Category

Tax Fraud

California Accountant Jailed for Filing False Tax Return

By | Tax Fraud

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.

Former CFO Imprisoned for Mail Fraud and Tax Evasion

By | Tax Evasion, Tax Fraud

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.

Army Contracting Official Sentenced in Bribery, Fraud and Kickback Scheme

By | Tax Fraud

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.

South Dakota Woman Gets 33 Months for Federal Tax Fraud Charges

By | Tax Fraud

On Oct. 22, 2014, in Sioux Falls, South Dakota, Veronica Fairchild was sentenced to 33 months in prison and ordered to pay over $214,000 in restitution to the IRS for unpaid taxes. Fairchild was convicted in June 2014 of four counts of tax fraud. According to court documents, Fairchild failed to claim over $850,000 in income on her 2005 through 2008 income tax returns which she filed in 2010. Fairchild claimed the unreported income she received from performing private shows as an exotic dancer was a gift.

Oklahoma State University Professor Sentenced on Federal Fraud Charges

By | Tax Crimes, Tax Fraud

On Oct. 22, 2014, in Great Falls, Montana, Gary Joseph Conti, of Three Forks, was sentenced to 60 months in prison, three years of supervised release and ordered to pay $1.7 million in restitution. Conti, a former Oklahoma State University professor, was convicted in March 2014 by a federal jury of bankruptcy fraud and convicted in May 2014 of 26 other felony crimes. According to court documents, Conti was part of a multi-million dollar tribal corruption and fraud case on the Blackfeet Indian Reservation. He assisted Blackfeet Tribal officials Frances Onstad and Delyle “Shanny” Augare, and others, obtain millions of dollars in federal monies for a program for troubled and at risk Blackfeet youth called the Po’Ka Project. The federal money was provided based on fraudulent claims as to matching or “in-kind” contributions of third parties which made it appear that the project was becoming self-sufficient. Once the federal money was provided to the Po’Ka program, Onstad and Augare paid Conti $475,000 from August 2008 to August 2011. Conti then kicked-back $225,000 through a children’s charity bank account over which Augare and Onstad had control. An audit by the Department of Health and Human Services’ Office of Inspector General found the projected loss due to fraud and mismanagement at $4.6 million out of the $9 million provided to the Po’Ka Project from 2005 to 2011.

Owner of Investment Company Sentenced on Tax and Money Laundering Charges

By | Money Laundering, Tax Fraud

On Oct. 16, 2014, in Salt Lake City, Utah, James Ronald Donahoo, II, of Pleasant Grove, was sentenced to 48 months in prison, three years of supervised release and ordered to pay $2,739,501 in restitution to victims of the fraud. A forfeiture money judgment has been entered in the same amount. Donahoo pleaded guilty in June 2014 to wire fraud, money laundering and failure to file a tax return. According to his plea agreement, Donahoo misrepresented to investors that if they would invest in Paradigm Investing, Inc., they would make a 1 to 3 percent return on their investment, which would be paid out monthly. Paradigm never earned any revenues on any of its purported investments from which interest payments could have been made. Donahoo created false bank statements for Paradigm that he showed to investors to convince them that the investment was safe, low risk, and a good investment. He also told investors that the risk was mitigated by the fact that for every dollar invested, he had a dollar in the bank. Donahoo made payments to investors totaling more than $267,000 out of investor funds in furtherance of what was a Ponzi scheme. In addition, Donahoo
did not file a tax return for 2008, even though he transferred funds from the Paradigm bank account to his personal bank account totaling $335,000. He used those funds for personal purposes.

New Jersey Woman Sentenced to Prison for Tax Crime and Defrauding Non-Profit

By | Tax Crimes, Tax Fraud

On Oct. 14, 2014, in Philadelphia, Pennsylvania, Rochelle Biesenthal, of Brigantine, New Jersey, was sentenced to 12 months and a day in prison, three years of supervised release and ordered to pay restitution of $171,187 to the victim organization and $61,637 to the IRS. On May 28, 2014, Biesenthal pleaded guilty to one count of wire fraud and three counts of tax evasion. According to court documents, Biesenthal engaged in a scheme to defraud a non-profit organization in Philadelphia that provides opportunities for Jewish individuals to engage with their Jewish heritage and reaffirm their Jewish identity. Biesenthal carried out the scheme between 2002 and April 2009, while she was employed as a bookkeeper at the organization. She fraudulently prepared and issued checks and authorized electronic debits from the organization’s bank accounts to herself and to pay her personal and family’s personal credit cards. As
part of the scheme, she defrauded the organization of a total of well over $400,000. In addition, she never reported her unauthorized income in her tax returns in tax years 2007 through 2009 and concealed the true sources of her income.

