Month: June 2022

Source: United States Department of Justice News

The United States filed a civil injunction suit to permanently bar Jason Elias Briley; Roxann Ladawn Johnson fka Roxann Ladawn Ellis; Alexander McKenzie; Courtney Jones; Derek Brooks; Deanna McKenzie; Erbia Lewis; Patrick McKenzie and JRC Elite Tax Solutions LLC dba Elite Tax Solutions from preparing federal income tax returns for others. The complaint also requests that the court require the defendants to disgorge the fees they obtained by preparing false and fraudulent tax returns.

The complaint, filed in the U.S. District Court for the Eastern District of Texas, alleges that these tax return preparers prepared more than 1,300 returns in 2021 and over 3,100 returns in 2022. According to the complaint, Briley and the others prepared returns that falsely claimed over $53 million in credits and refunds intended to provide COVID-19 related relief for self-employed individuals.

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a checklist of things to remember when filing income tax returns in 2022.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $73,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free. The IRS has tips on how seniors and individuals with low to moderate income can get other help or guidance on tax return preparation, too.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Source: United States Department of Justice News

An indictment was returned today by a federal grand jury in New Jersey, charging the former chief executive officer of a publicly-traded health care company (referred to in the indictment as Company-1) with two counts of securities fraud for his alleged participation in a scheme to mislead investors about Company-1’s procurement of COVID-19 rapid test kits in the early days of the COVID-19 pandemic.

According to court documents, Marc Schessel, 62, of Greenwich, Connecticut, caused Company-1 to issue multiple public statements claiming that Company-1 was buying and reselling at least 48 million COVID-19 test kits, despite knowing that such statements were false and misleading. Specifically, in early April 2020, Schessel executed a supply agreement with an Australian company (the Supply Company) to obtain two million COVID-19 test kits per week for six months beginning on April 24, 2020. The agreement was based on the Supply Company’s representations that it had the U.S. Food and Drug Administration’s (FDA) permission to distribute COVID-19 tests in the United States and was already distributing COVID-19 tests. Contemporaneously, Schessel received a purchase order from a U.S.-based company that planned to purchase the weekly shipments of two million COVID-19 test kits from Company-1.

Despite learning new information on or about April 11, 2020, that called into question whether the Supply Company had COVID-19 tests to sell to Company-1 that could be distributed in the United States, Schessel caused Company-1 to issue a press release on April 13, 2020, in which it announced the purchase order for 48 million COVID-19 rapid test kits. Following this press release, Schessel received additional information that further called into question Company-1’s arrangements for the COVID-19 test kits. Despite learning facts that cast significant doubt on the status of the COVID-19 test kit deals, Schessel repeatedly confirmed the status and terms of those arrangements on numerous occasions between approximately April 13, 2020, and April 17, 2020. In the wake of these announcements, Company-1’s share price surged, rising by over 400%, from approximately $2.25 to an intraday high of $14.88. As a result of this scheme, investors lost at least $116 million.

“Schessel allegedly took advantage of the COVID-19 crisis as an opportunity to scam investors and manipulate the market,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s indictment reinforces our commitment to rooting out schemes that have exploited the pandemic and holding accountable those who have prioritized greed during an unprecedented public health emergency.”

“As alleged in the indictment, Marc Schessel exploited the scarcity of COVID-19 tests at the outset of the pandemic to defraud investors and artificially increase his company’s stock price,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “His alleged fraud cost investors millions of dollars in losses.” 

“It is unacceptable to fraudulently capitalize on a national health emergency,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI, in tandem with our law enforcement partners, will continue to investigate anyone who undermines public safety and will bring those who commit fraud to justice.”

Schessel is charged with two counts of securities fraud. If convicted, he faces a total maximum penalty of up to 45 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI’s Newark Division is investigating the case.

Acting Principal Assistant Chief Justin Weitz and Trial Attorneys Lucy Jennings and Spencer Ryan of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Lauren Repole and Sean Sherman for the District of New Jersey are prosecuting the case.

The Fraud Section uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing Victimassistance.fraud@usdoj.gov. To learn more about victims’ rights, please visit: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas.

An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice News

NEWARK, N.J. – An Eastchester, New York, man has been charged with the transportation and possession of child pornography, U.S. Attorney Philip R. Sellinger announced today.

Androsky Lugo, 52, is charged by criminal complaint with one count of transportation of child pornography and one count of possession of child pornography. He is scheduled to make his initial appearance by videoconference this afternoon before U.S. Magistrate Judge Leda Dunn Wettre.

According to documents filed in this case and statements made in court:

From August 2019 to September 2021, Lugo stored multiple electronic devices with a coworker at the New Jersey office where he worked. One of the devices was subsequently discovered to contain a voluminous collection of images and videos depicting child sexual abuse. The investigation also revealed that Lugo transported child pornography, on a different electronic device, from New York into New Jersey on multiple dates in July 2020.

The charge of possession of child pornography carries a maximum penalty of 10 years in prison and fine of $250,000. The charge of transportation of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison, and fine of $250,000.

U.S. Attorney Sellinger credited special agents with the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Source: United States Department of Justice News

            CONCORD – Justin Stilson, 38, of Manchester, was sentenced to 60 months in federal prison for possessing fentanyl and methamphetamine with intent to distribute, United States Attorney Jane E. Young announced today.

            According to court documents and statements made in court, on September 25, 2019, Hooksett police officers were at a local motel to arrest a woman. Stilson was located in the bathroom of the motel room.  Based on evidence obtained during the incident, officers applied for a search warrant for the motel room.  During the execution of the warrant, a backpack belonging to Stilson was located.  The backpack contained 122 grams of fentanyl and 102 grams of methamphetamine, as well as other evidence of drug distribution.

