Category Archives: IRS

Utah Financial Advisor Sentenced To Prison For Tax Evasion, Securities Fraud And Wire Fraud

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June 8, 2018

A St. George, Utah, financial advisor was sentenced to 72 months in prison on June 4th for his role in selling fraudulent tax-avoidance and investment strategies to his clients, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah.

According to documents and information provided to the court, Henry Brock, pleaded guilty to tax evasion, securities fraud and wire fraud.  Brock founded a financial services company in 2009 and served as the president from 2009 through 2017.  As President, he marketed and sold a fraudulent tax scheme, called “IRA Exit Strategy,” to potential investors.  Brock promised investors that he could provide a way for them to avoid paying taxes on IRA withdrawals, which would otherwise be subject to Internal Revenue Service (IRS) penalties and taxes.  To implement his scheme, Brock caused his business to issue tax forms to his clients falsely representing that they were investors in his business who incurred losses, which served to offset the clients’ tax liabilities.  As a result, Brock caused clients to file fraudulent income tax returns claiming a total of approximately $3.8 million in bogus business losses and resulting in a tax loss of over $1.1 million.

During this period, Brock fraudulently raised more than $10.8 million in investments by making false representations to investors regarding the “IRA Exit Strategy,” the financial condition of his company and other matters.  On at least one occasion, Brock also transferred $196,323 of a client’s investment funds and used the money for his own personal and business expenses.

In addition to the term of imprisonment, U.S. District Court Judge Ted Stewart ordered Brock to serve three years of supervised release and to pay restitution in the amount of $12 million.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Huber thanked special agents of IRS Criminal Investigation and the Utah Division of Securities, who conducted the investigation, and AUSA Trina Higgins and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting this case.

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

Former Charity Executive Pleads Guilty to Bribery and Embezzlement Scheme

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June 7, 2018

A former executive of a Springfield, Missouri charity, who was also an Arkansas lobbyist, pleaded guilty in federal court today to bribing Arkansas elected officials in a multi-million-dollar scheme, and then along with other charity executives, embezzling millions of dollars from the Springfield health care organization.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney Timothy A. Garrison for the Western District of Missouri made the announcement.

Milton Russell Cranford, aka “Rusty,” 57, of Rogers, Arkansas, pleaded guilty before U.S. Magistrate Judge David P. Rush to one count of federal program bribery.  Cranford was an executive at Preferred Family Healthcare Inc. (formerly known as Alternative Opportunities Inc.), a nonprofit corporation headquartered in Springfield, and oversaw the charity’s operations and lobbying efforts in the state of Arkansas. Cranford also operated three lobbying firms: The Cranford Coalition, The Capital Hill Coalition and Outcomes of Arkansas.

By pleading guilty today, Cranford admitted that he and other Preferred Family Healthcare executives paid bribes to Arkansas State Senator Jonathan Woods, Arkansas State legislator Henry Wilkins IV, a person identified in court documents as “Arkansas Senator A,” and others, to provide favorable legislative action for Cranford, his clients, and Preferred Family Healthcare. In exchange for the bribes paid by Cranford, the officials identified in the Information steered Arkansas General Improvement Fund (GIF) money to Preferred Family Healthcare and other Cranford clients; held up agency budgets; requested legislative audits; and sponsored, filed and voted for legislative bills that favored the charity and Cranford clients.

The additional income gained by Preferred Family Healthcare from Cranford’s bribes enabled Cranford and other executives of the charity to engage in multiple schemes to embezzle, steal, and unjustly enrich themselves at the expense of the charity, including, but not limited to, diverting charity funds to for-profit companies owned by the executives, causing the charity to make rental payments to properties owned by Cranford and the executives; paying for their personal expenses using corporate credit cards; and causing the charity to lend significant funds to Cranford personally, and to for-profit companies owned by other charity executives.  The executives also caused the charity to misapply its funds for unlawful contributions to the campaigns of elected public officials and causing the charity to spend substantial amounts of funds on lobbying and political advocacy.

