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| Highlights |
The Investigation Highlights are updated weekly.
Second Guilty Plea for Defendant Related to IRS Workplace Crimes
On August 21, 2008, Donna Naylor pled guilty to one count of retaliation against a witness or victim in the U.S. District Court, District of Northern West Virginia.
According to court documents, in September 2006, someone poured a urine-like substance on the workspace of the victim, an Internal Revenue Service (IRS) employee. On September 6, 2007, Donna Naylor pled guilty in the U.S. District Court, District of Northern West Virginia, to one count of accessory after the fact, and admitted to writing and mailing an anonymous letter to the victim in which Naylor purported to be the perpetrator of the destruction of the victim’s workspace.
Naylor authored letters containing racial epithets, mailed the letters to IRS employees, and falsified the victim’s name or signature on the letters. Naylor also wrote and mailed a letter to the victim. This letter contained threats of bodily harm to the victim and the victim’s children. Naylor wrote and mailed a letter to another IRS employee depicting a drawing of three bodies hanging by nooses from a tree. The larger body was labeled with the name of the IRS employee and the two smaller bodies were labeled with the names of the employee’s children.
Naylor also authored a letter mailed to the U.S. Attorney’s Office in Martinsburg, West Virginia, which attempted to discredit the Treasury Inspector General for Tax Administration (TIGTA) agents investigating the case and called for formal charges to
be brought against the victim.
IRS Employee Sentenced for Unauthorized Accesses of Celebrities’ Accounts
On August 20, 2008, IRS employee John Snyder was sentenced in the U.S. District Court, Eastern District of Kentucky, Northern Division, for intentionally accessing a computer without authorization or exceeding authorized access to obtain information from the IRS. He was sentenced to three years probation and ordered to perform 60 hours of community service. He was also ordered to pay a fine of $1,000 and a $25 assessment.
According to court documents, between 2003 and 2008, Snyder accessed the accounts of at least 202 taxpayers for which no business-related purpose could be identified. All but five of the taxpayers were celebrities, spouses of these celebrities, sports figures, and well-known individuals. Snyder confessed to making the unauthorized accesses, stating that he did so out of curiosity.
TIGTA’s Strategic Enforcement Division detected the unauthorized accesses during routine analysis of suspicious accesses by IRS employees.
Woman Charged with Pretending to be an IRS Employee and Obtaining Funds from a 95-Year-Old Victim
On August 19, 2008, a Criminal Complaint was filed in the U.S. District Court, Northern District of New York, stating that Jessica Paradiso knowingly pretended to be an Internal Revenue Service (IRS) employee and, while acting as such and in such pretended character, demanded and obtained $1,550.
According to court documents, on March 20, 2008, Paradiso went to the apartment of the 95-year-old victim, identified herself as an IRS employee to the victim, told her that she owed additional taxes, and that Paradiso was there to collect them. The victim wrote Paradiso a personal check for $1,550 made payable to “cash.” On March 24, 2008, Paradiso returned to the victim’s apartment, again identified herself as an IRS employee, and demanded an additional $1,650 for “taxes.” Neighbors intervened on the victim’s behalf, and Paradiso subsequently left the victim’s apartment without additional funds
Former GSA Employee Sentenced for Bribery in Scheme Involving Security for IRS Locations
On July 28, 2008, Dessie Ruth Nelson was sentenced in the U.S. District Court, District of Maryland, to one count of bribery and one count of income tax evasion. Nelson was sentenced to 60 months in prison, followed by three years of supervised release. Nelson was ordered to pay a $200 assessment, a $25 processing fee, and to forfeit $138,500 and pay $38,780 in restitution to the Internal Revenue Service (IRS).
According to court documents, Nelson, a long-time employee of the General Services Administration (GSA) in San Francisco, California was responsible for contracting on GSA’s behalf with private companies to assist in providing security at GSA-managed buildings. GSA’s Public Buildings Service (PBS) was responsible for acquiring and managing real estate for other civilian branches of the Federal Government. The PBS in turn leased the space to Federal customer agencies, including the IRS.
Former Montgomery County Police Officer Michael Holiday was the Chief Executive Officer and sole shareholder of Holiday International Security (HIS), in Silver Spring, Maryland, which provided physical security to Federal installations.
Between 2000 and 2003, Holiday provided Nelson with cash, vacations, and other benefits in exchange for her assistance in awarding multi-million dollar contracts to HIS. Holiday arranged and paid more than $7,000 for Nelson’s passage on a Caribbean cruise, and gave Nelson a shopping bag containing approximately $35,000 in cash, and an envelope containing $10,000 in cash.
This case was worked jointly with the Federal Bureau of Investigation, the GSA Office of Inspector General (OIG), the Social Security Administration OIG, the Department of Homeland Security OIG, the IRS’s Criminal Investigation Division, and the Defense Criminal Investigative Service.
IRS Employee Charged with Unauthorized Inspection of Tax Return Information
On July 25, 2008, a Misdemeanor Information was filed in the U.S. District Court, Eastern District of California, charging Terry Irwin with one count of unauthorized inspection of tax return information and one count of fraud and related activity in connection with computers.
