Millionaire's lifestyle; Cocoplum loco; bourbon beef; and other highlights of recent tax cases.
Austin, Texas: Mathews Chacko pleaded guilty to conspiring with employees to defraud the United States by filing false federal tax returns for clients between January 2019 and October 2022.Chacko is the third Texas tax preparer who has pleaded guilty in a sweeping refund‑fraud scheme that ran for nearly four years, admitting he conspired with employees to file federal returns with fabricated business expenses that caused millions in losses to the government.
Chacko and his co‑conspirators inserted false business expenses on client returns to reduce tax liability and generate improper refunds. At times, clients did not know that false items were added to their returns.
The tax loss attributed to Chacko was more than $3.5 million but less than $9.5 million.Two co‑conspirators previously pleaded guilty. Anish Pillai admitted causing $1.5 million to $3.5 million in losses, while Mou Kundu admitted causing $250,000 to $550,000 in losses.Chacko faces up to five years in prison for conspiracy to defraud the IRS. Pillai and Kundu each face up to three years for preparing false returns.
Quincy, Massachusetts: Former Quincy city official Thomas Clasby, 61, has pleaded guilty to embezzling tens of thousands of dollars. Clasby used taxpayer money on personal items including steak tips, a car and a recording session in a music studio.
Clasby, from Fitchburg, was the director of the Quincy Department of Elder Services for 25 years. He pleaded guilty to embezzlement, mail and wire fraud and interstate transportation of stolen property.
Beginning in 2019, Clasby used the city's purchasing process to pay personal expenses, including $2,236 for 153 pounds of bourbon steak tips, $8,950 for a music studio to produce recordings of him singing, $4,800 for a Toyota Prius and $1,658 for a framed self-portrait.
Clasby is scheduled to be sentenced on June 17. The charges of embezzlement and interstate transportation of stolen property each carry a sentence of up to 10 years in prison and a fine up to $250,000. The charges of mail and wire fraud provide for a sentence of up to 20 years in prison, and a fine of up to $250,000.
Miami: The final defendant in a scheme to fraudulently obtain Paycheck Protection Program loans under the Coronavirus Aid, Relief, and Economic Security Act has been sentenced in federal court.
Max Alberto Mera Ulloa was sentenced to 27 months in federal prison, followed by one year of supervised release, after he pleaded guilty to conspiracy to commit wire fraud.
Between May 2020 and March 2021, Christian Mendoza, Guillermo Lopez Carrazana and Mera Ulloa, all residents of Miami‑Dade County, conspired to submit more than 165 false and fraudulent PPP loan applications to the U.S. Small Business Administration.
The defendants owned and operated several businesses, including G LUX LLC, Global Tax & Accounting Group Corp., CM Logistics Systems LLC and Max Mera Corporation. Through these entities, they submitted fraudulent loan applications that misrepresented payroll expenses and employee information in order to obtain substantial loan amounts under false pretenses.
The conspirators also carried out a kickback scheme where they had the borrower pay them a portion of the money they received from submitting the fraudulent loan applications. Rather than using the PPP loan proceeds for their intended purposes, the defendants used the funds for personal enrichment.
Mendoza and Lopez Carrazana also pleaded guilty to conspiracy to commit wire fraud.
Mendoza, a tax preparer, was sentenced to 33 months in federal prison, followed by 12 months of supervised release, and ordered to pay $2,287,855 in restitution.
Lopez Carrazana was sentenced to 22 months in federal prison, followed by 18 months of supervised release.
Honolulu: Richard Patterson, 44, was sentenced to 68 months in prison followed by three years of supervised release.
Patterson worked with two other co-conspirators, Dashawn Hill and Judy Ramos. They carried out an "advanced payment scheme" by soliciting victims to invest between $5,000 and $550,000.
The three claimed they would use the money to pay fees for financial products that would generate risk-free returns of 200 to 1,000%. Instead, they used the money to cover living expenses, travel, entertainment and other personal costs.
Patterson lived a millionaire's lifestyle, renting a luxury condominium in Ala Moana, buying luxury goods and traveling.
Collectively, Patterson, Hill, and Ramos collected more than $2 million from their scheme.
Patterson was convicted of conspiring to commit wire fraud and failing to appear for a court hearing. He was ordered to pay $2,030,000 in restitution to the victims. Ramos and Hill also admitted to certain crimes by signing a plea agreement. They are scheduled to be sentenced on May 13 and June 2, respectively.
Bridgeport, Connecticut: After pleading guilty to tax offenses in Bridgeport federal court, a Connecticut attorney has agreed to pay back $2.8 million to the IRS.
Michael Simes, 50, of Newtown, acknowledged in court his failure to file various tax returns. Simes admitted that he failed to pay over $3.1 million in taxes, penalties and interest owed.
Court documents and statements revealed that for the 2013 tax year and the 2016 through 2022 tax years, Simes didn't file any personal tax returns. This resulted in the IRS incurring a tax loss of $1,876,307 on gross income of more than $5.6 million.
The total amount of restitution Simes has agreed to pay the IRS is $2,871,676.
Simes pleaded guilty to three counts of failure to file a tax return and was released on a $40,000 bond pending sentencing, which is scheduled for June 8. Simes could face a prison sentence of up to three years.
Miami: A Miami real estate developer was charged with orchestrating an $85 million fraud scheme, failing to pay millions in taxes, and lying to financial institutions to obtain funds to purchase a luxury yacht.
Rishi Kapoor, formerly of Miami, was the CEO of Location Ventures, a Miami-based real estate development company that purported to develop projects in Coral Gables, Coconut Grove, Miami Beach and Fort Lauderdale.
Although Kapoor raised approximately $85 million from investors, most of the promised real estate projects were never built. Despite being entitled to a capped salary of $400,000 plus certain fees, Kapoor diverted substantially more funds for personal use, including the purchase of a 68-foot yacht and a residence in Cocoplum.
The indictment alleges that Kapoor misrepresented to investors the amount of his personal financial contribution to LV, claiming he had invested $13 million alongside his business partner and family when, in reality, he contributed roughly half that amount. In addition, Kapoor is charged with withholding payroll taxes from LV employees but failing to remit those taxes to the IRS.
Instead, Kapoor allegedly diverted more than $2 million from company accounts for his personal benefit.
The indictment further alleges that Kapoor failed to pay his own personal taxes from 2019 through 2023, despite earning more than $2.8 million in income in 2022 and 2023 alone.
If convicted, Kapoor faces up to 20 years in federal prison for each count of conspiracy to commit wire fraud and wire fraud; up to 10 years for money laundering; up to five years for each count of conspiracy to commit offenses against the U.S., failure to pay payroll taxes, tax evasion and failure to file tax returns; and up to 30 years for each count of bank fraud.