In addition, Cranford entered into an illegal kickback scheme whereby Cranford paid over $600,000 in illegal kickbacks to a charity executive in exchange for more than $3.5 million in payments made to The Cranford Coalition.  Cranford also acknowledged his role in a second illegal kickback scheme involving the charity’s contract with Philadelphia, Pennsylvania-based political operative Donald Andrew Jones, also known as “D.A.” Jones, and another charity employee, former Arkansas State Representative Eddie Wayne Cooper.  In exchange for Cranford’s role in facilitating the charity’s contract with Jones for lobbying and political advocacy, under which the charity paid Jones almost $1 million, Cranford received kickbacks totaling $219,000 from Jones, $18,000 of which Cranford provided to Cooper, and Cooper received another $45,000 directly from Jones.  In separate but related cases, both Jones and Cooper previously entered guilty pleas acknowledging their roles in that kickback scheme.

A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

The case was investigated by IRS-Criminal Investigation, the FBI and the Offices of the Inspectors General from the Departments of Labor, Health and Human Services, Housing and Urban Development, Veterans Affairs, and the Federal Deposit Insurance Corporation. This is a combined investigation with the Western District of Arkansas, the Eastern District of Arkansas, and the Eastern District of Pennsylvania.  This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich of the Western District of Missouri and Trial Attorneys Marco A. Palmieri and Sean F. Mulryne of the Criminal Division’s Public Integrity Section.

Mississippi Physician Sentenced to Over Three Years in Prison for Role in $3 Million Compounding Pharmacy Fraud Scheme

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June 7, 2018

A Biloxi, Mississippi physician was sentenced today to 42 months in prison for his involvement in a $3 million compounding pharmacy fraud scheme.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney D. Michael Hurst Jr. of the Southern District of Mississippi; Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Field Division; Acting Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation’s (IRS-CI) New Orleans Field Office and Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.

Albert Diaz, M.D., was sentenced by U.S. District Judge Keith Starrett of the Southern District of Mississippi.  Restitution to TRICARE and other insurance companies will be determined at a later date. On March 2 after a five-day jury trial, Diaz was convicted of one count of conspiracy to commit health care fraud and wire fraud, four counts of wire fraud, one count of conspiracy to distribute and dispense a controlled substance, four counts of distributing and dispensing a controlled substance, one count of conspiracy to falsify records in a federal investigation and five counts of falsification of records in a federal investigation.

According to evidence presented at trial, between 2014 and 2015, Diaz participated in a scheme to defraud TRICARE and other insurance companies by prescribing medically unnecessary compounded medications, some of which included ketamine, a controlled substance, to individuals he had not examined.  The evidence further demonstrated that, based on the prescriptions signed by Diaz, Advantage Pharmacy in Hattiesburg, Mississippi, dispensed these medically unnecessary compounded medications and sought and received reimbursement from TRICARE and other insurance companies totaling more than $3 million. The trial evidence further demonstrated that in response to a TRICARE audit, Diaz falsified patient records to make it appear as though he had examined patients before prescribing the medications.

The FBI, IRS-CI, the Defense Criminal Investigative Service, the U.S. Department of Health and Human Services Office of Inspector General, the Mississippi Bureau of Narcotics and other government agencies investigated the case.  Trial Attorneys Kate Payerle and Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

CCC’s: It’s A Crime There Isn’t a Criminal Antitrust Whistleblower Statute

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Kimberly Justice and I are continuing to write about what we believe is a very important issue in cartel fighting–the passing of criminal antitrust whistleblower legislation.  Below are the opening paragraphs of our latest article on the subject.  The full article, kindly posted by Wolters Kluwer in their Antitrust Law Daily, can be found here.

“The SEC’s wildly successful whistleblower program has returned hundreds of millions of dollars to investors as a result of actionable whistleblower information over the past six years.  The IRS paid one whistleblower more than $100 million for information that helped the government uncover a massive tax evasion scheme and led to a $780 million settlement.  The CFTC predicts that the results of its whistleblower program this year will be “huge.”  The Antitrust Division has paid $0 to whistleblowers and received $0 from cartels exposed by whistleblowers.  Or, as Charlie Brown would say, the Antitrust Division “got a rock.”