According to court documents, on or about December 16, 2005, and January 17, 2006, Irwin, an IRS employee, did unlawfully and without authorization access and inspect the tax return information of a private individual and intentionally exceeded her authorized access to a computer to do so.
IRS Tax Examining Technician Indicted for Assisting in the Preparation of Fraudulent 1040 Income Tax Return Forms for Taxpayers
On July 31, 2008, Jesse Pedro Hernandez, Jr. was indicted in the U.S. District Court, Eastern District of California, on seven counts of aiding and assisting in the preparation and presentation of false and fraudulent income tax returns and four counts of offenses by officers and employees of the United States.
According to the Indictment, Hernandez became aware through his work as a Tax Examining Technician with the IRS that the IRS did not always verify withholding amounts reported on Forms 1099-R and attached to individual income tax returns. As part of his duties with the IRS, Hernandez obtained a Form 1099-R issued to a taxpayer. He altered that form to make it appear that it was issued to another taxpayer, and submitted it to the IRS to enable the other taxpayer to obtain, or retain, a refund of withholdings to which the taxpayer was not entitled.
From about April 15, 2006 to about April 15, 2007, Hernandez did willfully aid and assist in, and procure, counsel, and advise the preparation and presentation to the IRS of individual income tax return Forms 1040 for taxpayers that were false and fraudulent. The Forms 1040 falsely represented that the taxpayers had received a “rollover” distribution from an Individual Retirement Account, and that taxes had been withheld from that distribution which the taxpayers were entitled to have refunded. In some cases, this claim was supported by a false and fraudulent Form 1099-R.
This case was worked jointly with the IRS’s Criminal Investigation Division.
Tax Preparer Sentenced for Embezzling Payments to the IRS
On July 8, 2008, James Richards was sentenced in the U.S. District Court for the Western District of Missouri on charges pursuant to a scheme to embezzle approximately $126,955.97 in payments to the Internal Revenue Service (IRS).
According to court documents, on January 23, 2008, James Richards pleaded guilty to one count of accepting funds intended for the IRS and converting the funds to his own use, one count of evasion of tax assessment, one count of making false statements to an agency of the U.S., and one count of fabricating documents purported to be from the IRS to conceal theft.
As the owner of Holliday and Associates, Richards was hired by his clients to prepare and file their tax returns as well as make their Federal tax deposits in a timely manner. Richards routinely asked clients to make payments toward their anticipated tax liability, payable to him or his company. Richards intentionally failed to make the clients’ required tax deposits, pay over their estimated tax payments, or even file the required forms with the IRS. Richards attempted to conceal his theft by preparing another set of income returns with the additional funds and fabricated letters to cause the release of garnishments. In addition, Richards made a materially false statement, in that he represented himself in documents submitted to the IRS to be a Certified Public Accountant.
This case was worked jointly with IRS’s Criminal Investigation Division.
Individual Charged in Murder for Hire Plot of an IRS Revenue Officer
On July 30, 2008, Randy Nowak was charged in a criminal complaint in the U.S. District Court, Middle District of Florida, Tampa Division, with attempting to kill an Internal Revenue Service (IRS) Revenue Officer while such officer was engaged in the performance of official duties.
According to court documents, on or about June 24, 2008, Nowak, owner of RJ Nowak Enterprises, Inc. (a Polk County construction company in Florida), had been asking around to find someone to kill an IRS employee. Nowak sought to kill the IRS employee because she was auditing Nowak, and he stood to lose $4,000,000 that he had hidden offshore. Nowak had an outstanding liability to the IRS of approximately $300,000 related to his personal income tax obligations and had four years of outstanding corporate tax returns for his business that he had not filed.
On July 29, 2008, Nowak met with an undercover Federal Bureau of Investigations (FBI) Task Force agent posing as a hit man and paid him $10,000 as a down payment for killing the IRS Revenue Officer. Nowak also asked the undercover agent if he would be willing to burn down the IRS’s office in Lakeland.
This case was worked jointly with the FBI.
Edward Sobczewski Indicted for Bribery of Revenue Agent with Colorado Rockies Tickets
On July 21, 2008, Edward Sobczewski was indicted in the U.S. District Court for the District of Colorado, on four counts of bribery of a public official.
According to court documents, on or about April 10, 2008, May 1, 2008, and May 6, 2008, Sobczewski offered and promised Colorado Rockies tickets to a Revenue Agent (RA) if the RA changed audit results of Sobczewski’s 2006 personal income tax return. On May 22, 2008, Sobczewski gave season tickets for the Colorado Rockies in exchange for changed audit results of Sobczewski’s 2006 personal income tax return.
Donita Williams Sentenced for Threatening TIGTA Agent with Bodily Harm
On July 1, 2008, Donita Williams was sentenced in the U.S. District Court, Eastern District of Michigan, to one count of obstruction of justice by threat of force. Williams was sentenced to probation for one year and ordered to pay a $25 fine.
