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Tag Archive for tax fraud

Freeman Law Tax Court In Brief: Case Of State Senator Convicted On Federal Criminal Charges Including Fraud

Freeman Law Tax Court In Brief: Case Of State Senator Convicted On Federal Criminal Charges Including Fraud

Fumo v. Comm’r, T.C. Memo. 2021-31 | May 17, 2021 | Lauber, J. | Dkt. No. 17614-13

Short Summary

Taxpayer, a state senator with 30 years of service, was convicted on Federal criminal charges, including mail and wire fraud. One victim included a 501(c)(1) & (3) organization, exempt from Federal income tax.  Taxpayer influenced the tax-exempt organization’s formation as, at his direction, three members of his senatorial staff incorporated the organization for the purposes of maintaining and improving the aesthetic appearance of the taxpayer’s district. At all periods in question, at least one member of the taxpayer’s staff worked for the charity organization as either President or Executive Director while remaining employed by the Senator.  Taxpayer influenced, as chairman of a senate appropriations committee, funding for the charitable entity from public and private sources.

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Florida Man Sentenced For Evading Taxes On Millions In Secret Offshore Bank Accounts

Florida Man Sentenced For Evading Taxes On Millions In Secret Offshore Bank Accounts

A resident of Palm Beach County, Florida, was sentenced to 24 months in prison for not reporting his foreign financial accounts from 2006 through 2015 and for willfully evading the assessment of millions in taxes from 2007 through 2014.

According to court documents, from 2003 through 2009, Dusko Bruer owned and operated a company that bought U.S.-made agricultural machinery and parts and sold them throughout the world. Bruer’s company had numerous employees and reaped millions of dollars in annual gross receipts. Despite its success, Bruer’s company did not file employment or corporate tax returns, nor did the company pay employment or income taxes. Furthermore, from 2003 forward, the company never paid Bruer a salary. Instead, Bruer directed that millions of dollars from the company’s bank accounts be used to pay his personal expenses, to make foreign investments, and to transfer funds to his family members.

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IRS Criminal Investigation On Tax Refunds

U.S. Department Of Justice
Residents of Florida, Georgia and North Carolina Indicted for Promoting Tax Fraud Scheme

Allegedly caused $40 million in false tax refund claims to be filed

A federal grand jury in Orlando, Florida, returned an indictment April 21, 2021, charging residents of Florida, Georgia and North Carolina with promoting a tax fraud scheme.

According to the indictment, from 2013 to 2017, Iran Backstrom of Milledgeville, Georgia; Mehef Bey of Charlotte, North Carolina; Yomarie Febres of Atlanta, Georgia; and Aaron Aqueron of Clermont, Florida, allegedly conspired together and with others to promote a tax fraud scheme to more than 200 individuals in 12 states. The indictment alleges that the defendants recruited clients by falsely representing that the clients’ mortgages and other debts entitled them to tax refunds. To execute the scheme, the defendants and their conspirators allegedly prepared and caused clients to file tax returns that falsely claimed large amounts of income taxes had been withheld from the clients and paid over to the IRS, entitling the clients to tax refunds. According to the indictment, the defendants typically charged each client fees ranging from approximately $10,000 to $15,000 and did not report on their own tax returns any income generated from the scheme.

The indictment further alleges that when the IRS discovered the fraud and attempted to recover the fraudulently obtained tax refunds, Aqueron encouraged clients to provide the IRS with false information and remove funds from their bank accounts in order to thwart the IRS’s collection efforts. As a result of the scheme, the defendants allegedly filed, and caused to be filed, with the IRS approximately $40 million in fraudulent claims for tax refunds.

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IRS Criminal Investigation Releases Fiscal Year 2020 Annual Report; Identifies $2.3 Billion In Tax Fraud

IRS Criminal Investigation Releases Fiscal Year 2020 Annual Report; Identifies $2.3 Billion In Tax Fraud

The Internal Revenue Service today released the Criminal Investigation Division’s annual report, highlighting the agency’s successes and criminal enforcement actions taken in fiscal year 2020, the majority of which occurred during COVID-19. A key achievement was the identification of over $10 billion in tax fraud and other financial crimes. 

“The special agents and professional staff who make up Criminal Investigation continue to perform at an incredibly high-level year after year,” said IRS Commissioner Chuck Rettig. “Even in the face of a global pandemic, the CI workforce initiated nearly 1,600 investigations and identified $2.3 billion in tax fraud schemes. This is no small feat during a challenging year, and their work is critical to protecting taxpayers and the integrity of our tax system.”

Key focuses of CI in fiscal year 2020 included COVID-19 related fraud, cybercrimes, with an emphasis on virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud and tax-related identity theft.

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Blockchain And Corporate Taxation: Change Is Coming

While the technology can sound quite complex, a blockchain is essentially an immutable, distributed ledger. This means that instead of a single, third-party record holder, every authorized party within the blockchain holds an instantly updated record of all transactions. Blockchain maintains data integrity this way because it’s virtually impossible to alter the data of every single ledger. Any discrepancies found will be compared against every ledger and any fraudulent data found will be disregarded. Read more

Hewlett-Packard Defrauded in the Acquisition of Autonomy for $11 Billion

A federal grand jury indicted former CEO of Autonomy Sushovan Hussain, 52, a citizen and resident of the United Kingdom, with conspiracy to commit wire fraud and multiple counts of wire fraud. According to the indictment filed last Nov. 10, Hussain allegedly engaged in a scheme to defraud purchasers and sellers of securities of Autonomy Corporation plc (Autonomy) and Hewlett-Packard Company about the true performance of Autonomy’s business, its financial condition and its prospects for growth.

