Month: April 2022

Source: United States Department of Justice News

SALT LAKE CITY- Daniel Fry, 46, of Ogden, was sentenced to one year and one day in federal prison after pleading guilty to failing to pay and account for trust fund taxes related to his four healthcare related businesses in the Ogden area. 

According to the plea agreement, Fry owned and operated four businesses in the Ogden area. These businesses were Burch Creek Homecare and Hospice LLC, which closed in 2015, Scrub World, which closed in 2018, Medical Billing Advantage LLC, and Country Niche LLC, both of which closed in 2020. Fry was responsible for handling the payroll for the businesses, including issuing paychecks to employees and withholding Federal Insurance Contribution Act (FICA) employment taxes. As a responsible party for each of these companies, Fry was required to collect, account for, and pay over the “trust fund taxes” to the Internal Revenue Service on a quarterly basis. Fry was also responsible for paying over the employer portion of these trust fund taxes to the IRS. 

From January 2013 to December 2016, Fry withheld from employee paychecks and collected the trust fund taxes for the businesses, as required. He also reported the trust fund tax withholdings of his businesses to the IRS. At the same time, however, he failed to pay over any of the trust fund taxes that the businesses owed to the IRS. Fry further failed to pay to the IRS the employer portion of the trust fund taxes owed by his businesses. In total, from January 2013 to December 2016, fry owed and willfully failed to pay over to the IRS $568,590 owed by the businesses. 

“Failure to pay taxes is a serious crime,” said United States Attorney Andrea T. Martinez.  “This case is proof that we will hold business owners accountable if they violate their duty to pay employment taxes to the United States Government.” 

“This investigation and prosecution demonstrates the toll that willful violations of the United States tax laws takes on not only the system, but on the average taxpayer,” stated Albert Childress, Special Agent in Charge, IRS-Criminal Investigation. “Mr. Fry’s actions hurt the taxpayers from whom he took withholdings but never paid over, he also harmed competing businesses who followed the law. The mission of IRS-Criminal Investigation is to enforce the tax laws of this country to instill confidence in and maintain a fair tax system for all.”

U.S. Attorney Andrea T. Martinez for the District of Utah made the announcement. The case prosecuted by Assistant United States Attorneys from the United States Attorney’s Office for the District of Utah. The case was investigated by IRS-Criminal Investigation.

Source: United States Department of Justice News

Acting U.S. Attorney Michelle M. Baeppler announced that a federal jury returned guilty verdicts on Thursday, April 14, 2022, against Defendant Andre Badley, 49, of Cleveland, Ohio, following a four-day trial before U.S. District Judge John R. Adams in Akron.  Badley was convicted of possession with intent to distribute crack cocaine, cocaine, fentanyl and heroin, and being a felon in possession of a firearm. 

Badley was previously convicted in 1997 in the United States District Court for the Northern District of Ohio and sentenced to life in prison for distribution of crack cocaine and cocaine.  Badley served more than 23 years of that sentence and was released in 2019 under the First Step Act.

According to court documents, on March 5, 2021, law enforcement authorities executed a search warrant at a residence known to be occupied by Badley after receiving information regarding suspected drug trafficking activity.  During the search, a K-9 unit alerted authorities to the presence of controlled substances, and investigators found large quantities of crack cocaine, cocaine, fentanyl and two firearms in the residence.  Then, on March 25, 2021, Badley was found to be in possession of another large quantity of crack cocaine in his vehicle.

Badley is prohibited from possessing a firearm due to a previous conviction of drug trafficking in the United States District Court for the Northern District of Ohio.

A sentencing date has yet to be scheduled.  Badley faces a statutory maximum penalty of life in prison.

This case was investigated by the Shaker Heights Police Department, with assistance from the DEA and ATF.  This case is being prosecuted by Assistant U.S. Attorneys Robert J. Kolansky and Vanessa V. Healy.

Source: United States Department of Justice News

FLINT– A former Michigan Department of Corrections officer was charged in a federal indictment with possession with intent to distribute methamphetamine; possession with intent to distribute cocaine; and possession with intent to distribute heroin, announced United States Attorney Dawn N. Ison. 

Joining in the announcement was Acting Special Agent in Charge Kent Kleinschmidt, Drug Enforcement Administration, Detroit Division.

Charged was Brandon McGaffigan, 29, of Flint, Michigan.  McGaffigan was employed as a corrections officer at Thumb Correctional Facility in Lapeer County Michigan.

