FROM: FDIC AND U.S. ATTORNEY'S OFFICE, DISTRICT OF NEW JERSEY
FOR IMMEDIATE RELEASE
May 19, 2015
Union City, New Jersey, Man Sentenced to 27 Months in Prison for Operating Supposed Charity as Illegal Bank, Falsifying Taxes
NEWARK, N.J. B A Union City, New Jersey, man was sentenced today to 27 months in prison for operating a supposed charitable organization, or “gemach,” as an unchartered bank, accepting millions of dollars in deposits – including nearly $1 million of his own money – which he shielded from state or federal regulation, U.S. Attorney Paul J. Fishman announced.
Moshe Schwartz, 34, a/k/a “David Schwartz” or “Gedalya David Schwartz,” previously pleaded guilty before U.S. District Judge Jose L. Linares to two counts of an information: operating an unchartered bank and aiding and assisting in the filing of a false 2007 tax return. Judge Linares imposed the sentence today in Newark federal court.
According to the information and statements made in court:
Schwartz operated Gemach Shefa Chaim (GSC), purportedly to provide interest-free loans to needy members of the Sanz community in Union City. During his guilty plea proceeding, Schwartz admitted he operated GSC as a bank, with millions of dollars in deposits and more than 350 client accounts by July 2009.
To operate a bank in the United States, a bank is required to obtain a charter from the United States or the state in which the bank operates. Chartered banks are subject to oversight, regulation, and periodic review by federal and state authorities. Neither Schwartz nor GSC had such a charter.
Schwartz admitted that, in operating GSC as a bank, he accepted deposits and credited clients’ accounts, wrote checks from GSC as directed by clients, made transfers between accounts, disbursed client funds upon request, negotiated GSC checks presented by persons other than the named payees, conducted wire transfers, provided clients with receipts of transactions, charged clients a fee for bounced checks and provided overdraft notices to clients. Schwartz also admitted that he opened and maintained various bank accounts at financial institutions in or around North Jersey in the name of GSC and used those institutions to deposit client funds, negotiate checks, provide clients with GSC checks and conduct wire transfers. Because client funds were deposited into and commingled within GSC’s bank accounts at financial institutions, the funds could only be traced back to GSC, thereby concealing the true ownership, nature and source of the funds. Many clients were thus able to use their GSC accounts to engage in suspicious and, at times, illegal activities, including evading federal taxes and money laundering.
Schwartz also admitted that he provided false and fraudulent information to his tax preparer in Union City concerning his income for tax year 2007, falsely representing that his income was $24,475 when it was approximately $208,845. Schwartz admitted that he used his own GSC account and a false identity to conceal his income and assets from the IRS, causing a $74,889 tax loss.
In addition to the prison term, Judge Linares sentenced Schwartz to serve two years supervised release and ordered him to pay restitution of $74,889 and a $60,000 fine.
GSC bank accounts were seized in July 2009 and approximately $500,000 was ultimately forfeited. The accounts had been used by Moshe Altman, 45, Itzak Friedlander, 47, and Shimon Haber, 39, to launder proceeds that cooperating witness Solomon Dwek, 42, had purported to be the proceeds of illegal activities. Altman pleaded guilty in December 2010, to, among other things, conspiring to launder monetary instruments and was sentenced in March 2011 to 41 months in prison. Friedlander pleaded guilty in April 2010 to conspiracy to launder monetary instruments and was sentenced in April 2011 to 24 months in prison. Haber pleaded guilty to the same charge in January 2010 and was sentenced in May 2010 to five months in prison.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing; as well as the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the Federal Deposit Insurance Corporation-Office of Inspector General, under the direction of Special Agent in Charge Francis L. Mace; and the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Edward J. Ryan, for their assistance.
The government is represented by Assistant U.S. Attorneys Mark J. McCarren of the Special Prosecutions Division and Frances C. Bajada of the Criminal Division in Newark.
