained the district court’s permission to serve the complaint on al-Dahab in Egypt via Facebook and electronic mail.
“The Department’s Office of Immigration Litigation – District Court Section will continue to pursue denaturalization proceedings against known or suspected terrorists who procured their citizenship by fraud,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The U.S. government is dedicated to strengthening the security of our nation and preventing the exploitation of our nation’s immigration system by those who would do harm to our country.”
Under the Immigration and Nationality Act, a naturalized U.S. citizen’s citizenship may be revoked, and his certificate of naturalization canceled, if the naturalization was illegally procured or procured by concealment of a material fact or by willful misrepresentation.
This case was investigated by the Civil Division’s Office of Immigration Litigation, District Court Section (OIL-DCS) and the FBI. The litigation was handled by Christopher W. Dempsey, Chief of the National Security and Affirmative Litigation Unit within OIL-DCS, with substantial assistance by FBI Special Agent Rami G. Nimri.
Antonia Bautista Sentenced for Conspiracy to Commit Visa FraudRead the Press Release
SHAWN ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant ANTONIA BAUTISTA (age 60) was sentenced today in the U.S. District Court by Chief Judge Frances Tydingco-Gatewood to two years probation and a $100 special assessment fee, for Conspiracy to Commit Visa Fraud.
BAUTISTA was part of a conspiracy involving Guam Construction Company (GCC), its president and vice-president, Byong H. Kang and Choon H. Kang, respectively. On April 4, 2014, an Information was filed against BAUTISTA charging Conspiracy to Commit Visa Fraud by intentionally misrepresenting occupations of H-2B workers in an effort to facilitate fraudulently obtaining H-2B visas. After the H-2B workers arrived in Guam, BAUTISTA, GCC’s office manager and corporate secretary, assisted the Kangs and caused GCC to employ the H-2B workers in skilled occupations not authorized on their H-2B visas, as electricians, engineers, heavy equipment operators and others.
BAUTISTA pled guilty on April 4, 2014.
This investigation was a joint effort between both local and federal law enforcement, the Department of Homeland Security (DHS) Homeland Security Investigations, the Internal Revenue Service-Criminal Investigations Section, U.S. Department of Labor, Wage & Hour Division working together with Guam Department of Labor and Guam Customs & Quarantine Agency task force officers. Jointly, they investigated not only visa fraud and a sophisticated money laundering scheme, but those who fraudulently obtain federal contracts, and do not pay fair wages.
This case was prosecuted by Assistant U.S. Attorney Stephen F. Leon Guerrero.
Readout of Meeting Between U.S. Attorney General Jeff Sessions and Mexican Attorney General Raúl Cervantes AndradeRead the Press Release
The Attorneys General of Mexico, Dr. Raúl Cervantes Andrade, and of the United States, Jeff Sessions, met on April 18, 2017, to follow up on matters discussed during their previous meeting of March 20, 2017, and to continue strengthening their bilateral law enforcement cooperation.
Both sides discussed recent statements made by U.S. authorities regarding immigration, including the intention of the U.S. to fully enforce its immigration laws, and to continue to respect all of its human rights obligations in this regard.
Attorney General Sessions thanked the Mexican government for its assistance in a number of recent matters, including the prosecution of those responsible for the murder and attempted murder of ICE Special Agents Jaime Zapata and Victor Avila; the extradition of Heraclio Osorio Arellanes, who is charged with participating in the murder of Border Patrol Agent Bryan Terry; and the recovery of the jerseys of New England Patriots player Tom Brady.
Both Attorneys General briefly discussed the arrest of Edgar Veytia Cambero, the former Attorney General of the Mexican State of Nayarit, in the United States , agreeing to mutually coordinate on this matter in both the United States and Mexico, and identify assets in both countries to be seized and forfeited.
The Mexican Prosecutor General’s Office and the U.S. Department of Justice reiterate their commitment to combat corruption and transnational organized crime through law enforcement cooperation in a close and coordinated manner.
New York Businessman Pleads Guilty to Making Illegal Campaign Contributions to Candidates for U.S. President and Senate in 2011Read the Press Release
A New York City man pleaded guilty today to making illegal political contributions in the names of others to campaign committees for U.S. President and U.S. Senate in 2011, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.
Adam H. Victor, 64, pleaded guilty to one count of making political contributions in the names of others before U.S. District Judge Ketanji Brown Jackson of the District of Columbia. Sentencing is set for Aug. 22, 2017.
According to admissions made in connection with his guilty plea, during the 2011 calendar year, Victor made $17,500 in aggregated contributions through numerous immediate family members and colleagues to the campaign committee of a candidate for President of the United States and a candidate for a U.S. Senate seat in West Virginia, when, in fact, Victor paid for all of the contributions. According to the plea, Victor did not reveal to either candidate that he was the true source of the contributions.
The FBI investigated the case. Trial Attorneys Todd Gee and Andrew Laing of the Criminal Division’s Public Integrity Section are prosecuting the case.
Michigan Owner of Sixteen Adult Foster Care Homes Indicted on Additional Charges Including Obstructing the IRS and Failing to File Tax ReturnsRead the Press Release
A federal grand jury sitting in the Eastern District of Michigan returned a superseding indictment today, charging a Grand Blanc, Michigan owner of adult foster care homes with additional tax crimes including obstructing the internal revenue laws and failing to file tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
Jeremiah Cheff was indicted in October 2016 on 60 counts of failing to collect, account for and pay over employment taxes. According to the superseding indictment, Jeremiah Cheff controlled the financial and business operations of 16 foster care homes that cared for individuals with mental illnesses and developmental and physical disabilities, including Hunter’s Home, Nico’s Place, Harmony Manor, Hilltop Estates and Deerwood Manor. It is alleged that from September 2010 through September 2014, Cheff withheld payroll taxes from employees’ paychecks, failed to timely file employment tax returns and failed to pay over the funds withheld to the Internal Revenue Service (IRS).
The new charges allege that Cheff corruptly endeavored to obstruct the internal revenue laws and failed to timely file his 2013 through 2015 individual returns. According to the indictment, after the IRS informed Cheff it intended to file a lien to collect unpaid employment taxes, Cheff sent an $80,000 fake financial instrument to the IRS and falsely claimed to a revenue officer that he had paid the taxes due. Cheff also allegedly spent money from his businesses for personal benefit instead of paying it to the IRS, falsely classified his employees as independent contractors, provided false information to his return preparer and filed false 2013 through 2015 partnership returns for Hunter’s Home.
An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Cheff faces a statutory maximum sentence of five years in prison for each of the 60 employment tax counts, three years in prison for obstructing the IRS and one year in prison for each of the failure to file counts. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey McLellan and Carl F. Brooker IV of the Tax Division, who are prosecuting the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Eastern District of Michigan for its substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Joint Statement by U.S. Attorney General Jeff Sessions and Mexican Attorney General Raúl Cervantes Andrade on Tomas Yarrington ArrestRead the Press Release
Today, Attorney General Jeff Sessions and Mexican Attorney General Raúl Cervantes Andrade released the following statement on the arrest of Tomas Yarrington:
“The detention of Mexican ex-Governor Tomas Yarrington Ruvalcaba, on April 9, 2017, in Florence, Italy, was the result of law enforcement cooperation between Mexican, Italian and U.S. authorities.
“Yarrington faces serious charges in both the United States and Mexico, which arise out of criminal acts allegedly committed in both countries during Yarrington’s tenure as Governor of the State of Tamaulipas from 1999-2004.
“After careful analysis of the evidence and potential penalties of both the U.S. and Mexican charges against Yarrington, and in accordance with the priority given to competing extradition requests pursuant to Article 13 of the Extradition Treaty between Italy and Mexico, and Article 15 of the Extradition Treaty between Italy and the United States, the governments of the United States and Mexico have agreed that, in the event of a favorable decision by the Italian judicial authorities regarding both the United States’ and Mexico’s extradition requests, as well as a favorable decision on both requests by the Italian Minister of Justice, the United States and Mexican governments have agreed to request that the Italian Minister of Justice grant precedence to the United States’ request and also to seek the authorization of the Italian Minister of Justice for the re-extradition of Yarrington to Mexico in accordance with Article 16 of the U.S.-Italy Extradition Treaty.
“The United States and Mexico have agreed that upon the conclusion of the U.S. prosecution of Yarrington, and upon a determination of extraditability pursuant to the U.S.-Mexico extradition treaty, he will be temporarily surrendered to Mexico so that he may be brought to justice for the offenses charged against him there.
“Both the United States and Mexico have made a further commitment to exchange information and to collaborate with their respective prosecutions against Yarrington, and to utilize all available legal instruments for that purpose.
“The United States and Mexico extend their thanks to the Government of Italy and its law enforcement authorities for their apprehension of Yarrington. We also extend our gratitude to Interpol, the Mexican Attorney General’s Office (PGR), the U.S. Department of Homeland Security Immigration and Customs Enforcement and the Justice Department’s Office of International Affairs for their diligent work in locating and arresting the fugitive. This arrest is another example of the United States’ and Mexico’s shared commitment to combat corruption and transnational organized crime."
Francisco C. Arias and Eder J. Cortez-Zelaya Sentenced to Prison in Ice Trafficking CaseRead the Press Release
SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendants FRANCISCO C. ARIAS and EDER J. CORTEZ-ZELAYA, who were convicted at the trial of U.S. v. Francisco Arias, Eder Cortez-Zelaya and Corinna Concepcion, in the District Court of Guam, were sentenced today.
FRANSISCO ARIAS, age 42, an undocumented alien and citizen from Mexico, was sentenced by Chief Judge Frances Tydingco-Gatewood, to life imprisonment for count one, conspiracy to distribute methamphetamine (ice), after taking into consideration his role of threatening one individual; 20 years for count two, conspiracy to commit money laundering; and five years each for counts 4 and 5, unlawful use of the mail to facilitate the conspiracy to distribute methamphetamine. All sentences are to be served concurrently.
EDER J. CORTEZ-ZELAYA, age 34, a naturalized U.S. Citizen originating from El Salvador, was sentenced by Chief Judge Frances Tydingco-Gatewood to 292 months for count one, conspiracy to distribute methamphetamine (ice), 20 years for count two, conspiracy to commit money laundering; and five years each for counts 4 and 5,unlawful use of the mail to facilitate the conspiracy to distribute methamphetamine. All sentences are to be served concurrently.
Both Francisco ARIAS and CORTEZ-ZELAYA were determined to be organized leaders, who conspired with 15 co-defendants, to have packages of methamphetamine (ice) transported from Las Vegas, Nevada and received on Guam. All of the co-defendants have been sentenced.
This OCDETF case involved federal agents and local law enforcement officers of the U.S. Postal Inspection Service (USPIS), Drug Enforcement Administration (DEA), U.S. Department of Homeland Security Investigations (HSI), Guam Police Department (GPD), Guam Customs and Quarantine Agency (GCQA), Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. National Oceanic Atmosphere Administration (NOAA), and U.S. Coast Guard Criminal Investigative Service (CGIS).
The case was prosecuted by Assistant U.S. Attorney Clyde Lemons, Jr.
Federal Court Issues Order in Lawsuit Against the Twin Cities of Colorado City, Arizona and Hildale, Utah, Finding Widespread Police Misconduct and Religious DiscriminationRead the Press Release
A federal judge yesterday found that the Town of Colorado City and the City of Hildale engaged in a decades-long pattern or practice of police misconduct and housing discrimination, and ordered expansive relief to remedy the violations and prevent further violations in the future, announced the Department of Justice.
U.S. District Judge H. Russell Holland’s order, issued yesterday, adopts findings made by a jury last year that the Colorado City Marshals Office engaged in a long-standing pattern of abuses that included false arrests, unreasonable seizures of property, discriminatory policing on the basis of religion, and violating the Establishment Clause of the First Amendment. “The constitutional right to free exercise of religion, on the one hand, and the statutory right to housing and constitutional policing, on the other hand, are vitally important to a viable, peaceful community,” U.S. District Judge Holland wrote.
“Religious discrimination threatens the Founders’ vision of a society based firmly on principles of liberty and freedom of conscience,” said Acting Assistant Attorney General Tom Wheeler for the Justice Department’s Civil Rights Division. “No individual in the United States should be treated differently by a town or its police officers because of his or her religion. No religious leaders should be permitted to use the power of sworn law enforcement officers to hide their misdeeds and enforce their decrees.
The adjoining towns of Colorado City and Hildale are located on the border of Arizona and Utah and are populated primarily by members of a faction of the Fundamentalist Church of Jesus Christ of Latter Day Saints (FLDS) that remains loyal to its imprisoned prophet, Warren Jeffs. Jeffs is currently serving a prison term in Texas of life plus 20 years for aggravated sexual assault of a minor.
The advisory verdict made permanent by U.S. District Judge Holland’s order came after a seven-week trial during which the United States presented evidence from over thirty witnesses that the governments of Colorado City and Hildale are controlled the FLDS Church and Warren Jeffs. Among other things, Judge Holland concluded that Marshals “officers turned a blind eye to criminal activity involving FLDS Church leaders or members,” including supporting a fugitive and ignoring underage marriages, unauthorized distribution of prescription drugs, and food-stamp fraud.
In addition to its verdict on the police-misconduct claim, the jury found that the defendants engaged in a pattern or practice of housing discrimination against persons who were not members of Warren Jeffs’ faction of the FLDS. The jury found that the defendants had used their municipal authority to coerce, intimidate, or interfere with individuals seeking housing, discriminated in the provision of municipal services, and denied housing to non-FLDS members. The United States settled the damages portion of the case shortly before the verdict for $1.6 million.
The Court’s findings are accompanied by a comprehensive order designed to remedy the police misconduct and housing discrimination. Under the terms of the order, which lasts for ten years, the defendants must revise the policies of the Marshal’s Office, adopt new internal affairs and hiring practices, hire two new officers, and hire both a police-practices consultant and a mentor for the Chief of Police. The defendants must submit to training and revise numerous municipal policies and procedures, including their water policies and water impact fees. The order also requires the defendants work to subdivide the land in Colorado City, an issue that has long been a point of contention between the defendants and the religiously neutral land trust that took over control of the property in the area from the FLDS Church over a decade ago. Judge Holland will appoint a monitor to track the defendants’ compliance with the order and report to the Justice Department and the court.
The opinion marks the end of five years of Justice Department litigation to address widespread discrimination in Colorado City and Hildale.
The Marshal’s Office currently has seven sworn officers. Arizona’s Police Officer Standards and Training Board (POST) recently voted to revoke the peace officer certifications of six of those officers, including the certification of the current Chief Marshal Jerry Darger. POST officials recently refused to approve the certification of the seventh officer on the grounds that he had been engaged in a pattern of criminal activity, including felony conduct. Since 2003, six other members of the Marshal’s Office have been decertified by Arizona state officials, including three officers who refused to cooperate with state law-enforcement efforts.
