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February 11, 2020

Property developer Monique Brady of Rhode Island has been sentenced to 8 years in prison and ordered to pay $4.8 million in restitution for defrauding 23 investors of $10.3 million in a Ponzi scheme that ran from 2014 to 2018.  Brady told investors, many of them her own family, friends, and business associates, that her property rehabilitation business, MNB LLC, had secured contracts to perform large scale rehabilitation work on foreclosed properties in Connecticut, Massachusetts, New Hampshire, and Rhode Island.  To entice investors, Brady promised a 50% return on profits and showed forged emails that purported to show the contracts were valid.  In reality, however, the jobs she was hired to do were menial and paid less than $1,000, and she was using investor funds to finance an extravagant lifestyle.  When she became the subject of a federal investigation, she told investors to delete all records of their investments with her company, then met with federal officials to request that they investigate her investors for usury, before attempting to abscond to Vietnam.  DOJ; USAO RI

December 20, 2019

Zurich-based Swiss bank Coutts & Co Ltd. has agreed to pay $27.9 million in an amendment to a 2015 non-prosecution agreement under the Swiss Bank Program between the bank and the U.S.  In 2015, Coutts reported that it held and managed 1,337 U.S. related accounts, with assets under management exceeding $2 billion, and paid a penalty of $78,484,000. In the amendment, Coutts acknowledges that it should have disclosed 311 additional U.S.-related accounts at the time of the signing of the non-prosecution agreement. DOJ

December 10, 2019

HSBC Private Bank (Suisse) SA has entered into a deferred prosecution agreement and agreed to pay $192 million for conspiring with U.S. clients and others to evade taxes over a ten year period.  At the peak of the scheme in 2007, HSBC Switzerland was estimated to hold undeclared assets worth approximately $1.26 billion on behalf of U.S. clients, before it self-disclosed to authorities three years later.  The resulting fine, which took into account the bank’s extensive cooperation with the investigation, represents about $61 million in restitution to the IRS, $72 million in civil forfeiture to the DOJ, and $59 million in penalties.  DOJ

December 3, 2019

The government has reached a settlement agreement with Franchise Group Intermediate L 1 LLC, the national franchisor and owner of Liberty Tax Service, one of the largest tax preparation service providers in the U.S.  The government alleged that Liberty failed to maintain adequate controls over tax returns prepared by its franchisees, and failed to take steps to prevent the filing of potentially false or fraudulent returns.  The proposed judgment bars Liberty from employing certain individuals, including its founder and former CEO John Hewitt, and requires Liberty to implement specific compliance and reporting procedures, including the implementation of an internal whistleblower program.  DOJ

November 8, 2019

Two New York City real estate development companies, Mica Gabe Brooklyn LLC and Brooklyn Warehouse 180 LLC, will pay $3 million to resolve claims that they secured a New York tax break, Section 421-a, by falsely stating that building service employees would be paid prevailing wages when, in fact, employees hired at the buildings were paid less than the wages required by law.  The $3 million settlement consists of $2.5 million in damages under Section 421-a and the New York False Claims Act, and $415,000 in back wages.  The investigation was initiated with the filing of a whistleblower complaint under the NY FCA by local union 32BJ SEIU, which will receive a portion of the damages as a whistleblower reward.  NY

November 6, 2019

Winston Shrout, who became a fugitive after being sentenced to 10 years in prison in 2017, has been captured and returned to custody.  Shrout led seminars promoting the use of fraudulent financial instruments as a means to avoid taxes, and sold materials for the preparation of such fraudulent instruments.  In addition, Shrout failed to file tax returns from 2009 through 2014.   DOJ

September 20, 2019

Pradyumna Kumar Samal, the former CEO of two Bellevue, Washington IT firms, has been sentenced to more than seven years in prison for his role in a long-running H1-B visa fraud scheme.  Samal's companies, Divensi and Azimetry, were employment agencies in the business of providing IT workers to major corporate clients.  Samal would submit fraudulent applications on behalf of foreign workers, claiming that they were being brought to the U.S. to perform a specific job, and instructing them to lie in their own applications, when, in fact, after being admitted, the employees would be benched and unpaid until Samal's companies were able to place them at actual client jobs.  In addition, Samal's companies failed to pay employment taxes on behalf of the foreign workers, instead diverting those funds to his personal use.  USAO WD WA

September 5, 2019

The owner of two defense contracting firms, Tico Manufacturing Inc. (TICO) and Military and Commercial Spares Inc. (MCS), has been sentenced to 3 years in prison and ordered to pay $8 million in restitution for conspiring to defraud the Department of Defense.  Between 2011 and 2015, Roger Sobrado fraudulently obtained DoD contracts by claiming that conforming parts for critical military equipment, including fighter jets and helicopters, would be supplied through authorized manufacturers.  Instead, Sobrado supplied non-conforming parts through non-authorized manufacturers, recruited family members to commit the same fraud, and collected DoD payments from his family members.  Additionally, he failed to report almost half of his taxable income for three years, causing the United States to lose a total of $509,962.  USAO NJ

August 29, 2019

Following a guilty plea, Treyton Lee Thomas was sentenced to over 21 years in prison and ordered to pay $14.6 million in restitution and forfeiture to the U.S. and victims of his investment fraud ponzi scheme.  Thomas's victims included his own father, his father's company, his wife, and his father-in-law. Thomas also pleaded guilty to income tax evasion, having failed to file returns for two decades, while using sham offshore entities to conceal his income.  USAO EDNC

August 12, 2019

The CEO of a Colorado-based technology company has been sentenced to over 6 years in prison for defrauding the IRS, impeding the administration of tax laws, and stealing money from his employees’ healthcare and 401(K) plans.  As the head of Touchbase USA (TBUSA) and its successor company Touchbase Global Services, Inc. (TBGSI), Riordan Maynard allegedly stole over $50,000 from his employees’ healthcare plan and $68,000 from their 401(K) plans for use on company expenses.  He also caused TBUSA to be closed and TBGSI to be opened in order to avoid paying more than $2.5 million in unpaid payroll taxes.  After running up another $2.5 million in unpaid payroll taxes, Maynard also conspired to work around IRS levies sent to his customers.  USAO CO
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