FORMER NEVADA CONSTRUCTION COMPANY OWNER INDICTED FOR INCOME TAX EVASION

FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, May 14, 2013

Former Construction Company Owner Indicted in Nevada for Income Tax Evasion

A federal grand jury in Nevada today returned an indictment against a former construction company owner for evading federal income and employment taxes, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber, FBI Acting Special Agent in Charge William C. Woerner of the Las Vegas Field Office, and Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department.

Leon Benzer, 46, of Las Vegas, was charged in U.S. District Court in the District of Nevada with two counts of tax evasion.

In January 2013, Benzer was indicted in a related case on charges of wire fraud and conspiracy to commit wire and mail fraud. According to court documents, from approximately August 2003 through February 2009, Benzer orchestrated a scheme to direct construction defect litigation and repairs at condominium complexes to a conspiring law firm and Benzer’s construction company, Silver Lining Construction (SLC). As a result of this scheme, the indictment alleges that SLC was awarded a contract worth over $7 million for work at the Vistana Homeowner’s Association (Vistana HOA) in Las Vegas. The case is pending.

According to the indictment returned today, in August 2006 Benzer filed five years’ worth of personal tax forms and business tax returns without any payments accompanying those returns. As of April 2007, Benzer had allegedly failed to pay his personal tax liability of approximately $459,000 and SLC’s employment tax liability of approximately $687,000 and unemployment tax liability of approximately $18,000. In May 2007, the IRS issued a notice of intent to file a levy; Benzer subsequently appealed this process and indicated that he wanted to enter into an "offer-in-compromise" with the IRS to pay a portion of what was owed in full satisfaction of all his tax liabilities. According to the indictment, during this offer-in-compromise process, the IRS requested detailed financial information from Benzer.

Between March 2005 and January 2008, the indictment alleges that Benzer and SLC received over $7 million from the Vistana HOA contract, including a wire transfer of over $1 million on Sept. 21, 2007, to a personal US Bank account that Benzer opened in August 2007. The indictment alleges that when Benzer filed certain IRS forms related to the offer-in-compromise process on Sept. 25, 2007, he failed to disclose this personal U.S. Bank account or the assets contained in it.

The maximum prison sentence for each count of tax evasion is five years in prison and a maximum fine of $100,000.

The charges and allegations against the indicted defendant are merely accusations, and the defendant is considered innocent unless and until proven guilty.

The case is being prosecuted by Senior Deputy Chief Kathleen McGovern, Deputy Chief Charles La Bella and Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section. The case is being investigated by IRS-CI, the FBI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.

OWNER OF NON-PROFIT MEDICAL PRACTICE SENTENCED FOR TAX EVASION

FROM:  U.S. JUSTICE DEPARTMENT
Friday, June 8, 2012
Former Alabama Resident Sentenced to 53 Months in Prison for Tax EvasionTried to Hide Wife’s Income from Irs as Phony Loans

William Paul, a self-described “bishop,” was sentenced yesterday to 53 months in federal prison for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. Paul was convicted on Dec. 1, 2011, after a four-day jury trial, of four counts of evasion of his wife’s 2004 through 2007 individual income taxes and of one count of failing to file a tax return. On Nov. 16, 2011, his wife, Donna Paul, a board-certified physician, pleaded guilty to one count of tax evasion and one count of filing a false individual income tax return. She was also sentenced yesterday to three years of probation, including six months of home confinement and 200 hours of community service. U.S. District Judge Mark E. Fuller also ordered the Pauls to pay $85,396 in restitution to the IRS. Both William Paul and Donna Paul are former residents of Montgomery, Ala.

According to evidence introduced at trial and documents filed with Donna Paul’s plea agreement, Donna and William Paul owned and operated a medical practice in Montgomery, which was registered as a non-profit organization. The Pauls attempted to evade the assessment and payment of Donna Paul’s income by falsely characterizing her income as loans, by making false statements to IRS employees, and by deliberately causing the non-profit organizations to not file tax returns.

Evidence at trial further showed that Donna Paul did not timely file federal individual income tax returns for the years 2004 through 2007. On April 5, 2011, the day special agents from IRS-Criminal Investigation arrested her, Donna Paul filed four false individual income tax returns for tax years 2004 through 2007. She testified at trial that none of these tax returns included money she earned from her medical practice.

Based on testimony at trial, William Paul had not filed a federal income tax return since the 1980s. Donna Paul also testified that William Paul ran the business side of the medical practice, initially called “Rheumatology Specialists of Central Alabama,” then “Rheumatology Specialists Arthritis and Osteoporosis Center,” then “Children and Adult Arthritis and Osteoporosis Center.”

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked special agents of IRS-Criminal Investigation, who investigated the case, Tax Division Trial Attorneys Justin Gelfand and Michael Boteler, who prosecuted the case, and George L. Beck Jr., U.S. Attorney for the Middle District of Alabama, and his entire office for their assistance in the prosecution.