This matter was litigated by attorneys from the Housing and Civil Enforcement Section and the Special Litigation Section of the Department of Justice’s Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. If you have any information regarding this matter, please contact the Department at 1-800-896-7743 or e-mail the Justice Department at [email protected].
Criminal Defense Attorney Sentenced to Prison for Tax EvasionRead the Press Release
WASHINGTON – A Louisiana criminal defense attorney was sentenced to 30 months in prison today for tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, Michael Thiel, 66, a resident of Baton Rouge, Louisiana, operated a criminal defense practice in Hammond, Louisiana. Despite earning substantial income through his law practice, Thiel evaded paying approximately $1 million in income and employment taxes, including interest and penalties. From 2003 through 2013, Thiel did not timely file income or employment tax returns and did not make timely payments of the taxes he owed. Though Thiel had the ability to make payments towards his tax obligations, he concealed his income and assets using trusts and nominees. In 2001, he created the Thiel Family Trust, of which he was the beneficiary, fiduciary and trustee. He created two additional trusts in 2008 in the names of family members.
Thiel used these three trusts to evade the payment of federal income and employment taxes. In January 2007, Thiel used nominees to purchase his primary residence for $435,000 and entered into a phony lease agreement with the nominees to conceal his ownership of the property and shield it from IRS collection efforts. Between January 2007 and January 2014, Thiel deposited $416,283 into the nominee account that was used to secure and pay the mortgage on the property. These funds came from the nominee trusts and other accounts not held in his name.
“As a result of today’s sentence, criminal defense attorney Michael Thiel’s decade-long effort to evade paying his income and employment taxes is over, and he will begin serving time in prison,” said Acting Deputy Assistant Attorney General Goldberg. “Each April, the vast majority of Americans follow the tax law and pay their fair share. They have the right to expect that taxpayers who spurn these obligations will be held fully to account -- no matter their profession, wealth or position in the community.”
“Today’s sentencing of Michael Thiel is a strong reminder that payment of individual and business taxes is an obligation, not a choice,” said Chief Richard Weber of Internal Revenue Service Criminal Investigation (IRS-CI). “When Mr. Thiel made the decision to evade paying taxes for himself and his business, he also made the decision to cheat his employees and other honest taxpayers. Investigation of employment tax fraud is a priority for the special agents of IRS-CI as our system of taxation depends on everybody paying their fair share.”
In addition to the term of prison imposed, Thiel was ordered to serve two years of supervised release and to pay restitution to the IRS in the amount of $998,352. Thiel pleaded guilty in December 2016 to evading the payment of federal income and employment taxes.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-CI, who conducted the investigation, and Assistant Chief Todd A. Ellinwood and Trial Attorney Michael Hatzimichalis 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.
Criminal Defense Attorney Sentenced to Prison for Tax EvasionRead the Press Release
A Louisiana criminal defense attorney was sentenced to 30 months in prison today for tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, Michael Thiel, 66, a resident of Baton Rouge, Louisiana, operated a criminal defense practice in Hammond, Louisiana. Despite earning substantial income through his law practice, Thiel evaded paying approximately $1 million in income and employment taxes, including interest and penalties. From 2003 through 2013, Thiel did not timely file income or employment tax returns and did not make timely payments of the taxes he owed. Though Thiel had the ability to make payments towards his tax obligations, he concealed his income and assets using trusts and nominees. In 2001, he created the Thiel Family Trust, of which he was the beneficiary, fiduciary and trustee. He created two additional trusts in 2008 in the names of family members.
Thiel used these three trusts to evade the payment of federal income and employment taxes. In January 2007, Thiel used nominees to purchase his primary residence for $435,000 and entered into a phony lease agreement with the nominees to conceal his ownership of the property and shield it from IRS collection efforts. Between January 2007 and January 2014, Thiel deposited $416,283 into the nominee account that was used to secure and pay the mortgage on the property. These funds came from the nominee trusts and other accounts not held in his name.
“As a result of today’s sentence, criminal defense attorney Michael Thiel’s decade-long effort to evade paying his income and employment taxes is over, and he will begin serving time in prison,” said Acting Deputy Assistant Attorney General Goldberg. “Each April, the vast majority of Americans follow the tax law and pay their fair share. They have the right to expect that taxpayers who spurn these obligations will be held fully to account -- no matter their profession, wealth or position in the community.”
“Today’s sentencing of Michael Thiel is a strong reminder that payment of individual and business taxes is an obligation, not a choice,” said Chief Richard Weber of Internal Revenue Service Criminal Investigation (IRS-CI). “When Mr. Thiel made the decision to evade paying taxes for himself and his business, he also made the decision to cheat his employees and other honest taxpayers. Investigation of employment tax fraud is a priority for the special agents of IRS-CI as our system of taxation depends on everybody paying their fair share.”
In addition to the term of prison imposed, Thiel was ordered to serve two years of supervised release and to pay restitution to the IRS in the amount of $998,352. Thiel pleaded guilty in December 2016 to evading the payment of federal income and employment taxes.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-CI, who conducted the investigation, and Assistant Chief Todd A. Ellinwood and Trial Attorney Michael Hatzimichalis 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.
Northern California Real Estate Investor Convicted of Rigging Bids at Public Foreclosure AuctionsRead the Press Release
A federal jury convicted real estate investor Glenn Guillory for his role in a conspiracy to rig bids at public foreclosure auctions held in Contra Costa County, California, the Department of Justice announced today.
After a week-long trial before the Honorable Chief Judge Phyllis J. Hamilton in Oakland, California, the jury convicted Guillory yesterday of conspiring to rig bids at foreclosure auctions in a conspiracy that operated from as early as June 2008 until about January 2011. Guillory was charged in an indictment returned by a federal grand jury in the Northern District of California on Dec. 3, 2014.
The evidence at trial showed that Guillory and his co-conspirators agreed not to compete for real estate sold at foreclosure auctions in Contra Costa County. The conspirators negotiated payoffs for agreeing not to compete and held second, private auctions known as “rounds” to determine the amounts of the payoffs for the individuals who had participated in the bid suppression.
Including Guillory’s conviction, 65 individuals have either pleaded guilty or been convicted after trial as a result of the department’s ongoing antitrust investigations into bid-rigging at public foreclosure auctions in Northern California (Alameda, Contra Costa, San Francisco and San Mateo counties). Indictments are pending against several other real estate investors who participated in the conspiracy.
The investigation is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to real-estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.
Justice Department Continues to Sue, Prosecute Delinquent EmployersRead the Press Release
Many Americans associate April with “Tax Day” and the annual deadline for filing individual income tax returns. But the end of April is also the first deadline for employers to file quarterly employment tax returns. Those who do not comply with filing requirements or who fail to pay the taxes withheld from their employees’ wages face civil lawsuits or criminal prosecutions as part of the Department of Justice’s ongoing focus to enforce employment tax laws using all tools available.
Employers in the United States are required to collect, account for and pay over to the Internal Revenue Service (IRS) tax withheld from employee wages, including federal income tax and social security and Medicare taxes. Employers also have an independent responsibility to pay their matching share of social security and Medicare taxes.
“Employers who willfully fail to comply with their employment tax obligations are cheating the U.S. Treasury at the expense of taxpayers, such as law-abiding employers and employees, who pay their taxes on time and in full,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “The Department is committed to holding employers that willfully fail to pay their employment taxes accountable with, as appropriate, criminal prosecution, bringing these offenders into compliance through civil injunctions, and working with the IRS to collect what is owed.”
“Employment taxes are a critical part of the tax system, generating more than $1 trillion a year in payments to the government, and the IRS works closely with employers and the payroll community to help ensure compliance in this area,” said IRS Commissioner John Koskinen. “We want to help employers avoid problems in the employment tax area. When problems do arise, we use civil enforcement tools and, when appropriate, work closely with the Justice Department in the pursuit of criminal cases. The collection of employment taxes is a priority area for the IRS and helps ensure fairness for employers and taxpayers. Employers who fail to pay or withhold these taxes enjoy an unfair economic advantage over those who comply with the tax laws.”
Willful Failure to Comply with Federal Employment Tax Laws is a Crime
An individual’s willful failure to comply with employment-tax obligations is not simply a civil matter. Employers whose business model is based on a continued failure to pay employment tax, who use withheld employment taxes as a slush fund to pay personal expenses or other creditors, who pay employees in cash to avoid employment tax obligations, or who file false employment tax returns are engaging in criminal conduct and face prosecution, imprisonment, monetary fines and restitution.
Recent prosecutions include:
Employers who “pyramid” taxes by opening successive businesses
In January, Napoleon Robinson of Lauderhill, Florida, was sentenced to serve 18 months in prison for evading more than $500,000 in employment taxes. Robinson owned and operated a series of ship welding and repair businesses in Virginia and New York. Robinson was not paying over employment taxes and would close down one company and open a new one in the name of a nominee owner, while continuing to run the company, making its financial and personnel decisions and controlling the businesses’ bank accounts. He was also ordered to pay restitution to the IRS.
In January, two West Virginia business owners, Michael and Jeanette Taylor, were sentenced to serve 21 and 27 months in prison for failing to pay over more than $1.4 million in employment taxes. The Taylors owned a construction business that transported steel and sold gravel and concrete. They changed the name of their business several times, though the operations of the business remained the same. Both were responsible for collecting, accounting for and paying over the employment taxes withheld from their employees’ wages. Instead of paying over the taxes that they collected, the Taylors used the funds to purchase property and finance their horse farm. They were also ordered to pay restitution to the IRS.
Employers using withheld employment taxes for personal expenses
In January, Paul Harvey Boone of Hillsborough, North Carolina, was sentenced to serve 15 months in prison for failing to pay over employment taxes. Boone owned and operated Boone Audio Inc. From 2008 through 2011, Boone used company funds for personal expenses while failing to pay over the employment taxes withheld from his employees’ wages. He was also ordered to pay restitution to the IRS.
In December 2016, Sreedar Potarazu, a Maryland surgeon and entrepreneur, pleaded guilty to failing to account for and pay over $7.5 million in employment taxes and to shareholder fraud. Potarazu founded VitalSpring Technologies Inc., a corporation that provided data analysis and services related to health care expenditures. Potarazu was responsible for collecting, truthfully accounting for and paying over VitalSpring’s employment taxes. Instead of paying over the employment tax, Potarazu spent millions on personal expenses including transferring funds to himself and others, travel, car service and the publication of a book.
Employers using employment taxes to pay other creditors
In January, Steven Lynch, a tax attorney and owner of the Iceoplex in Pittsburgh, Pennsylvania, was sentenced to serve 48 months in prison, fined $75,000 and ordered to pay restitution to the IRS of more than $793,000, after being convicted of failing to collect, account for and pay over employment taxes. Lynch co-owned and operated the Iceoplex, a recreational sports facility which included a fitness center, ice rink, soccer court, restaurant and bar. He controlled the finances for these businesses and was responsible for collecting, accounting for and paying over tax withheld from employee wages and timely filing employment tax returns. Lynch failed to pay over more than $790,000 in employment taxes withheld.
In June 2016, Muzaffar Hussain of Pleasanton, California, pleaded guilty to failing to account for and pay over employment taxes for Crossroads Home Health Care Inc. Hussain was the CFO and was responsible for filing the company’s employment tax returns and paying over the employment taxes. Hussain transferred funds in an amount equal or close to the amount of employment taxes from the business bank account into other accounts and used the money to fund other business and personal expenses.
Employers paying employees in cash to avoid employment tax
In September 2016, Phillip Hui of Sicklerville, New Jersey, was sentenced to serve 15 months in prison for conspiring to evade payroll taxes on cash wages paid to illegal immigrants employed at his dry cleaning business. Hui hired foreign nationals from Mexico and Guatemala who did not have legal status in the United States and paid them in cash. Their wages were not reported on the quarterly employment tax returns filed with the IRS. He was also ordered to pay restitution to the IRS.
Employers filing false employment tax returns
In March, Richard Tatum, a Houston, Texas, business owner of an industrial staffing company, pleaded guilty to failing to pay more than $18 million in employment taxes. Tatum filed false employment tax returns that did not report the majority of his employees and did not pay over the taxes he withheld from his employees. stead, he used the money for luxury travel and to make payments on his ranch.
In January, Janis Ann Edwards, an Oklahoma City, Oklahoma, business owner, pleaded guilty to evading more than $3.5 million in employment taxes. Edwards was the sole owner of Corporate Resource Management c. and a number of related companies that operated as professional employer organizations. Edwards directed her employees to alter quarterly employment tax returns to reflect less payroll tax liability than was actually owed.
Delinquent Employers Also Risk Injunctions and Money Judgments
The Tax Division is also aggressively pursuing civil enforcement action against those who fail to meet their employment tax obligations. Since 2003, the Division has permanently enjoined more than one hundred employers and obtained tens of millions of dollars in money judgments. Civil injunctions are court orders requiring the employer and principal officers to timely deposit and pay employment taxes to the U.S. Treasury. These court orders also impose various other requirements and prohibitions, including the obligation to provide notice of each deposit to the IRS, as well as restrictions on opening and operating new businesses and transferring or dissipating assets.
In recent years, the Tax Division increased the number of civil actions brought against employers who violate employment tax laws. In 2016, the Tax Division obtained employment tax injunctions against 38 employers—more than double the number of injunctions obtained in 2015. The injunctions obtained in the past year include court orders against employers throughout the United States, such as a St. Louis concrete business, a Florida restaurant, an Iowa lawn care business and a Michigan custom kitchen company.
Since Jan. 1, the Tax Division filed 17 suits, collectively seeking more than $10 million in unpaid employment taxes, against tax-delinquent medical-care providers who, despite IRS notices and efforts to collect, have been non-compliant for three or more quarters, despite persistent attempts by the IRS to remind them of their obligations and to collect the unpaid taxes.
These 17 suits collectively seek more than $10 million in unpaid employment taxes and are part of an ongoing effort by the Justice Department and the IRS focusing on employment tax compliance. Among these cases is a suit filed in federal court in Minnesota to enjoin Dawda Sowe and Nurse Staffing Solutions Health Care from failing to pay employment taxes and to obtain a $2 million judgment against the business for employment taxes the business allegedly failed to pay over an eight-year period. Also, this month the Tax Division filed suit in federal court in Texas to obtain a court order requiring Jeanna Smith to timely file employment and unemployment tax returns for her business and pay those taxes in full, amongst other requirements. In this suit, the government also seeks a judgment for unpaid employment taxes and alleges that Smith incorporated several home-health care businesses, such as Paris Senior Care Group Inc., which accumulated more than $1.3 million in unpaid employment taxes.
