Ex-NFL player pleads guilty to wire fraud in FBI sting

August 8, 2012

Sun Sentinel on August 7, 2012 released the following:

“By Paula McMahon

A former NFL first-round draft pick who was arrested in an FBI fraud sting earlier this year has pleaded guilty to his role in the crime, court records show.

A second former NFL player arrested in the same sting is scheduled for a change of plea hearing next week in federal court in Miami, according to court records.

Former Oakland Raiders running back Michael Antwon Bennett pleaded guilty last week in federal court in Fort Lauderdale to one count of wire fraud.

He was caught in an operation by the FBI, which set up an undercover financial services store in North Miami between February and April. An undercover agent worked behind the counter and the store was equipped with audio and video surveillance equipment.

Bennett, who turns 34 next week, admitted that he had sent an email to the store fraudulently claiming that he had $9 million in the bank so he could obtain a $200,000 loan, court records show.

Bennett went to the store on April 18 and signed a loan agreement to borrow $200,000 and repay $280,000 after three months. When agents checked the bank account, they found that Bennett had opened an account there about a month earlier but it had a zero balance and there had never been any money in the account.

When Bennett returned to the store and picked up a $150,000 cashier’s check on April 30, he was arrested. FBI agents said he admitted that he altered the bank statement to give the false impression that he had millions of dollars in his account.

The maximum penalty for the offense is 20 years in prison and a fine of up to $250,000 but prosecutors have agreed to recommend a punishment on the lower end of the sentencing guidelines, which are still being calculated, when he is sentenced in October.

Meanwhile another NFL player, William Joseph, is scheduled for a change of plea hearing on Aug. 14 in Miami. The terms of the proposed plea agreement will not be made public until the court hearing.

Joseph, 32, of Miramar, was indicted in May on five federal charges including aggravated identity theft, possession of false identification documents, theft of government money and forgery of U.S. Treasury checks.

Federal authorities said Joseph cashed a $10,088 income tax refund check that was not his and that he did not have permission to cash.

Joseph played for the New York Giants between 2003 and 2007, then spent three years with the Raiders.

Former Syracuse player Louis Gachelin, 31, of Miramar, pleaded guilty earlier this year to theft of government money and aggravated identity theft in the same investigation.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense 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 Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

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.


William Joseph among 3 former football players charged in Florida tax ring

May 3, 2012

CBS News on May 2, 2012 released the following:

“(CBS/AP) MIAMI – Three former professional football players are among eight charged in a South Florida tax refund and identity theft scheme.

Federal prosecutors said Tuesday the FBI operated an undercover check-cashing store in North Miami used by the suspects from February through April. The group allegedly cashed about $500,000 in fraudulent refund checks. The money was paid out of FBI funds and no checks were actually cashed.

Former Oakland Raiders and New York Giants defensive tackle William Joseph is one of the former NFL players arrested. The other is running back Michael Bennett, once a Minnesota Vikings first-round pick who played for several teams. A third ex-player, Louis Gachelin, played professionally in Europe.

According to CBS Miami, Joseph and Gachelin were charged Tuesday with with forgery of U.S. Treasury checks, theft of government money, and use of five or more identification documents with unlawful intent. If convicted they could face maximum prison terms of between five and 15 years in prison.

Bennett was charged with wire fraud after allegedly using a false bank statement in an attempt to obtain a $200,000 loan from the same FBI undercover store, CBS Miami reports. According to the criminal complaint, Bennett confessed to the crime after waiving his Miranda rights.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense 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 Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

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.


IRS policies help fuel tax refund fraud, officials say

March 20, 2012

CNN on March 20, 2012 released the following:

“By Scott Zamost and Randi Kaye, CNN Special Investigations Unit

North Miami Beach, Florida (CNN) — Criminals across the country are raking in billions of dollars in tax refunds through a new and brazen form of fraud that takes advantage of the IRS’s fast online returns, law enforcement officials say.

Using laptops and free Wi-Fi connections, criminals are stealing identities and using the names of legitimate taxpayers to file fraudulent online tax returns. They’ve raked in billions, buying luxury cars, expensive jewelry and plastic surgery, police said.

“It’s like the federal government is putting crack cocaine in candy machines,” said Detective Craig Catlin of the North Miami Beach, Florida, Police Department. “It’s that easy.”

First, thieves obtain Social Security numbers and other personal information from insiders at hospitals, doctor’s offices, car dealerships or anywhere the information is stored. Then, they file an online tax return using the real taxpayer’s name and a fictitious income. In most cases, the criminals buy a debit card so the IRS can issue the refund on that card, although some thieves have also gotten their returns on actual Treasury checks.