            “Fentanyl and methamphetamine are drugs that have decimated thousands of lives in communities across our state,” said U.S. Attorney Young.  “To protect our communities, we are working closely with our law enforcement partners to identify and prosecute the drug traffickers who flood our state with these deadly substances.  This federal prison sentence not only holds Mr. Stilson accountable for his conduct but also sends a message that there are substantial penalties for drug dealing in the Granite State.”

             This matter was investigated by the Hooksett Police Department.  The case was prosecuted by Assistant U.S. Attorney Joachim H. Barth.

             This case is part of Operation Synthetic Opioid Surge (S.O.S.).  In July of 2018, Attorney General Jeff Sessions announced the creation of S.O.S., which is being implemented in the District of New Hampshire and nine other federal districts.  The goal of S.O.S. is to combat the large number of overdoses and deaths associated with fentanyl and other synthetic opioids.   In New Hampshire, the U.S. Attorney’s Office is focusing its efforts on prosecuting synthetic opioid trafficking cases arising in Hillsborough County, which includes Manchester and Nashua. 

###

Source: United States Department of Justice News

SHERMAN, Texas – A Queens, New York man has been sentenced to prison in the Eastern District of Texas for federal violations, announced U.S. Attorney Brit Featherston today.

Anthony Terrell Lloyde, 33, pleaded guilty on July 29, 2021 to conspiracy to commit bank fraud and was sentenced to 121 months in federal prison today by U.S. District Judge Amos L. Mazzant.  Lloyde was also ordered to pay restitution in the amount of $1,339,025.37.

According to information presented in court, beginning in January 2013, Lloyde conspired with others in a scheme to use the stolen identities of unsuspecting victims to illegally purchase material goods and services, most often high-value electronics, such as iPhones and iPads, hotel rooms and vehicle rentals.  Though based in New York, participants traveled throughout the United States to cities associated with the victims’ identities to avoid detection of the fraud.  Lloyde was the organizer and leader of the scheme.  He purchased victims’ identifying information via the internet and directed the use of device-making equipment to manufacture fraudulent state identification documents and credit cards.  He recruited conspirators, to whom he provided the fraudulent documents, and directed them to travel to various cities throughout the United States, including cities located in the Eastern District of Texas such as Frisco and Plano.  Once they arrived at their target location, they used the victims’ stolen identification information and forged identification documents to open fraudulent instant credit accounts at retail stores, such as Apple Store and Best Buy, to purchase merchandise.  These stores utilize the credit services of federally insured banks such as Citibank, Barclays Bank Delaware and Synchrony.  Thus, by materially misrepresenting their identities to the retail stores, Lloyde and his coconspirators were able to defraud the banks.

Lloyde typically organized the trips by determining the target cities and stores and by booking and/or purchasing airline tickets on behalf of his coconspirators.  Lloyde and coconspirators typically traveled under their true identities and would often mail the fraudulent identification documents and credit cards to one another in order to avoid traveling with them in their possession. Conspirators used fraudulently obtained credit cards and forged identification documents to rent vehicles to travel during their commission of the offense, and those fraudulently obtained vehicles were often sold to third parties on the black market. As such, the offense involved an organized plan to steal or receive stolen vehicles.  Once conspirators arrived at the target stores, Lloyde and others would actively participate via phone calls and text messages, directing which victims’ identities were to be used and which products were to be purchased. Victims’ identities were often chosen based upon their proximity to the target city and store, making it less likely the fraud would be detected since it was occurring close to where the victims lived.  Some conspirators used victims’ identification and phone numbers to obtain duplicate cell phone subscriber identity modules (SIM cards). Those conspirators would then use the duplicate SIM cards to divert fraud alerts to their own cell phones, which allowed the conspirators to further their criminal conduct by authorizing the fraudulent transactions.  After purchasing items, conspirators shipped the illegally obtained goods to Lloyde in New York, and Lloyde would resell those products. Lloyde parlayed some of the proceeds generated by the criminal enterprise to purchase airline tickets for himself and other conspirators, to pay for hotel accommodations for himself and other conspirators, and to provide money for incidental expenses assumed by conspirators.  In all, the scheme targeted retail stores that provided instant lines of credit the conspirators could exploit to immediately purchase goods. The credit accounts were funded by banks, and those banks, rather than the retail stores, suffered the financial losses. The primary pecuniary victims of the offense include Citibank, Barclays Bank Delaware, Nordstrom, and Synchrony.  Citibank suffered an actual loss of $1,045,406.71. Barclays Bank Delaware reported an actual loss of $154,731.91. Nordstrom reported an actual loss of $71,016.01.  Synchrony reported an actual loss of $67,870.74. As such, the total actual known loss committed by Lloyde and his coconspirators is $1,339,025.37.

This case was investigated by the Department of Homeland Security HSI Dallas, along with HSI Long Island, HSI Atlanta and HSI Salt Lake City field offices; Dallas-Ft. Worth International Airport Department of Public Safety; Plano, Texas Police Department; Port of Portland Police Department; New York State Police; New York Police Department; Massachusetts State Police; Cincinnati-Northern Kentucky Airport Police Department; Orange County, Texas, Sheriff’s Office; Aurora, Colorado Police Department; Broomfield, Colorado, Police Department.  This case was prosecuted by Assistant U.S. Attorney Matthew Johnson.

###