Tax Fraud

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

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