The thieves know that the IRS does not verify the employer W-2s sent with the return until after the refund is issued.

It is a particular problem in the state of Florida, according to law enforcement officials.

“We can’t go … two days in a row without making a traffic stop, and there’s going to be tax return fraud in the car,” Catlin said. “We could stop an 18-year-old kid who’s got five (debit) cards. The average is $5,000 per card. So they’ll have $25,000, which is really cash, even though it’s on debit cards.”

And it’s not just small-time criminals, he said.

“We have other cases that range up to $100 million where subjects have opened up corporations and bank accounts and business accounts,” Catlin said. “And they’re receiving millions of dollars from the IRS that are all fraudulent.”

Prisoners’ tax refund scam nets millions from IRS

Last year, North Miami Beach police arrested the leader of the “Money Avenue” gang that they say specializes in tax return fraud. When police searched his home, they found about $250,000 in debit cards “just sitting on the dining room table for that week’s worth of work,” Catlin said.

“And inside his closet, there were nine to 10 spiral notebooks, ledgers of names, Social Security numbers, and dates of birth and the dollar amounts of returns that they’ve done on 3,000 victims,” he added.

It’s a crime that has replaced drug dealing in many neighborhoods.

“They’re sitting on a computer or iPad; they’re doing a return with a stolen identity where they don’t have to rob anybody or stick a gun in anybody’s face or run through the streets from police,” Catlin said.

Although tax refund fraud has been around for decades, North Miami’s interim police Chief Larry Gomer said the speedy returns and the option of having your refund issued on a debit card are making it easier for criminals to pull off the fraud.

“I think (the IRS’s) intentions might have been good in trying to speed returns to members of the community, but I think the problem is, they have set up a system that is too easy to abuse,” Gomer said.

He suggested that the IRS slow its processing of tax returns.

“Right now, when someone becomes a victim of income tax fraud and they catch it, it could take up to a year for them to get their return,” Gomer said. “But the way that the IRS is running the system right now, somebody can make a fraudulent return, (and) they are mailing out a check to them in two weeks without checking the information on the return.”

In Florida, where identity theft is rampant, the cities of North Miami Beach and Tampa have been particularly hard hit by the fraud. Police estimate that in the past two years, criminals in Tampa have cashed in on $450 million in fraudulent tax return money.

Even police who are fully aware of the scam have become targets themselves, including four North Miami Beach Police Department detectives who specialize in combating tax refund fraud and officers in other South Florida police departments.

Police in Tampa discovered “a written tutorial that tells you step by step how to commit this type of crime,” according to the city’s police chief, Jane Castor.

“Throughout those written pages, it says how simple it is to do it,” she said. “We’ve also heard from people on the street that it’s about a five-minute street-corner lesson.”

In fact, a police informant who teaches friends how to commit the fraud said anyone could learn it.

“It’s like friends get together, and everybody brings their laptops, and we all work together,” the informant said. “Some people I know get up at like 8 in the morning and don’t finish until 8 at night.”

Law enforcement officials said that if the IRS stopped allowing the use of debit cards, that would curtail a majority of the fraud.

“The debit cards are a huge problem,” Castor said. “Plus … the (IRS’s) focus, from my understanding, is getting these tax returns out quickly … so instead of focusing on getting those out quickly, (the IRS should) put more of a focus on the fraudulent aspect of it.”

Deputy IRS Commissioner Beth Tucker pointed out that the debit cards are widely used by legitimate taxpayers who may not have a bank account.

“One hundred and forty million folks are filing their returns every year. Not every taxpayer has a bank account, and so the debit cards that are issued by a third-party provider are a legitimate way for taxpayers to get their refund,” she said.

Last year, the IRS reported 938,664 fraudulent returns related to identity theft, totaling $6.5 billion, Treasury Inspector General for Tax Administration J. Russell George told a House subcommittee this month.

Treasury officials say that was money identified by the IRS as fraudulent but not actually issued. The IRS could not provide an estimate of how much fraudulent refund money it has issued.

“Any dollar that goes out of our tax system related to refund fraud is a dollar too much,” Tucker said. “We have noticed that there are more folks attempting identity theft. We’re in the middle of filing season, and we should be able to have a better assessment of exactly what the dollar amount could potentially be.”

Last year, the IRS identified at least 582,000 taxpayers who were the victims of identity theft, which is more than double the amount from only three years prior.

In testimony before Congress last year, National Taxpayer Advocate Nina Olson said the IRS has implemented a number of filters to catch the fraud, including an electronic marker to mark accounts of verified identity theft victims, an IRS identity theft affidavit form and a standardized list of acceptable documents to substantiate identity theft.

