Tax Fraud Blotter: Wide world of fraud
International schemes sought millions; an asset shuffle; time’s up for temp agency; and other highlights of recent tax cases.
Christiansburg, Va.: Regan Dwayne Reedy, 56, and Susan Annette Reedy, 50, have been sentenced following convictions on tax fraud and multiple bankruptcy fraud charges.
Regan Reedy received nine years in prison after being convicted of conspiracy to commit tax fraud, making false declarations in a bankruptcy proceeding, concealment of property in a bankruptcy proceeding and false testimony in a bankruptcy proceeding. Susan Reedy was sentenced to 78 months in prison after being convicted of making false declarations in a bankruptcy proceeding, concealment of property in a bankruptcy proceeding and false testimony in a bankruptcy proceeding.
According to trial evidence, Reagan Reedy filed a number of fraudulent returns for individuals claiming refunds. The returns claimed excessive federal withholdings that resulted in excessive claims for refunds of more than $1 million. Most of the fraudulent returns were detected before refunds were issued; one refund for $156,191 was issued.
The couple also filed three Chapter 7 bankruptcies seeking to discharge debts to private and governmental creditors. In filings in 2012 and again in 2014, the Reedys omitted assets from their bankruptcy schedules and concealed assets from the bankruptcy trustee. Those assets included bank accounts, real estate, and vehicles they had placed in nominee names.
At a creditors’ meeting in December 2014, both falsely testified regarding their assets; Regan and Susan Reedy were each eventually held responsible for concealing more than $1.8 million in assets during the course of the bankruptcies.
Boston: Tien Chau, operator of a temporary employment agency, has pleaded guilty to an indictment charging him with conspiring to defraud the government, failing to pay over employment taxes and obstructing internal revenue laws.
According to the indictment and statements in court, Chau ran an agency that provided temporary labor to businesses in Massachusetts and New Hampshire. The agency operated under at least four different names: Central Boston Staffing Services, Metro Boston Staffing Services, General Staffing Inc. and Kim’s Staffing Inc. Chau and others used nominees to conceal their ownership of the business.
From 2006 through 2011, Chau and others conspired to conceal the agency’s total number of employees from the IRS to lower the agencies’ employment tax liabilities. Chau attempted to hide the size of their workforce from the IRS by paying most of the employees cash and filing returns that both underreported the number of employees and omitted wages paid in cash.
The conspirators sought to obstruct an investigation by, among other things, directing an employee, after learning of her interview with special agents, to assist with shredding the agency’s records. Chau also allegedly destroyed and removed computers and computer equipment from the agencies’ office.
Sentencing is May 17, when Chau faces a maximum of five years in prison for the conspiracy charge, five years for each employment tax count and three years for obstructing the internal revenue laws. He also faces a period of supervised release, restitution and monetary penalties.
Columbia, S.C.: Local resident Desmond Lamar Williams has been sentenced to two years in jail for preparation of false returns.
Facts presented in court established that Williams was on active duty with the U.S. Army for many years and that for the tax years 2011 to 2014 he also worked as a tax preparer.
IRS investigation revealed that many of the returns Williams prepared contained false information. The government’s loss was $712,728.
Medford, Mass.: Local pizza shop owner Nikita Yanakopulos, 40, has pleaded guilty in connection with filing returns that failed to disclose the cash payroll payments he paid to employees.
Yanakopulos, owner of Pinky’s Famous Pizza, pleaded guilty to two counts of aiding and assisting in filing false 941s. Yanakopulos owned and operated Pinky’s from approximately 2000 to 2016 and during that period paid several employees by check and cash and other employees entirely in cash.
Yanakopulos caused his payroll service to file 941s that only included the payroll paid by check. During those years, he made cash payroll payments to his employees totaling approximately $675,000 but failed to report those payments to his payroll service or pay the required withholding amounts to the IRS.
Sentencing is May 22. Aiding and assisting the filing of false returns carries a maximum of three years in prison, a year of supervised release and monetary penalties.
Milwaukee: Dimas Chavez-Pina, 29, has pleaded guilty to theft of government money and aggravated ID theft in connection with a return fraud.
According to the plea agreement, Chavez-Pina fraudulently obtained ITINs using the personal ID documents from citizens of Mexico and then fraudulently filed returns. In the returns, he claimed the Additional Child Tax Credit by falsely claimed dependents.
From 2011 through June 2014, Chavez-Pina received $1,058,827.69 from his scheme.
He faces two to 12 years in prison when he’s sentenced on May 1. Chavez-Pina agreed to pay $1,058,827.69 restitution to the IRS and to be voluntarily deported to Mexico due to his lack of legal status in the United States.
Sun Valley, Calif.: Resident Karen Pogosian, 47, has been sentenced to 54 months of imprisonment for his participation in an international ID-theft scheme that fraudulently obtained tax refunds by using bogus Republic of Armenia passports and then engaged in money laundering of more than $14 million in stolen money.
According to court documents, the scheme involved more than 7,000 false returns that claimed approximately $38 million in refunds. Approximately $14 million obtained through the fraud was then deposited into bank accounts to conceal its illegal source. The returns were filed using ID information stolen from thousands of victims.
From August 2012 through March 2014, Pogosian opened mailbox and bank accounts using fraudulent IDs with the names and personal information of victims. He also used the identification documents to create other IDs. For example, Pogosian used a foreign passport in the name of another person to obtain a Costco membership card also in that same person’s name but with Pogosian’s photograph.
His use of stolen IDs resulted in approximately $277,617 in loses. According to court records, the defendant was present illegally in the U.S. at the time he committed the crimes and had been receiving public benefits.
The case is part of a larger investigation in which 14 defendants have been charged, nine have pled guilty and of those eight sentenced, two are fugitives, two are pending trial and one is awaiting extradition.
Pogosian, who pleaded guilty in September, was also ordered to pay $277,617 restitution to the IRS.