Archive

October 5, 2018

Following a court trial, a federal court in Utah has ordered that RaPower-3 LLC and International Automated Systems, Inc. stop all promotion and marketing and disgorge $50 million collected in an abusive tax scheme involving false tax deductions and solar energy credits.  The companies and their principals marketed what they claimed was technology that could be used in the production of solar energy and which, they further claimed, entitled the purchasers to take certain tax deductions and solar energy tax credits.  In fact, however, the technology was phony and defendants knew that its purchasers would not be entitled to the tax deductions and credits.  DOJ

October 4, 2018

David Tielle of Harrisburg, Pennsylvania, pleaded guilty to tax fraud for his role in the submission of over $4 million in fraudulent claims for tax refunds under the Biodiesel Mixture Tax Credit by Keystone Biofuels Inc.  Tielle inflated fuel amounts reported to the IRS, claiming tax refunds on fuel Keystone was not producing. To account for the inflated fuel amounts, Tielle created false books and records and engaged in a series of sham financial transactions. USAO MDPA; DOJ.

September 27, 2018

A New York-based hedge fund manager, Harbinger Capital Partners Offshore Manager LLC, has agreed to pay $30 million to settle charges that it used fraudulent means to avoid paying both New York State and City taxes. A related investment management company based in Alabama, Harbinger Management Corporation, had earlier settled for $40 million, bringing a total of $70 million recovered in a case first brought to light by a whistleblower filing under the New York False Claims Act. According to the New York Attorney General's office, the alleged fraud had involved listing an office in Alabama as the source of hundreds of millions of dollars earned through fees from successful trades, even though the trades had in fact been made through the New York office and were thus subject to New York taxes. For their role in exposing the fraud, the unnamed whistleblower is to receive a relator's share of $15.4 million. NY AG

September 21, 2018

Jose Martin Andrade Flores, the owner of the American Superior chain of second-hand clothing stores in the Los Angeles area, plead guilty for American Superior's failure to report $3.7 million in income to the Internal Revenue Service.  From 2012 through 2016, Flores concealed from his corporate tax preparer cash sales and deposits into foreign bank accounts that were made on behalf of American Superior.  USAO C.D. Cal.

September 20, 2018

House of Oxford and its officer Alex Goldman were sentenced for conspiring with others to evade California's excise taxes on tobacco products intended for sale in California.  In addition to a three-year prison sentence for Goldman and probation for the entity, the defendants agreed to a civil forfeiture of approximately $14 million in assets, which were returned to the State of California.  E.D. Cal. USAO

August 28, 2018

The U.S. has entered in to a deferred prosecution agreement with Swiss bank Basler Kantonalbank (BKB), with BKB agreeing to pay over $60 million in penalties and cooperate with ongoing investigations regarding U.S.-related accounts.  The bank held over 1,000 accounts for U.S. customers, with an aggregate value over $800 million; many of these accounts were not declared to U.S. taxing authorities by the account-holders; the bank provided specific services to its undeclared clients to promote concealment of assets and income from U.S. taxing authorities.  DOJ

August 24, 2018

Executives of Utah-based biodiesel company Washakie Renewable Energy, and another individual associated with NOIL Energy Group in California, were indicted for falsely claiming over $500 million in renewable fuel tax credits. The individuals allegedly created false production records and other paperwork to make it appear that fuel transactions that qualified for the tax credit were occurring.  The indictment also included allegations of money laundering.  DOJ

July 27, 2018

Mirelis Holding S.A., a Swiss financial and asset management firm, entered in to a non-prosecution agreement with a penalty of $10.25 million.  Mirelis also agreed to cooperate with U.S. investigations in to its U.S. clients who used Mirelis to conceal assets and evade U.S. tax obligations.  DOJ

July 23, 2018

Jenelle Robyn Pinkston has been sentenced to three years in prison ordered to pay $63,338 in restitution for her involvement in a scheme to fraudulently obtain income tax refunds.  Pinkston filed 143 fraudulent tax refunds in 2012 resulting in refunds totaling $403,615.00. USAO MDTN

July 12, 2018

A Collinsville, Virginia pharmacist pleaded guilty to failing to account for and pay over employment taxes, announced the Justice Department’s Tax Division. According to court documents, Jerry R. Harper, Jr., 61, owned and operated Family Discount Pharmacy, Inc. (FDP) in Stanleytown, Virginia, with multiple locations in Stuart, Rocky Mount, Chatham, and Brosville, Virginia. As owner of FDP, Harper was responsible for collecting and paying over FDP’s employment taxes. From 1998 through 2014, FDP accrued employment tax liabilities of more than $5 million. Harper withheld these taxes from FDP employees’ wages, but did not pay the taxes to the Internal Revenue Service (IRS). In over 15 years, Harper only filed one employment tax return with the IRS. DOJ