Tax Fraud

July 26, 2017

An Alaskan couple was charged in federal court in Juneau, Alaska with four counts of willful failure to pay their individual income taxes. According to the Information, Archie W. Demmert III and Roseann L. Demmert earned income from commercial fishing. The Information alleges that Archie Demmert owned Vetta Bay LLC, which owned the Demmerts’ fishing vessel, the Emerald Beauty. The Information further charges that the Demmerts have a long history of not paying their taxes to the Internal Revenue Service (IRS). It alleges that the Demmerts did not pay their taxes for 13 separate tax years, for which they owed over $400,000, excluding penalties and interest. DOJ

July 27, 2017

A District of Columbia woman was sentenced today to 63 months in prison for her involvement in a scheme to fraudulently obtain millions of dollars in income tax refunds, announced the Justice Department’s Tax Division. Tarkara Cooper, 34, was convicted by a jury on Feb. 17 for conspiring to commit theft of government funds and defraud the United States and theft of public money. Two of her co-defendants, Tony Bryant, 55, and his son, Brian Bryant, 29, both of Clinton, Md., were also convicted at trial and are awaiting sentencing. Cooper was part of a massive sophisticated stolen identity refund fraud scheme that involved a network of more than 130 people, many of whom were receiving public assistance. Conspirators fraudulently claimed refunds for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of, and refunds were issued to, willing participants in the scheme. The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia. According to court documents, the overall case involved the filing of at least 12,000 fraudulent federal income tax returns that sought at least $42 million in refunds. DOJ

July 19, 2017

A citizen and resident of Switzerland pleaded guilty to conspiring to defraud the United States in connection with her work as the head of a team of bankers for Credit Suisse AG, announced the Justice Department’s Tax Division. According to the statement of facts and the plea agreement, Susanne D. Rüegg Meier, admitted that from 2002 through 2011, while working as the team head of the Zurich Team of Credit Suisse’s North American desk in Switzerland, she participated in a wide-ranging conspiracy to aid and assist U.S. taxpayers in evading their income taxes by concealing assets and income in secret Swiss bank accounts. Rüegg Meier was responsible for supervising the servicing of accounts involving over 1,000 to 1,500 client relationships. She was also personally responsible for handling the accounts of approximately 140 to 150 clients, about 95 percent of whom were U.S. persons residing primarily in New York, Chicago and Florida, which held assets under management totaling approximately $400 million. Rüegg Meier admitted that the tax loss associated with her criminal conduct was between $3.5 and $9.5 million. DOJ

July 12, 2017

New York announced the convictions of Kulbir Singh, 53, and gas stations Dashmesh Petroleum, Inc., Gobind Petroleum, Inc. and Karam Mart Inc. on felony charges stemming from the theft of over $1 million in sales tax collected for gasoline sales. Kulbir Singh operated three BP gas stations in Nassau County, located at 2 Hempstead Avenue, West Hempstead NY (Gobind Petroleum, Inc.), 385 Merrick Road, Valley Stream, NY (Dashmesh Petroleum, Inc.), and 653 Hempstead Avenue, Elmont NY (Karam Mart, Inc.). His son, Ladpreet Singh, also operated Karam Mart. According to the prosecution, the Singhs’ gas stations collected but failed to remit to New York State a total of over $1,000,000 in sales taxes from September 2011 through December 2014. Each of the defendant corporations, Dashmesh Petroleum, Inc., Gobind Petroleum Inc. and Karam Mart, Inc., pleaded guilty to one count of Grand Larceny in the Second Degree, a Class C felony, and were fined $50,000 each. Defendant Kulbir Singh’s son, Ladpreet Singh, who operated Karam Mart, Inc., pleaded guilty to a misdemeanor and was sentenced to probation. NY

July 6, 2017

A Houston, Texas business owner was sentenced to 36 months in prison for failing to pay over employment taxes, announced the Justice Department’s Tax Division. According to documents filed with the court, Richard Floyd Tatum Jr., 57, owned Associated Marine & Industrial Staffing Inc. (AMI), an industrial staffing company that provided temporary labor to businesses in Texas and other states. Tatum employed approximately 1,000 people to include internal employees, who worked for AMI, and external employees, who AMI assigned to work on-site at client locations. Tatum was responsible for collecting, accounting for and paying over to the Internal Revenue Service (IRS) the payroll taxes withheld from AMI’s employees’ wages. Tatum exercised significant control over AMI’s finances, entered into contracts on behalf of AMI, signed checks, to include payroll, and decided which creditors to pay. Tatum also signed and filed AMI’s employment tax returns. DOJ

