Category: US Department of Justice

Source: United States Department of Justice Criminal Division

A Florida man pleaded guilty today to orchestrating a nearly decade-long scheme to promote an illegal tax shelter and commit wire fraud. He also pleaded guilty to assisting in the preparation of false tax returns for tax shelter clients.

According to court documents and statements made in court, Stephen T. Mellinger III, of Delray Beach, was a financial advisor, insurance salesman, and securities broker operating in Florida, Michigan, Mississippi, and elsewhere. Beginning in late 2013, Mellinger conspired with others to promote an illegal tax shelter whereby clients would claim false tax deductions for so-called “royalty payments” to fraudulently reduce their taxes.

In reality, as Mellinger knew, the “royalty payments” were merely a circular flow of money designed to give the appearance of genuine business expenses. Typically, a client would send money to bank accounts controlled by Mellinger and other co-conspirators, who then sent the money — less a fee — right back to a different bank account that the client controlled. In this way, tax shelter participants retained control of the money they transferred, while falsely deducting the transfers as business expenses on their tax returns.

In total, Mellinger and his co-conspirators helped clients prepare tax returns that claimed over $106 million in false tax deductions, which caused a tax loss to the IRS of approximately $37 million.

Mellinger and a co-conspirator who was a relative, collectively earned approximately $3 million in fees from promoting the scheme.

In January 2016, Mellinger learned that several of his clients were being investigated and that the United States had started seizing their funds. Mellinger and a relative subsequently stole more than $2.1 million of funds from some of those clients, some of which he used to buy a home in Delray Beach.

Mellinger is scheduled to be sentenced on Sept. 16, and faces a maximum penalty of five years in prison for conspiring to defraud the IRS and commit wire fraud, and three years in prison for aiding in the preparation of false tax returns. 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, Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, and Acting U.S. Attorney Patrick A. Lemon for the Southern District of Mississippi made the announcement.

IRS Criminal Investigation and the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service are investigating the case.

Trial Attorneys Richard J. Hagerman, William Montague, and Matthew Hicks of the Tax Division, Assistant U.S. Attorney Charles W. Kirkham for the Southern District of Mississippi, and Trial Attorneys Emily Cohen and Jasmin Salehi Fashami of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case.

Source: United States Department of Justice Criminal Division

This week, Attorney General Pam Bondi directed the Department of Justice’s Civil Rights Division to dismiss lawsuits against various jurisdictions across the country involving the hiring of police officers and firefighters. These lawsuits, launched by the previous administration, unjustly targeted fire and police departments for using standard aptitude tests to screen firefighter and police officer candidates.

“American communities deserve firefighters and police officers to be chosen for their skill and dedication to public safety – not to meet DEI quotas,” said Attorney General Bondi.

Despite no evidence of intentional discrimination — only statistical disparities — the prior administration branded the aptitude tests at issue in these cases as discriminatory in an effort to advance a DEI agenda. And it sought to coerce cities into conducting DEI-based hiring in response and spending millions of dollars in taxpayer funds for payouts to previous applicants who had scored lower on the tests, regardless of qualifications.

President Trump and Attorney General Bondi are dedicated to ending illegal discrimination and restoring merit-based opportunity nationwide, and in all sectors. But doing so is particularly important for front-line public-safety workers who protect our nation, including firefighters and police officers. Prioritizing DEI over merit when selecting firefighters and police officers jeopardizes public safety.

Today’s dismissal is an early step toward eradicating illegal DEI preferences across the government and in the private sector. 

Source: United States Department of Justice

A Delaware corporation with a manufacturing facility in Ohio pleaded guilty today in federal court in the Southern District of Ohio to a charge of willfully violating an Occupational Safety and Health Administration (OSHA) rule. The criminal charge is related to an incident where an employee was killed when a pneumatic door closed on his head.

Fabcon Precast LLC (Fabcon) operates several facilities in the United States, including one in Grove City, Ohio, that manufactures precast concrete panels. At Fabcon, employees known as batch operators were responsible for the operation and cleaning of the facility’s only concrete mixer. Concrete was discharged from the bottom of the mixer through a pneumatic door. By design, the mixer had an exhaust valve that released the pneumatic energy powering the discharge door, rendering it inoperable. Some months prior to June 6, 2020, the handle that operated the valve broke off and was not replaced.

On June 6, 2020, Zachary Ledbetter, 20, a batch operator since January 2020, was on duty when the discharge door failed to close after releasing a batch of concrete. Because the valve was broken, Ledbetter could not perform the proper procedure to make the door safe to work around. When he attempted to free the door it closed on his head, trapping him. Eventually, Ledbetter was freed and transported to a hospital where he died five days later.

Federal law makes it a class B misdemeanor to willfully fail to follow an OSHA safety standard, where the failure causes the death of an employee. The class B misdemeanor is the only federal criminal charge covering such workplace safety violations.

Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department’s Environment and Natural Resources Division, Acting U.S. Attorney Kelly A. Norris for the Southern District of Ohio, and Acting Special Agent-in-Charge Megan Howell of the Department of Labor’s Office of Inspector General, Great Lakes Region, made the announcement.

The Department of Labor’s Office of Inspector General investigated the case.

Senior Trial Attorney and Special Assistant U.S. Attorney Adam Cullman, of the Environment and Natural Resources Division’s Environmental Crimes Section and for the Southern District of Ohio respectively, prosecuted the case.

Source: United States Department of Justice Criminal Division

Today, Attorney General Pamela Bondi issued letters to officials in California, Maine, and Minnesota warning them to comply with federal antidiscrimination laws that require them to keep men out of women’s sports.

“This Department of Justice will defend women and does not tolerate state officials who ignore federal law,” said Attorney General Pamela Bondi. “We will leverage every legal option necessary to ensure state compliance with federal law and President Trump’s executive order protecting women’s sports.”

As President Trump’s recent executive order on this subject explains, allowing men and boys to compete in women’s and girls’ sports “is demeaning, unfair, and dangerous to women and girls.” The practice is also illegal under federal law: it denies women and girls the equal opportunity to participate and excel in competitive sports, in violation of Title IX of the Educational Amendments Act of 1972.

Source: United States Department of Justice

A Missouri woman pleaded guilty today in the Western District of Tennessee for her role in a scheme to defraud Elvis Presley’s family of millions of dollars and to steal the family’s ownership interest in Graceland, Elvis Presley’s former home in Memphis, Tennessee.

According to court documents, Lisa Jeanine Findley, 53, of Kimberling City, orchestrated a scheme to conduct a fraudulent sale of Graceland — using a fake company, forged documents, and false court filings — by falsely claiming that Elvis Presley’s daughter had pledged Graceland as collateral for a loan that she failed to repay before her death. Findley threatened to foreclose on Graceland and auction it to the highest bidder if Elvis Presley’s family did not pay or settle the claim against the estate.

Findley pleaded guilty to one count of mail fraud. She is scheduled to be sentenced on June 18 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, Acting U.S. Attorney Reagan Taylor Fondren for the Western District of Tennessee, Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group, and Special Agent in Charge Joseph E. Carrico of the FBI Nashville Field Office made the announcement.

The USPIS and FBI Nashville Field Office are investigating the case.

Trial Attorney Aaron Henricks of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Carroll L. André III for the Western District of Tennessee are prosecuting the case. Fraud Section Assistant Chief Cory E. Jacobs and Trial Attorney Christopher Fenton provided substantial assistance with the investigation and prosecution.