Showing posts with label FALSE TAX RETURN. Show all posts
Showing posts with label FALSE TAX RETURN. Show all posts
Saturday, May 23, 2015
Tuesday, February 25, 2014
JUSTICE ANNOUNCES RESULTS OF ANTI-TAX REFUND FRAUD EFFORTS
FROM: U.S. JUSTICE DEPARTMENT
Monday, February 24, 2014
Justice Department Highlights Efforts to Combat Stolen Identity Tax Refund Fraud
Today, the Justice Department announced the results of its ongoing efforts to combat tax refund fraud that involves identity theft. The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices (USAOs) nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF). According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names. In fiscal year 2013, the department filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes.
SIRF is the use of stolen or otherwise wrongfully acquired personal identification information to file a fraudulent claim with the IRS for a tax refund. These crimes occur when a social security number, or list of numbers, is stolen or bought; a false tax return showing a refund due is filed electronically, usually at the beginning of filing season before the legitimate taxpayer has filed for the year; and the refund is loaded to a prepaid card, sent to a bank account or mailed to an address accessible by those involved in the scheme.
The actual implementation of SIRF schemes is often complex to carry out. In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.
“The Department of Justice is committed to constant vigilance in investigating and prosecuting SIRF crimes,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division. “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out. We are determined to work with the IRS to stop this crime at the door, and to seek the conviction and punishment of these criminals.”
Some of the prosecutions from 2013 that resulted in significant prison sentences for SIRF crimes include:
• Vernon Harrison , a corrupt U.S. Postal Service mail carrier, was sentenced to serve 111 months in prison in October 2013. According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash.
• Lea’Tice Phillips worked for an Alabama state agency and had access to databases that contained personal identifying information. As alleged in court documents, Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. Djonret was sentenced in February 2013 to serve 12 years in prison, and Phillips was sentenced in September 2013 to serve 94 months in prison.
• Angela Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge, La. According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients. Myers was sentenced to serve 132 months in prison in July 2013.
• Leslie Brewster , a tax return preparer from Durham, N.C., was sentenced to serve 70 months in prison. According to court documents, Brewster was the manager of a branch office of a tax preparation franchise called Nothing But Taxes, and purchased personal identifying information to claim false dependents on tax returns she prepared for clients.
• Quentin Collick and Deatrice Williams were sentenced in November 2013 to serve 85 and 51 months in prison, respectively. Corey Thompson, a co-conspirator, was sentenced to serve 30 months in jail. Williams worked for a debt collection company and stole the identities of a number of individuals, then provided the stolen information to Collick, her son-in-law. Thompson worked as an independent contractor for a cable company installing cable and internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and, along with Collick, filed false tax returns using the customers' internet access. Thompson and Collick then directed the fraudulent tax refunds to be placed on pre-paid debit cards.
In 2014, the department has continued to pursue numerous prosecutions against SIRF criminals. On Jan. 24, 2014, a jury convicted current and former corrections officers of identity theft and tax fraud; according to court documents and evidence presented at trial, the pair accessed a state prison database and used the stolen identity information to file false tax returns. A check casher was sentenced to 37 months in prison on Jan. 16, 2014, for cashing refund checks in the names of individuals who did not authorize him to cash the checks, according to court documents. A nursing home employee was convicted by a jury on Jan. 14, 2014, of conspiracy, aggravated identity theft and other SIRF-related crimes; according to court documents and the evidence presented at trial, she stole the identity information of nursing home patients and used that information to create false tax returns. An Alabama man pleaded guilty on Jan. 13, 2014, for his role in a SIRF fraud. According to court documents, he obtained stolen identities from an Alabama state employee, used those identities to file false tax returns, and recruited a bank employee to assist him in having the false tax refunds deposited into various bank accounts. A social worker pleaded guilty on Jan. 10, 2014, to identity theft and tax fraud charges. According to court documents, she illegally obtained the identifying information of her clients – minors and disabled adults who may have been abused or neglected – and sold that information to others who used the stolen identities to claim as false dependents on fraudulent tax returns they prepared.
"We're fighting identity theft head-on at the IRS and making substantial progress with the help of the Justice Department and local law enforcement," said Commissioner John Koskinen for the IRS. "We're stopping more identity theft before these fraudulent refunds go out the door. The IRS initiated nearly 1,500 identity theft related criminal investigations last year, an increase of 66 percent over 2012. Fighting fraud is an ongoing battle as identity thieves continue to create new ways of stealing personal information. The IRS is continually reviewing our policies to strengthen our systems, minimize the incidence of identity theft and help victims.