Those Who Violate Injunctions are at Risk for Civil and Criminal Contempt
Those who violate an injunction can be charged with civil and criminal contempt and face being shut down, paying compensation for the damage the contempt caused and incarceration of the principal officer(s). For example, a federal court in Washington held Dr. James Hood and his wife, Karen Hood, in contempt of court for a consistent pattern of failing to meet their tax obligations. The court later ordered the two to close their dental care businesses, cease operating as employers, and barred them from opening any new businesses where the Hoods would serve as employers by June 8, 2017.
Liability Extends to Responsible Individuals
Any individual who is responsible for ensuring that employment taxes are collected, truthfully accounted for, and paid over to the IRS, and willfully fails to do so or willfully attempts to evade or defeat paying employment taxes may be subject to a civil penalty equal to the amount of the unpaid withholdings. This civil penalty, referred to as the trust fund recovery penalty, may be imposed even if the individual uses the employment tax to pay other creditors or keep the business afloat. Individuals subject to these penalties include, but are not limited to, corporate officers, treasurers, manager, and, in some circumstances, bookkeepers.
Since January 2013, the Tax Division has obtained tens of millions of dollars in money judgments against individuals subject to these penalties. For example, in July 2016, a Florida jury found the CEO and owner of a professional employer organization, David Goldberg of Deerfield Beach, Florida, personally liable for more than $4.2 million due to his failure to pay his company’s employment taxes. In addition, in December 2016, the U.S. Court of Federal Claims found that the CFO of an Internet-marketing platform, Mark V. Noffke, was responsible for his company’s failure to pay its employment taxes and entered a judgment of more than $500,000 against him. And in April, a federal court found the co-manager of an architectural woodwork installation company, Darren Commander of Jackson, New Jersey, personally liable for $1.9 million due to his failure to pay his company’s employment taxes.
These cases reflect the ongoing commitment of the Department of Justice and the IRS to pursue companies and individuals who fail to collect, account for, or pay employment taxes to the IRS. For more information about civil and criminal employment tax enforcement efforts, visit the Tax Division’s website.
Attorney General Jeff Sessions Announces New Actions to Support Law Enforcement and Maintain Public Safety in Indian CountryRead the Press Release
As part of the department’s efforts under the Task Force on Crime Reduction and Public Safety (Task Force), Attorney General Jeff Sessions today announced a series of actions the department will take to support law enforcement and maintain public safety in Indian Country.
“It is paramount that tribal police have the tools they need to fight crime and maintain public safety in their communities,” said Attorney General Sessions. “Law enforcement in Indian Country faces unique practical and jurisdictional challenges and the Department of Justice is committed to working with them to provide greater access to technology, information and necessary enforcement.”
The following three actions were announced today:
- The department will deploy the Tribal Access Program for National Crime Information (TAP) to 10 tribal sites, beginning today with the Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation in Montana. This expanding program, which was first implemented in 2015 as a successful pilot program with nine tribes, is designed to provide federally-recognized tribes access to national crime information databases for both civil and criminal purposes;
- In support of the Task Force, the Office of Tribal Justice will coordinate a series of listening sessions with tribal law enforcement officials and tribal leaders to ensure the unique perspective of law enforcement in Indian Country is taken into account; and
- The Office of Tribal Justice has created the Indian Country Federal Law Enforcement Coordination Group, an unprecedented partnership that brings together sworn federal agents and other key law enforcement stakeholders from 12 federal law enforcement components, including: the Department of Justice’s Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration; the Federal Bureau of Investigation Criminal Justice Information Services and Indian Country Crimes Unit, the U.S. Marshals Service and the Office of the Inspector General; The Department of the Interior’s Bureau of Land Management and Bureau of Indian Affairs, Office of Justice Services; the Department of Health and Human Services; the Department of Homeland Security’s Federal Emergency Management Agency, U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement, Homeland Security Investigations. This partnership will increase collaboration and coordination with the goal of enhancing the response to violent crime in Indian country.
The Attorney General will continue to receive and act upon recommendations from the Task Force as they become available and is committed to combatting violent crime and maintaining public safety in tribal lands.
With the Individual Income Tax Filing Deadline Approaching, Justice Department Warns Willful Violations of Tax Laws Are CriminalRead the Press Release
With the annual tax return filing deadline almost upon us, the vast majority of taxpayers are complying with their legal obligation to file accurate returns and pay the taxes that they owe. However, there are taxpayers who attempt to evade paying their fair share of taxes, file false returns, fail to file returns or seek to obstruct the Internal Revenue Service (IRS)’s efforts to assess or collect monies that are due. The Justice Department’s Tax Division warns taxpayers who attempt to violate the federal tax laws that they face prosecution, jail, restitution and significant monetary penalties.
“Most Americans follow the tax law and rightfully expect that each of their fellow citizens will do the same,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Yet every year some taxpayers try to take a different path – they hide money offshore, declare only a small portion of their income, make up bogus deductions and lie to the IRS if they are caught. With this year’s filing deadline approaching, these taxpayers should stop, reverse course and simply pay what they owe. As the Justice Department’s recent criminal prosecutions make clear, the consequences for willful violations are severe: jail time and substantial monetary penalties.”
“The majority of Americans file their taxes without issue and they would tell you that they want strong enforcement of the tax laws to ensure that we are all paying our fair share,” said Chief Richard Weber of IRS Criminal Investigation. “For those thinking about intentionally evading the tax laws – IRS-CI has the finest financial investigators and are trained to follow the money trail wherever it may lead.”
Over the past year, the Tax Division and the U.S. Attorney’s Offices have worked closely with the IRS and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through criminal investigations and prosecutions across the country, as evidenced by the sampling of recent convictions listed below. These enforcement efforts continue year-round.
Recent Tax Evasion and Filing False Tax Returns Prosecutions:
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In March, Denver Nichols, a Labadie, Missouri roofing contractor, pleaded guilty to filing false 2007 and 2008 income tax returns. Nichols operated his roofing business under the name Eagle Roofing Co. He late filed false 2007 and 2008 returns that underreported his business’s gross receipts by approximately $959,500 and $794,680.
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In March, Stephen Leib, a Philadelphia, Pennsylvania tech business owner, pleaded guilty to tax evasion. Leib owned New Wave Logistics Inc. He evaded more than $800,000 in taxes by cashing a significant amount of his business’s gross receipts at a check cashing facility, lying to his accountant about the total amount of income he earned and filing false tax returns.
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In March, Jeffrey Nowak, a Las Vegas, Nevada liquor storeowner, was sentenced to serve 41 months in prison for tax evasion and conspiring to defraud the United States. Nowak conspired with Ramzi Suliman, with whom he jointly owned and operated liquor stores in Las Vegas. Nowak and Suliman skimmed cash receipts and provided their accountant with a phony set of books that omitted nearly $4 million in cash receipts.
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In February, Jose Echeverria, a Chelan Falls, Washington businessman, pleaded guilty to filing a false individual income tax return. Echeverria owned and operated a produce sales business. He underreported his income by approximately $564,292.
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In December 2016, James and Mardeen Perin, former owners of Sully’s Pub in West Des Moines, Iowa, pleaded guilty to aiding and assisting in filing a false tax return. The Perins filed a false 2013 tax return that did not report cash that they earned through their business.
Recent Failure to File Tax Returns Prosecutions:
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In March, James Burton and Lucretia Pecantte-Burton, two Louisiana attorneys, pleaded guilty to failing to file individual income tax returns. Burton and Pecantte-Burton were partners of the law firm Pecantte-Burton & Burton (PB&B) and regularly received cash payments. They also had a partnership interest in a tax return preparation business. Burton and Pecantte-Burton did not file 2007 through 2009 income tax returns.
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In February, Samuel Frazier, a Gulfport, Mississippi businessman, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Frazier owned two companies in Gulfport: Frazier Fire Systems LLC and EZ Haul Demolition and Construction LLC. Frazier failed to file a 2009 tax return despite earning more than $618,253 in income.
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In December 2016, John Raschella, a former Parma, Ohio resident, was convicted at trial for failing to pay more than $1 million in income taxes, interest and penalties for 1995, 1996 and 1998 through 2012 on income earned as an insurance salesman. He also failed to timely file income tax returns between 1989 and 2012.
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In June 2016, Carlos Cortes, a San Antonio, Texas artist, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Cortes did not file tax returns for 2006 through 2009, despite earning more than $1.3 million in income during this time.
Recent Prosecutions Involving the Use of Nominee Entities and Offshore Bank Accounts to Hide Assets and Income:
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In March, Casey Padula, a Port Charlotte, Florida owner of Demandblox, a marketing and information technology business, pleaded guilty to conspiracy to commit tax and bank fraud. Padula conspired to move more than $2.5 million to offshore accounts in Belize and disguised them as business expenses in the corporate records. Padula used the funds to pay for personal expenses and purchase significant personal assets.
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In March, Masud Sarshar, a Los Angeles, California businessman, was sentenced to serve 24 months in prison for hiding more than $23.5 million in offshore bank accounts. Sarshar maintained several undeclared bank accounts at Israeli banks, both in his name and in the names of entities that he created. Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income. Sarshar reported none of this income on his individual and corporate tax returns.
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In January, three Orange County, California residents pleaded guilty to hiding millions of dollars in secret foreign bank accounts. Dan Farhad Kalili, David Ramin Kalili and David Shahrokh Azarian, willfully failed to file legally required reports, commonly known as FBARs, disclosing their bank accounts in Switzerland and Israel.
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In January, Peggy and John DeYoung, a Missoula, Montana couple, pleaded guilty to conspiring to defraud the United States. The DeYoungs had not filed an income tax return since 1998. Peggy DeYoung earned income through her ownership interest in two companies that owned Southern California mobile home parks. The DeYoungs also established a number of purported trusts. They owned bank accounts in the names of these trusts using fabricated taxpayer identification numbers and paid personal expenses from the accounts, causing a tax loss of $376,350.
Recent Prosecutions of Attempts to Obstruct IRS Efforts to Assess and Collect Taxes:
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In November 2016, Richard Thomas Grant, a Point Richmond, California man, was sentenced to serve 33 months in prison. Grant stopped filing income tax returns and paying income taxes despite earning significant income as a partner with an engineering company. Grant attempted to frustrate IRS collection and audit efforts by filing lawsuits against the IRS. To conceal his income, Grant used prepaid debit cards and money orders to pay personal expenses.
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In November 2016, Steven Headden Young of St. Petersburg, Florida, was sentenced to serve 21 months in prison. Young evaded a substantial portion of his individual income taxes for 2007 through 2011 and interfered with an IRS audit. He fabricated a letter from the IRS to a bank directing the bank to send subpoenaed records to a bogus address.
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In October 2016, Henti Lucian Baird, a Greensboro, North Carolina resident and former IRS revenue officer, pleaded guilty. Baird filed tax returns each year but has not paid since at least 1998. Baird created nominee bank accounts to hide hundreds of thousands of dollars from the IRS, submitted false information to the investigating IRS officer regarding these accounts and transferred funds from nominee accounts to avoid impending IRS levies.
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In June 2016, Paul Tharp, a North Carolina man, was sentenced to serve 21 months in prison. Tharp failed to file tax returns for 2003 through 2006, and the IRS assessed income tax against him for those years. Tharp attempted to evade payment of his tax debt by filing false disclosures with the IRS, omitting businesses that he owned as well as bank accounts and rental income.
More information about the Tax Division’s criminal and civil enforcement efforts in these and other areas is on the division’s website. The IRS website also has information about how to report tax fraud.
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Texas Tax Return Preparer Pleads Guilty to Filing False Tax ReturnRead the Press Release
A DeSoto, Texas resident pleaded guilty today to aiding and assisting in the preparation of a false tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John R. Parker for the Northern District of Texas.
According to documents filed with the court, Vicki Walker, 52, was a tax return preparer operating under the name Vicki Walker Tax Services LLC in Dallas. Walker admitted that she filed a false tax return with the Internal Revenue Service (IRS) for a client that contained false business loss and capital loss deductions. In addition, Walker admitted that she prepared other false returns intending to cause a tax loss of approximately $1,173,757.
Walker is scheduled to be sentenced on Aug. 2. She faces a statutory maximum sentence of three years in prison, as well as a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg 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 Chris Stokes of the Northern District of Texas, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Alabama Real Estate Investor Sentenced for Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
An Alabama real estate investor was sentenced on Monday, April 10, 2017, to serve 12 months and a day in prison for his role in a bid-rigging conspiracy and a fraud scheme related to public real estate foreclosure auctions in Mobile, Alabama, the Department of Justice announced.
Oscar Celso Anez pleaded guilty to bid rigging and conspiracy to commit mail fraud in the Southern District of Alabama on June 14, 2016. In addition to a term of imprisonment, Senior U.S. District Court Judge Callie V.S. Granade also ordered Anez to pay $343,561 in restitution.
Between March 2002 and November 2010, Anez conspired with others not to compete for selected foreclosure properties at public auctions in order to obtain the properties at artificially suppressed auction prices. In addition, Anez and his co-conspirators held secret, second auctions for rigged foreclosure properties. The winner of the second auction obtained title to the property and made payoffs to co-conspirators. The money that the conspirators paid to one another would have gone to mortgage holders, homeowners and others with a legal interest in the property.
"The Court’s sentence holds Oscar Anez accountable for his major role in carrying out these schemes and will serve as a strong deterrent to others who are considering violating federal laws that prohibit anticompetitive conduct," said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. "To date, fifteen defendants have been prosecuted and more than $1 million in restitution has been ordered by the United States District Court for the Southern District of Alabama."
"Fraud and bid-rigging have no place in this community," said Acting U.S. Attorney Steve Butler of the Southern District of Alabama. "This sentence should serve as a reminder that violations of federal anti-trust laws will be actively investigated and prosecuted in the Southern District of Alabama."
"The FBI remains dedicated to working with our law enforcement partners to eliminate this type of fraud," said Special Agent in Charge Robert F. Lasky of the FBI’s Mobile Field Office.
The sentencing of Anez is a result of an ongoing investigation that is being conducted by the Washington Criminal II Section of the Antitrust Division and the Mobile Field Office of the FBI, with substantial assistance from the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000.
Saltwater Disposal Well Operator Pleads Guilty to Multiple Felony Charges in Connection with Operation of WellRead the Press Release
Jason A. Halek, 43, of Southlake, Texas, pleaded guilty in federal court in Bismarck, North Dakota, to three felony charges stemming from the operation of a saltwater disposal well near Dickinson, in Stark County, North Dakota, the Justice Department announced. Halek pleaded guilty to three counts of violating the Safe Drinking Water Act.
The well, named the Halek 5-22, received “produced water” constituting “brine and other wastes” commonly and generically referred to as “saltwater.” “Saltwater” in this context covers a wide array of drilling waste fluids, including hydraulic fracturing fluid, which is water combined with chemical additives such as biocides, polymers and “weak acids.”