According to court documents, on March 28, 2007, Williams had her return prepared by a volunteer at a Volunteer Income Tax Assistance (VITA) site. In April 2007, an employee sent a letter to Williams explaining that her return was rejected due to someone else claiming her as a dependant on their return.
On April 9, 2007, Williams left a threatening voicemail message and, during a phone call to Williams, a Special Agent with the Treasury Inspector General for Tax Administration (TIGTA) was threatened by Williams.
IRS Chicago Employee Pleads Guilty to Embezzlement of Over $12,000 in Payroll Compensation
On June 20, 2008, Monique Steward pleaded guilty in the U.S. District Court, Northern District of Illinois, Eastern Division, to one count of embezzling public funds.
According to court documents, beginning as early as February 18, 2004 and continuing through about August 10, 2007, Steward embezzled money in the form of payroll compensation from the Internal Revenue Service (IRS). Steward worked as a secretary in the Chicago office where she entered IRS employees’ timesheets into an automated system. She made various false entries in the system regarding her time and attendance records. Steward was paid for 805 hours that she had not worked, for a total loss to the government of $12,657.68.
IRS Dallas Lockbox Employee Indicted for Theft and Embezzlement of Over $485,000 in Taxpayer Remittance Checks
On June 24, 2008, Emmanuel Ekwuruke was indicted in the U.S. District Court for the Northern District of Texas, Dallas Division, on one count of theft, embezzlement, misapplication by a bank employee, and one count of theft of public money.
According to court documents, from February 2006 through May 2008, Ekwuruke, employed at the Dallas lockbox, embezzled approximately $485,539.76 in taxpayer remittance checks.
IRS Mail Clerk Sentenced for Theft of Government Property
On June 9, 2008, Teresa Richardson was sentenced in the U.S. District Court for the Eastern District of California on one count of theft of government property. Richardson was sentenced to 36 months probation and was ordered to pay $1,405.00 in restitution and a $100 assessment.
According to court documents, from no later than August 16, 2004 through no earlier than March 6, 2006, Richardson, a mail clerk at the Fresno IRS Submission Processing Center, embezzled money orders remitted to the IRS by taxpayers.
This case was worked jointly with the U.S. Postal Inspection Service.
IRS Employee Charged with Unauthorized Inspection of Tax Return Information
On June 17, 2008, a Misdemeanor Information was filed in the U.S. District Court, District of Utah, Northern Division, charging Luwen Davis with five counts of unauthorized inspection of tax return information.
According to court documents, on or about October 24, 2005, March 6, 2006, and May 1, 2006, Davis, an employee with the Internal Revenue Service, did unlawfully and without authorization access and inspect tax return accounts of private taxpayers.
Former IRS Employee Pleads Guilty to Receipt of Over $9 Million in Fraudulent District of Columbia Checks or Cash Proceeds in District of Columbia Property Tax Refund Scheme
According to a Department of Justice press release, on June 25, 2008, former Internal Revenue Service (IRS) employee Robert Steven pleaded guilty to receipt of stolen property and conspiracy to commit money laundering in connection with a property tax refund scheme in which millions of dollars were stolen from the District of Columbia Office of Tax and Revenue.
From 1990 to 2007, 67 deposits in the form of fraudulently obtained District of Columbia government checks or cash proceeds from the scheme totaling $9,272,312 were made into a checking account maintained by Steven. The individual checks ranged in amounts from a handful of initial deposits over $4,000 each, to subsequent deposits of up to $490,000. Steven transferred at least $1,709,500 of these funds into another checking account used primarily by Steven. Using these funds, Steven purchased at least four Jaguar cars, a townhouse, and vacations to the Bahamas.
This case was worked jointly with the IRS’s Criminal Investigation Division, the Federal Bureau of Investigation, and the District of Columbia Office of Inspector General.
IRS Employee Charged With Unauthorized Inspection of Tax Return Information
On June 17, 2008, in a Misdemeanor Information filed in the U.S. District Court, District of Utah, Northern Division, Kathy Statler was charged with two counts of unauthorized inspection of tax return information.
According to the Information, on or about June 30, 2005 and September 13, 2005, Statler, while an employee of the Internal Revenue Service, did unlawfully and without authorization access and inspect the tax return accounts of private taxpayers.
IRS Employee Sentenced for False Claims on Employee Time Reports
On June 10, 2008, Charles Scoville was sentenced in the U.S. District Court for the Eastern District of Kentucky to six months in prison and three years of supervised release, and ordered to make restitution in the amount of $10,098.22, and pay a $100 assessment. Mr. Scoville was sentenced on one count of submitting false claims.
According to court documents, from about September 20, 2006 through on or about January 28, 2007, Scoville, while acting as an Internal Revenue Service (IRS) employee out of the Prestonsburg, Kentucky post of duty, submitted numerous false, fictitious, and fraudulent employee time reports for hours worked.
Scoville was paid for working a total of 233 hours over a span of 46 days, during which he did not perform any of his employment-related duties. Scoville filed false work reports in order to conceal the fact that he was not performing his employment-related duties.
