Source: United States Department of Justice Criminal Division
A federal grand jury in Jacksonville, Florida, returned an indictment yesterday charging a Florida businessman with tax evasion, not filing a tax return and not paying taxes.
According to the indictment, Phillip Mak, of Jacksonville, was a self-employed businessman who from 2008 through 2020 earned approximately $10.3 million in income. During that same period, Mak allegedly did not pay any federal taxes and, except for two years, did not file tax returns. The IRS allegedly assessed approximately $1.9 million in outstanding taxes, penalties and interest against Mak for tax years 2008, 2009, 2012-2015 and 2019-2020.
Instead of paying what he owed, Mak allegedly attempted to shield his assets from the IRS by transferring $1 million in cash to his domestic partner’s bank accounts. In addition, the indictment alleges that Mak, after being interviewed by IRS investigators, transferred ownership of his home to his domestic partner’s trust, created a nominee entity and began depositing his income into a bank account held in the name of that entity.
In total, Mak is alleged to have caused a tax loss to the IRS of more than $1.92 million.
If convicted, Mak faces a maximum sentence of five years in prison for tax evasion and a maximum sentence of one year in prison for each charge of failure to file a tax return and failure to pay tax. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and U.S. Attorney Roger B. Handberg for the Middle District of Florida made the announcement.
IRS Criminal Investigation is investigating the case.
Trial Attorneys Isaiah Boyd and Michael Jones of the Tax Division and Assistant U.S. Attorney John Cannizzaro for the Middle District of Florida 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.
A federal jury in Fresno, California, convicted yesterday former Sanger, California, Police Department officer J. DeShawn Torrence, 42, of eight counts of deprivation of constitutional rights under color of law for sexually assaulting four women whom he encountered during the course of his official duties. The jury found that the offenses included kidnapping, aggravated sexual abuse, and attempted aggravated sexual abuse, and caused bodily injury.
“Law enforcement officers are entrusted with great power to protect the public and keep them safe from harm. This officer’s crimes were an egregious breach of that trust and an appalling abuse of power, as he repeatedly preyed on the women in his community and violated their civil rights,” said Acting U.S. Attorney Michele Beckwith for the Eastern District of California. “We stand ready to investigate and prosecute such crimes with all the tools we have available.”
“The FBI Sacramento Field Office is grateful to the brave victims who came forward and trusted us to investigate the allegations of sexual abuse at the hands of a police officer,” said Special Agent in Charge Sid Patel of the FBI Sacramento Field Office. “The FBI is deeply committed to working with our partners to thoroughly investigate such cases to protect the American people and preserve public trust in law enforcement.”
The evidence at trial proved that Torrence sexually assaulted four women. He kidnapped a 21-year-old woman who was walking to a store to buy groceries for her young children, drove her outside of town in his police car, and sexually assaulted her at an isolated dead end. Torrence forcibly raped a second victim, a 67-year-old woman, after following her into her home during a DUI investigation. With a third victim, Torrence showed up at her door in his police uniform after midnight, entered her apartment, pinned her against the kitchen counter, and sexually assaulted her. Torrence showed up multiple times at the home of a fourth victim, a domestic violence victim, supposedly to investigate a prior domestic violence incident. During those follow up visits, Torrence forced the victim to expose sensitive parts of her body for no legitimate reason, and he sexually assaulted her. The jury also heard testimony that Torrence sexually assaulted a fifth woman while acting in his capacity as a police officer.
Five of the counts each carry a maximum penalty of life in prison and a $250,000 fine. The three remaining counts each carry a maximum penalty of one year in prison and a fine of up to $100,000. Torrence is scheduled to be sentenced on May 7.
Deputy Assistant Attorney General Kathleen Wolfe of the Justice Department’s Civil Rights Division made the announcement.
The FBI Sacramento Field Office investigated the case, with assistance from the Fresno County Sheriff’s Office.
Special Litigation Counsel Michael J. Songer of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Karen Escobar for the Eastern District of California are prosecuting the case.