According to an agreed upon factual statement filed in court, Halek admitted to injecting saltwater into the well without first having the state of North Dakota witness a test of the well’s integrity, which is necessary to protect drinking water. Halek also admitted injecting fluids down the “annulus” or “backside” of the well in violation of the well’s permit which required that fluids be injected through the tubing. Finally, Halek also admitted to failing to provide written notice to the state of the date of first injection into the well.
Previously, on Sept. 26, 2014, Nathan R. Garber pleaded guilty to various charges related to the operation of the well. Sentencing for Halek and Garber is scheduled for July 31, 2017.
The case was investigated by the U.S. Environmental Protection Agency’s Criminal Investigation Division. Significant cooperation was provided by the State of North Dakota and the North Dakota Industrial Commission (NDIC). The case is being prosecuted by the United States Attorney’s Office for the District of North Dakota and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Former Minnesota Housing Repair Contractor Pleads Guilty to Wire Fraud Scheme Affecting U.S. Financial InstitutionsRead the Press Release
A former housing repair contractor pleaded guilty to committing fraud, the Department of Justice announced today.
Patric G. Monahan pleaded guilty to one count of wire fraud in the U.S. District Court in Minneapolis today. The former repair contractor admitted to participating in a scheme to defraud financial institutions in connection with foreclosed properties the financial institutions owned in the Minneapolis area. Sentencing will be set at a later date.
According to the plea agreement, Monahan paid an unnamed realtor over $85,000 to steer housing repair contracts to Monahan and companies affiliated with him. Monahan participated in this scheme from in or about January 2008 until in or about February 2014.
“Patric Monahan knowingly participated in a long-standing scheme to defraud U.S. financial institutions,” said Deputy Assistant Attorney General Brent Snyder of the Department of Justice’s Antitrust Division. “We will continue to work with our law enforcement partners to protect U.S. companies from fraud, wherever we find it.”
“The plea filed today reflects the FBI’s steadfast commitment to ferreting out all forms of financial institution fraud and sends a strong message for those seeking new ways to steal from banks: you will be caught and held accountable for your crimes,” said Special Agent in Charge Richard T. Thornton of the Minneapolis office of the FBI.
This is the first case involving fraud and kickbacks relating to repair contracts for properties in the Minneapolis area owned by financial institutions. The maximum penalty for wire fraud is 30 years of imprisonment and a fine of $1,000,000. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea is the result of an ongoing federal investigation of housing repair contracts in the Minneapolis area. The investigation is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Minneapolis Division. Anyone with information concerning suspicious activity relating to housing repairs performed in the Minneapolis area should contact the Antitrust Division’s Chicago Office at 312-984-7200 or visit www.justice.gov/atr/contact/newcase.htm.
Department of Justice and Federal Trade Commission Support Reform of Alaska Laws that Limit Competition in the Health Care SectorRead the Press Release
The Department of Justice’s Antitrust Division (DOJ) and the Federal Trade Commission (FTC) have recommended that Alaska repeal its certificate-of-need (CON) laws, which require healthcare providers to obtain state approval before expanding, establishing new facilities or services, or making certain large capital expenditures.
In response to a request by Senator David Wilson for views on Alaska Senate Bill 62, which would repeal Alaska’s CON laws, the joint statement suggests the state consider whether its CON program best serves the needs of its citizens.
“Alaska lawmakers have the opportunity to bring lower costs and greater options to health care consumers,” said Acting Assistant Attorney General Andrew Finch of the Antitrust Division. “CON laws can increase the costs of investing in new health care services and can shield incumbents from competition. Repeal of Alaska’s CON laws could invigorate competition in this critical sector, to the benefit of patients, employers, and other health care consumers.”
“CON laws raise considerable competitive concerns and generally do not achieve their alleged benefits for health care consumers,” said Acting Chairman Maureen K. Ohlhausen of the Federal Trade Commission. “CON laws can restrict entry and expansion, limit consumer choice, and stifle innovation. Additionally, the CON process can be exploited by incumbent firms to thwart or delay entry by new competitors, as well as potentially obstruct efforts to restore competition lost to an anticompetitive merger, harming free markets and consumers.”
According to the joint statement, the DOJ and FTC historically have urged states to consider repeal or reform of their CON laws because they can prevent the efficient functioning of health care markets and harm consumers. CON laws can create barriers to entry and expansion, limit consumer choice, deny consumers the benefit of an effective remedy for antitrust violations, facilitate anticompetitive agreements, and stifle innovation.
Vice Lords Leader Sentenced for Gang-Related Shooting of Family of FourRead the Press Release
A leader of the Vice Lords street gang was sentenced today to 162 months in prison for his role in the May 7, 2015, shooting of four members of a family with an AK-47 in Detroit.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Chief James Craig of the Detroit Police Department made the announcement.
“Everett controlled the Vice Lords by ordering violent retribution against anyone who crossed him, his revenge had no limits,” said Acting Assistant Attorney General Blanco. “I am proud of the unified efforts of our prosecutors and law enforcement partners, including the Detroit One partners, who successfully brought Everett and other Vice Lord members to justice. The Justice Department will continue to work closely and jointly with all of our Federal, state and local law enforcement partners to investigate, prosecute and dismantle violent gangs, like the Vice Lords, wherever they may be present.”
“This conviction and sentence is particularly important since Mr. Everett was a leader of the gang and directed this violence to occur. This lengthy sentence underscores that one does not have to be physically present at a shooting to bear the full brunt of criminal responsibility and punishment,” said Acting U.S. Attorney Lemisch. “We hope Mr. Everett’s sentence sends a strong message of deterrence to those who may want to pursue the gang lifestyle.”
“This sentence is the culmination of countless hours of dedicated work by ATF agents and our law enforcement partners,” said Special Agent in Charge Shoemaker. “ATF will continue to aggressively target and dismantle criminal enterprises threatening the safety of Detroit’s citizens.”
“While gang violence continues to plague the safety and security of our neighborhoods, today’s sentence reflects the continuing impact the Detroit One Initiative is having on the ability of gang members to terrorize our communities,” said Special Agent in Charge Gelios. “Prior to today, defendants in this shooting incident had been sentenced to approximately 80 years collectively in prison. With today’s additional sentence, the message should be clear this collaboration of federal, state and local law enforcement partners is committed to restoring our streets to the law-abiding citizens of Detroit.”
Burney Everett, aka Tank, 27, of Detroit, pleaded guilty on Oct. 25, 2016, before U.S. District Judge David M. Lawson of the Eastern District of Michigan to two counts of assault with a dangerous weapon in aid of racketeering and one count of use and carry of a firearm during and in relation to a crime of violence.
According to admissions made in connection with Everett’s plea, the Vice Lords is a national gang engaged in a variety of crimes and the gang’s leaders are located in both Chicago and Detroit. The gang is broken down into various “sets,” “decks,” or “branches,” including the Detroit-based Traveling Vice Lords (TVL). The Vice Lords have often targeted members who sought to leave the gang for physical beatings or murder.
Everett admitted that in May 2015, he directed other members of the TVL to search for two brothers who had left or attempted to leave the gang in order to harm them. Everett further admitted that on May 7, 2015, at his direction, members of the TVL traveled in multiple cars to the intended victims’ house. After a brief confrontation with the brothers’ family members, Vice Lords member Antonio Clark admitted in connection with his own plea that he fired an AK-47 23 times, hitting the brothers, their mother and a 15-year-old sister. All of the victims survived the shooting.
All defendants charged for the shooting pleaded to charges related to the shooting. In addition to Everett, eight members and leaders of the TVL, all of Detroit, have pleaded guilty to charges related to the shooting, seven of whom have been sentenced: Antonio Clark, 27, was sentenced to 240 months in prison; Aramis Wilson, 26, was sentenced to 150 months in prison; Dion Robinson, 39, was sentenced to 121 months in prison; Jonathan Kinchen, 24, was sentenced to 120 months in prison; Tyrone Price, 27, sentenced to 140 months in prison; Kojuan Lee, 20, was sentenced to 97 months in prison; and Kirshean Nelson, 20, was sentenced to 36 months in prison. Kenneth Smith, 35, pleaded guilty on Jan. 28, 2016, and awaits sentencing, which has not yet been set. On Jan. 18, 2017, a co-defendant of Everett, Vice Lords associate Jamerio Clark, was sentenced to 48 months in prison for witness tampering by obtaining and disclosing the private health information of the May 7, 2015 shooting victims and victims’ family members to a member of the gang.
The convictions related to the May 7, 2015, shooting are just one component of the federal government’s prosecution of the Vice Lords street gang, which has led to the arrests and convictions of dozens of Vice Lords leaders and members over the last few years. In two trials during March and May 2015, juries convicted eight leaders and members of the Phantom Outlaw Motorcycle Club, many of whom were also leaders and members of the Vice Lords, for various crimes, including a mass-murder plot against a rival organization and the shooting of a member of another rival organization.
The arrests and convictions in this case are, in part, the result of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. Through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and FBI, law enforcement authorities linked various acts of violence in Detroit to the Vice Lords street gang, and identified the leaders and key members of the gang, who now have been held accountable.
The ATF, FBI and Detroit Police Department investigated the case. Assistant U.S. Attorneys Christopher Graveline and Mark Bilkovic of the Eastern District of Michigan and Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.
The United States Attorney’s Office Announces the Completion of the Settlement Agreement in the Civil Division’s Case Against Guam’s Department of CorrectionsRead the Press Release
SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that the U.S. Department of Justice and the Territory of Guam today jointly filed a motion to dismiss in the U.S. District Court, to terminate a 1991 Settlement Agreement for the civil reform of conditions in Guam’s jail and prison facilities.
“The completion of this civil Settlement Agreement demonstrates the U.S. Department of Justice’s continuing commitment to ensure that all men and women who are detained or serving prison sentences receive the protections guaranteed by the Constitution,” said Acting United States Attorney Shawn N. Anderson. “Guam’s compliance with the terms of the Settlement Agreement means inmates and detainees are more likely to be housed in cleaner and safer conditions, and that they will have adequate access to vital health care services.”
The United States Attorney’s Office continues to pursue other cases and matters involving federal criminal violations connected with the Guam Department of Corrections.
The Settlement Agreement resolved the United States’ allegations of a pattern or practice of constitutional violations in Guam’s correctional facilities related to fire safety, sanitation, and access to health care. The case was brought under the Civil Rights of Institutionalized Persons Act (42 U.S.C. § 1997), which protects the federal rights of people in state and locally operated institutions, including nursing homes, hospitals, and correctional facilities. To comply with the Settlement Agreement and remedy the constitutional violations, the United States Attorney’s Office and the Office of the Attorney General of Guam participated in a series of hearings before the U.S. District Court of Guam. The Office of the Attorney General of Guam partnered with national experts and recruited specialists within the Government of Guam, resulting in improvements to the fire safety and sanitation systems throughout its facilities. The Attorney General of Guam completely overhauled the Department of Correction’s health care practices by transferring control of its clinic to staff at Guam Memorial Hospital.
The case was handled by attorneys from the U.S. Department of Justice’s Civil Rights Division, Special Litigation Section, in Washington, D.C. and the U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands.
United States of America v. Territory of Guam, et al., Case No. 91-CV-00020 (D. Guam), Joint Motion for Dismissal and Memorandum in Support attached.
United States of America v. Territory of Guam, et al., Case No. 91-CV-00020 (D. Guam), 1991 Settlement Agreement attached as Exhibit A.Justice Department Seeks to Stop Louisiana Tax Return Preparer from Preparing Federal Tax ReturnsRead the Press Release
A Louisiana tax return preparer, Finecia Draper of Simmesport, Louisiana prepares fraudulent tax returns for her customers, according to a new civil suit filed by the Justice Department. The suit, filed in federal court in Alexandria, Louisiana asks the court to permanently bar Draper from preparing federal tax returns for others. The suit also asks the court to order Draper to turn over a list of all taxpayers for whom she has prepared returns since Jan. 1, 2013.
The complaint alleges that Draper, who prepares returns through her business Unlimited Fashion located at 245 Moreau St. in Simmesport, prepares returns that fraudulently understate her customers’ income tax liabilities and/or overstates the refunds they are entitled to receive. According to the complaint, Draper does so by fabricating or inflating business losses claimed on her customers’ returns. In many of the examples cited in the complaint, the taxpayer did not even own or operate a business. The bogus losses that Draper claims fraudulently understate the income her customers earned which results in underreporting their tax liabilities and overstating the refunds they are due, according to the complaint.
The complaint additionally alleges that Draper also fraudulently claims and/or inflates the Earned Income Tax Credit (EITC) on returns she prepares. The EITC is a benefit for working taxpayers with low to moderate income. The amount of EITC a taxpayer can claim is determined by the amount of income the taxpayer earned and the number of dependents a taxpayer claims. The complaint alleges that Draper uses false business losses to improperly reduce the earned income on her customers’ returns and claims improper dependents, to maximize the EITC. The complaint alleges that Draper does so without doing the due diligence required by Internal Revenue Service (IRS) regulations and despite being previously penalized over $97,000 by the IRS for failure to exercise the required due diligence.
From 2011 to 2015, Draper prepared over 2,000 returns, according to the complaint. The complaint alleges that audits of 163 returns prepared by Draper in 2011, 2012, and 2013 revealed that she overstated refunds and understated tax liability on 134 (82 percent) of these returns which resulted in a tax loss of over $275,000 in the aggregate.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has tips on its website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Attorney General Jeff Sessions Announces the Department of Justice’s Renewed Commitment to Criminal Immigration EnforcementRead the Press Release
Attorney General Jeff Sessions today spoke to Customs and Border Protection personnel at the United States-Mexico border in Nogales, Arizona.
In his remarks, the Attorney General announced that he has issued the attached memo to United States Attorneys that mandates the prioritization of criminal immigration enforcement. The memo directs federal prosecutors to focus on particular offenses that, if aggressively charged and prosecuted, can help prevent and deter illegal immigration.
Additionally, the Attorney General revealed that the Department of Justice will add 50 more immigration judges to the bench this year and 75 next year. He also highlighted the Department's plan to streamline its hiring of judges, reflecting the dire need to reduce the backlogs in our immigration courts.
Please find below the full remarks from Attorney General Sessions.
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Remarks Prepared for Attorney General Jeff Sessions
Meeting with Customs and Border Protection Personnel and Immigration Policy Announcement
NOGALES, ARIZONA
Good morning, everyone. Let me start by thanking the brave men and women of Customs and Border Protection, who not only served as our gracious hosts today, but who put themselves in harm’s way each day to secure our borders and protect us.
Here, along our nation’s southwest border, is ground zero in this fight. Here, under the Arizona sun, ranchers work the land to make an honest living, and law-abiding citizens seek to provide for their families.
But it is also here, along this border, that transnational gangs like MS-13 and international cartels flood our country with drugs and leave death and violence in their wake. And it is here that criminal aliens and the coyotes and the document-forgers seek to overthrow our system of lawful immigration.