The sentences imposed against those committing SIRF crimes are significant and reflect the seriousness of these crimes. The Justice Department is committed to investigating and prosecuting tax refund fraud that involves identity theft, and will continue to work with the IRS, FBI, U.S. Secret Service, U.S. Postal Inspection Service, other federal law enforcement agencies as well as state and local law enforcement agencies to combat SIRF-related crimes. Each U.S. Attorney’s Office has a point of contact to coordinate SIRF matters for its district.
The IRS has taken steps to detect and prevent the fraud before it occurs. For example, the IRS has designed new software filters to spot false returns before they are processed and before a refund is issued. The IRS has also expanded efforts to place identity-theft indicators on taxpayer accounts to track and manage identity-theft incidents.
Monday, February 24, 2014
Justice Department Highlights Efforts to Combat Stolen Identity Tax Refund Fraud
Today, the Justice Department announced the results of its ongoing efforts to combat tax refund fraud that involves identity theft. The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices (USAOs) nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF). According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names. In fiscal year 2013, the department filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes.
SIRF is the use of stolen or otherwise wrongfully acquired personal identification information to file a fraudulent claim with the IRS for a tax refund. These crimes occur when a social security number, or list of numbers, is stolen or bought; a false tax return showing a refund due is filed electronically, usually at the beginning of filing season before the legitimate taxpayer has filed for the year; and the refund is loaded to a prepaid card, sent to a bank account or mailed to an address accessible by those involved in the scheme.
The actual implementation of SIRF schemes is often complex to carry out. In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.
“The Department of Justice is committed to constant vigilance in investigating and prosecuting SIRF crimes,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division. “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out. We are determined to work with the IRS to stop this crime at the door, and to seek the conviction and punishment of these criminals.”
Some of the prosecutions from 2013 that resulted in significant prison sentences for SIRF crimes include:
• Vernon Harrison , a corrupt U.S. Postal Service mail carrier, was sentenced to serve 111 months in prison in October 2013. According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash.
• Lea’Tice Phillips worked for an Alabama state agency and had access to databases that contained personal identifying information. As alleged in court documents, Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database. In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds. Djonret was sentenced in February 2013 to serve 12 years in prison, and Phillips was sentenced in September 2013 to serve 94 months in prison.
• Angela Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge, La. According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients. Myers was sentenced to serve 132 months in prison in July 2013.
• Leslie Brewster , a tax return preparer from Durham, N.C., was sentenced to serve 70 months in prison. According to court documents, Brewster was the manager of a branch office of a tax preparation franchise called Nothing But Taxes, and purchased personal identifying information to claim false dependents on tax returns she prepared for clients.
• Quentin Collick and Deatrice Williams were sentenced in November 2013 to serve 85 and 51 months in prison, respectively. Corey Thompson, a co-conspirator, was sentenced to serve 30 months in jail. Williams worked for a debt collection company and stole the identities of a number of individuals, then provided the stolen information to Collick, her son-in-law. Thompson worked as an independent contractor for a cable company installing cable and internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and, along with Collick, filed false tax returns using the customers' internet access. Thompson and Collick then directed the fraudulent tax refunds to be placed on pre-paid debit cards.
In 2014, the department has continued to pursue numerous prosecutions against SIRF criminals. On Jan. 24, 2014, a jury convicted current and former corrections officers of identity theft and tax fraud; according to court documents and evidence presented at trial, the pair accessed a state prison database and used the stolen identity information to file false tax returns. A check casher was sentenced to 37 months in prison on Jan. 16, 2014, for cashing refund checks in the names of individuals who did not authorize him to cash the checks, according to court documents. A nursing home employee was convicted by a jury on Jan. 14, 2014, of conspiracy, aggravated identity theft and other SIRF-related crimes; according to court documents and the evidence presented at trial, she stole the identity information of nursing home patients and used that information to create false tax returns. An Alabama man pleaded guilty on Jan. 13, 2014, for his role in a SIRF fraud. According to court documents, he obtained stolen identities from an Alabama state employee, used those identities to file false tax returns, and recruited a bank employee to assist him in having the false tax refunds deposited into various bank accounts. A social worker pleaded guilty on Jan. 10, 2014, to identity theft and tax fraud charges. According to court documents, she illegally obtained the identifying information of her clients – minors and disabled adults who may have been abused or neglected – and sold that information to others who used the stolen identities to claim as false dependents on fraudulent tax returns they prepared.