During the same time frame, Scoville used his government vehicle for personal use on a regular basis, including, but not limited to, driving the vehicle on several trips to visit family in Lawrenceburg, Kentucky, driving the vehicle for personal use on weekends and holidays, and driving the vehicle to work at his second job as a sportscaster for a local radio station.
IRS Mail Clerk Indicted for Theft of Over $75,000 in Taxpayer Checks
On May 22, 2008, Shaun Lertswan was indicted in the U.S. District Court for the Eastern District of California, on six counts of theft of government property.
According to court documents, from about February 13, 2008 to April 15, 2008, Lertswan, a mail clerk at the Internal Revenue Service (IRS) Fresno Service Center, stole checks made payable to the IRS totaling $75,385.31. Lertswan changed the checks (or caused them to be changed), making them payable to himself, after which he deposited them into his bank account.
Individual Sentenced for Intentionally Accessing an IRS Computer Without Authorization
On June 2, 2008, Melody Woods was sentenced in the U.S. District Court, Southern District of New York, on one count of intentionally accessing a computer without authorization and exceeding authorization to obtain information from a U.S. agency. She was sentenced to two years probation and was ordered to pay a $25 assessment.
According to court documents, from at least June 2002 to February 7, 2006, Woods intentionally and knowingly accessed a computer system maintained by the U.S. Department of the Treasury without authorization. Woods exceeded her authorized access in order to obtain information from the IRS concerning at least six individuals.
IRS Employee Charged with Unauthorized Inspection of Tax Return Information
On May 12, 2008, in a criminal information filed in the U.S. District Court for the Eastern District of California, David Baker was charged with one count of unauthorized inspection of tax return information and one count of fraud and related activity in connection with computers.
According to court documents, between approximately February 15, 2007 and May 3, 2007, Mr. Baker, as an Internal Revenue Service (IRS) employee, unlawfully and without authorization accessed and inspected the tax return information of four private individuals and intentionally exceeded his authorized access to do so.
Individual Pleads Guilty to Theft of U.S. Treasury Checks
On May 19, 2008, Jacqueline White pleaded guilty in the U.S. District Court, District of Connecticut, to one count of theft of public money.
According to court documents, from approximately April 12, 2006 to approximately May 3, 2006, Ms. White willfully and knowingly stole eight U.S. Treasury checks with an aggregate value of $51,433.
IRS Employees Charged with Unauthorized Inspection of Tax Return Information
On May 12, 2008, in two separate cases filed in the U.S. District Court for the Eastern District of California, Brenda Jurado and Irene Fierro were each charged with one count of unauthorized inspection of tax return information, and one count of fraud and related activity in connection with computers.
According to court documents, between August 17, 2005, and February 15, 2007, Ms. Jurado, as an Internal Revenue Service (IRS) employee, unlawfully and without authorization accessed and inspected the tax return information of two private individuals and intentionally exceeded her authorized access to a computer to do so.
In addition, between February 16, 2007, and May 17, 2007, Ms. Fierro, as an IRS employee, unlawfully and without authorization accessed and inspected the tax return information of four private individuals and intentionally exceeded her authorized access to a computer to do so.
Two IRS Employees Charged with Unauthorized Inspection of Tax Return Information
On May 12, 2008, in two separate cases filed in the U.S. District Court for the Eastern District of California, Corina Yepez and Melissa Moisa were each charged with one count of unauthorized inspection of tax return information and one count of fraud and related activity in connection with computers.
According to court documents, on or about January 27, 2006, Yepez, as an Internal Revenue Service (IRS) employee, unlawfully and without authorization accessed and inspected the tax return information of one private individual and intentionally exceeded her authorized access to a computer to do so.
In addition, between approximately May 12, 2006, and July 7, 2006, Moisa, as an IRS employee, unlawfully and without authorization accessed and inspected the tax return information of two private individuals and intentionally exceeded her authorized access to a computer to do so.
Indicted IRS Revenue Agent Sentenced For Tax Fraud
On April 17, 2008, Harry Willner was sentenced in the U.S. District Court, Southern District of New York, on one count of endeavoring to obstruct and impede the Internal Revenue Laws.
According to the indictment, Mr. Willner was an IRS revenue agent assigned to the Large and Midsize Business Division and was also an officer of NIA Advertising, Inc. (NIA). Mr. Willner did not have the IRS's approval to serve as a corporate officer of NIA, but did receive the IRS's approval to engage in outside, part-time employment, to include an unspecified position with Royal Magazine, Inc. According to certain NIA records, NIA's address was the same as Mr. Willner's home address.
According to NIA's books and records, NIA purportedly loaned sums totaling approximately $849,000 to Royal Magazine, Inc. On NIA's 2002 Federal tax return, Mr. Willner reported gross receipts and a bad debt deduction associated with the purported loan, which resulted in NIA reporting a net operating loss of approximately $758,081.
Mr. Willner then attempted to make fraudulent use of NIA's net operating losses. Mr. Willner attempted to sell NIA's net operating losses to other taxpayers, thereby enabling those taxpayers to offset the income on their tax returns and fraudulently reduce their tax liabilities.
