Category: US Department of Justice

Source: United States Department of Justice

An indictment was unsealed today charging five former principals of Theia Group Inc., a Washington, D.C.-based aerospace start-up company, with conspiracy and fraud.

According to the indictment, Erlend Olson, John Gallagher, Stephen Buscher, Joseph Fargnoli, and Jamil Swati held various executive positions at the company, including chief executive officer, executive vice president, chief financial officer, chief technology officer, and head of strategic investment, respectively. They allegedly perpetrated a multi-year scheme to defraud investors and lenders out of $250 million, and Olson evaded more than $3.9 million in personal federal income taxes.

According to the indictment, Theia planned to launch 112 satellites starting in 2022 at a cost of $10 billion to $15 billion. Theia’s principals allegedly originally planned to raise the requisite funds from various nation-states by promising perpetual data and analytics for an upfront payment of $2 billion. However, from Theia’s founding in 2015 through its placement into receivership in 2021, Theia was allegedly unsuccessful in obtaining any funding except for approximately $250 million in loans and investments received from institutional and individual investors and lenders. To secure the funding, Olson, Gallagher, Buscher, Fargnoli, and Swati’s fraud scheme allegedly included making materially false statements about revenue from non-existent government contracts, providing multiple false financial statements, including a fake $6 billion escrow account statement, and making false representations about Theia’s technical capabilities.

The indictment further alleges that the IRS assessed over a million dollars in taxes, penalties, and interest against Olson for tax years 2009 through 2011, which Olson acknowledged in 2018. Instead of paying the outstanding debt to the IRS, which he acknowledged he owed, Olson allegedly directed his compensation from Theia to a nominee entity. Olson then allegedly used the nominee entity to pay personal expenses such as a private jet membership, $64,500 annual rent payments for his home, a new Land Rover, personal debts, and a pair of condominiums in Las Vegas. Olson now allegedly owes $1.6 million to the IRS related to those years. In addition, Olson allegedly also used the nominee entity to conceal his income from the IRS for 2018 through 2020.

Olson, Gallagher, Buscher, Fargnoli, and Swati are each charged with one count of conspiracy to commit wire and mail fraud for the overall scheme, and additionally charged with multiple wire or mail fraud counts arising from their various misrepresentations to investors. Olson is also charged with four counts of attempted tax evasion.

If convicted, they each face a maximum penalty of 20 years in prison for conspiracy and for each wire fraud or mail fraud count. Olson would face a maximum penalty of five years in prison for each tax evasion count. Each would also face a period of supervised release, restitution, monetary penalties, and forfeiture. 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 Interim U.S. Attorney Edward R. Martin Jr. for the District of Columbia made the announcement.

IRS Criminal Investigation and the FDIC Office of Inspector General are investigating the case.

Senior Litigation Counsel Nanette Davis and Trial Attorney Alexis Hughes of the Tax Division, and Assistant U.S. Attorneys Rebecca Ross and Joshua Gold for the District of Columbia are prosecuting the case.

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

Source: United States Department of Justice Criminal Division

A Miami man pleaded guilty yesterday to conspiring with others to defraud the United States by concealing millions of dollars in assets and income in undisclosed Swiss bank accounts.

According to court documents and statements made in court, between 1985 and 2020, Dan Rotta hid more than $20 million in assets in dozens of secret Swiss accounts at five different Swiss banks, including UBS, Credit Suisse, Bank Bonhôte, and Bank Julius Baer. The accounts were held in his own name, in the names of sham structures, and, in one instance, a pseudonym. Over the years, Rotta earned tens of millions of dollars of income from these assets that he did not report on his tax returns and that he used to fund his lavish lifestyle. He caused a substantial tax loss to the IRS.

Rotta employed increasingly elaborate schemes to keep his accounts hidden. Over the years, he kept his accounts open, in part, by falsely representing that he was not a U.S. citizen, leveraging his Brazilian citizenship to claim he was a Brazilian citizen residing in Brazil.

Starting in 2008, after it was reported publicly that UBS and its bankers were under criminal investigation for helping U.S. taxpayers evade their taxes, Rotta closed his UBS account and moved his funds to Credit Suisse and Bank Bonhôte.