Let’s stop here for a minute. When we talk about MS-13 and the cartels, what do we mean? We mean criminal organizations that turn cities and suburbs into warzones, that rape and kill innocent citizens and who profit by smuggling poison and other human beings across our borders. Depravity and violence are their calling cards, including brutal machete attacks and beheadings.
It is here, on this sliver of land, where we first take our stand against this filth.
In this fight, I am here to tell you, the brave men and women of Customs and Border Protection: we hear you and we have your back. Under the President’s leadership and through his Executive Orders, we will secure this border and bring the full weight of both the immigration courts and federal criminal enforcement to combat this attack on our national security and sovereignty.
The President has made this a priority — and already we are seeing the results. From January to February of this year, illegal crossings dropped by 40 percent, which was unprecedented. Then, last month, we saw a 72 percent drop compared to the month before the President was inaugurated. That’s the lowest monthly figure for at least 17 years.
This is no accident. This is what happens when you have a President who understands the threat, who is not afraid to publically identify the threat and stand up to it, and who makes clear to law enforcement that the leadership of their country finally has their back. Together, we will drastically reduce the danger posed by criminal aliens, gang members and cartel henchmen.
To that end, the President and I want to do our best to arm you, and the prosecutors who partner with you, with more tools in your fight against criminal aliens. So today, I am pleased to stand here with you and announce new guidance regarding our commitment to criminal immigration enforcement. As we speak, I am issuing a document to all federal prosecutors that mandates the prioritization of such enforcement.
Starting today, federal prosecutors are now required to consider for prosecution all of the following offenses:
- The transportation or harboring of aliens. As you know too well, this is a booming business down here. No more. We are going to shut down and jail those who have been profiting off this lawlessness — people smuggling gang members across the border, helping convicted criminals re-enter this country and preying on those who don’t know how dangerous the journey can be.
- Further, where an alien has unlawfully entered the country, which is a misdemeanor, that alien will now be charged with a felony if they unlawfully enter or attempt enter a second time and certain aggravating circumstances are present.
- Also, aliens that illegally re-enter the country after prior removal will be referred for felony prosecution — and a priority will be given to such offenses, especially where indicators of gang affiliation, a risk to public safety or criminal history are present.
- Fourth: where possible, prosecutors are directed to charge criminal aliens with document fraud and aggravated identity theft — the latter carrying a two-year mandatory minimum sentence.
- Finally, and perhaps most importantly: I have directed that all 94 U.S. Attorneys Offices make the prosecution of assault on a federal law enforcement officer — that’s all of you — a top priority. If someone dares to assault one of our folks in the line of duty, they will do federal time for it.
To ensure that these priorities are implemented, starting today, each U.S. Attorney’s Office, whether on the border or interior, will designate an Assistant United States Attorney as the Border Security Coordinator for their District. It will be this experienced prosecutor’s job to coordinate the criminal immigration enforcement response for their respective offices.
For those that continue to seek improper and illegal entry into this country, be forewarned: This is a new era. This is the Trump era. The lawlessness, the abdication of the duty to enforce our immigration laws and the catch and release practices of old are over.
In that vein, I am also pleased to announce a series of reforms regarding immigration judges to reduce the significant backlogs in our immigration courts.
Pursuant to the President’s executive order, we will now be detaining all adults who are apprehended at the border. To support this mission, we have already surged 25 immigration judges to detention centers along the border. I want to thank personally the judges who answered the call to help us with this new initiative.
In addition, we will put 50 more immigration judges on the bench this year and 75 next year. We can no longer afford to wait 18 to 24 months to get these new judges on the bench. So today, I have implemented a new, streamlined hiring plan. It requires just as much vetting as before, but reduces the timeline, reflecting the dire need to reduce the backlogs in our immigration courts.
With the President’s Executive Orders on Border Security, Transnational Criminal Organizations and Public Safety as our guideposts, we will execute a strategy that once again secures the border; apprehends and prosecutes those criminal aliens that threaten our public safety; takes the fight to gangs like MS-13 and Los Zetas; and makes dismantlement and destruction of the cartels a top priority. We will deploy a multifaceted approach in these efforts: we are going to interdict your drugs on the way in, your money on the way out and investigate and prosecute your trafficking networks to the fullest extent of the law.
Why are we doing this? Because it is what the duly enacted laws of the United States require. I took an oath to protect this country from all enemies, foreign and domestic. How else can we look the parents and loved ones of Kate Steinle, Grant Ronnebeck and so many others in eye and say we are doing everything possible to prevent such tragedies from ever occurring again?
Let me finish where I started, by thanking you — the brave men and women in uniform who are at the front lines of this fight. I know we ask a tremendous amount from all of you, but know this: we have your back, and will do all we can to empower you and support you in your work.
God bless you and thank you.
Memo on Renewed Commitment to Criminal Immigration EnforcementJustice Department Warns Dishonest Return Preparers Face Criminal Prosecution and Civil InjunctionRead the Press Release
The Department of Justice warns that unscrupulous return preparers who prepare false tax returns will face civil and criminal enforcement. In the last year, the Department of Justice’s Tax Division filed dozens of civil actions throughout the United States seeking court orders to shut down dishonest return preparers who allegedly prepared false tax returns and in collaboration with U.S. Attorney’s Offices prosecuted dozens of returns preparers who prepared false tax returns.
“Return preparer fraud is a significant drain on the U.S. Treasury, and the Justice Department is committed to working with the Internal Revenue Service (IRS) to bring enforcement actions against unscrupulous return preparers who prepare fraudulent tax returns,” said Acting Assistant Attorney General David A. Hubbert. “The Tax Division will use all available enforcement tools to hold dishonest return preparers accountable and protect the U.S. Treasury from further damage.”
Most tax return preparers provide professional tax service. However, a few set out to use the personal and financial information provided to them to perpetrate fraud or other scams that can hurt their customers. Earlier this year, the IRS warned taxpayers that they are legally responsible for what is on the tax return even if someone else prepared the tax return. Indeed, taxpayers should be vigilant and ensure that their chosen return preparer reports accurate information. The IRS also warned the public about various schemes deployed by dishonest return preparers in its Dirty Dozen Tax Scams. The following is a list of several of those scams with examples of recent enforcement actions taken by the Justice Department.
Falsifying Income to Claim the Earned Income Tax Credit (EITC)
Dishonest return preparers fabricate income on customers’ returns to support a claim for the EITC, which is a credit for working people with low to moderate income and eligibility depends on a variety of factors such as income. For example, in tax year 2016, taxpayers with income between $13,900 and $18,200 were eligible for the maximum EITC. One of the ways to falsely claim the EITC is to fabricate income. For example:
- In Texas, a federal court sentenced a return preparer to 22 months in prison for filing false returns that included fraudulent business income, losses, credits and deductions and sought refunds to which his clients were not entitled;
- In Michigan, the Justice Department filed suit to enjoin a Detroit-area return preparer from preparing tax returns, in part, because she allegedly reported fictitious wages on a customer’s return in order to inflate a claim for the EITC; and
- In Kansas, a return preparer was sentenced to 27 months in prison for filing false returns that included fictitious business income on his clients’ returns in order to qualify them for the EITC.
Falsely Padding Deductions, Such as Charitable Contributions or Business Expenses
Unscrupulous returns preparers report false deductions on customers’ returns in order to reduce the amount of tax a customer owes, often resulting in a higher, but fraudulent, refund. For example:
- In New York, a federal court sentenced a return preparer who fabricated charitable contributions and unreimbursed employee expenses on his customers’ returns to 18 months in prison;
- In North Carolina, a federal court sentenced a return preparer to 18 months in prison for preparing false tax returns that included false unreimbursed employee business expenses; and
- In Florida, a federal court enjoined a West Palm Beach-area return preparer whom the government alleged had claimed false or inflated charitable contributions and office expenses for his customers.
Excessive Claims for Business Credits, such as the Fuel Tax Credit
The Fuel Tax Credit is a business credit generally limited to use of certain types of fuel for off-highway business use. A frivolous claim for the Fuel Tax Credit is typically one for a taxpayer who has not used these types of fuel for off-highway business use. For example:
- In Louisiana, the Justice Department filed suit to enjoin a New Orleans-area return preparer from preparing returns, in part, because she allegedly claimed false Fuel Tax Credits on her customers’ returns; and
- In New York, a federal court sentenced a return preparer to 36 months in prison for preparing false tax returns that included fictitious claims for fuel tax credits for her customer.
Falsely Inflating Refund Claims with False Claims for Education Credits
Education credits are available for certain higher education related expenses. Dishonest preparers claim education credits for customers who have not attended a qualifying educational institution. For example:
- In Mississippi, a federal court enjoined a return preparer that the government alleged made fraudulent claims for educations credits; and
- In California, a return preparer pleaded guilty to preparing false tax returns and admitted that she prepared returns that claimed false education credits.
Return Preparer Fraud
In addition to the tax scams, listed above, unscrupulous return preparers may be prosecuted or enjoined for other types of return preparer fraud. For example:
- In Idaho, a return preparer pleaded guilty to filing false returns without his clients’ knowledge. He included false medical and education expenses to inflate their refunds and then diverted part of the refund into a bank account he controlled;
- In Illinois, a federal court enjoined a return preparer from preparing returns that the government alleged had claimed false filing statuses and dependents for her customers; and
- In Florida, a federal court enjoined the owner of a return preparation business that had at one time stores in Alabama, Florida, Georgia, and North Carolina. The federal court found that the owner and his preparers engaged in a series of widespread fraudulent schemes and ordered the owner to pay the United States more than $950,000 in fees he received from preparing tax returns.
The IRS is reminding taxpayers that there is information available on the IRS’s website regarding the 2017 individual income tax return filing season. The IRS has some tips on their website for choosing a return preparer and has launched a free directory of federal return preparers. In addition to tips on choosing a return preparer, the IRS warned taxpayers and tax professionals to be aware of scammers impersonating as the IRS. Earlier this year, the IRS alerted the public and tax professionals to some common scams to be aware of and ways to report suspicious activity.
In the past decade, the Tax Division has obtained convictions and injunctions against hundreds of unscrupulous return preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Announces Actions to Dismantle Kelihos BotnetRead the Press Release
The Justice Department today announced an extensive effort to disrupt and dismantle the Kelihos botnet – a global network of tens of thousands of infected computers under the control of a cybercriminal that was used to facilitate malicious activities including harvesting login credentials, distributing hundreds of millions of spam e-mails, and installing ransomware and other malicious software.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bryan Schroder for the District of Alaska, Assistant Director Scott Smith for the FBI’s Cyber Division and FBI Special Agent in Charge Marlin Ritzman of the AnchorageDivision made the announcement.
“The operation announced today targeted an ongoing international scheme that was distributing hundreds of millions of fraudulent e-mails per year, intercepting the credentials to online and financial accounts belonging to thousands of Americans, and spreading ransomware throughout our networks. The ability of botnets like Kelihos to be weaponized quickly for vast and varied types of harms is a dangerous and deep threat to all Americans, driving at the core of how we communicate, network, earn a living, and live our everyday lives,” said Acting Assistant Attorney General Blanco. “Our success in disrupting the Kelihos botnet was the result of strong cooperation between private industry experts and law enforcement, and the use of innovative legal and technical tactics. The Department of Justice is committed to combatting cybercrime, no matter the size or sophistication of the scheme, and to punish those who are engaged in such crimes.”
“Cybercrime is a worldwide problem, but one that infects its victims directly through the computers and personal electronic devices that we use every day,” said Acting U.S. Attorney Bryan Schroder for the District of Alaska. “Protecting the American people from such a worldwide threat requires a broad-reaching response, and the dismantling of the Kelihos botnet was such an operation. We are lucky that we have talented FBI agents and federal prosecutors with the skillsets to help protect Americans from this pervasive cybercrime.”
“On April 8, 2017, we started the extraordinary task of blocking malicious domains associated with the Khelios botnet to prohibit further infections,” said FBI Special Agent in Charge Ritzman. “This case demonstrates the FBI’s commitment to finding and eradicating cyber threats no matter where they are in the world.”
Kelihos malware targeted computers running the Microsoft Windows operating system. Infected computers became part of a network of compromised computers known as a botnet and were controlled remotely through a decentralized command and control system. According to the civil complaint, Peter Yuryevich Levashov allegedly operated the Kelihos botnet since approximately 2010. The Kelihos malware harvested user credentials by searching infected computers for usernames and passwords and by intercepting network traffic. Levashov allegedly used the information gained from this credential harvesting operation to further his illegal spamming operation which he advertised on various online criminal forums. The Kelihos botnet generated and distributed enormous volumes of unsolicited spam e-mails advertising counterfeit drugs, deceptively promoting stocks in order to fraudulently increase their price (so-called “pump-and-dump” stock fraud schemes), work-at-home scams, and other frauds. Kelihos was also responsible for directly installing additional malware onto victims’ computers, including ransomware and malware that intercepts users’ bank account passwords.
As with other botnets, Kelihos is designed to operate automatically and undetected on victims’ computers, with the malicious code secretly sending requests for instructions to the botnet operator. In order to liberate the victim computers from the botnet, the United States obtained civil and criminal court orders in the District of Alaska. These orders authorized measures to neutralize the Kelihos botnet by (1) establishing substitute servers that receive the automated requests for instructions so that infected computers no longer communicate with the criminal operator and (2) blocking any commands sent from the criminal operator attempting to regain control of the infected computers.In seeking authorization to disrupt and dismantle the Kelihos botnet, law enforcement obtained a warrant pursuant to recent amendments to Rule 41 of the Federal Rules of Criminal Procedure. A copy of this warrant along with the other court orders are produced below. The warrant obtained by the government authorizes law enforcement to redirect Kelihos-infected computers to a substitute server and to record the Internet Protocol addresses of those computers as they connect to the server. This will enable the government to provide the IP addresses of Kelihos victims to those who can assist with removing the Kelihos malware including internet service providers.
The efforts to disrupt and dismantle the Kelihos botnet were led by the FBI’s Anchorage Office and New Haven Office; Senior Counsel Ethan Arenson and Harold Chun, and Trial Attorney Frank Lin of the Computer Crime and Intellectual Property Section; and Assistant U.S. Attorneys Yvonne Lamoureux and Adam Alexander of the District of Alaska. Critical assistance was also provided by foreign partners, and invaluable technical assistance was provided by Crowd Strike and The Shadow server Foundation in executing this operation.
The details contained in the civil complaint and related pleadings are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The Government has and will continue to share samples of the Kelihos malware with the internet security community so that antivirus vendors can update their programs to detect and remove Kelihos. A number of free and paid antivirus programs are already capable of detecting and removing Kelihos, including the Microsoft Safety Scanner, a free product.
