Tag Archives: Mark McDonald

Michigan Real Estate Businessman Sentenced to Prison for Obstructing the Internal Revenue Laws and Bank Fraud

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Thursday, July 13, 2017

A Michigan business owner was sentenced to serve a year and a day in prison today for obstructing and impeding the internal revenue laws and committing bank fraud, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to documents filed with the court, Richard Pierce filed fraudulent 2004 through 2013 individual income tax returns. Those returns failed to report more than $9 million in gross business receipts that several of his real estate businesses earned, including Phoenix Real Estate Company, Phoenix Preferred Properties LLC, Detroit Matrix, First Metro Properties LLC, First Metro Real Estate Services LLC, Phoenix Office Plaza-II LLC, Rosedale/Grandmont Properties LLC, and RFP Ventures LLC. As a result of those fraudulent filings, Pierce caused a tax loss of more than $400,000.

In 2007, Pierce also committed bank fraud by submitting a fraudulent loan application to a mortgage lender on which he failed to disclose that the buyer of a residential property was receiving a kickback from the seller.

In addition to the term of prison imposed, Pierce was ordered to serve two years of supervised release and to pay restitution to the Internal Revenue Service (IRS), the amount of which will be determined at a later date. Pierce pleaded guilty in February 2015.

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Mark McDonald and Christopher O’Donnell of the Tax Division, who prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Eastern District of Michigan for their substantial assistance.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

Seven Defendants in Mortgage Origination Fraud Scheme Indicted for Bank Fraud Conspiracy Along with Other Charges

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The Justice Department announced that seven defendants were arrested and arraigned today for their roles in a mortgage fraud conspiracy that operated in Detroit.

A federal grand jury in the Eastern District Court of Michigan indicted Peter Allen, Suhail Hallak, Al Karana, Joey Murad, Jason Najor, Jeffrey Najor and Wasseem Shamoun with conspiracy to commit bank fraud, numerous counts of bank fraud and other fraud charges.

The indictment alleges that from approximately January 2006 to December 2008, the defendants conspired to defraud lending institutions by obtaining mortgage loans using fraudulent information.  According to the indictment, the defendants devised a scheme wherein they purchased property for approximately $5,000 to $40,000 per home, then recruited straw buyers to submit fraudulent loan applications for home mortgages in exchange for a fee. According to the indictment, the scheme caused financial institutions to pay approximately $10 million in fraudulent mortgage loan funds.

In addition to the conspiracy charge, Hallak, Karana, Jason Najor, Jeffrey Najor, and Shamoun are charged with 20 counts of bank fraud, Murad is charged with seven counts of bank fraud and Allen is charged with two counts of bank fraud.  Jeffrey Najor is also charged with two counts of assisting in the filing of false tax returns, in connection with his filings on behalf of J.A. Najor Corporation.  Jeffrey Najor is also charged with one count of bankruptcy fraud.

An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty.  If convicted of the conspiracy charge, the defendants face up to 30 years in prison and a $1 million fine.  Each count of bank fraud carries a maximum penalty of 30 years in prison and $1 million fine.   Assisting in the filing of a false return is punishable by up to three years in prison and a fine of $250,000.  The bankruptcy fraud charge has a maximum penalty of five years in prison and a fine of $250,000.

This case was investigated by Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration and the FBI and is being prosecuted by Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Justice Department’s Tax Division.