"We're fighting identity theft head-on at the IRS and making substantial progress with the help of the Justice Department and local law enforcement," said Commissioner John Koskinen for the IRS. "We're stopping more identity theft before these fraudulent refunds go out the door. The IRS initiated nearly 1,500 identity theft related criminal investigations last year, an increase of 66 percent over 2012. Fighting fraud is an ongoing battle as identity thieves continue to create new ways of stealing personal information. The IRS is continually reviewing our policies to strengthen our systems, minimize the incidence of identity theft and help victims.
The sentences imposed against those committing SIRF crimes are significant and reflect the seriousness of these crimes. The Justice Department is committed to investigating and prosecuting tax refund fraud that involves identity theft, and will continue to work with the IRS, FBI, U.S. Secret Service, U.S. Postal Inspection Service, other federal law enforcement agencies as well as state and local law enforcement agencies to combat SIRF-related crimes. Each U.S. Attorney’s Office has a point of contact to coordinate SIRF matters for its district.
The IRS has taken steps to detect and prevent the fraud before it occurs. For example, the IRS has designed new software filters to spot false returns before they are processed and before a refund is issued. The IRS has also expanded efforts to place identity-theft indicators on taxpayer accounts to track and manage identity-theft incidents.
Sunday, August 18, 2013
FORMER LIQUOR STORE OWNER PLEADS GUILTY TO SELLING CUTTING AGENTS TO DRUG DEALERS
FROM: DEPARTMENT OF JUSTICE
Tuesday, August 13, 2013
Former Owner of Liquor Store Pleads Guilty to Tax Crime and Selling Cutting Agents to Local Drug Dealers
Southfield, Mich., resident Bashar Saroki pleaded guilty to filing a false tax return and selling drug paraphernalia, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, Saroki controlled and operated Golden Star Party Store, a liquor store that was located in Detroit. From 2007 through 2011, Saroki sold more than $1 million worth of a variety of cutting agents to local narcotics dealers out of Golden Star Party Store and from his residence. The cutting agents were substances used by narcotics dealers to dilute the potency and increase the quantity of the narcotics sold to customers. Despite the significant proceeds from the sale of cutting agents, Saroki reported very little income on his false tax return for 2009.
Saroki faces a maximum sentence of three years in prison, one year of supervised release and a $250,000 fine on each count. U.S. District Judge Robert H. Cleland set sentencing for Dec. 17, 2013.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS-Criminal Investigation, who investigated this case, and Tax Division Trial Attorneys Kenneth C. Vert and Yael T. Epstein, who prosecuted the case.
Tuesday, August 13, 2013
Former Owner of Liquor Store Pleads Guilty to Tax Crime and Selling Cutting Agents to Local Drug Dealers
Southfield, Mich., resident Bashar Saroki pleaded guilty to filing a false tax return and selling drug paraphernalia, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, Saroki controlled and operated Golden Star Party Store, a liquor store that was located in Detroit. From 2007 through 2011, Saroki sold more than $1 million worth of a variety of cutting agents to local narcotics dealers out of Golden Star Party Store and from his residence. The cutting agents were substances used by narcotics dealers to dilute the potency and increase the quantity of the narcotics sold to customers. Despite the significant proceeds from the sale of cutting agents, Saroki reported very little income on his false tax return for 2009.
Saroki faces a maximum sentence of three years in prison, one year of supervised release and a $250,000 fine on each count. U.S. District Judge Robert H. Cleland set sentencing for Dec. 17, 2013.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS-Criminal Investigation, who investigated this case, and Tax Division Trial Attorneys Kenneth C. Vert and Yael T. Epstein, who prosecuted the case.
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