There is no cartel whistleblower program and this should change now.  Price-fixing and bid-rigging conspiracies are felonies costing American consumers millions of dollars in the form of artificially high prices.  These fraudulent schemes are particularly suited to exposure by whistleblowers because senior corporate executives frequently use lower level employees (and potential whistleblowers) to carry out the illegal scheme.  The time is right for serious antitrust whistleblower legislation.”

 

Full article here

Thanks for reading.  If you have any reaction/comment you’d like to share please use the comment section or through LinkedIn (here).

Alabama Resident and Ringleader of Multi-Million Dollar Stolen Identity Tax Refund Fraud Schemes Sentenced to 30 Years in Prison

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Thursday, March 8, 2018

Over 8,800 Identities Stolen from the U.S. Army, Alabama State Agencies and Georgia Businesses

A Phenix City, Alabama, resident was sentenced today to 30 years in prison for his role in masterminding multiple stolen identity refund fraud (SIRF) schemes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Louis V. Franklin, Sr. of the Middle District of Alabama.

William Anthony Gosha III, a/k/a Boo Boo, was convicted, following a jury trial in November 2017, of one count of conspiracy, 22 counts of mail fraud, three counts of wire fraud, and 25 counts of aggravated identity theft.

According to the evidence presented at trial and sentencing, between November 2010 and December 2013, Gosha ran a large-scale identity theft ring with his co-conspirators, Tracy Mitchell, Keshia Lanier, and Tamika Floyd, who were all previously convicted and sentenced to prison.  Together they filed over 8,800 tax returns with the Internal Revenue Service (IRS) that sought more than $22 million in fraudulent refunds of which the IRS paid out approximately $9 million.

In November 2010, Gosha stole IDs of inmates from the Alabama Department of Corrections and provided the IDs to Lanier who used the information to seek fraudulent tax refunds.  Gosha and Lanier agreed to split the proceeds.  Gosha also stole employee records from a company previously located in Columbus, Georgia.  In 2012, Lanier needed an additional source of stolen IDs and approached Floyd, who worked at two Alabama state agencies in Opelika, Alabama: the Department of Public Health and the Department of Human Resources.  In both positions, Floyd had access to the personal identifying information of individuals, including teenagers.  Lanier requested that Floyd primarily provide her with identities that belonged to sixteen and seventeen year-olds.  Floyd agreed and provided thousands of names to Lanier and others at Lanier’s direction.

After receiving the additional stolen IDs, Gosha recruited Mitchell and her family to help file the fraudulent tax returns.  Mitchell worked at a hospital located at Fort Benning, Georgia, where she had access to the personal identification information of military personnel, including soldiers who were deployed to Afghanistan.  She stole soldiers’ IDs and used their information to file fraudulent returns.

In order to electronically file the fraudulent returns, Gosha, Lanier, and their co-conspirators applied for several Electronic Filing Identification Numbers (EFIN) with the IRS in the names of sham tax preparation businesses.  Gosha, Lanier, and their co-conspirators then used these EFINs to file the returns and obtain tax refund related bank products from various financial institutions, which provided them with blank check stock.  Gosha and his co-conspirators initially printed out the fraudulently obtained refund checks using the blank check stock.

However, the financial institutions halted Gosha’s and his co-conspirators’ ability to print checks.  As a result, they recruited U.S. Postal employees who provided Gosha and others with addresses on their routes to which the fraudulent refund checks could be directly mailed.  In exchange for cash, these postal employees intercepted the refund checks and provided them to Gosha, Lanier, Mitchell and others.  Gosha also directed tax refunds to prepaid debit cards and had those cards sent to addresses he controlled.

