Michigan Man Sentenced to 30 Years for Ponzi Scheme

By | Tax Crimes, Uncategorized

On Dec. 3, 2014, in Grand Rapids, Michigan, David W. McQueen, of Byron Center, Michigan, was sentenced to 360 months in prison and ordered to pay $32,036,997 in restitution to his victims and $926,787 to the IRS. McQueen was convicted on May 9, 2014 of mail fraud, money laundering and tax evasion stemming from a massive Ponzi scheme that spanned three years. The scheme affected more than 800 families, and preyed upon unsophisticated, often elderly investors. According to evidence presented at trial, in 2006, McQueen borrowed funds to invest in a company called Multiple Return Transactions (MRT) which promised 10 percent return on investments. McQueen later created a company called Accelerated Income Group (AIG), through which he promised returns as high as 5-6 percent to investors. McQueen used MRT’s promised returns of 10 percent, to make AIG’s promised returns of 5 percent. McQueen could meet his 5 percent obligations to his investors and then keep 5 percent for himself. However, MRT was merely a Ponzi scheme. Instead of notifying AIG investors that MRT had failed, McQueen continued to tell investors that their money was safe and growing. Without MRT making its monthly payments, McQueen and AIG could not meet their 5 percent monthly obligations to investors based on investment earnings. Instead, McQueen used money from new investors to make promised interest payments. In addition to AIG, McQueen created three other funds that were nothing more than sham corporations designed to raise millions of dollars from investors. McQueen commingled the investor money between his various and purportedly distinct funds and used it to make bogus interest payments and redemption requests to investors, pay commissions to agents or simply spend the money. Despite knowing that he had absolutely no revenue coming in, McQueen took $100,000 of investor money per month tax free for his own personal use and enjoyment.

Doctor Sentenced for Tax Evasion

By | Uncategorized

On Oct. 22, 2014, in Milwaukee, Wisconsin, Dr. Michael N. Mangold was sentenced to 18 months in prison. Mangold pleaded guilty on May 22, 2014, to one count of tax evasion and one count of making false statements. According to court documents, Mangold was a medical doctor specializing in emergency medicine and urgent care who, since about 1993, had worked as a physician for various hospitals, emergency rooms and urgent care facilities. At times, he also worked as a physician in state and county correctional facilities. Mangold primarily earned income through a combination of employee wages and independent contractor payments. From 1997 through 2007,Mangold willfully concealed his income from the IRS and made false statements to the IRS. In total, Mangold owed approximately $191,577 in taxes based on his income and wages during the relevant calendar years plus interest. In addition, Mangold made materially false statements during the course of a civil lawsuit concerning his failure to repay federal student loan obligations. He submitted a false financial affidavit to government officials which contained false statements about the amount of income he earned as a doctor.

Attorney Jailed for Stealing Clients Funds and Filing False Tax Returns

By | Uncategorized

On Oct. 9, 2014, in Springfield, Missouri, Daniel D. Whitworth, of Joplin, was sentenced to 24 months in prison and ordered to pay $404,957 in restitution to his former clients and $72,810 to the government. In addition, Whitworth surrendered his license to practice law. On March 31, 2014, Whitworth pleaded guilty to wire fraud, money laundering and false statements on tax returns. According to court documents, Whitworth embezzled approximately $576,739 from 22 of his legal clients between 2004 and Oct. 18, 2013. Whitworth spent these embezzled funds on personal loans and items unrelated to the legal matters of his clients. Whitworth failed to report the embezzled funds on his personal income tax returns for the years 2009 through 2011, which totaled $448,835. For 2012, Whitworth did not file an income tax return and therefore did not report the embezzled funds during this year as well.