Memphis Woman Gets 22 Years for Tax Fraud

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A Memphis woman has recently been sentenced to 22 years in prison and ordered to pay nearly $700,000 in restitution after her tax fraud scheme was shut down by IRS Criminal Investigation.

Aundria Bryant-Branch, 38, was providing stolen social security numbers and other sensitive data to third party tax return filers.  The information was obtained from the Memphis Police Department. The news stories do not identify Bryant-Branch as a former employee of the Memphis Police Department, but it seem clear that she was either an employee or a contractor/vendor who would have had access to the confidential info.

The other parties involved in this scheme were responsible for filing the false tax returns and bilking the federal government out of thousands of dollars during the period 2006-2008.

For information about legal tax relief programs, call Montgomery & Wetenkamp for a free attorney consultation.

Don't Tip the Tax Collector

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image via tipsfortips.wordpress.com

The law is very tough on tax assessors and collectors who extend tax relief in situations where it is not warranted.  It is obviously illegal to bribe a property tax assessor or an IRS agent for reducing a tax bill.  Illegal to accept a bribe and illegal to do the bribing.

L.A. County Tax Assessor, John Noguez, has been charged with accepting huge bribes in exchange for reduced tax assessments.  Other charges include perjury, conspiracy and misappropriation — 24 felony counts in all.  Noguez was arrested and taken into custody last week.  If convicted, he will spend up to 30 years behind bars.

What about the guy who paid him off?  He’ll get his too, if found guilty.  Ramin Salari was charged with 23 felony counts including bribing public officials and conspiracy.  Salari appears to be pleading not guilty.  It is unclear how Noguez will plead.

Remember: bribes are expensive and risky.  Hire a good tax attorney instead.

Can We Trust the IRS with Guns?

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"desk pop" from the movie The Other Guys

TIGTA recently audited and reported on the firearm policies of the Criminal Investigation (CI) division of the IRS and found them to be somewhat lacking.  Usually I like to focus on tax relief, but this has got to be the strangest TIGTA report I have ever seen.  I couldn’t pass it up.

CI special agents are a unique breed, to say the least.  They are like the offspring of two completely opposite carreers: one’s tools are a pocket protector and calculator, and the other’s are a bullet proof vest and concealed handgun.  These are probably guys who really wanted to be FBI or CIA but ended up at the IRS instead.  And, let’s face it, a tax attorney probably sees as much action as they do.  They aren’t chasing down drug dealers; they are apprehending people who cheated on their taxes or who are running from a massive tax debt.  They definitely aren’t firing their weapons on a regular basis, so it’s no huge surprise to me that the firearm policies are subpar.

Their firearms qualification passage rate is pretty high; that’s not the problem.  TIGTA’s report has more to do with CI putting in place consistent policies and consequences.  The scenario that really stood out to me was what to do when a CI special agent accidentally discharges his firearm!  The report states that this is not a common occurence, but according to the report, there are more accidental discharges than intentional discharges!

During fiscal years 2009-2011, there were a total of 19 reported discharge incidents in all of CI; 8 intentional and 11 accidental.  Is is just me or does this report make CI agents look like a bunch of clowns?

Postal Workers Assisted in Tax Refund Fraud Scheme

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A multimillion dollar tax refund fraud scheme was dismantled by authorities recently, but not after the IRS paid out over $5 million in refunds based on claims made using stolen identities from citizens of Puerto Rico.  “Operation Mass Mail” finally resulted in a Complaint naming five defendants which was unsealed earlier this week.  IRS Criminal Investigation (IRS-CI) is normally assisted by other federal agencies in tax fraud investigations; this time the US Attorney and the US Postal Inspection Service.

The scheme operated more or less in this manner (allegedly):

  1. Jose Angel Quilestorres got things started from his apartment in the Bronx, filing false returns using stolen taxpayer information
  2. Refunds were received at multiple locations; some were intercepted by US Postal Service workers who accepted bribes to assist in the fraud
  3. The refund checks then changed hands again and were cashed by the other four defendants named in the Complaint

The leader of this operation, Quilestorres, faces a maximum of 32 years behind bars.

The tax problems of the Average Joe pale in comparison.  How can the IRS find time to pursue criminal charges against people who simply fail to file tax returns (even if they pile up a big tax debt) when things like this are going on around us?  Sure, they do find time on occasion, but they have bigger fish to fry.

$104 Million Award: Big Win for Whistleblower, Bigger Win for IRS

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image via nydailynews.com

The IRS Whistleblower Office, in its June 20th memorandum, promised to make some long-overdue changes to the whistleblower program, one of which would be to follow through on paying out awards to those who come forward with valuable intel.  When I saw this memo back in June, I wondered how long it would take for the Whistleblower Office to make good on its promise.  Well, the time has come.

The tax attorneys for former Swiss banker, Bradley Birkenfeld, announced yesterday that the IRS paid their client an award of $104 million for revealing information that resulted in the highly publicized exposure of UBS.  Why would the IRS pay out such a huge award in these miserable financial times?  Because the benefits far outweigh the cost.  Here’s what the IRS got out of the deal:

  • $780 million fine against UBS
  • strong message sent to tax cheats and financial institutions around the world that the IRS is serious about enforcement and collection of tax debts
  • strong message sent to potential whistleblowers around the world that the IRS is serious about compensating those who take risks and come forward
  • billions of dollars in taxes that otherwise would not have been collected

In the words of the IRS:

[T]he information provided by the whistleblower formed the basis for unprecedented  actions against UBS AG, with collateral impact on other enforcement activities and a continuing impact on future compliance by UBS AG.

This was a huge case for Mr. Birkenfeld and his tax attorney.  But for the IRS, the magnitude and value of this case really cannot even be measured at this point.  Full story here.