The documents filed by the Government as well as the court orders entered in this case are available online at the following web address: www.justice.gov/opa/documents-and-resources-related-us-v-peter-yuryevich-levashov
Executive Office for Immigration Review Swears in 14 Immigration JudgesRead the Press Release
FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the investiture of 14 new immigration judges. Chief Immigration Judge MaryBeth Keller presided over the investiture during a ceremony held April 7, 2017, at EOIR headquarters in Falls Church, Va.
After a thorough application process, former Attorney General Loretta E. Lynch appointed Justin F. Adams, Edward M. Barcus, Paula J. Donnolo, Lauren T. Farber, Paul M. Habich, Cara O. Knapp, Maria Lurye, Anthony E. Maingot, Sarah B. Mazzie, Matthew E. Morrissey, An Mai Nguyen, Sean D. Santen, Stuart A. Siegel, and Gwendylan E. Tregerman to their new positions.
“We are happy to welcome these 14 appointees to our growing immigration judge corps,” said Keller. “These new immigration judges will enhance the agency’s ability to process detained cases, our highest priority, while also strengthening the agency’s capacity to address its broader pending caseload.”
Biographical information follows.
Justin F. Adams, Immigration Judge, San Antonio Immigration Court
Former Attorney General Loretta E. Lynch appointed Justin F. Adams to begin hearing cases in April 2017. Judge Adams earned a Bachelor of Science degree in 1999 from the U.S. Air Force Academy and a Juris Doctor in 2004 from Suffolk University Law School. He served as deputy chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security from February 2011 to March 2017, and as an assistant chief counsel from 2007 to 2011. From 2004 through 2007, he was an attorney for the U.S. Air Force. Judge Adams is a member of the State Bar of Texas.
Edward M. Barcus, Immigration Judge, Imperial Immigration Court
Former Attorney General Loretta E. Lynch appointed Edward M. Barcus to begin hearing cases in April 2017. Judge Barcus earned a Bachelor of Arts degree in 1984 from Austin College and a Juris Doctor in 1988 from the University of Texas School of Law. He has been the interim executive director of Iron Gate in Tulsa, Okla., since November 2016. From 2015 through 2016, he was a conflict consultant for Concord Consultants Inc. From 2012 through 2015, he was a district judge for the Tulsa County District Court. From 2003 to 2012, he was a special judge for the State of Oklahoma, serving as Vice Chief Judge of the Family Division, Tulsa County District Court, from 2010 to 2012. From 2000 through 2003, he served as the first Family Court Referee for Tulsa County. Judge Barcus is a member of the Oklahoma Bar.
Paula J. Donnolo, Immigration Judge, New York City Immigration Court
Former Attorney General Loretta E. Lynch appointed Paula J. Donnolo to begin hearing cases in April 2017. Judge Donnolo earned a Bachelor of Arts degree in 1968 from St. John’s University and a Juris Doctor in 1980 from New York Law School. From 2001 to January 2017, she served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security in New York, N.Y. From 1991 through 2001, she served as general corporate counsel for ATC Real Estate Development Corporation. From 1981 to 1983, she was a litigation attorney at the Teamster Local 237 Legal Services Plan. Judge Donnolo is a member of the New York State Bar.
Lauren T. Farber, Immigration Judge, Varick Street Immigration Court
Former Attorney General Loretta E. Lynch appointed Lauren T. Farber to begin hearing cases in April 2017. Judge Farber earned a Bachelor of Arts degree in 1999 from Washington University in St. Louis and a Juris Doctor in 2003 from the American University Washington College of Law. From 2010 through 2017, she served as a senior attorney for the Office of the Chief Counsel (OCC), Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS) in New York, N.Y. From 2003 to 2010, she served as an assistant chief counsel for OCC, ICE, DHS. Judge Farber is a member of the New York and New Jersey State Bars.
Paul M. Habich, Immigration Judge, Imperial Immigration Court
Former Attorney General Loretta E. Lynch appointed Paul M. Habich to begin hearing cases in April 2017. Judge Habich earned a Bachelor of Arts degree in 2004 from The University of Wisconsin–Madison and a Juris Doctor in 2008 from the Arizona State University Sandra Day O’Connor College of Law. From June 2009 to March 2017, he served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security. From 2008 to 2009, he was an associate attorney with the law firm Lathrop & Clark LLP, in Madison, Wis. From 1996 through 2000, he served in the U.S. Marine Corps. Judge Habich is a member of the State Bar of Wisconsin.
Cara O. Knapp, Immigration Judge, Florence Immigration Court
Former Attorney General Loretta E. Lynch appointed Cara O. Knapp to begin hearing cases in April 2017. Judge Knapp earned a Bachelor of Arts degree in 1997 from the University of Arizona and a Juris Doctor in 2001 from the Arizona State University Sandra Day O’Connor College of Law. From September 2002 through March 2017, she served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security. From 2001 to 2002, she clerked for Arizona Supreme Court Justice Michael D. Ryan. Judge Knapp is a member of the State Bar of Arizona.
Maria Lurye, Immigration Judge, New York City Immigration Court
Former Attorney General Loretta E. Lynch appointed Maria Lurye to begin hearing cases in April 2017. Judge Lurye earned a Bachelor of Science degree in 2001 from Rutgers University–New Brunswick and a Juris Doctor in 2007 from the Rutgers School of Law–Newark. From 2008 to January 2017, she served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security in New York, N.Y. She was previously an associate attorney with the Kuba Law Firm in New York City. Judge Lurye is a member of the New Jersey and New York State Bars.
Anthony E. Maingot, Immigration Judge, Miami Immigration Court
Former Attorney General Loretta E. Lynch appointed Anthony E. Maingot to begin hearing cases in April 2017. Judge Maingot earned a Bachelor of Arts degree in 1981 from the University of Texas at Austin and a Juris Doctor in 1991 from The University of Miami School of Law. From September 2008 through March 2017, he served as an assistant U.S. Attorney for the District of Arizona, Tucson, Department of Justice. From 1997 to January 2017, he served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security in Miami, Fla. From 1991 through 1997, he served as an assistant public defender in the Miami-Dade County Public Defender’s Office. Judge Maingot is a member of the Florida Bar.
Sarah B. Mazzie, Immigration Judge, Miami Krome Immigration Court
Former Attorney General Loretta E. Lynch appointed Sarah B. Mazzie to begin hearing cases in April 2017. Judge Mazzie earned a Bachelor of Science degree in 2002 from The University of Wisconsin–Madison and a Juris Doctor in 2006 from the DePaul University College of Law. From 2014 to March 2017, she served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Fort Snelling, Minn., and from 2011 to 2014 in Lumpkin, Ga. Judge Mazzie practiced law in Madison, Wis., as a partner in her own firm Gennerman, Mazzie-Briscoe Law Group from 2008 through 2011, and as an associate attorney with Sipsma, Hahn & Brophy from 2007 to 2008. From 2006 through 2007, she served as an immigration attorney for the Wisconsin Coalition Against Domestic Violence. Judge Mazzie is a member of the State Bar of Wisconsin.
Matthew E. Morrissey, Immigration Judge, Omaha Immigration Court
Former Attorney General Loretta E. Lynch appointed Matthew E. Morrissey to begin hearing cases in April 2017. Judge Morrissey earned a Bachelor of Arts degree in 2001 from Saint Louis University and a Juris Doctor in 2004 from the Creighton University School of Law. From 2008 to March 2017, he served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Omaha, Neb. From January 2004 to 2008, he was an associate attorney with Chandra Law Office. Judge Morrissey is a member of the Nebraska State Bar and the Missouri Bar.
An Mai Nguyen, Immigration Judge, Los Angeles Immigration Court
Former Attorney General Loretta E. Lynch appointed An Mai Nguyen to begin hearing cases in April 2017. Judge Nguyen earned a Bachelor of Arts degree in 1996 from the University of Southern California and a Juris Doctor in 2000 from Southwestern Law School. From March 2007 to March 2017, she served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Las Vegas, Nev. During this post, she served as special assistant U.S. attorney for the District of Nevada from 2009 to 2011. From 2000 through 2003, she served as an assistant district counsel for the former Immigration and Naturalization Service, Department of Justice, in Los Angeles, entering on duty through the Attorney General’s Honors Program. Judge Nguyen is a member of the State Bar of California.
Sean D. Santen, Immigration Judge, Boston Immigration Court
Attorney General Loretta E. Lynch appointed Sean D. Santen to begin hearing cases in April 2017. Judge Santen earned a Bachelor of Arts degree in 2001 from the University of Illinois at Urbana–Champaign, a Master of Arts in 2003 from American University and a Juris Doctor in 2006 from the Indiana University Maurer School of Law. From September 2008 to March 2017, he served as an assistant regional counsel at the Office of General Counsel, Social Security Administration, in Boston, Mass. From 2006 through 2008, he served as a Judicial Law Clerk and Attorney Advisor for the San Antonio Immigration Court, Executive Office for Immigration Review, Department of Justice, entering on duty through the Attorney General’s Honors Program. Judge Santen is a member of the Massachusetts Bar.
Stuart A. Siegel, Immigration Judge, Miami Immigration Court
Former Attorney General Loretta E. Lynch appointed Stuart A. Siegel to begin hearing cases in April 2017. Judge Siegel earned a Bachelor of Arts degree in 1984 from the University of Michigan and a Juris Doctor in 1987 from the Touro College Jacob D. Fuchsberg Law Center. From December 1997 to March 2017, he served as an Assistant Chief Counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security in Pompano Beach, Fla. From 1994 to 1997 he was an associate attorney with Adorno & Zeder, PA, in West Palm Beach, Fla. From 1992 to 1994 he served as an administrative law judge for the New York City Department of Transportation. Prior to that role, he was a solo practitioner at the law offices of Stuart A. Siegel, Esq. Judge Siegel also served as assistant district attorney for Nassau County, N.Y., from 1987 to 1992. He was commissioned into the U.S. Army Reserves, Judge Advocate General in September 1994, and continues to serve. Judge Siegel is a member of the Florida Bar and the New York State Bar.
Gwendylan E. Tregerman, Immigration Judge, Atlanta Immigration Court
Former Attorney General Loretta E. Lynch appointed Gwendylan E. Tregerman to begin hearing cases in April 2017. Judge Tregerman earned a Bachelor of Arts degree from Stony Brook University in 1992 and a Juris Doctor in 1996 from the Boston University School of Law. From August 2002 to March 2017, she worked for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Boston, Mass., serving as deputy chief counsel from 2013 to 2017, senior attorney from 2007 to 2013, and assistant chief counsel from 2002 to 2007. Prior to these roles, she was a staff attorney for the U.S. Court of Appeals for the Eleventh Circuit in Atlanta, Ga., from 1997 to 2000, and served as acting supervisory staff attorney from 2000 to 2001. Judge Tregerman is a member of the New York State Bar, the Massachusetts Bar, and the State Bar of Georgia.
Attorney General Jeff Sessions Announces New Initiatives to Advance Forensic Science and Help Counter the Rise in Violent CrimeRead the Press Release
As part of the Department’s efforts under the Task Force on Crime Reduction and Public Safety (Task Force), Attorney General Jeff Sessions today announced a series of actions the Department will take to advance forensic science and help combat the rise in violent crime.
These actions are being undertaken on the expiration of the National Commission on Forensic Science (NCFS) and will increase the capacity of forensic science providers, improve the reliability of forensic analysis, and permit reporting of forensic results with greater specificity. The Task Force’s Subcommittee on Forensics will spearhead the development of that strategic plan.
“The availability of prompt and accurate forensic science analysis to our law enforcement officers and prosecutors is critical to integrity in law enforcement, reducing violent crime and increasing public safety,” said Attorney General Sessions. “As we decide how to move forward, we bear in mind that the Department is just one piece of the larger criminal justice system and that the vast majority of forensic science is practiced by state and local forensic laboratories and is used by state and local prosecutors. We applaud the professionalism of the National Commission on Forensic Science and look forward to building on the contributions it has made in this crucial field.”
The following three actions were announced today:
1. In the coming weeks, the Department will appoint a Senior Forensic Advisor to interface with forensic science stakeholders and advise Department leadership;
2. The Department will conduct a needs assessment of forensic science laboratories that examines workload, backlog, personnel and equipment needs of public crime laboratories and the needs of academic and non-traditional forensic science practitioners, and issue a report to Congress; and
3. The Department will publish a notice in the Federal Register seeking public comment on how the Department should move forward to strengthen the foundations of forensic science and improve the operations and capacity of forensic laboratories. The notice will remain open until June 9, 2017.
The Attorney General will continue to receive and act upon recommendations from the Task Force as they become available.
Arson Awareness Week 2017 to Focus on Preventing Arson at Houses of WorshipRead the Press Release
The Justice Department today announced that its Civil Rights Division is partnering with the Federal Emergency Management Agency’s U.S. Fire Administration on this year’s Arson Awareness Week, May 7-13, with a focus on Preventing Arson at Houses of Worship.
There were an average of 103 arsons of houses of worship per year from 2000 to 2015. Half of all reported fires at houses of worship turn out to involve arson.
The Department of Justice enforces a number of federal statutes protecting places of worship from attack, including 18 U.S.C. § 247, known as the Church Arson Prevention Act, which was passed in the 1990s in response to a sharp increase in church arsons. That law makes it a federal crime to target religious property because of the religion or race of the congregation. In February of this year, the Department indicted an Idaho man under § 247 alleging that he set fire to a Catholic Church in Bonner’s Ferry in April 2016. In 2013, an Indiana man was sentenced to 20 years imprisonment for setting a fire at the Islamic Center of Greater Toledo.
FEMA and the Department of Justice have produced a number of materials to help congregations, community organizations and local law enforcement and fire safety officials to increase arson awareness and hold events highlighting proactive steps that can be taken to try to reduce house of worship arson. These materials are available at the Arson Awareness Week homepage, www.usfa.fema.gov/aaw.
“Arson against houses of worship is a serious crime that the Department of Justice is committed to prosecuting to the fullest extent of the law,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “But our role as prosecutors, while critically important, only comes after the fact when the damage is already done. That is why we encourage communities and local officials to take proactive steps to increase public awareness of the problem and measures that can be taken to reduce the likelihood of being a victim of house of worship arson.”
Further information about hate crimes, including arsons against on places of worship, is available at the Civil Rights Division hate crimes page, https://www.justice.gov/crt/hate-crimes-0.
Statement of Attorney General Jeff Sessions on the District Court's Entry of Baltimore Consent DecreeRead the Press Release
Attorney General Sessions released the following statement on the District Court’s entry of the Baltimore consent decree:
“Today, a federal court entered a consent decree that will require the court and a highly-paid monitor to govern every detail of how the Baltimore Police Department functions for the foreseeable future. This decree was negotiated during a rushed process by the previous administration and signed only days before they left office. While the Department of Justice continues to fully support police reform in Baltimore, I have grave concerns that some provisions of this decree will reduce the lawful powers of the police department and result in a less safe city.
