John M. Moore sentenced to Prison for Filing False Tax Returns

February 4, 2015

A tax preparer, John M. Moore, 53, was sentenced to 78 months in federal prison for filing false tax returns that cost a Kansas company more than $744,000.

Tax Fraud1Moore pleaded guilty to one count of filing a false tax return and one count of wire fraud. In his plea, he admitted a company he owns, Accent Payroll Services (APS), was hired to provide payroll processing services for Tytan International L.L.C. of Lenexa, Kan. From 2008 to 2010, APS was responsible for paying the wages of Tytan’s employees, withholding employment taxes, filing Tytan’s employment tax returns on Internal Revenue Service form 941 and paying withheld employment taxes to the IRS.

Moore transferred more than $2 million in employment tax withholdings from Tytan’s bank account to his company’s bank account. However, he only paid the IRS approximately $1.3 million. To keep Tytan from receiving notices from the IRS that taxes were not paid, Moore gave the IRS an address for Tytan at a post office box he controlled.

“These victims trusted Mr. Moore to properly remit their taxes, but instead he used their funds for his own purposes. Unfortunately, these victims are left holding the bag,” said Sybil Smith, Special Agent in Charge of IRS Criminal Investigation. “Businesses who utilize a third party for paying their payroll taxes must realize that if the taxes aren’t paid, they are ultimately responsible for the tax liability. The IRS will work with victims to set up payment plans or possibly reduce penalties.”

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Tax Fraud Scheme earns Georgia man Prison Sentence

February 2, 2015

A Georgia man, Sirhon “Ron” Rivers, 40, was sentenced in federal court to eight years and six months in federal prison without parole for a wire fraud scheme in which he used the identity information of deceased persons to obtain more than $2.3 million in tax refunds from several states.  The court also ordered Rivers to pay $2,358,612 in restitution.

Tax FraudOn Sept. 14, 2014, Rivers pleaded guilty to one count of wire fraud, one count of aggravated identity theft, one count of conspiracy to commit money laundering and one count of conspiracy to commit wire fraud and aggravated identity theft.

Rivers admitted that he unlawfully obtained $547,000 from the Missouri Department of Revenue from January 2008 to August 2012 by filing fraudulent tax returns. Rivers used the same scheme in others states—including Kansas, Alabama, Arizona, Connecticut, Delaware, Georgia, Idaho, Louisiana, Michigan, Minnesota, New York, North Carolina, North Dakota, Oklahoma, Rhode Island and Virginia—to unlawfully acquire a total of $2,365,617 in fraudulent state tax refunds.

Rivers obtained personal identification information—including names, Social Security numbers, and dates of birth—from deceased persons. He submitted state tax returns using that information, adding false and fraudulent information such as employment and wages earned. State tax returns were submitted electronically, with the refunds electronically transferred to bank accounts that Rivers opened at several financial institutions.


John C.McBride – Disbarred Attorney Guilty of Bank Fraud

January 27, 2015

A Marblehead man pleaded guilty to tax and bank fraud violations, primarily for recording fraudulent federal tax lien releases on properties he owned in Marblehead and Edgartown.

Bank Fraud 1John C. McBride, 65, pleaded guilty before U.S. District Chief Judge Patti B. Saris to endeavoring to obstruct and impede the due administrations of the Internal Revenue laws and bank fraud.  McBride, who was indicted in June 2013, is scheduled to be sentenced on April 28, 2015.

In early 2008, McBride, a now-disbarred criminal defense lawyer, recorded six fraudulent federal tax lien releases against his Marblehead home, in order to obtain a $288,000 loan secured by that property and deprive the IRS of its nearly $700,000 secured interest.  McBride prepared the releases himself, without the knowledge or authorization of the IRS, and forged the signatures of IRS officials on them.  In March 2008, McBride attempted, unsuccessfully, to record two similar fraudulent tax lien releases against a second home he owned in Edgartown, on Martha’s Vineyard.  In 2011, McBride attempted to obtain a $387,000 reverse mortgage loan from Bank of America, which was to have been secured by his Edgartown property.  In connection with that loan application, McBride falsely told the bank that there were no liens on the Edgartown property and that he was not then in bankruptcy.  In fact, there were substantial liens on the property and McBride’s bankruptcy case, which he had filed in 2009, was still ongoing.  In furtherance of his effort to obtain the bank loan, McBride prepared and recorded a fraudulent and unauthorized discharge of mortgage which purported to discharge a more than $700,000 existing mortgage on his Edgartown property.  Bank of America discovered that the discharge was fraudulent before the loan closed, and no funds were disbursed to McBride.