This case was investigated jointly with the IRS's Criminal Investigation Division.
Individual Indicted for Bribery of IRS Auditor
On April 24, 2008, Victor John was indicted in the U.S. District Court for the Eastern District of California on one count of bribery of a public official.
According to court documents, between about March 24, 2008, and April 3, 2008, Mr. John corruptly gave $4,900 to an Internal Revenue Service (IRS) auditor, to influence the auditor, a public official, on a pending assessment of tax due and owed by Mr. John.
IRS Employee Charged with Unauthorized Inspection of Tax Return Information
On April 7, 2008, Internal Revenue Service (IRS) employee Brandon A. Lynch was charged in the U.S. District Court, Eastern District of California, with unauthorized inspection of tax return information, and fraud and related activity in connection with computers.
According to the criminal information, the IRS employee accessed and inspected the tax return information of two private individuals between March 12, 2006, and May 17, 2006. The IRS employee made these accesses without authorization, and intentionally exceeded his authorized access to a computer.
Individual Indicted on Eight Counts of Impersonating an IRS Employee
Morgan Taylor Mayfaire was indicted on April 17, 2008, in the U.S. District Court, Southern District of Florida, on 35 counts of preparing fraudulent tax returns and eight counts of falsely pretending to be an IRS employee.
According to the indictment, Mayfaire prepared tax returns for taxpayer clients, and
in return, her clients paid tax return preparation fees in the amount of 10 percent of the amount of the refund claimed on their Federal tax returns. Mayfaire caused approximately $472,904 to be fraudulently refunded by the IRS to her clients based on false deductions she included on the tax returns. Mayfaire did so by willfully aiding and assisting in the preparation of Individual Income Tax Returns (Forms 1040 and 1040X), that included Itemized Deductions (Schedule A), with fictitious and/or inflated deductions that Mayfaire knew the taxpayers were not entitled to claim.
Mayfaire also pretended to be an IRS employee by falsely representing to taxpayers that as an IRS employee, she had ways of increasing taxpayer deductions on tax returns that no other person would know. Thus, she induced taxpayers to hire her to prepare their taxes, file false tax returns, collect improper tax refunds, and pay her fees totaling approximately $13,478.
This case was investigated jointly with the IRS's Criminal Investigation Division.
Individuals Indicted on Charges of Conspiracy and Interference with the Administration of Internal Revenue Laws
On April 7, 2008, in the U.S. District Court for the Northern District of Ohio (Western Division), Winfield Thomas and Jeanne Herrington were charged with conspiracy to defraud the United States. Herrington was also indicted on a second count of interfering with the administration of Internal Revenue laws. This case was investigated jointly with the Internal Revenue Service's (IRS) Criminal Investigation Division.
From about 1993, Thomas and Herrington conspired to defraud the United States by obstructing the IRS in collecting income taxes by promoting and selling abusive trusts, preparing and advocating the preparation of false Federal income tax returns, submitting and/or assisting in the submission of false and fraudulent documentation to the IRS to eliminate tax liabilities and harass IRS employees, and organizing and/or attending meetings to discuss methods of tax evasion.
Beginning in October 2006, Herrington corruptly endeavored to obstruct the due administration of the Internal Revenue laws by preparing and submitting to the IRS fraudulent Forms 1099, which falsely reported that individuals associated with the Federal criminal investigation against her had engaged in certain reportable transactions in excess of $2 million.
Revenue Officer Indicted in a $13 Million Securities Fraud Scheme
On April 3, 2008, Revenue Officer Luis Acosta-Andino was charged with securities fraud and aiding and abetting in the U.S. District Court for the District of Puerto Rico.
According to the indictment, from in or about 2003 through in or about 2005, Acosta-Andino worked part-time as a promoter and sales agent in the high yield investment program of CIA Financial Consulting Services, Inc. (CIA), a for-profit corporation in Puerto Rico. CIA engaged in the practice of soliciting money from unsuspecting investors in the general public by persuading them to provide money to CIA to be invested in high yield investment programs, and CIA guaranteed the investors a specific monetary return. CIA was not registered nor licensed to offer or sell investments to the general public.
In one program, CIA offered and sold investments through investment contracts in which participants were solicited to invest money upon the promise of a 100 percent rate of return in a short period of time. Acosta-Andino offered and sold these investment contracts on behalf of CIA. He also gave private promotional presentations. On August 30, 2004, Acosta-Andino and other defendants sent and caused to be sent via mail a security, that is, an investment contract, for sale to an investor in Hartford, Connecticut, without the required registration statement and without being registered as brokers and dealers.
The indictment also alleges forfeiture to the U.S. by the defendants, including Acosta-Andino, any property constituting, or derived from, proceeds obtained directly and indirectly, as the result of securities fraud and other violations, including, but not limited to, $13 million.
Tax Preparer Indicted for Theft in Tax Refund Scheme
On March 12, 2008, Angelo Principio was indicted in the U.S. District Court of New Jersey for theft of public money.
