Month: January 2025

Source: United States Department of Justice Criminal Division

A federal grand jury in Portland, Oregon, returned an indictment earlier this week charging a business owner with not paying employment taxes and not filing tax returns.

According to the indictment, Joyce Leard, of Boring, Oregon, owned and operated Mr. Tree Inc., a Happy Valley, Oregon-based company that provided tree removal and landscaping services to customers. Between 2018 and 2020, Mr. Tree allegedly employed approximately 50 to 75 employees. Leard was allegedly responsible for withholding Social Security, Medicare and income taxes from her employees’ wages and paying those funds over to the IRS each quarter. She was also responsible for filing quarterly tax returns with the IRS.

From the fourth quarter of 2018 through the fourth quarter of 2020, Leard allegedly withheld approximately $655,000 from employees’ wages but did not pay over all those funds to the IRS or file quarterly tax returns as required by law. Instead of paying all the funds over, Leard allegedly purchased real estate that was titled in her name. Finally, according to the indictment, Leard did not file individual tax returns for 2018 through 2020, as required by law.

If convicted, Leard faces a maximum penalty of five years in prison for each employment tax charge and a maximum penalty of one year in prison for each failure to file a return charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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

IRS Criminal Investigation is investigating the case.

Trial Attorneys J. Parker Gochenour and Megan E. Wessel of the Tax Division are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice 2

A federal grand jury in Portland, Oregon, returned an indictment earlier this week charging a business owner with not paying employment taxes and not filing tax returns.

According to the indictment, Joyce Leard, of Boring, Oregon, owned and operated Mr. Tree Inc., a Happy Valley, Oregon-based company that provided tree removal and landscaping services to customers. Between 2018 and 2020, Mr. Tree allegedly employed approximately 50 to 75 employees. Leard was allegedly responsible for withholding Social Security, Medicare and income taxes from her employees’ wages and paying those funds over to the IRS each quarter. She was also responsible for filing quarterly tax returns with the IRS.

From the fourth quarter of 2018 through the fourth quarter of 2020, Leard allegedly withheld approximately $655,000 from employees’ wages but did not pay over all those funds to the IRS or file quarterly tax returns as required by law. Instead of paying all the funds over, Leard allegedly purchased real estate that was titled in her name. Finally, according to the indictment, Leard did not file individual tax returns for 2018 through 2020, as required by law.

If convicted, Leard faces a maximum penalty of five years in prison for each employment tax charge and a maximum penalty of one year in prison for each failure to file a return charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

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

IRS Criminal Investigation is investigating the case.

Trial Attorneys J. Parker Gochenour and Megan E. Wessel of the Tax Division are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

The American Express Company (American Express), based in New York, New York, has agreed to pay a $108.7 million civil penalty to resolve allegations that it violated the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by deceptively marketing credit card and wire transfer products and by entering “dummy” Employer Identification Numbers in the credit card accounts of its affiliate bank.

“When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement makes clear that the department will hold accountable those who violate the trust placed in them to follow the rules governing our financial institutions and to be truthful about their business practices.”

The United States alleged that, from 2014 through 2017, American Express deceptively marketed credit cards through the conduct of an affiliated entity that initiated sales calls to small businesses. The alleged deceptive practices included misrepresenting the card rewards or fees and whether credit checks would be done without a customer’s consent and submitting falsified financial information for prospective customers, such as overstating a business’s income.  

The United States also alleged that American Express engaged in practices to deceive its federally insured financial institution into allowing certain small business customers to acquire American Express credit cards without the required employer identification numbers (EINs). EINs are required by law if the card recipient is a business entity such as a corporation or partnership; the requirement does not apply to sole proprietors. The United States alleged that American Express employees used “dummy” EINs such as “123456788” in opening small business credit cards in 2015 and the first half of 2016. These cards were sold to replace an American Express co-branded credit card that was being discontinued during that time period. American Express allegedly allowed these “dummy” EINs to remain on the credit card accounts for up to two years before remediating the problem. American Express allegedly knew that many of the small business applicants had previously acquired American Express-issued co-brand cards where the card application stated that EINs were required for corporations or partnerships, but if the applicants left the EIN line blank, American Express would assume they are sole proprietors. That practice exacerbated the effects of American Express’s failure to enter proper EINs when it sold these customers replacement cards.