In 2011, after the IRS obtained records related to one of Rotta’s Swiss accounts, Rotta nominally changed the documentation of his accounts at Credit Suisse and Bank Bonhôte to make it appear that his co-conspirator, a Brazilian national and resident, owned the assets in the accounts. Despite the change, Rotta continued to control the assets and transferred millions of dollars out of those accounts for his use.

Shortly after Rotta changed the account documentation, the IRS began auditing Rotta. During the audit, Rotta falsely denied that he owned the assets in the foreign financial accounts and, instead, claimed that the millions of dollars he withdrew from the accounts were non-taxable loans from foreign nationals. Rotta provided the IRS with fake promissory notes and false affidavits from the foreign nationals to corroborate his claims. During the audit, Rotta continued to use the funds in his foreign accounts to fund his lifestyle in the United States, but to conceal his use of the funds from the IRS, he often routed transfers from his foreign accounts through nominee accounts and attorney trust fund accounts in the United States.

The IRS did not believe Rotta’s story and assessed millions of dollars of additional taxes as well as penalties and interest against him. Rotta sought to reverse the assessments by filing a false petition in U.S. Tax Court. In that petition, Rotta, through his attorney, falsely denied having any foreign accounts and attached fictitious loan documents. Furthermore, the nominee account owners traveled to the United States to retell the false loan story to IRS attorneys.

In 2017, after Rotta presented evidence that the purported loans had been repaid, the IRS reversed the deficiencies and agreed that Rotta owed no additional tax. Unbeknownst to the IRS, however, the “loan repayments” were fake: the funds that Rotta purportedly repaid went back into accounts that Rotta controlled shortly after the IRS dismissed the suit. Also as part of the conspiracy, Rotta had his U.S.-based attorneys create sham trust structures that he used to transfer his assets to the United States without alerting the IRS. On paper, it appeared that Rotta’s co-conspirator funded the trusts for Rotta’s benefit. In reality, Rotta funded the trusts with transfers from Swiss accounts.

In 2019, Rotta became aware that the IRS would receive additional account records from Switzerland that contradicted the false claims that he had previously made. To avoid criminal liability, Rotta applied to participate in the IRS’s voluntary disclosure practice. Under that practice, taxpayers who failed to comply with their tax and reporting obligations can make timely, accurate, and complete disclosures of their conduct, which may offer a path to resolve their non-compliance and limit their criminal exposure. Rotta made false statements in his submission, including falsely claiming that the assets in the Swiss accounts mostly belonged to others, and that any funds provided to Rotta were non-taxable gifts. Rotta also claimed that the nominee account owner gifted Rotta money because the nominee had no children to benefit from the funds. In fact, the nominee had two children.

Rotta is scheduled to be sentenced on June 4. He faces a maximum penalty of five years in prison. 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, U.S. Attorney Hayden O’Byrne for the Southern District of Florida, and Executive Special Agent in Charge Kareem Carter of IRS Criminal Investigation (IRS-CI)’s Washington, D.C., Field Office made the announcement.

Special Agents from IRS-CI’s International Tax & Financial Crimes specialty group, a team based out of Washington, D.C., and dedicated to uncovering international tax crimes, is investigating the case.

Senior Litigation Counsels Sean Beaty and Mark Daly and Trial Attorneys Patrick Elwell and William Montague of the Tax Division, as well as Senior Litigation Counsel Christopher J. Clark for the Southern District of Florida, are prosecuting the case.

Source: United States Department of Justice 2

A Miami man pleaded guilty yesterday to conspiring with others to defraud the United States by concealing millions of dollars in assets and income in undisclosed Swiss bank accounts.

According to court documents and statements made in court, between 1985 and 2020, Dan Rotta hid more than $20 million in assets in dozens of secret Swiss accounts at five different Swiss banks, including UBS, Credit Suisse, Bank Bonhôte, and Bank Julius Baer. The accounts were held in his own name, in the names of sham structures, and, in one instance, a pseudonym. Over the years, Rotta earned tens of millions of dollars of income from these assets that he did not report on his tax returns and that he used to fund his lavish lifestyle. He caused a substantial tax loss to the IRS.