According to court documents, Principio was the principal owner and operator of Jersey Tax and Financial Services located in Middlesex, New Jersey. Jersey Tax and Financial Services provided a variety of services to its clients, including the preparation and filing of electronic Federal income tax returns.
From January 1, 2005, through December 31, 2006, Principio and other individuals knowingly converted to their own use U.S. money in the amount of $225,609.24 through a tax refund scheme. Principio and others, while operating Jersey Tax and Financial Services, signed accurate Federal tax returns for their clients and provided them with hard copies of these returns. Without the knowledge or consent of the taxpayers, Principio and others created, substituted, and signed inaccurate tax returns, which inflated the tax refund amounts. These fraudulent tax returns were filed electronically with the Internal Revenue Service (IRS). The fraudulently procured tax refund checks were then forwarded to Principio, who used the improperly obtained funds for his own personal benefit.
Employee Sentenced for Falsifying IRS Records
On November 28, 2007, Internal Revenue Service (IRS) employee Maulik Desai was sentenced in the U.S. District Court for the Southern District of Ohio on one count of falsifying records regarding IRS audit activity. Desai was ordered to pay a $100 assessment, a $2,500 fine, and $250.14 in restitution. Desai was also placed on 24 months of probation.
According to court records, Desai was previously indicted on May 15, 2007, on one count of wire fraud and eight counts of making or signing fraudulent entries or statements in IRS records, by knowingly falsifying examination or audit activities while working as a revenue agent. Specifically, Desai made or signed fraudulent entries regarding telephone communications, work activities, travel, and meetings relating to examinations or audits that Desai had been assigned to carry out regarding certain taxpayers.
Individual Indicted for Submitting Fraudulent Documentation to the IRS to Receive Employment Benefits
On March 5, 2008, Torita Proctor was indicted by the U.S. District Court for the Eastern District of Virginia for submitting fraudulent documentation to the Internal Revenue Service (IRS) in order to receive various employment benefits.
According to court documents, Proctor, who was an IRS Information Technology Specialist, was working full-time from her home due to on-going health problems. In May 2003, Proctor signed a lease for and operated The Good News Bible Bookstore. The business opened in June 2003 and closed by the end of October 2003. While employed as an IRS employee, Proctor was present at the store and oversaw daily operations.
From June 2003 through October 2003, Proctor submitted fraudulent documentation to the IRS indicating that she was working for the IRS at her home when, in fact, she was operating The Good News Bible Bookstore, causing a loss of $11,896.11 to the Federal Government. During this same time period, Proctor submitted fraudulent documentation to the IRS indicating that she was unable to work in order to receive donated leave, causing a loss of $9,081 to the Federal Government. Additionally, Proctor submitted fraudulent documentation to the IRS indicating that she was unable to work in order to receive health insurance benefits while on sick leave, causing a loss to the Federal Government of $2,199.70.
IRS Revenue Agent Sentenced for Filing False Tax Returns, Tax Evasion, Structuring Financial Transactions, and Bank Fraud
On February 25, 2008, Bohdan Senyszyn was sentenced by the U.S. District Court for the District of New Jersey to 34 months of imprisonment, supervised release for a term of five years after being released from prison, a fine in the amount of $12,500, and a special assessment of $400. Senyszyn was sentenced after pleading guilty on September 20, 2007, to filing false returns by an IRS agent, tax evasion, structuring financial transactions, and bank fraud.
According to court documents, on April 15, 2003, Senyszyn, while working as an IRS Revenue Agent, prepared and filed with the IRS a 2002 U.S. Corporation Income Tax Return (Form 1120) on behalf of a corporation. Senyszyn knowingly, willfully, and falsely stated in the tax return that shareholders had invested $500,000 into the corporation.
During calendar year 2003, Senyszyn acquired taxable income in the amount of $252,726 in addition to the income paid to him as salary and wages by the IRS. On January 29, 2004, Senyszyn prepared, co-signed, and filed a U.S. Individual Income Tax Return (Form 1040), declaring $78,115.80 in wages and salaries as the only income for his family.
On July 9, 2003, and July 10, 2003, Senyszyn knowingly and willfully structured and assisted in structuring transactions with domestic financial institutions by causing U.S. currency to be deposited in amounts of less than $10,000.
According to court documents, on July 16, 2003, Senyszyn prepared a Fleet National Bank Small Business Credit Express Application for a company as part of a scheme to obtain money by falsely representing the company's business revenue and net income. Senyszyn submitted falsified documents to the bank in order to secure a loan on behalf of the company in the amount of $25,000.
This investigation was worked jointly with IRS's Criminal Investigation Division.
Individual Sentenced to Imprisonment for Bribery of IRS Revenue Officer
On February 22, 2008, Jeffrey Darr was sentenced in the U.S. District Court for the Central District of Illinois on two counts of bribery, for a total term of 24 months of imprisonment on each count to run concurrently.
Upon release from imprisonment, Darr will be on supervised release for a term of three years on each count to run concurrently. In addition, he was ordered to pay a $6,000 fine, a $200 assessment, and to forfeit the $3,000 in bribe money.
