IRS worker charged in an alleged tax refund scam

April 11, 2012

Philadelphia Daily News on April 11, 2012 released the following:

“By Michael Hinkelman

An Internal Revenue Service employee and her boyfriend were arrested this morning and charged in a tax refund scam that defrauded Uncle Sam.

In an indictment unsealed today, federal prosecutors charged IRS employee Patricia Fountain, 34, with conspiring to file false claims, filing 15 false tax returns, extortion and related offenses.

Codefendant Larry Ishmael, 39, was charged with conspiracy to file false claims and aiding in the filing of a false tax return.

Authorities said Fountain and Ishmael, of North Philadelphia, shared a residence, money and assets, including a 2007 Mercedes Benz R350.

Fountain’s job at the IRS was to assist taxpayers with Telephone Excise Tax Refunds or credits (TETRs), the indictment said.

The TETR was a one-time payment individuals, businesses, nonprofits and government entities could claim – typically $30 to $60 – for telephone excise taxes paid from Feb. 28, 2003 to Aug. 1, 2006. (The TETR credit could only be claimed on 2006 federal tax returns.)

Federal prosecutors said that between November 2006 and May 2009, Fountain solicited taxpayers to file false returns claiming the TETR.

The indictment said Fountain directed a person identified only as N.W. and Ishmael to interact with taxpayers on her behalf.

The charging document alleges 21 separate instances in which Fountain allegedly filed false tax returns claiming the TETR, including her own false tax return and Ishmael’s false tax return for the year 2006.

Authorities said Fountain charged taxpayers $400 to file the return and warned that she would “red flag” those who did not pay her fee.

The indictment said Fountain filed amended returns for certain taxpayers whom she believed had not paid the fee, thus reversing refunds that had been previously issued by the IRS.

Fountain also allegedly structured a $11,299 down payment on the financed 2007 Mercedes by paying part in cash and charging the rest to a Mastercard to avoid the reporting requirement by financial institutions for cash transactions in excess of $10,000. (Prosecutors are seeking forfeiture of the luxury automobile.)

Fountain and Ishmael were to appear before a federal magistrate this afternoon and will likely be released on bail, sources said.”

US v Fountain et al – Federal Criminal Indictment

18 U.S.C. § 286

18 U.S.C. § 287

18 U.S.C. § 1951

26 U.S.C. § 7206

31 U.S.C. § 5324

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Douglas McNabb – McNabb Associates, P.C.’s
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Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Mount Pleasant Man Charged with Allegedly Committing Federal Grant Fraud; Charged with His Wife in an Alleged Campaign Finance Fraud

September 20, 2011

The Federal Bureau of Investigation (FBI) on September 19, 2011 released the following:

“United States Attorney Bill Nettles stated today that two indictments previously returned by a federal grand jury were unsealed today. A 36-count indictment charges that Mount Pleasant native Jian-Yun Dong and one of his companies, Vaxima, Inc., committed a number of offenses relating to the fraudulent use and conversion of funds received as federal grants. The indictment charges that the defendants submitted false claims for payment of federal grant monies and that they used grant funds received for scientific research for prohibited purposes. Specifically, this indictment charges that Dong, as the president and chief executive officer of GenPhar, Inc, (1) submitted false claims to federal agencies in violation of Title 18, United States Code, Section 287; (2) converted grant funds to his own use in violation of Title 18, United States Code, Sections 641 and 666; and (3) committed wire fraud, in that he used interstate communications to execute a scheme to defraud the United States, in violation of Title 18, United States Code, Section 1343. The indictment also charges that Defendant Vaxima, Inc, a corporation owned solely by Dong, assisted in the execution of the scheme.

The second indictment charges Dong (54) and his estranged wife, Danher Wang (52) with violations of federal campaign laws. The seven-count indictment charges that Dong and Wang conspired to make illegal campaign contributions in the names of other persons using money from a foreign national, in violation of Title 18, United States Code, Section 371. The indictment further alleges in other counts that Dong and Wang made or caused others to make illegal contributions after they (Dong and Wang) exceeded their maximum contribution allowance, in violation of Title 2, United States Code, Sections 437(g)(1)(D)(I) and 441f. According to the indictment, contributions were made in a way to conceal their true origin from the FEC, campaigns and the public. Finally, the indictment alleges that Dong made false statements to law enforcement agents (in violation of Title 18, United States Code, Section 1001) and that Dong attempted to illegally influence the testimony of a witness in violation of Title 18, United States Code, Section 1512.

As to the grant fraud indictment, the maximum sentences Dong faces for wire fraud regarding the misuse of federal grant funds is 30 years’ imprisonment as to each count, with a maximum fine of $250,000 per count. Dong faces sentences of up to 10 years for the other charges contained in this indictment. Both Dong and Wang face maximum sentences of five years’ imprisonment and a $250,000 fine for each count of campaign finance fraud, and Dong faces an additional maximum sentence of 20 years as to the witness tampering charges in the first indictment.

These companion cases were investigated by agents of the Department of Defense Criminal Investigative Service, U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, United States Army Criminal Investigation Command, and the Naval Criminal Investigative Service. The cases will be prosecuted by Assistant United States Attorneys Mark C. Moore and Debbie Barbier of the Columbia office.

The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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