In addition, between January 2010 and December 2013, Gosha participated in a separate SIRF scheme with Pamela Smith and others, in which Gosha sold the IDs that he had stolen from the Alabama Department of Corrections to Smith and others.  Smith and others used the IDs to file returns that sought approximately $4.8 million in fraudulent refunds of which the IRS paid out approximately $1.85 million.  Smith also has been convicted and sentenced to prison for this conduct.

At Gosha’s sentencing, the government offered victim impact statements from several individuals whose identities were stolen, and from companies and governmental agencies where the identity theft breaches occurred.  An Alabama Department of Public Health representative noted, the identity theft was not only devastating financially, but it also had a chilling effect on the department’s ability to serve the residents of the State of Alabama.  A mother of a young U.S. Army soldier who was an identity theft victim described the consequences of the fraud on her and her family, stating:

While [my son] was fighting for our country and all back home[,] I received a very disturbing phone call from [an] Agent [] from the IRS that my son[,] while at Ft. Benning training to defend our country[,] the land of the free[,] had his identity stolen and fraudulent tax returns were filed with his social security number.  This news was devastating to think that my [] 19-year-old son[,] who was defending the very freedom this country stands [for] [,] was wronged by one of those people [he] was willing to die for.  My whole family could not believe what was happening.  We now had to worry about this terrible act by one of our own.  As I tried my best to keep composed and handle all of the gruesome mounds of paperwork to get this straightened out with the IRS, [my son] was then denied his tax refund [as result of this scheme].  This created a financial hardship on [him].  We were too afraid to tell [him] while he was deployed because we did not want to worry him and we wanted him to focus only on getting home alive and not have to worry about such an atrocious act by someone who did not even know [him].

In addition to the term of imprisonment, U.S. Chief District Court Judge Keith Watkins ordered Gosha to serve three years of supervised release and to pay restitution in the amount of $9,052,049.

Prior to Gosha’s sentencing, thirty of his co-conspirators have been sentenced, including Keisha Lanier who received 15 years and Tracy Mitchell who received over 13 years.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Franklin commended special agents of Internal Revenue Service-Criminal Investigation and U.S. Postal Service Office of Inspector General who investigated this case and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who prosecuted the case.

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

California Internet Sales Company President Sentenced to Prison for Embezzlement and False Tax Returns

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Monday, September 11, 2017

A Manhattan Beach, California resident was sentenced to nine months in prison for wire fraud and filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Alana W. Robinson for the Southern District of California.

According to the evidence presented at trial, James Miller, a California attorney, was the president and managing partner of MWRC Internet Sales LLC, an online sales company. As part of his duties, Miller had check signing authority for the company’s business bank account. From January 2009 through October 2012, Miller wrote unauthorized checks to himself from MWRC’s account, embezzling more than $300,000. Miller used this money to pay for personal expenses and did not report it on his individual tax returns for 2009 through 2012, causing a tax loss of approximately $58,000.

In addition to the term of prison imposed, U.S. District Judge George Wu ordered Miller to serve two years of supervised release and to pay $64,329 in restitution to the Internal Revenue Service (IRS).

Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of FBI and IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Rebecca Kanter and Trial Attorney Benjamin Weir of the Tax Division, who prosecuted the case.

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

District of Columbia Woman Sentenced to 63 Months in Prison For Her Role in Scheme That Used Stolen Identities To Fraudulently Seek Tax Refunds

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Thursday, July 27, 2017

Wide-Ranging Operation Filed Over 12,000 Fraudulent Tax Returns Seeking More Than $42 Million

WASHINGTON – 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 U.S. Attorney Channing D. Phillips; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; Special Agent in Charge Kimberly Lappin of the Internal Revenue Service Criminal Investigation (IRS-CI) Washington D.C. Field Office; Inspector in Charge Robert B. Wemyss of the U.S. Postal Inspection Service, Washington Division, and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.

Tarkara Cooper, 34, was convicted by a jury on Feb. 17, 2017, 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.