The U.S. District Court for the Northern District of Georgia entered an order earlier this week authorizing the IRS to serve John Doe summonses on TT (USA) Holdings Inc.; Trident Corporate Services Inc. and Trident Fund Services Inc., entities that are members of a multinational group of affiliated companies generally operating under the trade name “Trident Trust” and collectively referred to as the “Trident Trust Group.”
Separately, on Dec. 18, 2024, the U.S. District Court for the District of South Dakota entered an order, unsealed on Jan. 21, authorizing service of a similar John Doe summons on Trident Trust Company (South Dakota) Inc. The United States also previously obtained approval in the U.S. District Court for the Southern District of New York for the IRS to serve John Doe summonses on a different affiliate entity of the Trident Trust Group, as well as to third party financial service companies, banks and courier services that may have information about Trident Trust Group’s U.S. taxpayer clients.
The United States is not alleging that any of the entities engaged in wrongdoing. Rather, the IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown. These summonses seek information about U.S. individuals who may have used the Trident Trust Group’s services to underreport their worldwide income and conceal their ownership of certain foreign assets that U.S. individuals are required to report to the U.S. government.
“The Justice Department and the IRS are dedicated to unearthing tax evasion that uses foreign bank accounts and offshore shell corporations,” said Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “We will use the many tools available to us, including John Doe summonses like the ones authorized by the courts here, to ensure that taxpayers are fully meeting their responsibilities.”
Federal law requires certain individual taxpayers, including all U.S. citizens and residents with gross annual income above the reporting threshold, to pay taxes on all income earned worldwide. They must also disclose certain foreign financial accounts, assets and controlled foreign corporations. Failure to report these offshore arrangements can result in serious civil and criminal consequences.
The government’s petitions allege that Trident Trust Group is an offshore service provider operating in nearly 30 countries worldwide, and it has provided corporate, trust and fund administration services for over 40 years. The petitions further allege that Trident Trust Group offers services that enable offshore account and entity concealment, like mail forwarding and retention, and ready-to-use “shelf” companies. For example, the petitions allege that Trident Trust Group personnel have listed themselves as the founders, directors and officers of thousands of Panamanian companies to help their U.S. clients potentially conceal their interests in and income from those foreign entities.
A declaration from an IRS revenue agent that accompanied the petitions alleges that at least nine U.S. taxpayers used Trident Trust Group’s services to avoid compliance with U.S. tax laws. The declaration further alleges that the IRS learned of this noncompliance through the Offshore Voluntary Disclosure Program, a program that allowed U.S. taxpayers to voluntarily disclose foreign accounts or entities used to evade tax in exchange for settling their civil liabilities on fixed terms.
These orders authorize the IRS to issue summonses to TT (USA) Holdings Inc.; Trident Corporate Services Inc.; Trident Fund Services Inc. and Trident Trust Company (South Dakota) Inc seeking information about U.S. taxpayer clients who may have used the services of the entities and the broader Trident Trust Group to establish, maintain, operate or control any foreign financial account or other foreign asset; any foreign corporation, company, trust, foundation or other legal entity or any foreign or domestic financial account or other asset in the name of such foreign entity from 2014 through 2023. By obtaining these records, the IRS expects to be able to identify clients of the Trident Trust Group to investigate whether they potentially used the group’s services to avoid or evade federal taxes.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Tax Division Attorneys Christina T. Lanier and Brij B. Patnaik are handling the case in the U.S. District Court for the District of South Dakota; and they, along with Elisabeth K. Kryska of the Tax Division, are handling the case in the Northern District of Georgia. Assistant U.S. Attorney Anthony J. Sun for the Southern District of New York is handling the case in the U.S. District Court for the Southern District of New York.
The Justice Department today announced its participation in a multinational operation involving actions in the United States, Romania, Australia, France, Germany, Spain, Italy, and Greece to disrupt and take down the infrastructure of the online cybercrime marketplaces known as Cracked and Nulled. The operation was announced in conjunction with Operation Talent, a multinational law enforcement operation supported by Europol to investigate Cracked and Nulled.