Financial Advisor Sentenced for Tax Fraud

By | Tax Evasion, Tax Fraud

On Oct. 2, 2014, in New Orleans, Louisiana, Jabari Ragas, of New Orleans, was sentenced to 42 months in prison and three years of supervised release for money laundering and tax fraud. Ragas was also ordered to pay nearly $1,700,000 in restitution for the money laundering count, and $259,210 for the tax fraud count. According to court documents, Ragas was employed by as a registered broker and investment adviser from 2005 through 2009. Ragas previously pleaded guilty to embezzling nearly $1,400,000 from clients, and failing to pay nearly $260,000 in tax due and owing to the IRS. In early 2006, a client of Ragas indicated that he wished to open a Simplified Employee Pension (SEP) account to allow him to contribute towards retirement. Without authorization, Ragas began moving money from the SEP account into an account controlled by Ragas. Ragas supplied the client with a fraudulent account statement along with a fraudulent balance. After using the interstate wire to embezzle funds from the client’s account, Ragas then committed money laundering by further transferring $20,000 into a different account that he controlled. Additionally, on Oct. 12, 2008, Ragas signed and filed an income tax return for 2007 that did not report approximately $288,000 in income.

“Real Housewives of New Jersey” Stars Sentenced for Fraud and Federal Tax Offenses

By | Tax Crimes, Tax Fraud

On Oct. 2, 2014, in Newark, New Jersey, Teresa Giudice and her husband, Giuseppe “Joe” Giudice, both of Towaco, were sentenced to 15 months and 41 months in prison, respectively. Both also were sentenced to two years of supervised release and ordered to forfeit $414,588. Both previously pleaded guilty to conspiracy to commit mail and wire fraud, bankruptcy fraud by concealment of assets, bankruptcy fraud by false oaths, and bankruptcy fraud by false declarations. Giuseppe also pleaded guilty to failure to file a tax return. According to court documents, from September 2001 through September 2008, both engaged in a mail and wire fraud conspiracy in which they submitted fraudulent applications and supporting documents to lenders in order to obtain mortgages and other loans. In relation to a petition for individual bankruptcy protection, the Giudices intentionally concealed businesses they owned and income they received and provided false testimony under oath. Giuseppe admitted that during tax years 2004 through 2008, he received income totaling $996,459 but did not file tax returns for those years.

Town Finance Director Sentenced for Embezzling Tax Crime

By | Tax Crimes, Tax Fraud

On May 22, 2015, in Bridgeport, Connecticut, David J. Bertnagel, of Thomaston, was sentenced to 30 months in prison and three years of supervised release. Bertnagel was also ordered to pay $808,029 in restitution to the Town of Plymouth and cooperate with the IRS to pay all outstanding taxes, penalties and interest. On Feb. 20, 2015, Bertnagel pleaded guilty to theft from a local government receiving federal funds and making and subscribing a false tax return. According to court documents, from October 2011 through October 2014, Bertnagel was employed as the Finance Director for the Town of Plymouth. During that time period, Bertnagel issued 207 checks totaling approximately $808,030 from the Town’s payroll account to himself.  Bertnagel used the embezzled funds to make mortgage payments, pay credit card bills, fund home improvement projects and purchase more than $100,000 in coins, stamps and other collectibles. He also converted more than $182,000 of the stolen funds by way of cashed checks, ATM withdrawals and money orders. In addition, Bertnagel’s federal tax returns for the 2012 and 2013 tax years failed to report any of his embezzled income, resulting in a tax loss to the government of $145,564 for those two years. Bertnagel also did not file a tax return with the IRS for the 2011 tax year.