Conspirators played various roles in the scheme: stealing identifying information; allowing their personal identifying information to be used; creating and mailing fraudulent federal tax returns; allowing their addresses to be used for receipt of the refund checks; cashing the refund checks; providing bank accounts into which the refund checks were deposited and forging endorsements of identity theft victims on the refund checks. The false returns typically reported inflated or fictitious income from a sole proprietorship and claimed phony dependents to generate an Earned Income Tax Credit, a refundable federal income tax credit for working families with low to moderate incomes. To date, approximately two dozen participants in this scheme have pleaded guilty.

According to the evidence presented at trial, from approximately April 2010 through June 2012, Cooper and the Bryants participated in claiming $4,959,310 in fraudulent refunds, of which the IRS paid out approximately $2,285,717. Cooper agreed to allow her residence to be used for the delivery of tax refund checks, and was paid by a co-conspirator when she provided the tax refund checks to him. The Bryants deposited refund checks fraudulently obtained by others into accounts that they controlled.

In addition to the term of prison imposed, U.S. District Judge Rosemary M. Collyer ordered Cooper to serve three years of supervised release and to pay $1,926,958 in restitution to the IRS. She also ordered a forfeiture money judgment of $16,750.

U.S. Attorney Phillips, Acting Deputy Assistant Attorney General Goldberg, Special Agent in Charge Lappin, Inspector in Charge Wemyss, and Assistant Inspector General Phillips commended the special agents who conducted the investigation and acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein; Assistant U.S. Attorney Chrisellen Kolb; Paralegal Specialists Jessica Mundi, Aisha Keys, and Donna Galindo; former Paralegal Specialist Julie Dailey; Litigation Technology Specialist Ron Royal; Investigative Analysts William Hamann and Zachary McMenamin, and Victim/Witness Advocate Tonya Jones. They also expressed appreciation for the work of Trial Attorneys Jeffrey B. Bender, Thomas F. Koelbl, and Jessica Moran of the Tax Division, who worked on the case.

Finally, they commended the work of Assistant U.S. Attorneys Ellen Chubin Epstein and Michelle Bradford of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorney Kimberly G. Ang of the Tax Division, who prosecuted the case, as well as Assistant U.S. Attorney Diane Lucas, who assisted with forfeiture issues.

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

Florida Businessman Sentenced to Prison for Conspiring to Commit Tax and Bank Fraud

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Monday, July 17, 2017

Concealed Approximately $2.5 Million in Secret Belize Accounts

A Florida businessman was sentenced today to 57 months in prison in U.S. District Court for the Middle District of Florida for conspiring to commit tax and 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, Casey Padula, 48, of Port Charlotte, was the sole shareholder of Demandblox Inc., a marketing and information technology business. Padula conspired with others to move funds for his benefit from Demandblox to offshore accounts in Belize and disguised these transfers as business expenses in Demandblox’s corporate records. Padula created two offshore companies in Belize: Intellectual Property Partners Inc. (IPPI) and Latin American Labor Outsourcing Inc. (LALO). He opened and controlled bank accounts in the names of these entities at Heritage International Bank & Trust Limited (Heritage Bank), a financial institution located in Belize. From 2012 through 2013, Padula caused periodic payments to be sent from Demandblox to his accounts at Heritage Bank and deposited approximately $2,490,688. Padula used the funds to pay for personal expenses and purchase significant personal assets. However, he falsely recorded these payments in Demandblox’s corporate books as intellectual property rights or royalty fees and deducted them as business expenses on Demandblox’s 2012 and 2013 corporate tax returns. As a result of these false deductions, Padula caused a tax loss of more than $728,000.

Padula also conspired with investment advisors Joshua VanDyk and Eric St-Cyr at Clover Asset Management (CAM), a Cayman Islands investment firm, to open and fund an investment account that he would control, but that would not be in his name. Heritage Bank had an account at CAM in its name and its clients could get a subaccount through Heritage Bank that would not be in the client’s name but rather would be a numbered account. Padula transferred $1,000,080 from the IPPI bank account at Heritage Bank in Belize to CAM to fund a numbered account that concealed his financial interest in it. Padula failed to disclose this account to the U.S. Department of Treasury and the Internal Revenue Service (IRS) despite being required to do so under the law.

