Articles Posted in Fraud, Embezzlement & White Collar Crimes

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.

On February 25, 55-year-old John Miri and 38-year-old Wisam Daman pleaded guilty to charges of failing to maintain an effective anti-money laundering program, according to a press release issued by U.S. Attorney Barbara L. McQuade. Miri operated and managed Junction Party Store, and Daman operated and managed Big Apple Fruit Market, both located in Southwest Detroit. Jarod Koopman, IRS Criminal Investigation Acting Special Agent in Charge, joined McQuade in the announcement. writing-check-678948-m

Both stores were registered as MSB’s, or Money Services Businesses with the state. Essentially, Junction Party Store and Big Apple Fruit Market would cash checks in amounts of more than $1,000 for their customers, for a fee. Under the Bank Secrecy Act, businesses who provide this service for their customers are qualified as financial institutions. Because the two stores are considered financial institutions, they are required to file CTR’s or Currency Transaction Reports with the Financial Crimes Enforcement Network. When a customer cashes a check for an amount greater than $10,000, a CTR must be filed. In their positions as managers/operators of the stores which were considered financial institutions, Miri and Daman were obligated to develop, enforce, and maintain effective anti-money laundering programs.

Between late 2011 and early 2012, the two store owners cashed a total of nearly $15 million in refund checks issued by the IRS for Juan Carlos Pena-Lora, checks which were issued to alleged taxpayers in New Jersey, New York, and other eastern states. In all, there were approximately 2,000 checks cashed by both stores combined. Daman and Miri charged a fee for cashing the checks, a fee which is based on a percentage of the total amount of each check. The IRS refund checks were issued after false income tax returns had been filed using names/social security numbers that had been stolen from Puerto Rican nationals. On the dates Daman and Miri cashed checks for Pena-Lora, those payments were greater than $10,000, however the two business owners did not file CTR’s for some of the cash payments as required. Because of this, the two men were charged with failure to maintain an effective anti-money laundering program, an offense punishable by fines of $250,000 and/or up to five years in prison.

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.

On Monday, February 9 it was announced in a press release issued by U.S. Attorney Barbara L. McQuade that Richard Alan Williams, owner and operator of Imperial Tax Service in Jackson, had been found guilty on 20 counts of filing false tax returns. IRS Criminal Investigations Special Agents investigated the case, including Special Agent in Charge Jarod Coopman, who stated in the press release that, “IRS Criminal Investigation focuses on protecting revenue by identifying, investigating and prosecuting abusive return preparers. This case accentuates the importance for taxpayers to carefully select a tax return preparer.” taxes-761162-s

According to the release, Williams was convicted of 17 counts of assisting in the preparation and filing of fraudulent tax returns for clients, and three counts of subscribing and filing fraudulent personal income tax returns of his own. The charges were related to filing of fraudulent tax returns for these customers for tax years including 2004, 2006, and 2007. Essentially, false business losses and expenses were claimed on these returns, which resulted in the taxpayers’ refunds being greater than the customers were entitled to. In some cases, phony business income was added to the returns so that customers could claim an increased Earned Income Credit.

While Williams collected substantial fees for the preparation of client tax returns in 2004, 2006, and 2007, he claimed that his own income was $1, $2, and $10 for those years respectively. Some of the customers who had Williams prepare their taxes testified at trial that they were not aware of the fraudulent income, expenses, or other items he had included in their tax returns, although some of the taxpayers have been ordered by the IRS to repay excess refunds after being audited.

On January 14, it was announced by U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and several others that a Redford physician had been sentenced to 15 months in prison for her role in a $2.1 million Medicare fraud scheme. hospital-corridor-1-65905-m

According to a news article at Mlive.com, 69-year-old Dr. Paula Williamson has been ordered to pay $1.3 million in restitution in addition to spending time in prison. Essentially, Williamson signed off on unnecessary treatments for patients so that a home health care company based in Farmington Hills could bill the government for those charges. The scheme allegedly took place between 2009 and 2012, according to investigators.

Williamson certified that certain Medicare patients were homebound when they were not; she also falsified medical records. The fraud scheme involved several home health care workers who enlisted Williamson’s assistance in avoiding a requirement of Medicare that reimbursement could not be obtained without the approval of a certified physician.

In December of last year, 46-year-old Stacy Morgan was sentenced to five years in prison along with payment of restitution in the amount of $7,912,950 for his role in a mortgage fraud scheme, according to Special Agent in Charge Jarod J. Koopman of the IRS-Criminal Investigation. Koopman was joined in announcing Morgan’s sentence by U.S. Attorney for the Eastern Judicial District of Michigan Barbara L. McQuade. FAN2042421

Court records indicate that Morgan conspired with other individuals to secure fraudulent mortgage loans on several Bloomfield Hills properties between December of 2003 and February of 2008.

According to the indictment, Morgan supplied information in loan applications and closing documents on specific properties that were falsified or he caused to be falsified. Information that was falsified included that regarding income information, loan applicant’s assets, and false income documents in support of the requests for loans. Morgan also supplied false bank account balances and verification of employment so that applicants could obtain mortgage loans. Ultimately, the lenders involved granted loans in excess of $9 million, according to the press release.

Recently, Mary Leona Gillison, a 50-year-old Arcadia resident, was arrested for allegedly having embezzled more than $50,000 from the Traverse City Area Public School district. Gillison had been employed as an administrative assistant for the district, according to a news article at MI Headlines. shutterstock_37643449

Gillison was arrested on December 18 after the school district performed a forensic audit, working in unison with Sheriff’s detectives. Detectives had obtained a warrant to arrest Gillison on charges of embezzling following the audit, which took several months to complete. An auditing firm for the school district reviewed procedures involving cash handling and purchase card use after Gillison resigned her position at West Middle School unexpectedly in March of this year.

Officials believe that Gillison used a district purchasing card to make “questionable” purchases, one of which was a personal item bought using the card by Gillison in December of last year. It appears that she resigned her position as administrative assistant once she suspected authorities were β€œon” to her scheme, although until proven guilty beyond a reasonable doubt, she is innocent.

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.

On October 6, it was announced by U.S. Attorney Patrick Miles that Mohamad Abduljaber, husband of Dr. Shannon Wiggins of Okemos, was sentenced to three and a half years in prison after being convicted in a healthcare fraud scheme in which Abduljaber and his wife received healthcare kickback payments. Abduljaber also signed a false tax return, according to the press release. medical-doctor-1314903-m

In sentencing Abduljaber to prison, U.S. District Judge Robert Holmes Bell also ordered him to forfeit $550,000 and to pay more than $285,000 in restitution to the IRS and Medicaid.

Between January of 2004 and April of 2011, Abduljaber and Dr. Shannon Wiggins, his wife, conspired to receive kickbacks for referring patients for electrodiagnostic testing. According to the press release, Abduljaber worked at Dr. Wiggins’ medical practice in the position of office manager. He admittedly signed a fraudulent tax return in which he claimed income for the billing of medical marijuana certifications, however the amount of cash income disclosed on the return was inaccurate.

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.

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