According to court documents, on November 21, 2006, Darr corruptly offered and promised to give money to an Internal Revenue Service (IRS) revenue officer with the intent to induce the revenue officer to violate his or her lawful duty. On December 7, 2006, Darr corruptly gave money to an IRS revenue officer with the intent to induce the revenue officer to violate his or her lawful duty.
Individual Pleads Guilty to Misuse of IRS Symbol
Amanda Evans pleaded guilty in the U.S. District Court for the Central District of California in a plea agreement filed on January 31, 2008, to one count of misuse of the Department of the Treasury name or symbol.
According to court documents, on July 25, 2006, Evans knowingly used the words "Internal Revenue Service" and the IRS symbol in connection with a business activity in a manner that could reasonably be interpreted and construed as conveying the false impression that her business activity was endorsed, authorized by, or associated with the Department of the Treasury.
IRS Employee Pleads Guilty to Unauthorized Access of a Computer
On February 13, 2008, Christopher Supple pleaded guilty in the U.S. District Court of Connecticut to one count of unauthorized access of a computer, and he agreed to resign from his position at the IRS. In addition, Supple agreed not to apply for any future position or job with the U.S. Government.
According to court documents, on November 21, 2002, Supple, an IRS employee, used a computer to access information regarding a taxpayer's individual income tax returns for the years 1997 and 2000. Supple willfully and intentionally accessed and inspected the tax returns without a legitimate business purpose, without proper authorization, and knowing that the unauthorized inspection of a return and return information was in violation of Federal law and IRS policy.
Individual Sentenced to Imprisonment and $534,203.76 in Restitution to the IRS
On February 15, 2007, William Neesley was indicted in the U.S. District Court for the Western District of Michigan on an 18-count indictment. The charges included: attempting to interfere with the administration of Internal Revenue laws, attempting to evade/defeat tax liabilities, and offering fictitious obligations with intent to defraud.
From October 1, 2005, through January 16, 2007, Neesley knowingly and with the intent to defraud presented to the IRS and other taxing authorities nine false and fictitious instruments in the amount of $1,000,427.06, purporting to be actual financial instruments issued under the authority of the United States for the purpose of satisfying his tax liability.
According to court documents, Neesley failed to file income tax returns for tax years and calendar years 1998 through 2004. From April to May 2003, he prepared five false and fictitious income tax returns for estates and trusts for tax years and calendar years 1998 through 2002. He altered his Social Security number to make it appear to be a valid employer identification number. In addition, Neesley zeroed his income by falsely claiming that he paid himself a like amount in "fiduciary fees," which he wrongfully deducted.
On January 30, 2008, Neesley was sentenced to 36 months of imprisonment on count one, 60 months of imprisonment for each of counts two through nine, and 72 months imprisonment for each of counts 10 through 18 - all terms to be served concurrently. In addition, Neesley was ordered by the court to pay $534,203.76 in restitution to the Internal Revenue Service (IRS), along with an $1,800 assessment. Upon release from imprisonment, he will be placed on supervised release for one year on count one and three years on counts two through 18 - all terms to run concurrently.
This case was worked jointly with the IRS's Criminal Investigation Division.
IRS Employee Pleads Guilty to Unauthorized Inspection of Tax Returns or Tax Return Information
On February 6, 2008, Kathaleen Wells pleaded guilty in the U.S. District Court for the Eastern District of California to unauthorized inspection of tax returns or tax return information.
According to court documents, between April 2002 and May 2006, Wells, while an employee of the Internal Revenue Service (IRS), willfully and unlawfully made unauthorized accesses to inspect the tax return information of six private individuals without the authorization of the IRS or the individuals.
Former IRS Employee Sentenced for Unauthorized Inspection of Tax Returns and Return Information
On January 8, 2008, Diane Snyderman, a former employee of the Internal Revenue Service (IRS), was sentenced in the U.S. District Court of New Jersey to four years of probation, six months of home confinement, a $10,000 fine, and a $25 special assessment fee on one count of unauthorized inspection of tax return information.
On August 9, 2007, Diane Snyderman pleaded guilty in the U.S. District Court for the District of New Jersey to the unauthorized inspection of tax returns and return information.
According to court documents, an investigation was initiated after the Treasury Inspector General for Tax Administration's (TIGTA) Strategic Enforcement Division (SED) established that on April 22, 2005, Snyderman inspected return information of an individual who was a certified public accountant (CPA) and who had prepared Snyderman's tax returns for the past 30 years. The SED also established that between August 1997 and September 2006 Snyderman engaged in a variety of unauthorized activities and accesses that were outside the scope of her duties. She inspected tax returns and/or return information for approximately 56 individuals, all of whom were clients of the CPA. Snyderman also inspected tax returns and return information relating to a real estate sales firm listed on her IRS employment application as her former employer, and tax returns and return information relating to her friends and relatives, as well as her friends' relatives.