July 6, 2017

An insurance salesman and former resident of Parma, Ohio was sentenced to 37 months in prison following his conviction in December 2016 for failing to file income tax returns and failing to pay taxes, announced the Justice Department’s Tax Division. According to documents and information provided to the court, John Christopher Raschella, 57, of Estero, Florida, failed to pay more than $1 million in income taxes, interest and penalties that he owed to the Internal Revenue Service (IRS) for 1995, 1996, and 1998 through 2012. During those years, Raschella sold insurance, and earned additional income working for other insurance salesmen. Between 1989 and 2012, Raschella failed to timely file income tax returns with the IRS. For several years, Raschella filed delinquent returns, reporting that he owed taxes, but failed to make the required payments. For other years, the IRS assessed Raschella’s taxes and sent him letters notifying him of the amount he owed, but Raschella still did not pay. DOJ

June 27, 2017

A Brentwood, Tennessee doctor and his wife were sentenced to prison for conspiring to defraud the Internal Revenue Service (IRS), announced the Justice Department’s Tax Division. According to documents filed with the court, from 2002 through 2014, Jeff and Andra McCoy conspired to defraud the IRS by impeding the collection of their income taxes. The McCoys filed 2003 through 2007 income tax returns with the IRS on which they claimed fake income tax withholding amounts and sought approximately $2,620,208 in fraudulent refunds. They submitted false documents to the IRS and placed their assets in the names of nominees and in nominee bank accounts. For example, they established a bank account for a purported nonprofit business and directed Jeff McCoy’s employer to deposit his income into the nominee account. In addition to seeking fraudulent refunds, the McCoys also failed to pay more than $500,000 in taxes owed for tax years 2001 through 2008, despite earning more than $2 million during that time. DOJ

June 21, 2017

A federal grand jury in Madison, Wisconsin indicted a Johnson Creek, Wisconsin produce vendor corporate officer for tax evasion, failure to file a corporate tax return, and structuring currency transactions, announced the Justice Department’s Tax Division. According to the indictment, during the relevant timeframe, Thomas G. Paine was the Vice President and Treasurer of G.W. Paine Inc., which sold fresh fruit and other produce under the business name Tree Ripe Citrus Company. Paine was allegedly responsible for the finance and tax aspects of the company. The indictment alleges that Paine failed to file corporate tax returns with the Internal Revenue Service (IRS) for 2010 through 2012 and attempted to evade the taxes due and owing by G.W. Paine Inc. According to the indictment, Paine concealed the company’s income by structuring cash deposits so they were made in amounts less than $10,000 in order to evade the bank’s reporting requirements. Banks are required to file reports with the U.S. Treasury for cash deposits exceeding $10,000. These reports include the identity of the person who conducted the transaction. The indictment alleges that from 2012 through 2013, Paine structured more than $400,000. DOJ

June 20, 2017

A Boynton Beach, Florida resident pleaded guilty to corruptly endeavoring to obstruct the administration of the internal revenue laws and theft of government funds, announced the Justice Department’s Tax Division. According to documents filed with the court, from 2010 to 2015, David R. Andre, 41, filed fraudulent personal tax returns with the Internal Revenue Service (IRS) that sought more than $5.6 million in refunds to which he was not entitled. As a result of these returns, which falsely reported income earned and income tax withheld, the IRS paid Andre more than $485,000 in refunds. He used the funds to purchase his residence and multiple vehicles, including a Jaguar and Mercedes Benz. In late 2012, the IRS began trying to collect the taxes Andre owed and placed a lien on his residence. Days after the lien was recorded, Andre filed a form with the IRS that falsely claimed he was making a substantial payment, and the IRS released the lien. After Andre did not make the payment, the IRS revoked its release and re-filed the lien. In 2015, Andre also made false statements to IRS agents and told them that he purchased his residence with money he inherited, did not recall receiving any large refunds from the IRS and had not filed a tax return since 2008. DOJ

June 16, 2017

An Allentown, Pennsylvania resident was sentenced to serve 42 months in prison for conspiring to file tax returns using stolen IDs, announced the Justice Department’s Tax Division. According to the indictment and information presented to the court, Jessenia E. Cordero, 37, operated MJ & Associates and Express Tax Services, both located in Allentown. These businesses provided tax preparation, check cashing, and other services to customers. Cordero and her co-conspirators obtained lists of Puerto Rico residents’ names and social security numbers and used these IDs to file fraudulent tax returns seeking refunds with the Internal Revenue Service (IRS). The conspirators directed the IRS to mail the refund checks to addresses they controlled or to deposit the refunds onto pre-paid debit cards. Cordero used her businesses to cash fraudulently obtained refund checks totaling approximately $4,316,103. DOJ