The Victims of Identity Theft and Refund Fraud

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Tampa, Florida criminals are still fixated on tax return fraud, a local trend that has held the attention of the IRS and law enforcement for the past several months.  I have blogged before about the criminals, but what about the victims of these schemes?  The victims are those whose social security numbers have been used to obtain false refunds and are who are blindsided by major tax problems.  When these innocent folks file their own legitimate returns and seek refunds, the IRS often denies them what is rightfully theirs.

It is reasonable for the IRS to carefully investigate these cases; they don’t want to give multiple refunds to the same taxpayer.  But the whole process for rectifying identity theft situations is flawed.

It is clear that the first step for the victim is to prepare and file a Form 14039 “Identity Theft Affidavit,” but what happens next is a mixed bag.  Most of the complaints about the process have to do with the fact that there is no process, no consistency.  This has led one Tampa-area attorney to use a rather unconventional tactict for providing tax help to victims of identity theft.  Attorney Jim Staack has been filing class action lawsuits against the IRS on behalf of aggrieved identity theft victims.  Coincidentally (or not), the class members have received their refunds, without fail, just days after being added in the case.

California Attorney Failed to File Tax Returns – Sentenced to 6 Months in Prison

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California attorney Kevin Mirecki has been sentenced to six months in federal prison after pleading guilty to three counts of failing to file his tax returns and will not obtain tax relief. Mirecki was also ordered to pay more than $225,000 in restitution and fines. Mirecki entered his guilty plea in 2009 and admitted he failed to report more than $1.3 million in income over a three-year period.

Mirecki also founded Genesis Fund Ltd., which investigators say was a foreign-currency Ponzi scheme that bilked at least $80 million from hundreds of investors. Eight people pleaded guilty and another was convicted at trial in connection with the scam.

According to the indictment related to Genesis Fund Ltd., the defendants falsely claimed that investors received monthly returns of four percent, when investments were actually used to make “profit” distributions to defendants and early investors. The defendants promoted the Genesis Fund as having no reporting obligations to the IRS. Bank accounts in the names of trusts and offshore bank accounts were allegedly used to receive distributions from the Genesis Fund that were not reported to the IRS. Some of the defendants allegedly created “disclosed” and “undisclosed” Genesis Fund accounts for themselves and certain fund investors in order to conceal from the IRS all but a small portion of the fund’s distributions. In addition, some Genesis Fund investors were allegedly advised to create nominee offshore corporations and bank accounts to receive distributions from the fund.

The indictment further alleged that to obscure the operations of the fund and to limit scrutiny of its operations by investors and the government, the defendants caused the Genesis Fund to maintain no financial statements or other statements of operation. Additionally, in or about April 2000, to conceal the true nature of its operations from investors and the government, Genesis Fund’s administrative operations were relocated from Anaheim, Calif., to Costa Rica. At about the same time, paper records were moved to Costa Rica and electronic data on computers was destroyed.

Tennessee Man Gets 2 Years in Prison for Theft of Under $10k

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If George Albright had known the magnitude of the risks he was taking by filing false refund returns, I don’t think he would have done it.  He was sentenced to two years in prison on Wednesday.  Albright, 57, worked for the IRS for 17 years.  During the period of 2008-2011 Mr. Albright filed false income tax returns using confidential financial information available to him by virtue of his position at the IRS.  And for his efforts, he earned himself a dismal $9,600.  There are criminals on the streets of Tampa, FL who could make that kind of money in one day!

Judges tend to show very little mercy to federal government workers with tax problems, especially Internal Revenue Service employees, who cheat the very system they’re a part of.  And the U.S. Attorney’s office prosecutes these cases very aggressively:

Anyone filing a fraudulent tax return and anyone employed in a position of public trust should take note of the prison sentence they risk if they engage in this sort of criminal conduct, even if they have no criminal record.

~ U.S. Attorney Jerry Martin

On a side note, in Florida, tax collectors are independent elected county officers responsible for collecting a variety of taxes and fees.  The Collector for Marion County, FL happens to be named George Albright.  Same name; different guy.

A Former IRS Agent’s Witness Tampering Fail

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I don’t understand how anyone could think that witness tampering would work, at least not where you plan to kill unfriendly witnesses.  Its one thing to bribe witnesses, or threaten them so that you get just what you want from them on the witness stand, or even to ensure (somehow) that they are not available to testify.  But its quite another thing to actually murder them.

Former IRS agent, Steven Martinez, was picked up by the FBI recently for plotting to kill four witnesses that were going to testify against him in a criminal trial that involved defrauding clients to the tune of $11 million.  Martinez’ poor decision-making skills followed him all the way to trial where he decided he would have not one, but four witnesses, killed — and he didn’t think that would appear suspect (all four of them dropping off at about the same time)?  Even his hitman selection demonstrated poor judgment because the guy he picked had a conscience and turned Martinez in.

There must be something about the repetitive harrassing of taxpayers, denying tax relief, and blindly following procedure that saps all the common sense out of IRS employees.  If Steve Martinez is any example at all, they certainly make very bad criminals.

Ex-UBS Client Sentenced For Tax Crimes

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In 2009 Zurich-based UBS avoided federal prosecution by paying $780 million, admitting it helped thousands of United States citizens evade federal taxes and turned over the names of 250 clients to U.S. authorities. U.S. prosecutors have since charged about 50 Americans with tax crimes

One such former client, Luis Quintero, from Florida, was recently sentenced to four months in federal prison for failing to disclose $4 million in Swiss bank accounts. Quintero, a 64-year-old wholesale perfume importer, pleaded guilty in April and agreed to pay a $2 million fine for failing to file a Report of Foreign Bank and Financial Accounts for the calendar year 2006, according to court records. Read the full article by Susannah Nesmith here.