Category: US Department of Justice

Source: United States Department of Justice News

The Defendants evaded more than $1.35M in Taxes and Spent more than $738K in COVID Relief Funds on a Waterfront Condo, Personal Investments, Vacation, and College Tuition

            WASHINGTON – Gholam “Tony” Kowkabi, 63, and Karen Kowkabi, 64, of Vienna, Virginia, pleaded guilty in federal court today to tax offenses relating to their failure to pay more than $1.35 million in taxes, arising from their operation of several restaurants in the Washington, D.C. area. Gholam Kowkabi also pleaded guilty to stealing more than $738,000 from the emergency small business relief funds his Georgetown restaurant—Ristorante Piccolo—received during the COVID pandemic. As part of his plea, Mr. Kowkabi acknowledged having spent money, which was intended to help his business, on a waterfront condo in Ocean City, Maryland, as well as personal investments, vacations for his family, and college tuition for his child.

            The announcement was made by U.S. Attorney Matthew M. Graves, Acting Deputy Assistant Attorney General Stuart M. Goldberg, of the Justice Department’s Tax Division, and Acting Special Agent in Charge Kareem Carter of the Internal Revenue Service (IRS)-Criminal Investigation, Washington, D.C. Field Office.

            “This defendant robbed a program intended to help fellow restauranteurs and other small business owners who were struggling to stay afloat amid the devastating economic impacts of the COVID-19 pandemic,” said U.S. Attorney Graves. “He also created an elaborate scheme to hide assets and play a shell game with the IRS so he could avoid paying the more than one million dollars in taxes that he and his business owed. Our Office will continue to vigorously prosecute such frauds.”

            “Tax evasion and misappropriation of COVID-19 relief funds undermine the integrity of our tax system and harm honest taxpayers,” said Acting Special Agent in Charge Kareem Carter of the Washington D.C. Field Office.  “IRS Criminal Investigation remains steadfast in its commitment to upholding tax compliance and pursuing those who attempt to evade their tax responsibilities.”         

            Gholam Kowkabi pleaded guilty in the U.S. District Court for the District of Columbia to wire fraud and tax evasion. Wire fraud carries a statutory penalty of 20 years and financial penalties. Tax evasion carries a statutory penalty of five years and financial penalties.

            Karen Kowkabi pleaded guilty in the U.S. District Court for the District of Columbia to five counts of willfully failing to pay taxes. Failing to pay tax carries a statutory penalty of one year and financial penalties.

            Sentencing hearings are scheduled for December 1, 2023. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Tax Evasion Scheme

            According to the statements of offense submitted to the Court and admitted by Gholam Kowkabi and Karen Kowkabi, the Kowkabis have owned and operated Ristorante Piccolo in Georgetown since 1986.  The Kowkabis also owned and operated restaurants Catch 15 and Tuscana West in Washington, D.C. From 1998 to 2018, the Kowkabis amassed an unpaid tax balance of $1,351,038.51, including federal income and employment taxes and Trust Fund Recovery Penalties. Gholam Kowkabi admitted to willfully attempting to evade payment of those taxes by concealing assets and obscuring the large sums of money he took from the businesses by, among others, purchasing property in the name of a nominee entity and causing false entries in the businesses’ books and records to hide personal purchases using business bank accounts.  Karen Kowkabi admitted that she willfully failed to pay these taxes as well.

            Gholam and Karen Kowkabi have agreed to pay $1,351,038.51 in restitution to the IRS.

The Scheme to Steal COVID-19 Relief Funds

            Further, from May 13, 2020, to July 27, 2021, Gholam Kowkabi obtained more than more than $1.6 million in COVID-19 relief funds including $474,000 from first draw and second draw Paycheck Protection Program (PPP) loans, an Economic Injury Disaster Loan (EIDL) for $499,900 and a Restaurant Revitalization Fund (RRF) grant for $631,823.28.

            First Draw PPP loans could be used to help fund payroll costs, including benefits, and could also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. Second Draw PPP loans could be used to help fund payroll costs, including benefits. Second Draw PPP loan funds could also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. EIDL loan proceeds could be used for working capital to make regular payments for operating expenses, including payroll, rent/mortgage, utilities, and other ordinary business expenses, and to pay business debt. Restaurant Revitalization Funds could be used for specific expenses including business payroll costs (including sick leave), payments on any business mortgage obligation, business rent payments (not including prepayment), business debt service (not including prepayment), both principal and interest, business utility payments, business maintenance expenses, construction of outdoor seating, business supplies, business food and beverage expenses, covered supplier costs, business operating expenses.

