Under Development; lack of security; CI at work; and other highlights of recent tax cases.
Trenton, New Jersey: Business owner Khuram Raja, of Locust Valley, New York, has admitted to evading personal income taxes.
During tax years 2016 to 2018, he owned and operated a company that provided construction and building services; he earned income from the company and filed returns for the company for tax years 2016 and 2017 that materially understated the company's income.
Raja failed to report certain taxable income that his company received in cash and checks cashed at check-cashing facilities. He also deducted expenses from the company's reported income that included personal expenses.
Raja also filed no business returns for tax year 2018 and no personal income tax returns for tax years 2016 to 2018 and failed to report the income from the company that would have flowed through to his personal income tax returns. He evaded $543,815 in personal income taxes for 2016 to 2018.
The charge of tax evasion carries a maximum of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentencing is April 16.
Omaha, Nebraska: Attorney Thomas Campbell, of Bennington, Nebraska, has been sentenced to a year and a day in prison for filing false individual income tax returns.
Between 2014 and 2018, Campbell, a licensed attorney since 2011, owned and managed TLN Law, a solo-practice law firm. He controlled the firm's finances and was aware of substantial amounts of cash payments his firm received for legal services. For 2014 through 2018, he did not report more than $2.8 million in cash his firm received, which flowed through to, and should have been reported on, his personal returns. He caused a tax loss to the IRS exceeding $400,000.
Campbell, who pleaded guilty in July, was also ordered to serve a year of supervised release and to pay $407,665 in restitution to the United States.
Orlando, Florida: Tax preparer Rafael Ramos has been sentenced to 27 months in prison for promoting a scheme to file false documents with the IRS to fraudulently obtain large refunds.
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When the IRS tried to collect the refunds, Ramos tried to obstruct the IRS by providing clients with frivolous correspondence saying that they'd self-prepared their returns and by telling clients to move funds out of their bank accounts to avoid levies.
The scheme caused a federal tax loss exceeding $1.15 million.
Ramos was also ordered to serve two years of supervised release and to pay some $594,685 in restitution to the United States.
Cambridge, Ohio: Resident Daniel L. Speedy has been sentenced to a year and a day in prison for filing false income tax returns.
From about January 2011 through July 2015 Speedy, who pleaded guilty in December 2021, was contracted by the Guernsey County Community Development Corp. to provide services, including as contract director, through his company Monster Management.
During his time as a contractor, Speedy controlled various financial aspects of the company and willfully failed to accurately report all the income he earned from various sources, including the development corporation, on his income tax returns for 2011 through 2015. The omitted income partially included but was not limited to rental income, oil and natural gas royalties, income from overpayments on real estate sales and gains on sales of real estate.
The IRS sustained a tax loss totaling nearly $625,000.
Monmouth Beach, New Jersey: Resident Joseph Cammarata has been found guilty of five counts of tax evasion.
Cammarata and two conspirators, David Punturieri and Erik Cohen, were the principals of Alpha Plus Recovery, a claims aggregator firm in Old Bridge, New Jersey. Punturieri and Cohen previously pleaded guilty to tax evasion, fraud and money laundering.
Cammarata, Punturieri and Cohen used Alpha Plus to make false and fraudulent claims on the proceeds of securities fraud class-action settlements and SEC enforcement actions, falsely claiming that corporate clients of Alpha Plus Recovery had purchased shares of securities that were the subject of the lawsuits and actions. The supposed clients were entities controlled by the defendants, had not purchased the subject securities and were entitled to no recovery.
The defendants created fraudulent brokerage and other financial documents for claims administrators, then transferred the fraudulently obtained funds into accounts that they controlled, stealing more than $39 million from 2015 to 2019. Cammarata's share amounted to more than $18 million, much of which he failed to declare or pay taxes on and hid from his accountant.
Each count of tax evasion is punishable by up to five years in prison.
Cammarata was previously convicted of conspiracy to commit wire fraud and mail fraud, wire fraud, money laundering conspiracy and money laundering in connection with this scheme and last June was sentenced to 10 years in prison on those charges.
Mount Airy, Maryland: Businessman Francesco Illiano has pleaded guilty to failing to pay employment taxes withheld from employees' wages.
Illiano owned and operated two restaurants and a property management company employing more than 100. He was responsible for collecting, accounting for and paying the income and Social Security and Medicare taxes withheld from the wages of employees. From at least April 2014 to July 2016, Illiano did not pay the withholdings to the IRS.
Illiano had previously been assessed a trust fund recovery penalty for not paying more than $1.4 million in taxes withheld from employees of five restaurants he owned in 2011 and 2012.
In total, he caused a tax loss to the IRS of more than $1.7 million.
Sentencing is March 6. He faces up to five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Southfield, Michigan: Tax preparer Lori Bradford, 56, has been sentenced to 15 months in jail after pleading guilty to 10 felonies stemming from her preparation of false returns for clients.
Bradford prepared and filed tax returns that contained false statements and false claims for refunds. Despite having each client's real W-2, she prepared returns with an inflated withholding amount, leading to claims for inflated refunds.
When the Michigan Department of Treasury sought to verify the accuracy of the returns, Bradford prepared and provided false W-2s and other supporting documentation.
Washington, D.C.: In fiscal year 2023, IRS Criminal Investigation initiated some 2,676 criminal investigations, identified more than $37.1 billion from tax and financial crimes and obtained an 88.4% conviction rate on cases accepted for prosecution, the IRS said.
During FY23, CI used data analytics to support more than 1,300 investigations of questionable refunds and preparers, 231 of which included ID theft. CI also seized digital data from more than 3,300 computer devices and delivered 33 trainings to over 1,100 law enforcement officials from 96 countries.
In May and September 2023, CI, in conjunction with private-sector and global law enforcement partners, delivered blockchain analysis tools and cyber training to Ukrainian law enforcement agencies to aid in sanctions-related enforcement efforts, among other international initiatives.