“Make no mistake, Baltimore is facing a violent crime crisis.
“Baltimore has seen a 22 percent increase in violent crime in just the last year. While arrests in the city fell 45 percent based on some of these ill-advised reforms, homicides rose 78 percent and shootings more than doubled. Just in 2017, we’ve seen homicides are up another 42 percent compared to this time last year. In short, the citizens of Baltimore are plagued by a rash of violent crime that shows no signs of letting up.
“The mayor and police chief in Baltimore say they are committed to better policing and that there should be no delay to review this decree, but there are clear departures from many proven principles of good policing that we fear will result in more crime. The citizens of Baltimore deserve to see a real and lasting reduction in the fast-rising violent crime threatening their city.
“The Department of Justice stands ready to work with Baltimore to fight violent crime and improve policing in the city.”
Justice Department Honors Contributions to Crime Victims' Rights and ServicesRead the Press Release
The Department of Justice today recognized 12 individuals and teams for their exceptional service to crime victims and innovative work to support victims’ rights. The award recipients were honored during the annual National Crime Victims’ Service Awards Ceremony.
“During this year’s National Crime Victims’ Rights Week, the Department of Justice is proud to pay tribute to the outstanding contributions of the people and groups helping crime victims, reducing crime and improving public safety,” said Acting Associate Attorney General Jesse Panuccio. “We are inspired by their lives, and we are honored to stand with them.”
The awardees were selected from public nominations in nine categories, including federal service, special courage, public policy and victim services. The Office for Victims of Crime, a component of the Department’s Office of Justice Programs, leads communities across the country in observing National Crime Victims’ Rights Week. President Ronald Reagan proclaimed the first Victims’ Rights Week in 1981, calling for greater sensitivity to the rights and needs of victims. This year’s observance takes place April 2-8 and features the theme Strength. Resilience. Justice.
“These remarkable individuals and teams demonstrate the tremendous difference a small group of dedicated, inspired and courageous people can make in the lives of victims,” said Acting Assistant Attorney General Alan R. Hanson for the Office of Justice Programs. “The Department of Justice is proud to honor them and build on their good work through the Department’s Office of Victims of Crime.”
Following is a list of the award recipients:
- The National Crime Victim Service Award honors extraordinary efforts to provide direct services to crime victims.
Recipient: The Harry and Jeanette Weinberg Center for Elder Abuse Prevention, Riverdale, New York
- The Crime Victims’ Rights Award recognizes those whose efforts to advance or enforce victims’ rights benefit victims at the state, tribal or national level.
Recipient: Office of Victim Services Agency Support Team, Office of the Arizona Attorney General, Phoenix, Arizona
- The Allied Professional Award recognizes individuals working outside the victim assistance field for their service to victims.
Recipient: Captain Michael Holt, Jackson Police Department, Jackson, Tennessee
- The Award for Professional Innovation in Victim Services recognizes a program, organization or individual who expands the reach of victims’ rights and services.
Recipient: Healing Hurt People, Philadelphia, Pennsylvania
- The Ronald Wilson Reagan Public Policy Award honors leadership, innovation and vision that lead to noteworthy changes in public policy on behalf of crime victims.
Recipient: Kendall L. Carver, Phoenix, Arizona
Recipient: Diane Moyer, Esq., Harrisburg, Pennsylvania
Recipient: The late Teresa P. Scalzo, Alexandria, Virginia
- The Volunteer for Victims Award recognizes individuals who serve victims without compensation.
Recipient: BastaYaPR, Inc., Guaynabo, Puerto Rico
Recipient: Linda D. Axley, Tahlequah, Oklahoma
- The Federal Service Award recognizes federal agency personnel for service to victims of federal, tribal or military crimes.
Recipient: The Blackwater Victim Services Team, Washington, D.C.
- The Tomorrow’s Leaders Award recognizes youth up to 24 years old for efforts to support crime victims.
Recipient: Maya Weinstein, Washington, D.C.
- The Special Courage Award honors extraordinary bravery in the aftermath of a crime or a courageous act on behalf of a victim or potential victim.
Recipient: Laura L. Dunn, Esq., Washington, D.C.
The Office of Justice Programs, headed by Acting Assistant Attorney General Alan R. Hanson, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP and its components can be found at www.ojp.gov.
Miami Almighty Imperial Gangsters Nation Member Sentenced on Racketeering ConspiracyRead the Press Release
A member of the Almighty Imperial Gangsters Nation was sentenced to 300 months in prison today in Southern District of Florida for conspiracy to conduct and participate in the affairs of the gang through a pattern of racketeering activity.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Field Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Division made the announcement.
Miguel Pedraza, aka “Fuzzy,” 35, of Chicago, was sentenced to 300 months in prison for his involvement in the RICO conspiracy before U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida.
According to Pedraza’s plea agreement, the Almighty Imperial Gangsters Nation is a violent street gang that originated in Chicago in the 1980s and expanded to other areas of the country, including Indiana and South Florida. Members and associates of the Almighty Imperial Gangsters Nation are responsible for numerous acts of violence, including murder, attempted murder, aggravated battery, aggravated assault, narcotics distribution and other criminal activities, occurring in Illinois, Indiana and the South Florida area and elsewhere.
According to admissions made in connection with his plea, Pedraza has been a member of the Almighty Imperial Gangsters Nation since 1997 and that for a period of time, he took over the street leadership of the gang’s activities in the Drake and Courtland area of Chicago, Illinois. Pedraza admitted that while in Chicago on Aug. 3, 2002, he shot and killed another individual who Pedraza believed was a rival gang member. Pedraza also admitted that he received stolen guns from other Almighty Imperial Gangsters Nation members, distributed cocaine and heroin to other members, and earned money for other members and regularly financed activities through funds derived from narcotics distribution of controlled substances.
Pedraza is the last of 16 defendants to be sentenced in this case. Co-defendants Victor Emmanuel Lopez, aka “Magic,” Jose Ivan Herrera, “Spyro,” Ramon Madruga, aka “Porky,” Alex Enrique Somarriba, “A-Rock,” Robert Martinez, aka “Trap,” Santiago Salcedo, aka “Chino,” Rogelio Perez, aka “Popeye,” Carlos Mena, aka “Rollo,” Piero Benitez, aka “Bam Bam,” Eddie Camacho, aka “NeNe,” Carlos Gomez, aka “Lokes,” Guillermo Sinisterra, aka “Memo,” Elio Quesada, aka “Whiz,” and Brandon Foeman, aka “Drama.”
The FBI field offices in Miami and Chicago, along with the Miami-Dade Police Department; the City of Miami Police Department; the Chicago Police Department; the Franklin Park, Illinois, Police Department and the East Chicago Police Department investigated the case, with assistance from the U.S. Attorney’s Offices for Southern District of Florida, the Northern District of Indiana and the Northern District of Illinois, the FBI and ATF field offices in Merrillville, Indiana, the State Attorney’s Offices of Miami-Dade and Broward counties in Florida and the State Attorney’s Offices in Cook and DuPage Counties in Illinois, as well as the Florida Department of Corrections and the Broward County Sheriff’s Office.
Trial Attorneys Joseph A. Cooley, Rebecca A. Staton and Nicholas J. Regalia of the Criminal Division’s Organized Crime and Gang Section and the Forfeiture Section of the U.S. Attorney’s Office for the Southern District of Florida prosecuted the case, with the assistance of the U.S. Attorney’s Office for the Northern District of Indiana and the State Attorneys’ Offices for Miami-Dade and Broward counties.
Justice Department Settles Immigration-Related Discrimination Claim Against Florida Roadside Assistance Services CompanyRead the Press Release
The Justice Department reached an agreement today with Brickell Financial Services Motor Club, Inc., d/b/a Road America Motor Club, Inc. (Road America), headquartered in Miami, Florida. The settlement resolves the department’s investigation into whether the company violated the Immigration and Nationality Act (INA) by discriminating against work-authorized immigrants when verifying their work authorization.
The department concluded, based on its investigation, that Road America routinely requested that lawful permanent residents show their Permanent Resident Cards to prove their work authorization but did not request specific documents from U.S. citizens. Lawful permanent residents often have the same work authorization documents available to them as U.S. citizens, and may choose acceptable documents other than a Permanent Resident Card to prove they are authorized to work. The investigation further revealed that Road America required lawful permanent resident employees to re-establish their work authorization when their Permanent Resident Cards expired, even though federal rules prohibit this practice. The antidiscrimination provision of the INA prohibits employers from subjecting employees to unnecessary documentary demands based on the employees’ citizenship or national origin.
“When verifying the work authorization of employees, employers may not erect unnecessary barriers based on employees’ citizenship or national origin,” said Acting Assistant Attorney General Tom Wheeler of the Civil Rights Division. “Employers must ensure they are aware of their legal obligations to avoid discrimination, and we applaud Road America for committing itself to do so through this settlement.”
Under the settlement, Road America will pay a civil penalty of $34,200 and pay $1,044 to compensate a worker who lost wages due to its unfair documentary practices. Road America has also agreed to post notices informing workers about their rights under the INA’s antidiscrimination provision, train their human resources personnel, and be subject to departmental monitoring and reporting requirements.
The division’s Immigrant and Employee Rights Section (IER), formerly known as the Office of Special Counsel for Immigration-Related Unfair Employment Practices, is responsible for enforcing the antidiscrimination provision of the INA. The statute prohibits, among other things, citizenship, immigration status, and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation and intimidation.
For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email [email protected]; or visit IER’s English and Spanish websites.
Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship, immigration status, or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral, should contact IER’s worker hotline for assistance.
Road America Settlement AgreementEl Departamento de Justicia Resuelve Una Denuncia de Discriminación Contra una Empresa de Asistencia en Carretera en el Estado de la FloridaRead the Press Release
WASHINGTON, D.C. – El Departamento de Justicia llegó a un acuerdo hoy con Brickell Financial Services Motor Club, Inc., cuyo nombre comercial es Road America Motor Club, Inc. («Road America»), con sede en Miami, Florida. El acuerdo resuelve la investigación que el Departamento llevó a cabo para determinar si la empresa había violado la ley de Inmigración y Nacionalidad (INA, por sus siglas en inglés) al discriminar a inmigrantes con autorización para trabajar a la hora de verificar dicha autorización para trabajar.
El Departamento concluyó, con base en su investigación, que Road America había solicitado de forma rutinaria a residentes permanentes legales que mostraran su tarjeta de residencia permanente para demostrar su autorización para trabajar mientras que no pidieron documentos específicos a ciudadanos estadounidenses. En muchos casos los residentes permanentes legales y ciudadanos estadounidenses disponen de los mismos documentos de autorización para trabajar, y los residentes permanentes legales pueden elegir otros documentos aceptables aparte de su tarjeta de residencia permanente para demostrar que tienen autorización para trabajar. Más aún, la investigación reveló que Road America había obligado a empleados que son residentes permanentes legales a restablecer su autorización para trabajar al vencerse sus tarjetas de residencia permanente, aunque los reglamentos federales prohíben prácticas de esa clase. La disposición antidiscriminatoria de la INA prohíbe a los empleadores someter a sus empleados a requisitos documentales innecesarios por motivos de su ciudadanía o nacionalidad de origen.
«Al comprobar la autorización que sus empleados tienen para trabajar, los empleadores no deben imponer barreras innecesarias por motivos de la ciudadanía o nacionalidad de origen de tales individuos», afirmó el Fiscal General Auxiliar en funciones, Tom Wheeler, de la División de Derechos Civiles. «Los empleadores deben asegurarse de que están al tanto de sus responsabilidades y obligaciones legales para evitar la discriminación, y aplaudimos a Road America por comprometerse a hacerlo a través de este acuerdo.».
Conforme el acuerdo, Road America pagará sanciones civiles de $34.200 y pagará $1.044 para compensar a un trabajador que perdió salario a causa de las prácticas documentales injustas. Asimismo, Road America ha acordado publicar avisos para informarles a los trabajadores acerca de sus derechos bajo la disposición antidiscriminatoria de la INA, capacitar a su personal de recursos humanos y someterse a los requisitos de supervisión del Departamento.
La Sección de Derechos de Inmigrantes y Empleados (IER, por sus siglas en inglés), que anteriormente se conocía como la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas con la Inmigración, que pertenece a la División, es responsable de aplicar la disposición antidiscriminatoria de la INA. Entre otras cosas, esta ley prohíbe la discriminación por motivos de estatus migratorio, ciudadanía o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; la discriminación en el proceso de verificación de la elegibilidad para trabajar; las represalias y la intimidación.
Para más información sobre protecciones contra la discriminación en el empleo en virtud de las leyes migratorias, llame a la línea directa de la IER para trabajadores al 1 800 255-7688 (1 800-237-2515, TTY para personas con discapacidades auditivas); llame a la línea directa de la IER para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); matricúlese para un seminario en línea gratuito; mande un correo electrónico a [email protected] o visite la página web de la IER en inglés o español.
Aquellos postulantes o empleados que creen haber sido sometidos a otros requisitos documentales por motivos de su estatus migratorio, ciudadanía o nacionalidad de origen, o a la discriminación por motivos de su estatus migratorio, ciudadanía o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión deben llamar a la línea directa de la IER para trabajadores para pedir ayuda.
SETTLEMENT AGREEMENT
Department of Justice Compensates Victims of State Sponsored TerrorismRead the Press Release
In honor of National Crime Victims’ Rights Week, Acting Assistant Attorney General for the Criminal Division Kenneth A. Blanco announced today that the Criminal Division has made payments totaling more than $800 million from the U.S. Victims of State Sponsored Terrorism Fund (the Fund) to compensate thousands of U.S. victims of international acts of terrorism by state sponsors of terrorism. These individuals, many of whom have been waiting years for compensation, include the Iran hostages held from 1979 to 1981 and their spouses and children, and victims of the embassy bombings in Kenya and Tanzania, the attack on the U.S.S. Cole, and other international terrorist incidents. The more than $800 million in payments have been issued to victims, their family members and survivors. The Fund will continue making payments in the coming weeks that will bring the total to over $1 billion.
The Fund was established by legislation in 2015 and is administered by the Money Laundering and Asset Recovery Section in the Criminal Division. Congress authorized the department to deposit certain forfeiture proceeds, penalties and fines into the Fund if they come from civil and criminal matters involving prohibited transactions with state sponsors of terrorism. Originally, Congress provided $1.025 billion for payments to victims, and recent Justice Department prosecutions and U.S. government enforcement actions have increased the total available for initial payments to more than $1.1 billion.
On May 17, 2016, the Attorney General appointed Kenneth R. Feinberg, Esq., as the Special Master to administer the Fund with the assistance of the Money Laundering and Asset Recovery Section, Criminal Division. The Special Master rendered 2,332 eligibility decisions by December 2016, and in February 2017, the department informed all eligible claimants of their initial payment amounts.