According to the indictment, McGaffigan is alleged to have possessed with the intent to distribute over 50 grams of methamphetamine as well as cocaine and heroin on January 22, 2022 with the intent of delivering the drugs into the prison.  The indictment was returned on April 6, 2022.  McGaffigan surrendered to DEA investigators and was arraigned before United States Magistrate Judge Curtis Ivy, Jr., the following day where he was released on bond.  A trial date is currently set for June 14, 2022, in Flint, Michigan. 

“As a corrections officer, McGaffigan’s duties are to maintain safety and security within the facility,” stated U.S. Attorney Ison.  “The allegations that he intended to smuggle drugs into the prison completely undermines his duties as a corrections officer and creates significant dangers within the walls of the prison.”

“Illicit drugs have no place in our society, but they can be especially problematic inside a correctional facility,” said Detroit Division Acting Special Agent in Charge Kent Kleinschmidt. “No matter your profession or background, DEA will investigate anyone who violates the nation’s drug laws.”

The Drug Enforcement Administration Flint Residence Office, in coordination with the Thumb Area Narcotics Unit, the Michigan Department of Corrections, and Michigan State Police investigated this case.  The case is being prosecuted by Assistant United States Attorney Timothy Turkelson.

An indictment is only an allegation. A defendant is considered innocent unless and until proven guilty.

Source: United States Department of Justice News

Leonard C Boyle, United States Attorney for the District of Connecticut, and Joleen D. Simpson, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that LIZBEL SANCHEZ, also known as Lizbel Diaz, 47, of Brookfield, waived her right to be indicted and pleaded guilty yesterday in Bridgeport federal court to a federal tax offense.

According to court documents and statements made in court, Sanchez is a minority owner of Danbury Food Corp. (“DFC”), which operates a C-Town grocery store in Danbury.  Sanchez was responsible for DFC’s accounting and financial records, and for collecting and paying over certain federal taxes from DFC’s employees, namely federal income taxes and Federal Insurance Contribution Act (“FICA”) taxes, which include Medicare and social security taxes.  She also was also responsible for ensuring that DFC, as an employer, paid its own share of FICA and its Federal Unemployment Tax (“FUTA”), which were based on its employees’ taxable wages.

An investigation revealed that, Sanchez and DFC paid several employees in cash and failed to collect, account for and pay over the federal income taxes and FICA taxes associated with the cash wages.  Sanchez also failed to account for and pay over DFC’s share of FICA taxes and its FUTA obligation based on the taxable wages of those employees that DFC paid in cash.  This conduct caused a tax loss of $408,121.85 to the IRS for the 2016 tax year.

Sanchez pleaded guilty to one count of willful failure to collect or pay over taxes, which carries a maximum term of imprisonment of five years.  She is scheduled to be sentenced by U.S. District Judge Michael P. Shea on July 7 in Hartford.

Sanchez is released on bond pending sentencing.

Sanchez has paid $408,121.85 in restitution to the IRS.  She also has acknowledged similar conduct for DFC in 2017 and 2018, and for other businesses in which Sanchez had an interest in 2016, 2017 and 2018.  Additional tax losses will be addressed civilly by the IRS.

This investigation has been conducted by the Internal Revenue Service – Criminal Investigation Division and the case is being prosecuted by Assistant U.S. Attorney David T. Huang.

Source: United States Department of Justice News

A former trader at a global financial institution pleaded guilty today to manipulating U.S. Treasury securities prices.

According to court documents, Tyler Forbes, 27, of Manlius, New York, was employed as a trader on the U.S. Treasuries desk of a global financial institution. From approximately January to June 2019, Forbes engaged in an unlawful “spoofing” scheme to manipulate the price of U.S. Treasury securities traded in the secondary (or “cash”) market, which predominantly consists of two and three-year U.S. Treasury notes, as well as 10-year U.S. Treasury notes. Forbes’s spoofing strategy involved electronically placing large, non-bona fide “spoof orders” that he intended to cancel prior to execution on one side of the market, while simultaneously entering smaller, genuine orders that he intended to execute on the opposite side of the market. Many of Forbes’s genuine orders were “iceberg” orders, meaning that only a portion of the order’s full size was visible to other market participants at any given time, whereas all of Forbes’s spoof orders were fully displayed. The purpose of Forbes’s “spoof orders” was to create a false appearance of market depth and activity in order to mislead other traders, and to artificially raise or depress the prevailing market price so that Forbes could execute his genuine orders more easily or more profitably. 

Forbes pleaded guilty to one count of manipulation of security prices. He is scheduled to be sentenced on July 28 in the Eastern District of New York and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division made the announcement.

The FBI investigated the case.

Deputy Chief Avi Perry and Trial Attorney Sara Hallmark of the Criminal Division’s Fraud Section are prosecuting the case.