Tucker said the IRS filters are “in place from the start of the filing season” and are “part of our prevention and detection.” She also said the IRS has trained 40,000 employees across the country in the past three months to deal with identity theft.

Also, the IRS last year began issuing an Identity Protection Personal Identification Number to victims of identity theft when filing their future returns.

But the filters, according to Olson’s annual report to Congress, “inevitably block large numbers of proper refund claims” since there “is no easy way to distinguish proper claims from improper ones.”

Tax refund fraud by identity theft will be the subject of Tuesday’s hearing before the Senate Subcommittee on Fiscal Responsibility and Economic Growth. It is the third hearing on the issue since last year.

Tampa officials have expressed concern that the IRS is not doing enough to combat the situation, which Castor said is one of the worst cases of fraud she has seen in her career.

“In my 28 years of law enforcement, I don’t think that I have ever seen this magnitude of fraud that is just wide open,” the police chief said. “It’s wide open and there just doesn’t seem to be much being done about it.”

Tampa Mayor Bob Buckhorn said he’s angry that the IRS has not done more to help the city combat the fraud.

“As far as I’m concerned, they’re missing in action,” Buckhorn said. “They have not been helpful; they have not been a player; they have not taken responsibility for their side of the enforcement. If anything, you know, we’ve been banging our heads against their door asking for help and getting nothing in response. The silence has been deafening.”

Tucker disagreed with the mayor, noting that the IRS has “significantly increased the amount of resources we’ve devoted to identity theft, a heinous crime.”

A week after CNN’s March 6 interview with Tucker, the IRS sent a team of officials to meet with police officials in North Miami Beach and Tampa.

Buckhorn said the problem in Tampa is “just the tip of the iceberg” and offered this warning to the mayors of other U.S. cities:

“Go back and ask the IRS in (your) jurisdiction, ‘What are you doing? Is this a problem in my jurisdiction?’ Because I guarantee you it is,” Buckhorn said. “You may not know it, but it is.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

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 C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Samuel Warren Sentenced for his Role in a False Tax Refund Scheme

July 8, 2011

The U.S. Attorney’s Office Northern District of California on July 7, 2011 released the following:

“DEFENDANT IN $6.2 MILLION EAST BAY FALSE TAX REFUND SCHEME SENTENCED TO 21 MONTHS IN PRISON

SAN FRANCISCO – For his role in a false tax refund scheme, Samuel Warren was sentenced to 21 months in prison followed by three years of supervised release, United States Attorney Melinda Haag and Special Agent in Charge, Internal Revenue Service Criminal Investigation, Scott O’Briant announced. The sentence was handed down yesterday afternoon by U.S. District Court Judge Charles Breyer, who also ordered Warren to pay restitution in the amount of $64,140.

According to his plea agreement, Warren admitted that, beginning in June 2008, he participated in obtaining tax refunds in the names of others from the Internal Revenue Service. Warren admitted that he engaged in this scheme along with his wife, Latrece O’Neal, who used prisoners’ identities to file false returns from her computer. Warren also acknowledged that O’Neal filed a false return using his name and Social Security number to claim a fraudulent refund. Warren was charged while he was serving sentence in state prison and is currently in custody.

This case was filed last year with criminal complaints filed by an IRS Criminal Investigation special agent. In those criminal complaints, the special agent identified 790 fraudulent income tax returns that resulted in more than $6.2 million in fraudulent refund claims. In March and April of 2009, IRS Criminal Investigation agents executed nine search warrants, at the residences of the individuals who maintained the bank accounts listed on the fraudulent income tax returns, in the Northern and Eastern Districts of California.

Niyah Edwards, 30, of Sacramento, Calif., was sentenced on May 17 to 51 months in prison.

Ayani Davis, 33, of Antioch, Calif., was sentenced on April 13 to 63 months in prison.

Three other defendants are awaiting sentencing: Kwamina Davis, of Antioch is scheduled to be sentenced on July 27, and Latrece O’Neal, 41, of Oakley, Calif., is scheduled to be sentenced on Aug. 17. Those defendants admitted that, beginning in 2008, they helped obtain tax refunds from the IRS based on tax returns that were filed using other individuals’ names. The defendants acknowledged that they did not have permission to use the individuals’ identities, but did list identifying information of others on more than 100 false tax returns filed from their residences. The tax returns were false because tax refunds were claimed based on claims that the individuals listed on the returns had federal taxes withheld, when in fact no incomes were earned and no taxes were withheld.

In a related case, Sparkle Jernigan, 32, who was charged on Dec. 2, 2009, with conspiracy to file false claims and aggravated identity theft is set to be sentenced on July 20.

Thomas Newman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by IRS Criminal Investigation.”

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

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