            In these applications and loan agreements, Gholam Kowkabi fraudulently and falsely promised that the PPP, EIDL, and RRF proceeds would be used only for business-related and eligible purposes as specified in the applications. Instead, Gholam Kowkabi used a portion of the PPP funds, EIDL funds, and RRF funds for unauthorized purposes and for his own personal enrichment, including the purchase of a waterfront condo in Ocean City, Maryland for more than $500,000, two joint venture investments totaling more than $237,000 for the construction of homes in Great Falls, Virginia, and more than $78,500 to open Divan Restaurant in McLean, Virginia. Gholam Kowkabi spent more than $11,000 of COVID relief funds on his home mortgage, more than $14,000 on vacations, more than $62,000 on personal legal expenses, more than $20,000 on home improvement, and more than $5,500 on college tuition payments.

            Gholam Kowkabi has agreed to pay $738,657.18 in restitution to the SBA. Gholam Kowkabi has agreed to a money judgment in the amount of $738,657.18 and to the forfeiture of the waterfront condo and the two joint ventures funded with COVID-19 relief funds.

            In announcing the plea, U.S. Attorney Graves, Acting Deputy Assistant Attorney General Stuart Goldberg, and Acting Special Agent in Charge Carter commended the work of those who investigated the case from IRS-CI. They expressed thanks for assistance provided by the SBA Office of Inspector General during the investigation of this case. This case is being prosecuted by Assistant U.S. Attorney Leslie A. Goemaat of the Fraud, Public Corruption, and Civil Rights Section and Trial Attorney Sarah Ranney of the Department of Justice, Tax Division.

# #

            On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

            Anyone with information about allegations of fraud related to COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Source: United States Department of Justice News

RAPID CITY – United States Attorney Alison J. Ramsdell announced today that U.S. District Judge Jeffery L. Viken has sentenced a Rapid City, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance. The sentencing took place on December 5, 2022.

Michael McLeod, 43, was sentenced to three years in federal prison, followed by three years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.

Michael McLeod was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury in September of 2020. He pleaded guilty on August 19, 2022.

During the conspiracy, McLeod traveled to Nebraska on at least one occasion to transport methamphetamine to South Dakota. Once the methamphetamine arrived in the Rapid City area it was dispersed to others for use and distribution. Others charged in the conspiracy have already been sentenced.

This case was investigated by the Unified Narcotics Enforcement Team (UNET), Drug Enforcement Agency, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.  UNET is comprised of law enforcement from the Pennington County Sheriff’s Office, Rapid City Police Department, South Dakota Division of Criminal Investigation, South Dakota Highway Patrol, and the South Dakota National Guard. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.

McLeod was immediately remanded to the custody of the U.S. Marshals Service.

Source: United States Department of Justice News

RAPID CITY – United States Attorney Alison J. Ramsdell announced that U.S. District Judge Jeffrey L. Viken has sentenced a Rapid City, South Dakota, woman convicted of Conspiracy to Distribute a Controlled Substance. The sentencing took place on December 12, 2022.

Stevie Williams, 39, was sentenced to 14 years in federal prison, followed by five years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.

Williams was indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury in March of 2021. She pleaded guilty on August 19, 2022.

During the conspiracy, methamphetamine was trafficked into South Dakota from Arizona and Mexico through arrangements made with Williams and others in the conspiracy. Williams was responsible for sending large amounts of money through the U.S. Postal Service, UPS, and other mail carriers for the methamphetamine that was received. The methamphetamine was then dispersed to others for use and further distribution. Others charged in the conspiracy are awaiting sentencing or trial.

This case was investigated by the Unified Narcotics Enforcement Team (UNET), Drug Enforcement Agency, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. UNET is comprised of law enforcement from the Pennington County Sheriff’s Office, Rapid City Police Department, South Dakota Division of Criminal Investigation, South Dakota Highway Patrol, and the South Dakota National Guard. Assistant U.S. Attorney Gina S. Nelson prosecuted the case.

Williams was immediately remanded to the custody of the U.S. Marshals Service.

 

 

Source: United States Department of Justice News

            WASHINGTON — A Connecticut man has been arrested on felony and misdemeanor charges, including assaulting law enforcement, related to his actions during the breach of the U.S. Capitol on Jan. 6, 2021. His actions and the actions of others disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the presidential election.

            Benjamin Cohen, 21, of Westport, Connecticut, is charged in a criminal complaint filed in the District of Columbia with civil disorder and assaulting, resisting, or impeding certain officers, both felony offenses. In addition to the felonies, Cohen is charged with several misdemeanor offenses, including entering and remaining in a restricted building or grounds, disorderly and disruptive conduct in a restricted building or grounds, engaging in physical violence in a restricted building or grounds, and engaging in an act of physical violence on Capitol grounds or buildings.