The charge of bank fraud provides a sentence of no greater than 30 years in prison and three years of supervised release.  The charge of endeavoring to obstruct and impede the due administrations of the Internal Revenue laws is three years in prison and one year of supervised release.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.


John Winston Boone Sentenced to Prison for Website Domain Fraud

January 18, 2015

A Northern California man who defrauded 18 victims by selling website domains that he falsely claimed would generate substantial advertising revenue was sentenced today to 120 months in federal prison.

Internet FraudJohn Winston Boone, 51, of Novato, was sentenced by United States District Judge Otis D. Wright II, who called the defendant’s conduct “cruel and callous.”

In addition to the 10-year prison term, Judge Wright ordered Boone to pay $1,219,138 in restitution to the victims, who reside across the United States and in Canada.

During today’s hearing, Judge Wright said Boone “showed a lack of humanity that was so base and so depraved.”

Boone pleaded guilty in November 2013 to two counts of wire fraud, admitting that he engaged in a five-year-long fraud scheme that targeted victims who wanted to own online businesses that would allow them to work from home. Boone offered the websites for sale in advertisements he placed on popular business websites, such as Bizquest.com and BizBen.com. When prospective buyers responded to his ads, Boone sent them phony financial records that falsely showed the websites had generated advertising revenue in the past. As part of his scheme, Boone lied about his employment background and falsely promised to provide training and other assistance in setting up the websites. After the victims paid money, Boone failed to provide any training or other support he promised, and the websites, with one small exception, never generated any income. When victims discovered the scam, Boone ceased all contact with them and he never returned their money.

Boone is a “financial predator, a master manipulator and a pathological liar who will do or say anything to steal money from his victims,” prosecutors wrote in a sentencing memo filed with the court. Prosecutors also cited Boone’s callous conduct, describing how he defrauded one victim knowing he was disabled, and defrauded another victim knowing he had large medical bills to pay.

Boone displayed predatory conduct, according to the government’s sentencing papers. After a victim sued him for return of her $60,000 down payment, Boone counter-sued her for the full amount of the $100,000 bogus contract and won, and then harassed her for payment with the knowledge that she suffered from panic attacks.

“For 30 years, nothing has deterred him – not criminal investigation or prosecution, not civil judgments, and not distraught victims,” according to prosecutors, who described the defendant as “extraordinarily charismatic and manipulative, while lacking any conscience.”


Brad Stinn Sentenced – Every Choice Has A Consequence – Update by Chuck Gallagher Ethics Speaker

April 29, 2009

On of the most viewed Blog entries was the one about Brad Stinn and Friedman’s Jewelers.

Pump up those sales! We’ve got to make the quarter! How often are those command heard and how tempting is it to make the wrong choices in order to please the investing public and Wall Street?

Following six weeks of trial – Bradley Stinn, age 47, – former CEO of Freidman’s, Inc. and Crescent Jewelers, found himself being convicted of securities fraud, mail fraud and conspiracy. Likewise, in addition to Stinn’s conviction, the former CFO, Victor Suglia and form Controller, John Mauro have entered guilty pleas into what was a massive accounting fraud.

Having been found guilty, the wheels of justice in the federal system move slowly at times.  Many have wondered just what outcome would befall Brad Stinn  prison1who some hated and others sympathized with.  Well, today the verdict has been handed down.

His sentence:

12 years in federal prison

3 years probation

$4M restitution

He should report sometime in the next 60 days

Speaking from experience, Stinn will be required to serve 85% of his active sentence, which means that he’ll serve 122.4 months – which is a long time!

US Attorney’s New Release:

Bradley Stinn, the former Chief Executive Officer of Friedman’s Inc. and its affiliate, Crescent Jewelers, was sentenced today to 12 years’ imprisonment for securities fraud, mail fraud, and conspiracy. On March 24, 2008, following a six-week trial, a federal jury in Brooklyn convicted Stinn on all counts in the indictment and returned a forfeiture verdict against him in the amount of $1,019,000. The trial and sentencing proceeding were held before Senior United States District Judge Nina Gershon.