Operation Talent Seizure Banner
Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, U.S. Attorney Trini E. Ross for the Western District of New York, U.S. Attorney Jaime Esparza for the Western District of Texas, Assistant Director Brian A. Vorndran of the FBI’s Cyber Division, Special Agent in Charge Matthew Miraglia of the FBI Buffalo Field Office, and Special Agent in Charge Aaron Tapp for the FBI San Antonio Field Office made the announcement.
Cracked
According to seizure warrants unsealed today, the Cracked marketplace has been selling stolen login credentials, hacking tools, and servers for hosting malware and stolen data — as well as other tools for carrying out cybercrime and fraud — since March 2018. Cracked had over four million users, listed over 28 million posts advertising cybercrime tools and stolen information, generated approximately $4 million in revenue, and impacted at least 17 million victims from the United States. One product advertised on Cracked offered access to “billions of leaked websites” allowing users to search for stolen login credentials. This product was recently allegedly used to sextort and harass a woman in the Western District of New York. Specifically, a cybercriminal entered the victim’s username into the tool and obtained the victim’s credentials for an online account. Using the victim’s credentials, the subject then cyberstalked the victim and sent sexually demeaning and threatening messages to the victim. The seizure of these marketplaces is intended to disrupt this type of cybercrime and the proliferation of these tools in the cybercrime community.
The FBI, working in coordination with foreign law enforcement partners, identified a series of servers that hosted the Cracked marketplace infrastructure and eight domain names used to operate Cracked. They also identified servers and domain names for Cracked’s payment processor, Sellix, and the server and domain name for a related bulletproof hosting service. All of these servers and domain names have been seized pursuant to domestic and international legal process. Anyone visiting any of these seized domains will now see a seizure banner that notifies them that the domain has been seized by law enforcement authorities.
The FBI Buffalo Field Office is investigating the case.
Senior Counsel Thomas Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Charles Kruly for the Western District of New York are prosecuting the case.
Nulled
The Justice Department announced the seizure of the Nulled website domain and unsealed charges against one of Nulled’s administrators, Lucas Sohn, 29, an Argentinian national residing in Spain. According to the unsealed complaint affidavit, the Nulled marketplace has been selling stolen login credentials, stolen identification documents, hacking tools, as well as other tools for carrying out cybercrime and fraud, since 2016. Nulled had over five million users, listed over 43 million posts advertising cybercrime tools and stolen information, and generated approximately $1 million in yearly revenue. One product advertised on Nulled purported to contain the names and social security numbers of 500,000 American citizens.
The FBI, working in coordination with foreign law enforcement partners, identified the servers that hosted the Nulled marketplace infrastructure, and the domain used to operate Nulled. The servers and domain have been seized pursuant to domestic and international legal process. Anyone visiting the Nulled domain will now see a seizure banner that notifies them that the domain has been seized by law enforcement authorities.
According to the complaint, Sohn was an active administrator of Nulled and performed escrow functions on the website. Nulled’s customers would use Sohn’s services to complete transactions involving stolen credentials and other information. For his actions, Sohn has been charged with conspiracy to traffic in passwords and similar information through which computers may be accessed without authorization; conspiracy to solicit another person for the purpose of offering an access device or selling information regarding an access device; and conspiracy to possess, transfer, or use a means of identification of another person with the intent to commit or to aid and abet or in connection with any unlawful activity that is a violation of federal law.
If convicted, Sohn faces a maximum penalty of five years in prison for conspiracy to traffic in passwords, 10 years in prison for access device fraud, and 15 years in prison for identity fraud.
The FBI Austin Cyber Task Force is investigating the case. The Task Force participants include the Naval Criminal Investigative Service, IRS Criminal Investigation, Defense Criminal Investigative Service, and the Department of the Army Criminal Investigation Division, among other agencies.