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Don’t Be A Victim To IRS Phone And E-Mail Scams

TaxConnections Member Barry Fowler

Thieves use taxpayers’ natural fear of the IRS and other government entities to ply their scams, including e-mail and phone scams, to steal your money. They also use phishing schemes to trick you into divulging your SSN, date of birth, account numbers, passwords and other personal data that allow them to scam the IRS and others using your name and destroy your credit in the process. They are clever and are always coming up with new and unique schemes to trick you.

These scams have reached epidemic proportions, and this article will hopefully provide you with the knowledge to identify scams and avoid becoming a victim.

The very first thing you should be aware of is that the IRS never initiates contact in any other way than by U.S. mail. So if you receive an e-mail or a phone call out of the blue with no prior contact, then it is a scam. DO NOT RESPOND to the e-mail or open any links included in the e-mail. If it is a phone call, simply HANG UP.

Additionally, it is important for taxpayers to know that the IRS:
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Peter Amrein: The Latest Swiss Banker To Have His Head Put On The Government’s Chopping Block

The Justice Department just recently announced its latest catch: Peter Amrein, a Swiss citizen and former asset manager at a Swiss asset management firm. Mr. Amrein pleaded guilty to one count of conspiracy to defraud the IRS, to evade federal income taxes, and to file false federal income tax returns. By way of his allocution during the plea hearing, Mr. Amrein acknowledged entering into an agreement with U.S. taxpayer-clients and others to help U.S. taxpayers hide millions of dollars in offshore accounts from the Internal Revenue Service (IRS), and to evade U.S. taxes on the income earned in those accounts.

The allegations in the superseding Information and the prior indictment lay out the sordid details. Mr. Amrein started out as a client advisor at a Swiss bank (Swiss Bank No. 3), later working his way up to an asset manager at a Swiss asset management firm (the Read more

An Unusual But Effective IRS Collection Tool: The Writ Of Ne Exeat Republica

Congress has given the IRS potent tools to collect taxes. The IRS can impose liens on a taxpayer’s property and can seize it through levy, all without prior judicial authorization. But for taxpayers who attempt to move or keep their assets offshore to circumvent IRS collections – beware of the writ of ne exeat republica.

The writ of ne exeat republica effectively prevents a person from leaving the Court’s jurisdiction and the IRS has demonstrated that where its efforts to seize a taxpayer’s property to collect his past due taxes, the IRS essentially seized the taxpayer instead.

Predictably, it takes some fairly serious misbehavior to lead a court to bar someone from traveling – and that is what happened to Charles and Kathleen Barrett of Colorado. Read more

Tools And Tactics That IRS Criminal Investigation Division Uses To Gather Information About You

A simple mistake, oversight, or your accountant’s malpractice may trigger an IRS criminal investigation. Specifically, unreported income, a false statement, the use of an impermissible accounting or banking service, or declaring too many deductions are things that could initiate an audit, which could then rise to the level of an IRS criminal investigation.

As you can imagine, the IRS Criminal Investigation Division (“CID”) uses a vast array of tools to investigate a suspected tax evasion case or while conducting a criminal investigation. If you think about it, every employee of the IRS has a single task of ensuring that the IRS tax collections are maximized. IRS Special Agents, who work on the criminal tax cases, are no different. If you file your taxes, their goal is to prove that you may have Read more

What’s In Your Wallet? Uncle Sam Wants To Know

Folks with Panamanian bank accounts may soon be getting some official-looking envelopes in the mail, as the Justice Department recently served John Doe subpoenas on FedEx, DHL, Western Union and a number of other shipping and wire transfer companies. These summonses require the targets to turn over any documents or material relating to their business with Panama-based Sovereign Management and Legal, Ltd.

With typical government bravado, Deputy AG David Hubbert warned that “the world is getting smaller for tax cheats, and we will work with our partners at the IRS to vigorously enforce the nation’s tax laws against those who seek to avoid paying their fair share.” Read more

Guideline, Schmideline!

The battleground in the government’s ongoing war against financial criminals shifted to a Brooklyn courthouse last month, as another UBS defendant was sentenced after he pleaded guilty to concealing a foreign bank account. Prosecutors alleged that 73-year-old Gabriel Gabella, an Italian citizen, failed to file a Report of Foreign Bank and Financial Accounts (FBAR) to disclose his ownership of a Swiss bank account held at Union Bank of Switzerland in tax years 2006 and 2007.

Mr. Gabella faced a maximum 60 months in prison, and a guideline range of 24 to 30 months. However, U.S. District Judge Jack Weinstein sentenced him to three years’ probation and a $50,000 fine. In addition, Mr. Gabella paid a civil penalty of $3.1 million, which was about half the value of his account in 2007, and $239,000 in back taxes. Read more