Archive

January 11, 2022

A man who orchestrated a $10 million tobacco excise tax evasion scheme against the State of Washington, engaged in money-laundering, and evaded $850,000 in federal income taxes has been sentenced to a little over 2 years in prison and ordered to pay $5 million in restitution.  Through his company, TC MAC, Hyung Il Kwon of Nevada purchased significant quantities of tobacco in cash, failed to report the purchases to the state, and subsequently resold the products for cash.  In order to avoid alerting the state to large cash deposits, Kwon then laundered the money by writing checks in exchange for large amounts of cash.  Kwon has a prior state conviction for similar charges.  USAO WDWA

January 10, 2022

Following his guilty plea on charges related to the filing of false tax returns claiming nonexistent fuel tax credits, Michael Dexter Little was ordered to forfeit $12.3 million and sentenced to 19.5 years in prison.  Little and his fellow fraudsters filed false tax returns in their own names and in the names of identity theft victims, and laundered the proceeds via real estate and other assets. USAO MDFL

January 4, 2022

A rabbi who was shot at an attack on a San Diego synagogue in April 2019 has been sentenced to 14 months in prison and ordered to pay $2.8 million in restitution for defrauding the IRS, several Fortune 500 companies, and multiple public and private agencies.  In exchange for a 10% cut, Rabbi Yisroel Goldstein provided fake donation receipts from the Chabad of Poway that helped co-conspirators claim illegal tax deductions or pocket matching donations from their employers.  He also let his brother, Mendel Goldstein, conceal income from the IRS by allowing him to deposit nearly $1 million in bank accounts belonging to the Chabad.  Lastly, with co-conspirator Alexander Avergoon, the rabbi used false information and fake records to fraudulently apply for emergency funds, grants, and loans from FEMA, the California Governor’s Office of Emergency Services, and private foundations.  USAO SDCA

December 20, 2021

James Tarpey, an attorney and principal in Project Philanthropy Inc. dba Donate for Cause (DFC), has been ordered to pay $8.5 million in penalties for promoting a tax shelter with claims that timeshare owners could donate their unwanted timeshare interests to DFC and receive tax benefits in return.  Tarpey and his agents prepared appraisals on donated timeshares, despite lacking sufficient independence and knowing that his false appraisals resulted in tax avoidance.  DOJ

December 13, 2021

Following his conviction at trial on tax fraud charges, John Barry Jr. was sentenced to 12 years in prison and ordered to pay $4.2 million in restitution.  According to evidence at trial, Barry promoted a “mortgage recovery” tax scheme, telling clients that they could extinguish mortgage debts by filing false forms with the IRS claiming that a large amount of taxes had been withheld.  These false withholding claims caused the IRS to issue more than $4 million in refunds to Barry’s clients; Barry typically charged each client a fee of between 20% to 35% of the refund obtained.  DOJ

August 27, 2021

Prithviraj “Roger” Bhikha, a former Senior Director of Global Supplier Management at Cisco Systems, Inc. was sentenced to three years in prison and ordered to pay $2.5 million to the IRS following his guilty plea on charges arising from his receipt of kickbacks from Cisco vendors, his creation of a front company that billed $10 million in services to Cisco while concealing his role, and his failure to report more than $9 million in income to the IRS.  Bhikha was also ordered to pay $1.15 million to Cisco, and forfeited to pieces of real estate in San Francisco.  IRS; USAO ND Cal

August 6, 2021

Chandra Yarlagadda, who owned and operated biodiesel supplier Alpha Bioenergy LLC, was sentenced to two and a half years in prison and ordered to pay restitution of $3.3 million following his guilty plea to income tax evasion charges.  Yarlagadda, who reported income and expenses associated with Alpha Bioenergy on Schedules C attached to his personal income tax returns, admitted that over the course of three years he reported that the company incurred expenses totaling more than $14.2 million for the purchase and retirement of Renewable Identification Numbers (RINs) used by the EPA, when, in fact, he had incurred only $80,000 in RIN expenses during those years.  Without the inflated deduction claims, Yarlagadda would have owed an additional $2.3 million in federal income taxes.  DOJ

August 3, 2021

Bermuda bank Bank of N.T. Butterfield & Son Limited will pay $5.6 million and enter into a deferred prosecution agreement to resolve charges that between 2001 and 2013 it assisted U.S.-taxpayer clients in opening and maintaining undeclared foreign bank accounts.  The bank has provided the government with approximately 386 unredacted client files.  USAO SDNY; IRS

July 13, 2021

Joel Jerome Tucker, the principal in payday loan business eData Solutions, LLC and related entities, was ordered to pay $8.1 million in restitution to the IRS and sentenced to 12.5 years in prison following his conviction on charges related to his fraudulent sale of non-existent payday loan portfolios and the failure by him and his companies to file federal income tax returns or pay taxes.  Tucker used nominee bank accounts to conceal income and assets and owed taxes, penalties, and interest of more than $12 million.  In addition, in 2020, Tucker fraudulently obtained a $20,000 Paycheck Protection Program loan.  USAO WD MO

May 14, 2021

Dusko Bruer, who owned and operated an agricultural machinery company, was sentenced to two years in prison and ordered to pay $2.8 million in restitution following his conviction on tax evasion charges.  Between 2003 and 2009, Bruer's company did not file or pay either corporate or employment taxes.  Bruer was not paid a salary; instead, he used funds from corporate bank accounts for personal expenses.  Bruer also failed to report foreign bank accounts that he owned and controlled, and to which he transferred millions of dollars between at last 2006 and 2015.   DOJ