Articles Posted in Fraud and Embezzlement

Approximately one week ago, it was announced in a press release by U.S. Attorney Barbara L. McQuade that a Grosse Pointe Woods woman had been sentenced for filing false tax returns with the IRS. Jarod J. Koopman, Special Agent in Charge of the IRS Criminal Investigation Division joined McQuade in the announcement.

According to the announcement, Janet Gentile pleaded guilty to filing false tax returns in September of last year. She was sentenced by U.S. District Court Judge Robert H. Cleland to 21 months in federal prison, along with restitution to be paid to the Internal Revenue Service in the amount of $219,123. 24259101_s

Between 2008 and 2012, Gentile embezzled more than $739,000 from her employer, Sagres Partners LP. The press release revealed that while employed as manager of the business management consulting firm in Grosse Pointe, she stole money from the firm’s owner, writing checks from the owner’s personal checking account and forging the owner’s signature. Gentile would make the checks out to “cash,” and write in the memo line that the checks were for petty cash. Essentially, Gentile was embezzling from the company, depositing the “petty cash” checks into her own account, and using the money to shop on QVC, the Home Shopping Network, and other shopping venues. She was charged with filing false tax returns due to the fact that she did not report the income on her federal tax returns, resulting in an understated federal income tax liability. Had Gentile properly reported the stolen funds as income, she would have owed the IRS $219,123 on the income.

Recently, it was announced by U.S. Attorney for the District of Connecticut that 36-year-old Kenya Malcolm, a former resident of Detroit who now resides in Surprise, AZ, pleaded guilty to operating a fraudulent federal income tax refund scheme. accounting-work-911459-m

According to the press release, Malcolm, along with co-defendants Bernard Brantley, Charles Ross, and others, conspired to file fraudulent federal income tax returns with the IRS using the names of other individuals without their knowledge. These accusations were supported by statements made in court and court documents during late 2012 through May of 2013.

Malcolm, who at one time resided in Detroit, operated “Biggest Refund Taxes,” a business based in Arizona in which Malcolm claimed to be a CPA, or certified public accountant. The scheme involved Malcolm paying Charles Ross to recruit clients for her tax preparation business. After recruiting new clients, Ross contacted Bernard Brantley, offering him a portion of his own earning for recruiting clients if Brantley would himself recruit clients for Biggest Refund Taxes. Ross is a resident of Surprise, AZ and Brantley a resident of Waterbury, CT.

Recently, a 55-year-old Dearborn Heights woman was sentenced to one year and a day, along with more than $225,000 in restitution for willfully filing false tax returns with the IRS, according to a press release issued recently by United States Attorney Barbara L. McQuade. Joining in the announcement was IRS Criminal Investigation Special Agent in Charge of the Detroit Field Office, Jarod J. Koopman. commerce-acts-books-477966-m

According to the press release, Janey Golani was employed as an office manager of several companies owned by Latif “Randy” and Hind Oram. Golani embezzled from the Orams in an amount reaching almost $700,000 over a time period beginning in 2005 and ending in 2009. She admitted she intentionally did not report the money she embezzled from her employer as income, although she knew the money was taxable income and was to be reported on her income tax returns. She pleaded guilty to the charges against her in August of 2014.

Golani’s failure to report the income she obtained for her own personal use through embezzlement lowered her tax liability by more than $77,000 for the year 2008, according to the release. In all, the government experienced a tax loss in excess of $225,000 because of Golani’s failure to report the embezzled money on federal income tax returns for the years 2006, 2007, 2008, and 2009.

Recently it was announced by U.S. Attorney Barbara McQuade and Special Agent in Charge of the IRS, Criminal Investigation Jarod J. Koopman that Antonio Lundy had pleaded guilty to involvement in a scheme to defraud the Internal Revenue Service. Lundy, who is 43 years old, pleaded guilty to access device fraud after working with others to prepare and file false income tax returns with the IRS. The History of Criminal Law Pic

In essence, Lundy committed identity theft as he worked to gather the personal identification information and addresses of other individuals and supplying this information to others participating in the scheme who would then prepare and file fraudulent income tax returns. According to the announcement, this scheme began in September of 2011 and continued through April of the next year. In all, there were about 180 fraudulent returns filed which resulted in refunds totaling $1.7 million. The IRS paid out the refunds, which were then loaded onto Turbo Tax Visa debit cards, then picked up by Lundy at the addresses he had provided to others who participated in the scheme. Those whose names were on the cards were not aware that they were the victims of identity theft.

