On Nov. 3, 2014, in Topeka, Kansas, Jerold D. Fisher, of Arma, Kansas, was sentenced to 41 months in prison and ordered to pay more than $4 million in restitution for collecting false tax refunds. Fisher pleaded guilty to one count of filing a false federal tax return. According to his plea agreement, from 2006 to 2009, while Fisher was a registered agent for Fisher Alfalfa Farms, he prepared false federal tax returns both for himself and for his mother in order to receive tax refunds that were not owed to them. In 2006, he started to test the tax system by filing false income tax returns claiming Fisher Alfalfa Farms had withheld taxes from his wages and paid them to the federal treasury. As he continued to fraudulently receive tax refunds without being detected, Fisher increased the amount of his claims.
On Oct. 30, 2014, in Charlotte, North Carolina, Glen Adkins Jr., of San Diego, California, was sentenced to 300 months in prison and Warren F. Tonsing Jr., of St. Paul, Minnesota, was sentenced to 144 months in prison. Both were ordered to pay $2.4 million in restitution, joint with their co-defendants. Adkins and Tonsing were convicted in August 2013 of wire fraud and money laundering. According to court documents, the defendants defrauded United States residents, most over the age of 55, out of millions of dollars by deceiving them into believing that each had won a large monetary prize in a “sweepstakes contest.” Both defendants worked in a Costa Rica-based call center that used computers to make telephone calls over the Internet to victims in the United States. This process allowed the defendants and their co-conspirators to disguise the originating location of the calls. Victims were informed that the callers were from a federal agency and that to receive their “prize” they had to wire thousands of dollars to Costa Rica for a purported “refundable insurance fee.” As long as the victims continued to pay, the co-conspirators continued to solicit more money from them in the form of purported fees. To date, 46 defendants have been convicted for their participation in similar Costa Rican telemarketing schemes.
On Oct. 30, 2014, in Denver, Colorado, Libia Hernandez-Garcia, of Miami, Florida, formerly of Denver, Colorado, was sentenced to 12 months in prison, three years of supervised release and ordered to pay over $70,000 in restitution. Hernandez-Garcia pleaded guilty on May 22, 2014, to tax fraud, visa fraud and social security fraud. According to court documents, from 2009 through 2011, Hernandez-Garcia made false claims against the IRS by preparing and filing federal income tax returns for several individuals where the claims for income tax refunds were fraudulent. Particularly, Hernandez-Garcia provided false information to a tax preparer, so refunds not belonging to her would be deposited into her own bank account. Also, from 2009 through 2012, Hernandez-Garcia misused the social security number (SSN) of several individuals by causing the filing of individual income tax returns which falsely included the name and SSN, as a dependent, for the person identified as the filer of the tax return. In addition, from 2008 through 2011, Hernandez-Garcia assisted in the preparation and filing with the IRS the U.S. Individual Income Tax Return of her husband for tax years 2007 through 2010 which were materially false and fraudulent. Dependents were claimed on her husband’s tax returns who could not lawfully be claimed as dependents of his. On her own personal tax returns for tax years 2006 through 2011, Hernandez-Garcia followed a similar pattern claiming dependents that could not be claimed as her dependents all in an effort to receive higher refunds.
On Oct. 29, 2014, in Sacramento, California, Jeremy Michael “Mike” Head, of Huntington Beach, was sentenced to 120 months in prison for a nationwide foreclosure rescue scam. In September 2014, Mike Head’s brother and co-defendant Charles Head was sentenced to 35 years in prison. According to evidence presented at trial, Mike Head played an important leadership role in a fraud scheme that promised to help homeowners avoid foreclosure and repair their credit. Through misrepresentations, fraud and forgery, the Head brothers and their associates substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings. Between January 2004 and March 2006, the scam netted more than $15 million in fraudulently obtained funds from scores of homeowners.
On Oct. 27, 2014 in Statesville, North Carolina, Denise Swanson, of Lenoir, North Carolina, was sentenced to 24 months in prison, three years of supervised release and ordered to pay restitution of $839,830 to client victims and $249,912 to IRS. Swanson previously pleaded guilty to tax evasion for tax year 2010. According to court documents, Swanson was the owner and operator of “Bottom-line Accounting,” a tax preparation and bookkeeping business. From 2006 to 2012, Swanson performed tax preparation services for her clients and their business, which included making related tax payments on their behalf. According to court records, Swanson received funds from her clients that were supposed to be used to pay their various tax obligations to IRS and other state agencies. But instead of making the payments, Swanson embezzled the money and used it to pay for personal expenses. Swanson failed to report the embezzled income on her own individual tax returns for tax years 2006 through 2011.