“The Criminal Division aggressively prosecutes terrorist financiers and others who abuse the U.S. financial system to commit crimes, and uses all available tools, including civil and criminal forfeiture, to seize their assets and illicit funds,” said Acting Assistant Attorney General Blanco. “Through this program, we will continue to be resolute in our commitment to victims of state sponsored terrorism and aggressively search for illicit funds and assets to compensate them for their losses. I am so proud of the wonderful work done by the Criminal Division and Special Master to vindicate the rights of these victims.”
According to the Special Master, “[s]ince the Act’s enactment in December 2015, the Department of Justice team administering the Fund has been extremely busy. The team worked expeditiously to set up the compensation program by publishing its Federal Register notice and establishing a claims processing system, adjudicating all claims and issuing eligibility decisions and award payments to innocent victims of state-sponsored terrorism who have been waiting a long time for justice. I am very pleased with the accomplishments of the entire Fund team, who undertook their work in meeting statutory deadlines with deep commitment and compassion for those whose lives were forever changed by events of international terrorism. With this strong foundation, I know the Fund team will continue to work hard and carry out its mission in the upcoming years.”
The Fund continues to accept applications and to collect deposits for future payments as authorized by the Act for the ten-year life of the Fund. Victims and their family members can be assured that their claims will be processed promptly, fairly and transparently. More information about the Fund’s compensation to victims of state sponsored terrorism is available on the Fund’s website at www.usvsst.com, such as application materials, frequently asked questions (FAQs) and publications including the Federal Register notice and a report to Congress. Further questions may be directed to the Criminal Division’s Money Laundering and Asset Recovery Section.
Every year in April, the Justice Department’s Office for Victims of Crime (OVC) helps lead communities throughout the country in their annual observances of National Crime Victims' Rights Week (NCVRW), which runs from April 2–8, 2017. This year’s theme – Strength. Resilience. Justice. – reflects a vision for the future in which all victims are strengthened by the response they receive, organizations are resilient in response to challenges and communities are able to seek collective justice and healing. Further information on this event can be found on the Office of Justice Programs’ website at https://ovc.ncjrs.gov/ncvrw2017/.
Attorney General Jeff Sessions Updates United States Attorneys and DOJ Component Heads on the Department’s Task Force on Crime Reduction and Public SafetyRead the Press Release
Attorney General Jeff Sessions today issued the attached memo to 94 U.S. Attorney’s Offices and Department of Justice component heads providing an update on the Department’s Task Force on Crime Reduction and Public Safety.
Task Force on Crime Reduction and Public Safety Memo
As part of that update, the Attorney General announced the creation of Task Force subcommittees that will focus on a variety of issues including developing violent crime reduction strategies, supporting prevention and re-entry efforts, updating charging and sentencing policies, reviewing asset forfeiture guidance, reducing illegal immigration and human trafficking, combatting hate crimes, and evaluating marijuana enforcement policy.Alfredo Beltran Leyva Sentenced to Life in Prison for Leading an International Drug Trafficking ConspiracyRead the Press Release
Alfredo Beltran Leyva, also known as Mochomo, one of the leaders of the Beltran Leyva Organization, a Mexican drug-trafficking cartel responsible for importing multi-ton quantities of cocaine and methamphetamine into the United States, was sentenced today to life in prison for his participation in an international narcotics trafficking conspiracy.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Assitant Director Stephen E. Richardson of the FBI’s Criminal Investigative Division, Special Agent in Charge James J. Hunt of the Drug Enforcement Administration (DEA) New York Division and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) made the announcement.
“For well over a decade, the defendant commanded a major Mexican drug trafficking organization that imported ton-quantities of cocaine and methamphetamine into the United States and led a campaign of violence and fear that gripped communities across North America,” said Acting Assistant Attorney General Blanco. “Through close cooperation with our foreign counterparts, the United States brought this international drug-trafficker to justice, significantly disrupted the flow of narcotics into the United States and stemmed the tide of destruction wrought by this violent cartel.”
“Alfredo Beltran Leyva spent decades at the head of a criminal organization responsible for trafficking large amounts of cocaine and methamphetamine into the U.S.,” said Assistant Director Richardson. “Today’s sentencing marks an end to Alfredo Beltran Leyva's reign of terror, and demonstrates that the FBI and our law enforcement partners around the globe will aggressively pursue and bring justice to those individuals who use violence and intimidation to threaten our communities.”
“Alfredo Beltran Leyva is one of the ‘Goliaths’ of Mexican drug traffickers known for his savage business tactics and responsible for flooding the United States with illegal drugs,” said Special Agent in Charge Hunt. “This sentencing exemplifies law enforcement’s commitment to bringing justice to the victims of drug abuse through successful prosecutions of the highest echelon of drug traffickers.”
“Today’s sentencing dealt a major blow to the Beltran Leyva Organization by taking out one of its leaders. It is with tireless joint enforcement efforts like this one that we can remove drugs from America’s streets and make our communities that much safer,” said HSI Executive Associate Director Edge. “HSI and our law enforcement partners, both in the United States and around the world, will not waver in our resolve to dismantle and cripple violent drug organizations, and remove their leadership.”
Beltran Leyva, 46, was indicted on Aug. 24, 2012, for conspiracy to distribute cocaine and methamphetamine for importation into the United States. The defendant was extradited from Mexico to the United States on Nov. 15, 2014, and pleaded guilty on Feb. 23, 2016, before U.S. District Judge Richard J. Leon of the District of Columbia. Judge Leon imposed today’s sentence and ordered Beltran Leyva to forfeit $529,200,000.
In court, Beltran Leyva admitted that he was part of a conspiracy to import large quantities of drugs into the United States. At his plea hearing and during pre-trial conferences, the government proffered evidence that from the early 1990s until his indictment in August 2014, the defendant was a leader of the Beltran Leyva Organization, a global criminal enterprise responsible for importing multi-ton quantities of cocaine and methamphetamine into the United States. Beltran Leyva admitted that he and his organization obtained tonnage quantities of cocaine from South American suppliers, which the defendant and his organization helped finance and which were transported to Mexico via air, land and sea. Once the cocaine reached Mexico, the defendant’s organization transported it to key points in Mexico, including Culiacan, Sinaloa, which was also the central point for the collection of billions of dollars from drug trafficking proceeds in the United States. At sentencing, the government’s evidence showed that the organization used weapons and carried out acts of violence, including murders, kidnappings, tortures and violent collections of drug debts, in order to sustain the drug importation operation.
On May 30, 2008, the United States added the Beltran Leyva Organization to the Department of Treasury’s Office of Foreign Asset Control’s Specially Designated Nationals and Blocked Persons list, pursuant to the Foreign Narcotics Kingpin Designation Act. On Aug. 20, 2009, the United States specifically designated Beltran Leyva as a specially-designated drug trafficker under the same act.
The FBI’s El Paso, Texas, Division led the investigation in partnership with the DEA’s New York Division and HSI’s Special Agent in Charge, New York office as part of the Organized Crime Drug Enforcement Task Force. Acting Deputy Chief Amanda Liskamm and Trial Attorney Adrian Rosales of the Criminal Division’s Narcotic and Dangerous Drugs Section and Assistant U.S. Attorneys Marcia M. Henry and Andrea Goldbarg of the Eastern District of New York prosecuted the case. The Criminal Division’s Office of International Affairs provided valuable assistance in the case.
Third Conspirator Pleads Guilty to 2012 Florida Cross BurningRead the Press Release
William A. Dennis, 56, of Port Richey, Florida, pleaded guilty in the U.S. District Court for the Middle District of Florida, Tampa Division, to one count of conspiring with others to threaten, intimidate, and interfere with an interracial couple’s enjoyment of their housing rights, announced Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division and Acting U.S. Attorney W. Stephen Muldrow for the Middle District of Florida.
According to court documents, in September and October 2012, Dennis was living on Seward Drive in Port Richey in a predominantly white community. After an interracial couple moved next door, Dennis joined others in harassing the African-American neighbor with racial slurs and derogatory statements.
On Halloween night, Dennis attended a party at a neighbor’s house, where several Seward Drive residents decided to burn an over six-foot tall cross in the front yard of the interracial couple in order to intimidate them and force them to move from the residence. Using wood and tools from the host of the Halloween party, Dennis and his co-conspirators constructed a wooden cross, and Dennis poured gasoline on the cross. Dennis and a co-conspirator carried the cross to the victims’ front yard, leaned it against their mailbox, and Dennis instructed the co-conspirator to set the cross on fire.
“The defendant and his co-conspirators’ racially-fueled actions to threaten and intimidate a couple in their own home and neighborhood are reprehensible and will not be tolerated in our communities,” said Acting Assistant Attorney General Wheeler. “The Justice Department is committed to vigorously prosecuting those who engage in such violent acts of hate.”
“This guilty plea underscores our ongoing commitment to aggressively investigate and prosecute individuals who commit hate crimes,” said Acting U.S. Attorney Muldrow.
“The FBI pledges to remain vigilant in protecting our communities from hateful acts of bias,” said Special Agent in Charge Paul Wysopal of the FBI Tampa Division. “This case is an example of that commitment and determination to investigate crimes of hate and bring the offenders to justice.”
Two of Dennis’ co-conspirators, Thomas H. Sigler, III, and Pascual Carlos Pietri, previously pleaded guilty to the same charge. Pietri was sentenced to 37 months imprisonment, and Sigler’s sentencing date is pending.
This case was investigated by the FBI. It was prosecuted by Assistant U.S. Attorneys Josephine W. Thomas and Simon A. Gaugush of the Middle District of Florida and Trial Attorney William E. Nolan of the Civil Rights Division’s Criminal Section.
Justice Department Seeks to Shut Down Chicago Area Tax Return PreparerRead the Press Release
Gregory T. Goss, of Dolton, Illinois, reported false information on federal income tax returns he prepared for his customers, according to a new lawsuit filed by the U.S. Department of Justice today. In the complaint, the government alleges that Goss prepared false tax returns individually and doing business as G & V Tax and Insurance (G & V Tax), a tax preparation firm located at 625 E. 170th Street in South Holland, Illinois. The government’s complaint, filed in federal court in Chicago, Illinois, asks the court to bar Goss and G & V Tax from preparing federal tax returns for others.
According to the complaint, Goss and G & V Tax prepare fraudulent federal tax returns for their customers by fabricating itemized deductions and falsifying self-reported income. Goss and G & V Tax falsified self-employment income and itemized deductions to inflate claims for the Earned Income Credit (EIC) on their customers’ tax returns, according to the complaint. The EIC is a benefit for working people with low to moderate income. The EIC is a refundable credit meaning that it not only can reduce the amount of tax an eligible individual owes, dollar for dollar, but if some credit remains, it can result in a cash refund.
According to the complaint, the suit is a culmination of a lengthy Internal Revenue Service (IRS) investigation into Goss and G & V Tax. The complaint alleges that the IRS audited 237 tax returns prepared by Goss and determined that 147 — or 60 percent — of those returns either understated his customers’ respective tax liabilities or overstated their refunds, including claims for the EIC. These 147 tax returns prepared by Goss underreported $323,547 in taxes, the complaint alleges. The suit alleges that Goss’s misconduct damages the public fisc, undermines public confidence in the U.S. tax system, and harms his customers, who now may owe taxes, interest, and penalties.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has tips on its website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Florida Salesman Indicted for Evading Taxes on More than $1.5 Million in IncomeRead the Press Release
A Fort Lauderdale, Florida resident was indicted today for tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to the indictment, between 2002 and 2015, Thomas Daly earned more than $1.5 million in income working as a salesman for several companies. The indictment alleges that Daly has not filed a federal tax return since 2002, with the exception of the 2007 tax year. In August 2009, the Internal Revenue Service (IRS) notified Daly that it intended to levy his wages to collect his unpaid tax liabilities for 2002 through 2006. Allegedly, in an effort to evade the collection of his back taxes, Daly incorporated South Florida Home Marketing Inc. (SFHM) to serve as his nominee and alter ego. Daly allegedly entered into an agreement with his employer to receive his wages in the name of SFHM. The indictment charges that as a result, the IRS’s levy was unsuccessful. Daly also allegedly directed others to make payments to him in the name of SFHM and used the income deposited into SFHM’s bank account to pay personal expenses, including apartment rent, a boat, international travel, entertainment, his girlfriend’s cosmetic surgery and jewelry.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Daly faces a statutory maximum sentence of five years in prison for each tax evasion count. Daly also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Charles M. Edgar, Jr. and Michael C. Boteler of the Tax Division, who are prosecuting the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Chicago-Area Return Preparer Barred from Preparing Federal Tax ReturnsRead the Press Release
Today, a federal judge barred Irving Brown Sr., a retired Chicago Fire Department captain, from preparing federal tax returns for others, the Justice Department announced. After a two-day bench trial in February, the court found that Brown Sr. of Chicago, Illinois, prepared and filed fraudulent tax returns for his customers, including Chicago Fire Department firefighters.
The court found that Brown, Sr. operated a seasonal tax return preparation business out of his Chicago home called Irving Brown, Sr. Tax Services and prepared more than 1,600 federal tax returns from 2011 to 2015 either himself or with the assistance of others. The court’s ruling noted that the Internal Revenue Service (IRS) audited 94 returns prepared by Brown Sr. and found that all but two required an adjustment by the IRS. Based upon these audits, the total tax deficiency was more than $700,000, and the IRS projects that the tax loss is well in excess of $1 million, according to the court’s findings.
The court determined that Brown engaged in a variety of ways to underreport his customers’ tax liabilities, such as fabricating the existence of small businesses with high expenses and inflating itemized deductions in order to offset earned income on his customers’ tax returns. The court also determined that Brown Sr. routinely fabricated itemized deductions such as charitable contributions and unreimbursed employee expenses. For example, on one of his customer’s returns, Brown Sr. reported more than $3,000 in parking expenses as unreimbursed employee expenses when the customer did not drive to work or park any car at work. The court noted that this customer did not even have a car for that particular year.
In addition to underreporting his customers’ tax liabilities, the court determined that Brown actively attempted to impede and obstruct the IRS’s investigation into his preparation activities. For example, the court found that Brown offered to pay $3,000 towards a customer’s tax liability if the customer agreed not to turn Brown in or sign an affidavit implicating him. The court also determined that Brown provided customers with false receipts and blank work orders, which appeared to be written in the same handwriting, and instructed those customers to present those documents to the IRS in support of the fraudulent items reported on their returns.
Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division thanked the revenue agent of the IRS–Small Business/Self-Employed Division, who conducted the investigation and Trial Attorneys Jordan A. Konig and Mary A. Stallings of the Tax Division, who litigated this case.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has tips on its website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.