Lundy withdrew cash using the debit cards at several ATM machines in the Detroit area, withdrawing cash in the amount of $251,990. His sentencing is scheduled for April of next year. He will face potential fines of $250,000 and a maximum of ten years in prison; in addition, Lundy will pay restitution of the $251,990 withdrawn at ATMs to the IRS.

Recently, United States Attorney Barbara L. McQuade and Special Agent in Charge of the IRS, Criminal Investigation Jarod Koopman announced in a press release that a 53-year-old Royal Oak, Michigan woman had pleaded guilty to tax evasion. According to the release, Robin Petty, who is part owner and treasurer of Superior Metal Finishing, a Detroit corporation, pleaded guilty to failure to report substantial income from 2008 through 2011. While Petty did report some of her income, she ultimately evaded payment of almost $340,000 in federal income taxes over the four year time period. 12736626

In 2008 alone, Petty under-reported her income by $236,933. She did report a total income of $119,117, however she had also received checks made payable to her from Superior Metal Finishing totaling $356,050. Because she failed to report the balance of the income for 2008, her tax liability for the year was understated by more than $70,000. Other years through 2011 were similar.

While Petty’s sentence had not been set at the time of the press release, income tax evasion carries punishment which includes a fine of up to $250,000 and/or a maximum of five years in prison. She agreed to pay restitution to the IRS in an amount of up to $339,526, and to pay $100,000 toward this restitution prior to her sentencing.

On Wednesday, November 19, the U.S. Justice Department announced that the president and founder of Happy’s Pizza, Happy Asker, had been convicted in a multi-million dollar tax fraud scheme defrauding the IRS of more than $6.2 million dollars. Asker was convicted on 32 counts of tax crimes, according to the release. pizza-2-1364933-m

Asker’s Farmington Hills, Michigan based pizza franchise has locations in Chicago, Michigan, and Ohio, which Asker has ownership interests in. Other individuals, some employees and some franchise owners, were also involved in the scheme to defraud the U.S. In all, there are 60 Happy’s Pizza franchise restaurants across three states. The release indicates that payroll amounts and gross sales were significantly underreported for nearly all of the franchises. More than $6.1 million was diverted from about 35 of the stores between 2008 and 2010, with the unreported income being distributed among Asker and most of the Happy’s Pizza store franchise owners.

In November and December of 2010, Asker was involved in voluntary interviews in which he is said to have purposely misled IRS – Criminal Investigation special agents. Those who investigated the case include the DEA and special agents with the IRS – CI. Asker is scheduled to be sentenced in March of next year in the Eastern District of Michigan. He faces a maximum of five years in prison for conspiring to defraud the IRS, three years for each count of filing a false income tax return/aiding or assisting in filing a false return, three years for obstruction and impeding the administration of the Internal Revenue Code. He also faces numerous fines including $250,000 for each count of filing a false income tax return, of which he was convicted on 28 counts.

Recently it was announced by U.S. Attorney Barbara McQuade that two Detroit residents pleaded guilty to aiding and abetting in the use of false identification, and wire fraud. Jarod Koopman, Acting Special Agent in Charge IRS Criminal Investigation joined McQuade in the announcement. iStock_000004337124

According to the press release, McAllen Jackson Knight and Renita Adams worked with others in filing hundreds of fraudulent tax returns for the year 2010, using the social security numbers and names of individuals who were recently deceased. Those involved in the scheme used various credits including education and earned income credits, and Making American Work credits in order to obtain refunds. Adams and Knight worked in conjunction with the others to establish bank accounts for the receipt of the fraudulent refunds, and to distribute the refunds among participants.

According to court documents, Knight, Adams, and two other defendants used the information from decedents who had passed away across the U.S. between September 1 of 2010 and March 13 of 2011.