ARIZONA POLITICIAN SENTENCED FOR FRAUD, TAX EVASION RELATED TO DEFRAUDING A CHARITY

FROM:  U.S. DEPARTMENT OF JUSTICE
Monday, June 4, 2012
Former Arizona State Representative Sentenced to 27 Months in Prison for Wire Fraud and Tax Evasion Related to the Misuse of More Than $140,000 in Charity Funds
WASHINGTON – Former Arizona State Representative Richard David Miranda was sentenced today to 27 months in prison for defrauding a charity of more than $140,000 and evading income tax related to those unlawfully obtained funds, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Special Agent in Charge James L. Turgal of the FBI’s Phoenix Field Office; and Special Agent in Charge Dawn Mertz of the Internal Revenue Service-Criminal Investigation (IRS-CI) Phoenix office.

Miranda, 55, of Tolleson, Ariz., served as a member of the Arizona House of Representatives for the 13th District from 2011 until his resignation, effective Feb. 20, 2012.  Miranda previously served as a member of the Arizona State Senate from 2002 until 2011, and the Arizona House of Representatives from 1999 until 2002.  Since July 2002, Miranda also served as executive director of Centro Adelante Campesino Inc., a non-profit charitable organization that provided food, clothing and educational assistance to persons in need, including migrant farm workers, in and around Maricopa County, Ariz.

On March 14, 2012, Miranda pleaded guilty to a two-count information charging him with defrauding Centro of more than $140,000 and evading income tax related to those unlawfully obtained funds.  As part of his plea agreement, Miranda agreed to resign from office.  Miranda was also ordered to pay a total of $230,342 in restitution ($212,220 for funds he unlawfully obtained from Centro, along with an additional $18,122 he unlawfully obtained from the Arizona Latino Caucus Foundation).

During his plea, Miranda admitted that, in May 2005, he initiated a scheme to wind down Centro, sell Centro’s sole remaining asset (a building), and use the proceeds of the sale for personal expenses.  To do so, Miranda removed the charity’s longstanding volunteer accountant as an authorized signer on the charity’s bank and credit union accounts, and assumed sole control of the charity’s accounts and financial records.  He also told the volunteer accountant that the proceeds of the sale would be used to fund scholarships.  In March 2007, the building was sold for $250,000, and on March 7, 2007, a significant portion of the profits of that sale, $144,576, were wired across state lines into Centro’s credit union account.

 Miranda also admitted that within one week of the wire transfer, he began to withdraw the proceeds from Centro’s credit union account without the authorization or knowledge of Centro’s board of directors.  For example, Miranda obtained two checks payable to himself totaling $37,000 and paid off personal credit card debts totaling more than $60,000.   By Dec. 31, 2007, Miranda had withdrawn the remaining proceeds (approximately $46,836) using checks, withdrawals and electronic funds transfers, and used the funds to pay off additional personal debts and make numerous purchases for personal travel, services, clothing, food and household items.  Miranda also failed to report the proceeds of the sale as income on his IRS Form 1040 for calendar year 2007.

This case is being prosecuted by Trial Attorneys Monique T. Abrishami and Brian A. Lichter of the Public Integrity Section in the Justice Department’s Criminal Division, and Assistant U.S. Attorney Frederick A. Battista of the District of Arizona.  The case is being investigated by agents from the FBI Phoenix Field Office and IRS-CI Phoenix Office.

FIREARMS DEALER WHO CREATED SHAM TRUSTS TO HIDE INCOME WILL HE SENT TO PRISON

The following excerpt is form the Department of Justice website:
Wednesday, March 28, 2012
Honolulu Firearms Business Owner Sentenced to 51 Months in Prison for Federal Tax Offenses
Arthur Lee Ong of Honolulu was sentenced Tuesday to 51 months in prison and ordered to pay $1 million in restitution to the Internal Revenue Service (IRS) by District Court Judge Leslie Kobayashi today, the Justice Department and IRS announced today.   On Nov. 7, 2001, a federal jury in Honolulu convicted Ong of conspiracy to defraud the United States and six counts of tax evasion.

 According to evidence introduced at trial, Ong, the owner and operator of Thunder Bug Inc., doing business in the state of Hawaii as Magnum Firearms, failed to report to the IRS millions of dollars of income he earned from the sale of firearms and related products to federal, state, county and military agencies, as well as to the general public.  Ong, with the assistance of a Hawaiian attorney, created multiple sham trusts in 1990 for the purpose of hiding his income and assets.   He stopped filing personal income tax returns beginning in 1994 and also filed false tax returns on behalf of the sham trusts that fraudulently reported to the IRS that the income from his businesses was attributable to these trusts and not to him.

The evidence at trial showed that Ong evaded more than $600,000 in federal income taxes from 2000 to 2006.   In sentencing Ong, Judge Kobayashi found that Ong had attempted to evade more than $973,300 in federal and state income taxes from 1994 to 2009.

“There are some responsibilities that come with living in this great country, such as paying the federal income taxes that you legally owe,” said Kenneth J. Hines, the IRS Special Agent in Charge in Hawaii.  “With Tax Day right around the corner, this sentence sends a clear warning to anyone contemplating a tax crime.”

The case resulted from an investigation by IRS - Criminal Investigation and was prosecuted by Trial Attorneys Timothy J. Stockwell and Todd P. Kostyshak of the Justice Department’s Tax Division.