In addition to the tax fraud, Padula also conspired with others to commit bank fraud. Padula had a mortgage on his Port Charlotte, Florida home of approximately $1.5 million with Bank of America (BoA). In 2012, he sent a letter to the bank stating that he could no longer repay his loan. At the same time, Padula provided Robert Robinson III, 43, who acted as a nominee buyer, with more than $625,000 from his IPPI bank account in Belize to fund a short sale of Padula’s home. Padula and Robinson signed a contract, which falsely represented that the property was sold through an “arms-length transaction,” and agreed that Padula would not be permitted to remain in the property after the sale. Padula in fact never moved from his home and less than two months after the closing, Robinson conveyed it back to Padula by transferring ownership to one of Padula’s Belizean entities for $1. Robinson was also sentenced today to five years of probation for signing a false Form HUD-1 in connection with his role in the scheme.

“Casey Padula used secret numbered bank accounts, foreign shell companies and phony deductions to hide millions and evade U.S. taxes,” said Acting Deputy Assistant Attorney General Goldberg. “His 57 month sentence today makes clear that there is no place safe in the world for tax cheats to hide their money and feel secure that the Department of Justice and the IRS will not uncover their scheme and hold them fully accountable.”

“As Mr. Padula has learned, using shell companies and offshore accounts is not tax planning; it’s tax fraud,” said Chief Don Fort of IRS Criminal Investigation (CI). “The use of sophisticated international financial transactions does not prevent IRS CI from following the trail of money back to the person breaking the law. In conjunction with our law enforcement partners, we will continue our ongoing efforts to pursue individuals who use these offshore schemes to circumvent the law.”

In addition to the term of prison imposed by U.S. District Court Judge Sherri Polster Chappell, Padula was ordered to serve three years of supervised release and to pay a fine of $100,000 and to pay restitution of $728,609 to the IRS and to BoA in the amount of $739,459.90. He was remanded into custody.

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS CI, who conducted the investigation, and Assistant Chiefs Todd Ellinwood and Caryn Finley of the Tax Division, who prosecuted this case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office of the Middle District of Florida for its assistance.

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

Surgical Practice Office Manager’s Boyfriend Sentenced to Nearly 6 Years in Prison for Embezzlement Conspiracy

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Friday, July 14, 2017

BIRMINGHAM – A federal judge this week sentenced a Mississippi man to nearly six years in prison for conspiring with his girlfriend to steal more than $1 million from the Birmingham surgical practice where she worked, announced Acting U.S. Attorney Robert O. Posey and FBI Acting Special Agent in Charge David W. Archey.

U.S. District Court Judge Madeline Hughes Haikala sentenced ANTHONY T. MICHAEL, 43, of Jackson, Miss., to five years and 10 months in prison for conspiracy, bank fraud and aggravated identity theft. Michael pleaded guilty to the charges in March. The judge ordered him to pay $1.2 million in restitution and to forfeit the same amount to the government as proceeds of illegal activity.

Michael conspired with Anntwine Moss, 51, of Bessemer, to steal from Thoracic and Cardiovascular Surgery of Alabama between 2006 and 2013. Moss was office manager for the practice during that time and she and Michael were romantically involved.

U.S. District Court Judge Karon O. Bowdre sentenced Moss in May to three years and five months in prison on five counts of wire fraud and four counts of tax evasion in the case. The judge ordered Moss to pay $987,375 in restitution to the practice and to forfeit the same amount to the government.

According to court documents, Moss stole from the surgical practice by using her authority as office manager to write unauthorized checks to herself and to Michael, make unauthorized direct deposits into her account, and use the company’s credit cards for unauthorized personal purchases for herself and Michael. Moss had authority over several key functions at the surgical practice including payroll, accounting, bookkeeping and managing the office’s budget. She falsified her personal tax returns for several years by failing to report to the IRS the illicit income she stole from the practice.

The FBI and IRS investigated the case, which Assistant U.S. Attorney Xavier O. Carter Sr. prosecuted.

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.