On October 2, it was announced by U.S. Attorney Barbara L. McQuade that 42-year-old Shane Bateman of Brownstown Township was sentenced for his role in a fraudulent tax scheme. Bateman, who pleaded guilty to the charges in May of this year, was sentenced to one year and one day in prison. He will also pay restitution to the IRS of more than $185,000, and be on supervised release for two years once released from prison. paper-work-911375-m

According to the press release, Bateman and others participated in the scheme, with Bateman securing personal identification information and mailing addresses of innocent victims to give to the others who participated. The information was used to file fraudulent tax returns with the IRS, and in total requested $1.7 million in refunds on the 180 fraudulent tax returns that were filed, many with stolen identities.

Bateman provided the stolen information to a “supervisor” of the scheme; the refunds were then loaded onto TurboTax Visa debit cards, which Bateman picked up and used at ATM machines to withdraw cash in the metropolitan Detroit area. Bateman gave a portion of the money to the supervisor, and kept the rest. According to court documents, Bateman was not aware of the full scope of the scheme, or that it involved $1.7 million in returns.

On August 15, U.S Attorney Barbara L. McQuade announced that Janey Golani, a 54-year-old former Crestwood school board member, pleaded guilty to willfully filing false tax returns. Golani is a former education trustee of the board, and was employed by Hind Oram as office manager of several companies, including International Outdoor Advertising. She pleaded guilty before Judge Stephen J. Murphy, III in U.S. District Court on August 14. accounting-work-911459-m

Golani embezzled money from Hind Oram beginning in 2006 and continuing through 2009, however she intentionally did not report the embezzled income on the federal tax returns she filed.

Jarod Koopman, IRS criminal investigation agent out of the Detroit Field Office, said that income that is gained illegally is subject to income tax, a fact made very clear in the Internal Revenue Tax Code. Even income that is embezzled is subject to federal income tax.

In 2008, Golani understated her income by more than $234,000. Over the four-year time span from 2006 through 2009, Golani did not report the embezzled funds on her federal income tax returns. According to McQuade, this resulted in a tax loss in excess of $225,000.

The IRS – Criminal Investigation division investigated Golani’s case; she is scheduled to be sentenced before Judge Murphy on January 9, 2015.

Many people who embezzle money from their employers are understandably afraid to report that money on their federal income tax returns, not only out of fear of being caught, but in order to avoid paying additional tax. Regardless of whether income is obtained in an illegal manner, it is still subject to income tax.

Janey Golani has been charged with embezzling from her employer and filing false tax returns, both which are serious charges. Although she did plead guilty, the criminal penalties for these types of white collar crimes are harsh.

In Michigan, the crime of embezzlement of money or property valued at more than $100,000 is a felony. Individuals who are found guilty may be sentenced to a maximum of 20 years in prison, and fined up to $50,000 or three times the value of the money/property, whichever is greater. In many cases, individuals who plead guilty and avoid going to trial may receive a sentence that is less harsh. Filing fraudulent tax returns is a serious matter as well which will result in prison time and fines. We will learn of Golani’s fate when she is sentenced in January.

Continue reading

On August 13, United States Attorney Barbara L. McQuade announced that Monique Gray, owner and operator of MO Tax Services in Detroit, had been sentenced to 30 days in prison for filing a false federal income tax return. Gray also owns a trucking company, U&M XSpress, Inc. accounting-calculator-tax-return-90372-m

Gray pleaded guilty to the charge, which was in connection with under-reporting of gross receipts for the tax year 2008. According to court documents, Gray’s tax business and trucking firm generated substantial income during 2008. Businesses are required under the law to correctly report their gross receipts for a given year, however Gray did not report all of the gross receipts. In fact, Gray’s Form 1040 for 2008 indicated gross receipts of $5,458 on a Schedule C Profit or Loss from Business, when the business actually had receipts of $44,982. She also had gross receipts of more than $122,000 from her trucking company, although she reported only $6,000.

Ultimately, Gray knew when she signed the 2008 Individual Tax Return 1040 form that the information she had provided was false.

In addition to spending 30 days in prison, Gray is required to pay restitution of $102,899 as ordered by U.S. District Judge Paul D. Borman.

Acting Special Agent in Charge Jarod Koopman of the IRS – Criminal Investigation unit said in a release that Gray’s actions were an affront to other business owners and taxpayers who are honest in filing their federal income taxes. He also said that her attempt undermines the tax system, and that the IRS – Criminal Investigation will continue the aggressive pursuit of others who believe they can commit tax fraud and get away with it.

Continue reading

Contact Information