Finally, the United States further contended that American Express employees deceptively marketed wire transfer products known as Payroll Rewards and Premium Wire to its small business customers from 2018 through 2021, making false assertions regarding these products’ tax benefits. As to both products, American Express allegedly would wire money for an above-market fee that was far in excess of that offered by competitors in the marketplace and award the businesses or the business owners credit card membership reward points. American Express sales employees allegedly told customers that the wire transfer fees were tax deductible as business expenses, while the reward points earned on the transaction were not taxable, and thereby afforded the customer tax-free benefits.  The United States contended, however, that the above-market wiring fee was not deductible as an ordinary or necessary business expense insofar as it was incurred by a customer solely for the purpose of generating a personal benefit.

Contemporaneous with the civil resolution, American Express will enter into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Eastern District of New York and pay a criminal fine and forfeiture. That agreement deals exclusively with the Payroll Rewards and Premium Wire programs referenced above. Under the terms of the civil settlement, American Express will receive a credit toward the satisfaction of the civil penalty in the amount of $30.35 million if it makes a full payment of the forfeiture and fine amounts due under the criminal resolution.

“This multi-million-dollar settlement holds American Express accountable for violating FIRREA through unlawful sales tactics and recordkeeping requirements, and deceiving small business customers who placed their trust in the Company,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Mid-Atlantic Region. “The FDIC-OIG will continue to work with our law enforcement partners to investigate financial crimes that harm customers and undermine the integrity of our Nation’s financial institutions.”

“Today’s multi-million dollar settlement should make clear that financial companies who engage in fraudulent and deceptive practices will be held accountable for their actions,” said Special Agent in Charge John T. Perez of Headquarters Operations, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. “We are proud to have worked alongside our federal law enforcement partners to achieve this result.”

Attorneys Daniel Spiro and Mary Beth Hickcox-Howard of the Civil Division’s Commercial Litigation Branch, Fraud Section handled the matter with assistance from the Legal Division of the Federal Reserve Board of Governors and the Office of Comptroller of the Currency’s Chief Counsel’s Office. Senior Special Agent Brittany Harding of the Office of the Inspector General for the Department of Treasury, Special Agent Will Burmeister of the Office of the Inspector General for the Federal Reserve Board and Senior Special Agent Mike Serra from the Office of the Inspector General for the Federal Insurance Deposit Corporation investigated the matter.

Except for the conduct admitted in connection with the criminal resolution, the claims resolved by the settlement are allegations only. There has been no determination of liability.

View the settlement here

Source: United States Department of Justice 2

The American Express Company (American Express), based in New York, New York, has agreed to pay a $108.7 million civil penalty to resolve allegations that it violated the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by deceptively marketing credit card and wire transfer products and by entering “dummy” Employer Identification Numbers in the credit card accounts of its affiliate bank.

“When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement makes clear that the department will hold accountable those who violate the trust placed in them to follow the rules governing our financial institutions and to be truthful about their business practices.”

The United States alleged that, from 2014 through 2017, American Express deceptively marketed credit cards through the conduct of an affiliated entity that initiated sales calls to small businesses. The alleged deceptive practices included misrepresenting the card rewards or fees and whether credit checks would be done without a customer’s consent and submitting falsified financial information for prospective customers, such as overstating a business’s income.  

The United States also alleged that American Express engaged in practices to deceive its federally insured financial institution into allowing certain small business customers to acquire American Express credit cards without the required employer identification numbers (EINs). EINs are required by law if the card recipient is a business entity such as a corporation or partnership; the requirement does not apply to sole proprietors. The United States alleged that American Express employees used “dummy” EINs such as “123456788” in opening small business credit cards in 2015 and the first half of 2016. These cards were sold to replace an American Express co-branded credit card that was being discontinued during that time period. American Express allegedly allowed these “dummy” EINs to remain on the credit card accounts for up to two years before remediating the problem. American Express allegedly knew that many of the small business applicants had previously acquired American Express-issued co-brand cards where the card application stated that EINs were required for corporations or partnerships, but if the applicants left the EIN line blank, American Express would assume they are sole proprietors. That practice exacerbated the effects of American Express’s failure to enter proper EINs when it sold these customers replacement cards.

Finally, the United States further contended that American Express employees deceptively marketed wire transfer products known as Payroll Rewards and Premium Wire to its small business customers from 2018 through 2021, making false assertions regarding these products’ tax benefits. As to both products, American Express allegedly would wire money for an above-market fee that was far in excess of that offered by competitors in the marketplace and award the businesses or the business owners credit card membership reward points. American Express sales employees allegedly told customers that the wire transfer fees were tax deductible as business expenses, while the reward points earned on the transaction were not taxable, and thereby afforded the customer tax-free benefits.  The United States contended, however, that the above-market wiring fee was not deductible as an ordinary or necessary business expense insofar as it was incurred by a customer solely for the purpose of generating a personal benefit.