Individual Pleads Guilty to Embezzling IRS Tax Payments from Clients
On January 23, 2008, James Richards pleaded guilty in the U.S. District Court for the Western District of Missouri to one count of accepting funds intended for the IRS, one count of evasion of tax assessment, one count of representing himself as a CPA in documents submitted to the IRS, and one count of fabricating documents purported to be from the IRS.
According to court documents, Richards is the owner of Holliday and Associates, a sole proprietorship that performs general accounting services and tax preparation for clients. Richards routinely asked clients to make payments toward their anticipated tax liability. He asked clients to make the checks out to him or his company. Richards accepted the estimated tax payments intended for the IRS from his clients but failed to make the required tax deposits, pay their estimated payments, or file the required forms with the IRS.
In addition, Richards made false statements by representing that he was a CPA in Missouri and represented taxpayers before the IRS based on that status. In an effort to conceal his theft, Richards fabricated IRS documents to stop collection activity for his clients.
This case was worked jointly by IRS-Criminal Investigation Division and TIGTA.
Individual Indicted for Theft of Public Money
Jennifer Jackson was indicted on January 17, 2008, in the U.S. District Court for the Southern District of Texas on one count of theft of public money.
According to court documents, on May 9, 2005, Jackson knowingly converted for her own use a cashier's check in the amount of $19,749.69, made payable to the Internal Revenue Service (IRS) for a client's tax payment.
Individual Pleads Guilty to Assaulting a Federal Officer
Lisa Blechman pleaded guilty on December 12, 2007, in the U.S. District Court for the Central District of California to one count of assaulting a Federal officer.
On November 14, 2007, Blechman was arrested by Treasury Inspector General for Tax Administration (TIGTA) special agents in response to an arrest warrant issued on November 13, 2007. Blechman was arrested for intentionally assaulting an employee of the Internal Revenue Service (IRS) by unleashing two dogs on the employee while the employee was in the course of performing her official duties.
On October 30, 2007, an IRS employee went to Blechman's residence to serve an IRS summons. When the employee identified herself, Blechman became visibly agitated and began yelling and swearing at her. After the IRS employee taped the summons to the front door, Blechman told the employee that if she did not remove the summons from the door, Blechman was going to come outside with her dogs. As the IRS employee began to walk to her vehicle, Blechman opened the front door and released the dogs in an attempt to scare and intimidate the IRS employee.
Individual Charged with Misuse of the IRS Symbol
On January 23, 2008, a criminal information was filed in the U.S. District Court for the Central District of California charging Amanda Evans with one count of misuse of a Department of the Treasury name or symbol.
According to court documents, in connection with a business activity on July 25, 2006, Evans knowingly used the words “Internal Revenue Service” and the IRS symbol in a manner that could reasonably be construed as conveying the false impression that her business activity was endorsed, authorized by, and associated with the Department of the Treasury.
Individual Charged with Stealing over $27,000
Tracie Coleman was charged in the Circuit Court of Jackson County, Missouri, with one count of stealing by deceit.
According to court documents, from August 7, 2004, to February 12, 2005, Coleman appropriated Public Housing Assistance benefits by falsely reporting that her only source of income was child support and that she did not have a savings account. Coleman was employed by the Internal Revenue Service, received State unemployment benefits, and failed to report her savings account information. The loss to the Housing Authority of Kansas City, Missouri, was $27,335.01.
This case was worked jointly by the U.S. Department of Housing and Urban Development, Office of Inspector General, and the Treasury Inspector General for Tax Administration (TIGTA).
IRS Employee Sentenced for Unauthorized Access of Computer Data
On December 20, 2007, Patricia Moreno was sentenced in the U.S. District Court, Eastern District of California, to one year of probation, 50 hours of community service, a $500 fine, and a $25 penalty assessment for unauthorized access of computer data.
According to court documents, from March 17, 2003, to April 22, 2004, Moreno, in her capacity as an Internal Revenue Service (IRS) Tax Examining Technician, exceeded her authorized access and obtained confidential information contained in the IRS's tax database. Specifically, Moreno accessed the confidential tax records of an individual on at least 85 different occasions.
Wilfredo Ventura Sentenced for Bribery of an IRS Revenue Agent
On December 17, 2007, Wilfredo Ventura was sentenced in the U.S. District Court,
Southern District of Texas, to 21 months of imprisonment, three years of supervised release upon release from imprisonment, and a $100 criminal monetary penalty for bribery of a public official.
According to court documents, on October 16, 2006, Ventura knowingly offered $500 to an IRS Revenue Agent, with the intent to influence the agent to aid in committing a fraud against the United States, which was in violation of the agent's lawful duty as a public official.
Latitia Simmons Indicted on Theft Charges
On December 20, 2007, Latitia Simmons was indicted in the Circuit Court of the 18th Judicial Circuit, DuPage County of Illinois on theft charges.
According to court documents, between September 26, 2002, and September 12, 2006, Simmons committed theft of United States currency valued between $300 and $10,000 that was the property of the Internal Revenue Service (IRS) by knowingly delivering to the IRS employee time reports that were capable of defrauding another.
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