Rotta employed increasingly elaborate schemes to keep his accounts hidden. Over the years, he kept his accounts open, in part, by falsely representing that he was not a U.S. citizen, leveraging his Brazilian citizenship to claim he was a Brazilian citizen residing in Brazil.

Starting in 2008, after it was reported publicly that UBS and its bankers were under criminal investigation for helping U.S. taxpayers evade their taxes, Rotta closed his UBS account and moved his funds to Credit Suisse and Bank Bonhôte.

In 2011, after the IRS obtained records related to one of Rotta’s Swiss accounts, Rotta nominally changed the documentation of his accounts at Credit Suisse and Bank Bonhôte to make it appear that his co-conspirator, a Brazilian national and resident, owned the assets in the accounts. Despite the change, Rotta continued to control the assets and transferred millions of dollars out of those accounts for his use.

Shortly after Rotta changed the account documentation, the IRS began auditing Rotta. During the audit, Rotta falsely denied that he owned the assets in the foreign financial accounts and, instead, claimed that the millions of dollars he withdrew from the accounts were non-taxable loans from foreign nationals. Rotta provided the IRS with fake promissory notes and false affidavits from the foreign nationals to corroborate his claims. During the audit, Rotta continued to use the funds in his foreign accounts to fund his lifestyle in the United States, but to conceal his use of the funds from the IRS, he often routed transfers from his foreign accounts through nominee accounts and attorney trust fund accounts in the United States.

The IRS did not believe Rotta’s story and assessed millions of dollars of additional taxes as well as penalties and interest against him. Rotta sought to reverse the assessments by filing a false petition in U.S. Tax Court. In that petition, Rotta, through his attorney, falsely denied having any foreign accounts and attached fictitious loan documents. Furthermore, the nominee account owners traveled to the United States to retell the false loan story to IRS attorneys.

In 2017, after Rotta presented evidence that the purported loans had been repaid, the IRS reversed the deficiencies and agreed that Rotta owed no additional tax. Unbeknownst to the IRS, however, the “loan repayments” were fake: the funds that Rotta purportedly repaid went back into accounts that Rotta controlled shortly after the IRS dismissed the suit. Also as part of the conspiracy, Rotta had his U.S.-based attorneys create sham trust structures that he used to transfer his assets to the United States without alerting the IRS. On paper, it appeared that Rotta’s co-conspirator funded the trusts for Rotta’s benefit. In reality, Rotta funded the trusts with transfers from Swiss accounts.

In 2019, Rotta became aware that the IRS would receive additional account records from Switzerland that contradicted the false claims that he had previously made. To avoid criminal liability, Rotta applied to participate in the IRS’s voluntary disclosure practice. Under that practice, taxpayers who failed to comply with their tax and reporting obligations can make timely, accurate, and complete disclosures of their conduct, which may offer a path to resolve their non-compliance and limit their criminal exposure. Rotta made false statements in his submission, including falsely claiming that the assets in the Swiss accounts mostly belonged to others, and that any funds provided to Rotta were non-taxable gifts. Rotta also claimed that the nominee account owner gifted Rotta money because the nominee had no children to benefit from the funds. In fact, the nominee had two children.

Rotta is scheduled to be sentenced on June 4. He faces a maximum penalty of five years in prison. 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, U.S. Attorney Hayden O’Byrne for the Southern District of Florida, and Executive Special Agent in Charge Kareem Carter of IRS Criminal Investigation (IRS-CI)’s Washington, D.C., Field Office made the announcement.

Special Agents from IRS-CI’s International Tax & Financial Crimes specialty group, a team based out of Washington, D.C., and dedicated to uncovering international tax crimes, is investigating the case.

Senior Litigation Counsels Sean Beaty and Mark Daly and Trial Attorneys Patrick Elwell and William Montague of the Tax Division, as well as Senior Litigation Counsel Christopher J. Clark for the Southern District of Florida, are prosecuting the case.

Source: United States Department of Justice

The Federal Task Force to Combat Antisemitism announced that the Justice Department filed a statement of interest in the Central District of California to advance the appropriate interpretation of federal laws that prohibit colleges and universities from discriminating against students because of their religion or national origin. The statement of interest is part of the Task Force’s nationwide effort to combat antisemitism in all of its forms.