Assistant U.S. Attorneys G. Karthik Srinivasan and Christopher Mangels for the Western District of Texas are prosecuting the case, with Assistant U.S. Attorney Mark Tindall for the Western District of Texas handling the forfeiture component.
The Justice Department worked in close cooperation with investigators and prosecutors from several jurisdictions on the takedown of both the Cracked and Nulled marketplaces, including the Australian Federal Police, Europol, France’s Anti-Cybercrime Office (Office Anti-cybercriminalité) and Cyber Division of the Paris Prosecution Office, Germany’s Federal Criminal Police Office (Bundeskriminalamt) and Prosecutor General’s Office Frankfurt am Main – Cyber Crime Center (Generalstaatsanwaltschaft Frankfurt am Main – ZIT), the Spanish National Police (Policía Nacional) and Guardia Civil, the Hellenic Police (Ελληνική Αστυνομία), Italy’s Polizia di Stato and the General Inspectorate of Romanian Police (Inspectoratul General al Poliției Romane). The Justice Department’s Office of International Affairs provided significant assistance.
A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The Justice Department today sued to block Hewlett Packard Enterprise Co.’s (HPE) proposed $14 billion acquisition of rival wireless local area network (WLAN) technology provider Juniper Networks Inc. (Juniper). HPE and Juniper are the second- and third- largest providers, respectively, of enterprise-grade WLAN solutions in the United States. The complaint, filed in the Northern District of California, alleges that the proposed transaction would eliminate fierce head-to-head competition between the companies, raise prices, reduce innovation, and diminish choice for scores of American businesses and institutions, in violation of Section 7 of the Clayton Act.
“HPE and Juniper are successful companies. But rather than continue to compete as rivals in the WLAN marketplace, they seek to consolidate — increasing concentration in an already concentrated market,” said Acting Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division. “The threat this merger poses is not theoretical. Vital industries in our country — including American hospitals and small businesses — rely on wireless networks to complete their missions. This proposed merger would significantly reduce competition and weaken innovation, resulting in large segments of the American economy paying more for less from wireless technology providers.”
WLAN technology — which includes hardware, software, and advanced artificial intelligence — is critical for the modern workplace. Millions of Americans today create and share company resources and access the internet from wireless-enabled devices. Retail employees wirelessly process payments and log inventory. Doctors access medical records on phones and tablets and track life-saving patient care on the go. University students take notes on their laptops and access course materials from their dorm rooms. Wireless networking is the primary means by which many employees connect to their employer’s computer network and the internet.
As alleged in the complaint, Juniper has been a disruptive force that has grown rapidly from a minor player to among the three largest enterprise-grade WLAN suppliers in the U.S. Juniper has also introduced innovative tools that have materially decreased the cost of operating a wireless network for many customers. This competitive pressure has forced HPE to discount its offerings and invest in its own innovation. HPE recognized and tracked Juniper’s growing significance and engaged in a campaign, including mandatory training for its engineers and salespeople, to “beat” Juniper when competing for contracts. Indeed, just a month before the proposed acquisition was announced, front-line HPE salespeople were concerned that “[t]he Juniper threat [was] dire” because in dozens of opportunities Juniper was “trying to unseat” HPE. Senior HPE executives shared this view; one former HPE executive reminded his team that “there are no rules in a street fight” with Juniper and encouraged them to “kill” Juniper when going head-to-head for sales opportunities.
Now, HPE seeks to acquire its smaller, innovative rival. The proposed transaction between HPE and Juniper, if allowed to proceed, would further consolidate an already highly concentrated market — and leave U. S. enterprises facing two companies commanding over 70% of the market: the post-merger HPE and market leader Cisco Systems Inc. This substantial lessening competition in a critically important technology market poses the precise threat that the Clayton Act was enacted to prevent.
Hewlett Packard Enterprise Company is headquartered in Spring, Texas. Its WLAN-focused business unit is located in Santa Clara, California.
Juniper Networks Inc. is headquartered in Sunnyvale, California.