Contemporaneous with the civil resolution, American Express will enter into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Eastern District of New York and pay a criminal fine and forfeiture. That agreement deals exclusively with the Payroll Rewards and Premium Wire programs referenced above. Under the terms of the civil settlement, American Express will receive a credit toward the satisfaction of the civil penalty in the amount of $30.35 million if it makes a full payment of the forfeiture and fine amounts due under the criminal resolution.

“This multi-million-dollar settlement holds American Express accountable for violating FIRREA through unlawful sales tactics and recordkeeping requirements, and deceiving small business customers who placed their trust in the Company,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Mid-Atlantic Region. “The FDIC-OIG will continue to work with our law enforcement partners to investigate financial crimes that harm customers and undermine the integrity of our Nation’s financial institutions.”

“Today’s multi-million dollar settlement should make clear that financial companies who engage in fraudulent and deceptive practices will be held accountable for their actions,” said Special Agent in Charge John T. Perez of Headquarters Operations, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. “We are proud to have worked alongside our federal law enforcement partners to achieve this result.”

Attorneys Daniel Spiro and Mary Beth Hickcox-Howard of the Civil Division’s Commercial Litigation Branch, Fraud Section handled the matter with assistance from the Legal Division of the Federal Reserve Board of Governors and the Office of Comptroller of the Currency’s Chief Counsel’s Office. Senior Special Agent Brittany Harding of the Office of the Inspector General for the Department of Treasury, Special Agent Will Burmeister of the Office of the Inspector General for the Federal Reserve Board and Senior Special Agent Mike Serra from the Office of the Inspector General for the Federal Insurance Deposit Corporation investigated the matter.

Except for the conduct admitted in connection with the criminal resolution, the claims resolved by the settlement are allegations only. There has been no determination of liability.

View the settlement here

Source: United States Department of Justice Criminal Division

The Justice Department and the Environmental Protection Agency (EPA) today announced a settlement agreement with Fayat S.A.S. and nine of its subsidiaries — BOMAG GmbH, Bomag Americas Inc., BOMAG (China) Construction Machinery Co. Ltd., MARINI S.p.A., RAVO B.V., Charlatte of America Inc., PTC S.A.S., Secmair S.A.S. and MATHIEU S.A. — for alleged violations of the Clean Air Act’s mobile source emission standards regulations.

The complaint alleges that, between 2014 and 2018, Fayat and its subsidiaries illegally imported and sold hundreds of pavers, rollers and other nonroad equipment containing diesel engines that failed to meet Clean Air Act emission requirements. The complaint also alleges that Fayat failed to comply with Clean Air Act labeling and reporting requirements. The agreement requires Fayat to pay a civil penalty of $11 million and requires the company to complete a project to reduce the harm caused by excess nitrogen oxides and particulate matter emissions.

“Fayat failed to ensure that the equipment it introduced into the United States market complied with Clean Air Act requirements designed to protect the public’s health from harmful emissions,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “We will not tolerate violations of Clean Air Act standards. The settlement requires both a substantial civil penalty and a project that will reduce emissions in the Mobile, Alabama, area and contribute to improved public health.”

“Fayat’s import of nonroad vehicles with outdated diesel engines violates the Clean Air Act standards for emissions from mobile sources and threatened exposure to harmful diesel air emissions,” said Acting Assistant Administrator Cecil Rodrigues for EPA’s Office of Enforcement and Compliance Assurance. “Today’s announcement demonstrates that EPA will hold accountable companies that put outdated equipment into commerce that pollutes the air and risks exposing communities to toxic air pollutants.”

In addition to paying a civil penalty, Fayat will, as part of the agreement, undertake a project to reduce the harm from the emissions. The company will retrofit a tugboat currently in service in Mobile, Alabama. Retrofitting the tugboat includes removing and destroying two engines and two auxiliary generators and replacing them with two new engines and two new generators that meet current emission controls.

More information regarding this settlement is available from the Fayat Clean Air Act Violations Settlement Summary. 

The proposed consent decree, lodged in the U.S. District Court for the District of Columbia, is subject to a public comment period and final court approval. Information on submitting comment and access to the settlement agreement is available at www.justice.gov/enrd/consent-decrees.

EPA investigated the case.

Attorneys with the ENRD’s Environmental Enforcement Section are handling the case.