            Cohen was arrested today in Westport and made his initial appearance in the District of Connecticut.

            According to court documents, Cohen was identified by law enforcement authorities among the crowd of rioters gathered along a police line on the West Plaza of the Capitol grounds on Jan. 6, 2021. Just before 2:29 p.m., open-source video and body-worn camera footage show Cohen joining rioters in breaching the police line and moving toward a group of officers. Cohen is then seen making physical contact with the group of officers by pushing and shoving them with his hands as the crowd surges forward. Seconds later, Cohen rushes toward the officers again, shoving and striking officers with his hands. At some point shortly thereafter, video footage shows Cohen standing in the crowd of rioters, where he can be heard shouting, “Our House!”

            Later, at approximately 2:48 p.m., Cohen is seen entering the Lower West Terrace tunnel, joining other rioters assembling against a police line. Cohen then makes his way deeper into the mob and begins to push against a rioter in front of him as additional rioters join the effort around him. Together, the mob pushed in a concerted “heave-ho” effort against the police line in the tunnel.

            After the first “heave-ho”, Cohen participated in subsequent efforts in the tunnel against the police line. At approximately 2:56 p.m., a rush of additional rioters entered the tunnel, and those rioters, including Cohen, engaged in another “heave-ho” effort by moving their bodies in unison back and forth, pushing with coordinated force against the police.

            By approximately 3:05 p.m., Cohen made his way back to the tunnel entrance and began rinsing his eyes after having apparently been sprayed by officers. Cohen remained with the mob just outside the tunnel until at least approximately 4:01 p.m., where he continued to assist combined efforts by the mob to push back into the tunnel.

            Court documents say that at some point thereafter, Cohen was photographed inside an office inside the Capitol building situated with a window, which had been broken, just to the left of the tunnel entrance. Cohen is then seen in open-source video departing this office through the broken window.

            This case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section. Valuable assistance was provided by the U.S. Attorney’s Office for the District of Connecticut.

            This case is being investigated by the FBI’s New Haven and Washington Field Offices, which identified Cohen as BOLO (“Be On the Look Out”) #379 on its seeking information photos.

            Valuable assistance was provided by the U.S. Capitol Police and the Metropolitan Police Department.

            In the 31 months since Jan. 6, 2021, more than 1,106 individuals have been arrested in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including more than 350 individuals charged with assaulting or impeding law enforcement. 

            Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

            A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice News

            WASHINGTON – Jonathan Willis, 37, of North Bethesda, Maryland, was sentenced today to 10 years in prison for coercion and enticement of a minor. The sentence was announced by U.S. Attorney Matthew M. Graves and Acting Special Agent in Charge Emily Odom, of the FBI Washington Field Office’s Criminal and Cyber Division.

            Willis pleaded guilty on March 15, 2023, in U.S. District Court for the District of Columbia. According to the government’s evidence, on March 31, 2022, the defendant began communicating with a 14-year-old minor victim who resided in Washington, D.C. using Snapchat. The defendant offered to pay the victim money in exchange for sexually explicit photographs. Over a two-week period, the defendant sent the fourteen-year-old girl multiple photos of his penis and of himself masturbating, and repeatedly asked her to come to his residence in Maryland to “make love.” The victim refused and reported the defendant’s communications to law enforcement. On May 12, 2022 and May 24, 2022, an undercover officer assumed the victim’s identity on Snapchat. On both occasions, the defendant requested sexually explicit photographs of the 14-year-old girl, sent her photos and videos of his penis, and attempted to persuade her to travel to Maryland for sexual activity.

            In addition to the prison term, U.S. District Court Randolph D. Moss ordered 10 years of supervised release and ordered Willis to register as a sex offender for 25 years.

           This case was investigated by the FBI Washington Field Office’s Child Exploitation and Human Trafficking Task Force. The task force is composed of FBI agents, along with other federal agents and detectives from northern Virginia and the District of Columbia. The task force is charged with investigating and bringing federal charges against individuals engaged in the exploitation of children and those engaged in human trafficking. Valuable assistance was provided by the FBI’s Baltimore Field Office, the U.S. Postal Inspection Service, and the Prince George’s County, Maryland Police Department.

            In announcing the sentence, U.S. Attorney Graves and Acting Special Agent in Charge Odom commended the work of those who investigated the case from the FBI’s Child Exploitation and Human Trafficking Task Force, which includes members of the FBI’s Washington Field Office and the Metropolitan Police Department’s (MPD) Youth Investigations Division. They also commended the work of Assistant U.S. Attorney Caroline Burrell, who prosecuted the case.

            This case was brought as part of the Department of Justice’s Project Safe Childhood initiative. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney’s Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.