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Tax Enforcement Actions

The Internal Revenue Service (IRS) is the United States agency with primary responsibility for enforcing federal tax laws, working with the Department of Justice. Whistleblowers with knowledge of violations of the federal tax laws can submit a claim to the IRS under the IRS Whistleblower Reward Program, and may be eligible to receive a monetary reward.

Below are summaries of recently-announced settlements or successful prosecutions by the IRS or DOJ. If you believe you have information about fraud or wrongful conduct which could give  rise to a claim under the IRS Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

March 11, 2020

The owner and operator of multiple parcel delivery businesses in Florida has been sentenced to 2 years in prison and ordered to pay $9 million in restitution for withholding over $10.8 million in payroll taxes.  Despite his business earning over $100 million in revenue, and despite withholding taxes from hundreds of employees, Ricardo Betancourt failed to actually pay it to the IRS and instead used those funds to finance personal expenses and other business ventures.  DOJ

March 2, 2020

A man in Colorado who was part of a tax fraud scheme involving renewable fuel credits has been sentenced to nearly 7 years in prison and ordered to pay $7.2 million in restitution.  Along with co-conspirators, Matthew Taylor created a fake company, Shintan Inc., that they then used to seek out and obtain over $7.2 million in tax credits for renewable fuel that Shintan never actually produced.  The fraud ran from 2010 to 2013 and personally netted Taylor about $4.5 million.  DOJ

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 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

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

August 5, 2019

Swiss private bank LLB Verwaltung (Switzerland) AG will pay a $10.6 million penalty to resolve allegations that the bank and some of its management employees conspired with a Swiss asset manager and U.S. clients to conceal assets and income from the IRS. The Swiss asset manager provided prospective customers with a sales letter -- the bank also had a copy -- pitching his ability to conceal a client’s assets and income from taxing authorities through the use of multiple layers of sham offshore entities and nominee directors in favorable countries or regions. LLB-Switzerland at one time had approximately 100 U.S. clients holding nearly $200 million in assets.  DOJ

July 19, 2019

Lawrence Robert Gazdick Jr., owner of a Virginia equipment rental business operating under the names National Technology Rentals, NTL Technology Leasing Services, and AV Rental Solutions, pleaded guilty to employment tax fraud, withholding payroll taxes from employee paychecks but failing to file payroll tax returns or pay the IRS.  In total, Gazdick caused a loss to the IRS of approximately $5.35 millionDOJ
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