On Oct. 28, 2014, in Portland, Maine, Stacey A. Backman, of Brunswick, Maine, was sentenced to 20 months in prison and ordered to pay $365,168 in restitution. On June 9, 2014, Backman pleaded guilty to federal program and tax fraud. According to court documents, Backman was a fund accountant at Coastal Enterprises, Inc. (CEI). CEI is a private, nonprofit, charitable community development corporation and community development financial institution based in Wiscasset, Maine that received more than $10,000 in federal funds each year. From 2010 to January 2014, Backman embezzled $365,168 from CEI and failed to report the embezzled income on her federal income tax returns. CEI learned of the embezzlement in January 2014 and terminated Backman’s employment.
On Oct. 27, 2014, in Raleigh, North Carolina, Jeffrey Wayne Scott was sentenced to 12 months and one day in prison for tax evasion. Scott previously pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007. According to court documents, Scott owned and operated Greenville Loop Seafood (GLS). For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns. Scott reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. However, during these five years, the Scotts spent far in excess of this reported taxable income on personal expenditures. Between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. Scott also made a monthly transfer of $10,000 from the GLS business account into a personal brokerage account. After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from the GLS business account to pay the mortgage and related expenses. Scott failed to report in excess of $1,270,000 in taxable income for these five years and owed at least $412,844 in additional federal income taxes. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 corporate income tax return claiming work on his personal residence, including painting and repair work by a plumber, and health bills related to his family dog as business expenses.
On Oct. 27, 2014, in San Francisco, California, Sandra Lynn Vitorelo, aka Sandra Mathewson, was sentenced to 24 months in prison, three years of supervised release and ordered to pay $91,442 in restitution. Vitorelo pleaded guilty to filing false tax returns. According to court documents, Vitorelo had her own tax return preparation and accounting business called M-V Services. In 2000, Vitorelo became the bookkeeper for her cousin. Vitorelo managed her cousin’s assets including stocks, currency, and real property. In 2006, the daughter of Vitorelo’s cousin opened a clothing store in Novato, California. Vitorelo subsequently began managing the finances for that store. Vitorelo made unauthorized transfers from the bank accounts of her cousin and cousin’s daughter to her own bank accounts. Vitorelo misappropriated at least $248,583 which she kept for her own use. Vitorelo further underreported her income on her federal income tax returns beginning in 2006 and continuing through 2009 as a result of her intentional failure to report these funds as income.
On Oct. 27, 2014, in Fort Myers, Florida, Shawn Fuentes was sentenced to 60 months in prison. Fuentes was also ordered to pay restitution to Naples Concrete and Masonry of $1,951,459, restitution to the IRS of $624,728 and a money judgment of $106,979. Fuentes pleaded guilty on July 17, 2014 to mail fraud and tax evasion. According to court documents, Fuentes was the Chief Financial Officer of N.C.M. of Collier County, Inc., doing business as Naples Concrete and Masonry, which was headquartered in Naples, Florida. On numerous occasions, between October 2008 and February 2010, Fuentes fraudulently wrote checks payable to American Express and to Bank of
America drawn on the bank accounts of N.C.M. and then sent them to satisfy her own credit card debt. As part of the scheme, the fraudulent checks appeared to be written for legitimate business expenses in the accounting system utilized by the company. As a result of the scheme, she obtained in excess of $500,000. Fuentes also filed a 2009 tax return reporting a taxable income of approximately $35,148, omitting the amount of money misappropriated or stolen from Naples Concrete and Masonry. The actual taxable income that she had received was $822,060; therefore, she failed to report taxable income in the amount of approximately $786,912. For the calendar year 2009, Fuentes paid $2,671 in taxes rather than $262,081.
On Oct. 24, 2014, in Alexandria, Virginia, In Seon Lim, of Fairfax Station, Va., a former contracting official for the U.S. Department of the Army, was sentenced to 48 months in prison, three years of supervised release, and ordered to pay restitution of $250,000 to the Department of Defense and nearly $125,000 to the IRS. In addition, he must pay a forfeiture money judgment of $490,262. Lim pleaded guilty in July 2014 to conspiracy to commit bribery and honest services wire fraud; bribery; and attempting to interfere with and impede tax laws. Lim is among 18 individuals and one corporation, Nova Datacom, LLC, to plead guilty to federal charges in an investigation that uncovered this bribery and bid-rigging scheme. Overall, participants in the scheme stole over $30 million in government money through inflated and fictitious invoices. Lim was an assistant project manager and product director with the Program Executive Office Enterprise Information Systems, a part of the Army that provides infrastructure and informational management systems. As part of his work responsibilities, Lim coordinated work on a major contract, which, in turn, had numerous subcontracts. Lim secretly used his official position to enrich himself by soliciting and accepting gifts, payments and other things of value from government contractors – totaling more than $490,000 – in return for favorable official action. He also disclosed confidential bid information to the favored government contractors. Lim also admitted that he failed to report the bribes he received on tax returns for the years 2007 through 2011. He also failed to keep records that would allow him to file accurate records for 2012 and 2013.