According to the allegations in Frankel et al. v. Regents of the University of California et al., in the spring of 2024 administrators of the University of California system allowed members of a protest encampment to physically prevent University of California, Los Angeles (UCLA) students and faculty from accessing portions of the UCLA campus if they were wearing articles reflective of their Jewish faith or if they refused to denounce Israel.

The plaintiffs are Jewish students and a Jewish professor at UCLA who allege that the university knowingly acted in concert with or allowed members of the protest encampment to prevent them from accessing a central campus space and adjacent classrooms and library on the basis of their Jewish faith or national origin in violation of Title VI of the Civil Rights Act of 1964 (Title VI), the Fourteenth Amendment’s Equal Protection Clause, and California state law. The United States’ statement of interest addresses the sufficiency of plaintiffs’ claims that defendant administrators violated Title VI and the Equal Protection Clause.

The Justice Department recently announced the formation of a multi-agency task force coordinated by the Civil Rights Division to combat antisemitism, which is visiting 10 university campuses that have experienced antisemitic events. The Department also recently announced its investigation into the University of California to assess whether the university system engaged in a pattern or practice of discrimination based on race, religion and national origin against its professors, staff and other employees by allowing an antisemitic hostile work environment to exist on its campuses, including UCLA. The Task Force also recently announced that the Department, together with other federal agencies, would cancel $400 million in federal contracts and grants to Columbia University due to the school’s inaction in the face of persistent harassment of Jewish students.

“The President, Attorney General Pam Bondi, and the Task Force know that every student must be free to attend school without being discriminated against on the basis of their race, religion or national origin,” said Leading Task Force member and Senior Counsel to the Assistant Attorney General for Civil Rights Leo Terrell. “The Department of Justice is working to combat antisemitism using all of the tools at our disposal.”

“Discrimination of any kind will not be tolerated in our community,” said Acting U.S. Attorney Joseph McNally for the Central District of California. “Our office will enforce anti-discrimination laws to address the issue of antisemitism affecting our residents.”

To learn more about the Civil Rights Division visit www.justice.gov/crt, and to report possible violations of federal civil rights laws go to www.civilrights.justice.gov or call toll-free at 800-253-3931.

Source: United States Department of Justice

President Trump has been clear that securing the Southwestern Border of the United States is a priority of the absolute highest level. To that end, the Department of Justice is prosecuting every possible immigration violation, including first-time illegal entry cases, and is seeking a meaningful prison sentence in every possible case.

Last week, the U.S. Attorneys for Arizona, Western Texas, Southern Texas, New Mexico, and Central California charged more than 750 defendants with criminal violations of U.S. immigration laws.

“The District of Arizona has brought immigration-related criminal charges against 232 defendants. Specifically, the United States filed 92 cases in which aliens illegally re-entered the United States, and the United States also charged 124 aliens for illegally entering the United States.”

“The Western District of Texas announced [Friday], that federal prosecutors in the district filed 215 immigration and immigration-related criminal cases. Several individuals were charged with illegal reentry after deportation, after being found in local area jails.”

The Southern District of Texas announced Friday “A total of 245 new cases have been filed. Of those, 115 are charged with illegally re-entering the country with the majority having felony convictions such as narcotics, violent and/or sexual crimes and prior immigration offenses. A total 118 face charges of illegally entering the country, 10 cases involve various instances of human smuggling, and the remainder relate to firearms and assault of federal officers.”

The Central District of California “filed charges against 16 defendants who allegedly illegally re-entered the United States after being removed. Many of the defendants charged were previously convicted of felony offenses before they were removed from the U.S., offenses that include sexual abuse of children. One of the defendants is charged in state court with a murder in Inglewood last month.”

The District of New Mexico “brought the following criminal charges in New Mexico: 38 individuals were charged this week with Illegal Reentry After Deportation (8 U.S.C. 1326), 5 individuals were charged this week with Alien Smuggling (8 U.S.C. 1324), and 22 individuals were charged this week with Illegal Entry (8 U.S.C. 1325).”

We are grateful for the hard work of our border prosecutors in bringing these cases and helping to make our border safe again.