The sentence was announced by Benton J. Campbell, United States Attorney for the Eastern District of New York.

During the period of the conspiracy, Friedman’s was a national jewelry chain whose shares were traded on the New York Stock Exchange. The evidence at trial established that Stinn led a multi-year securities fraud scheme that inflated Friedman’s reported financial performance and hid from the market the serious problems the company had collecting money owed for hundreds of millions of dollars of jewelry that it had sold on credit. As part of the scheme, Stinn and his co-conspirators repeatedly lied to shareholders and the investing public about Friedman’s financial performance, made false and fraudulent representations to Friedman’s auditors, and manipulated the company’s accounting in order to prevent auditors from discovering the falsity of Friedman’s financial statements. As found by the court at sentencing, Stinn’s fraud scheme resulted in Friedman’s shareholders and other victims of the scheme losing more than $20 million.

Several months after the announcement of the government’s investigation in November 2003, Friedman’s stock was de-listed from the New York Stock Exchange. Friedman’s ultimately filed for bankruptcy in January 2005.

As always, this blog is open for comments.

Do you think that this sentence is fair?

Would you, if you had the opportunity to serve on a jury, have given Brad – more, less or this amount a punishment for his guilty plea?

COMMENTS ARE WELCOME!


Ethics Speaker Chuck Gallagher to Address University of South Dakota Business Ethics Symposium

April 26, 2009

VERMILLION, S.D. – During troubled economic times, Chuck Gallagher isn’t afraid to share his story of success – and how he lost it all. Gallagher, a business executive and motivational speaker, will be a guest of the Beacom School of Business of The University of South Dakota on Monday, April 27 at 7 p.m. in the Wayne S. Knutson Theatre.

Gallagher, a former CPA who lost everything because of poor choices, will present the program “Choices: Negative Consequences, Positive Results” where he will discuss some of the decisions he made in his attempts to make a better life for he and his family. Gallagher eventually lost it all, spent time in federal prison, but has found success again by making the right choices – personally and professionally.

“My lecture deals with issues of business ethics, particularly the choices we make in life and the consequences that follow,” says Gallagher. “Having been a successful CPA in the 80s, spent time in federal prison in the 90s and risen to the level of senior VP in a public company in the 2000s, I can speak from experience that I’ve lived with negative consequences thanks to some very stupid choices I made. But I’ve also had some incredible positive results based on the choices I made after spending time in a federal prison.”

Gallagher’s message is sure to resonate with students who are seeking answers on what it takes to be successful in today’s business world despite the presence of poor ethics and negative consequences. Ultimately, he explains, it’s about students differentiating themselves – positively – from their peers.

“I’m the poster child of what not to do,” he admits. “Ethical issues aren’t always black and white. If you want to be successful, ask the question ‘what are you doing to differentiate yourself?’”

A professional speaker, business entrepreneur, and sales executive, Gallagher has led a $40 million sales region with 125 sales representatives and started his own training business with projects in 30 states. Gallagher currently helps employees increase their sales results and skills while realizing the ramifications of their ethical choices. In addition to addressing students and audiences at colleges and universities throughout the United States, Gallagher also shares his business ethics message with business-related and health care related organizations.

“Choices: Negative Consequences, Positive Results” is made possible by the Beacom Opportunity Fund and the Arthur A. Volk Symposium. The Beacom Opportunity Fund provides resources for initiatives that promote the Beacom School of Business’s students and programs. Funding from the Volk Symposium affords opportunities for the business school to bring together students, academicians, and business leaders for discussion of current topics of interest. For more information about “Choices: Negative Consequences, Positive Results,” please contact the Beacom School of Business at (605) 677-5455.

A photograph of Gallagher is available for download at http://www.usd.edu/urelations/images/Chuck_Gallagher.jpg.

About The University of South Dakota
Founded in 1862, The University of South Dakota is designated as the only public liberal arts university in the state and is home to a comprehensive College of Arts and Sciences, School of Education, the state’s only School of Law, School of Medicine, School of Health Sciences, the accredited Beacom School of Business and the College of Fine Arts. It has an enrollment of approximately 9,200 students taught by 400 faculty members. More information is available at http://www.usd.edu/press/news.


Funeral Fraud – LA Women Charged in $1 Million Fake Funeral Scam – AMAZING!

April 13, 2009

I have heard of many things, but this one ranks high in creative approaches to scamming.  The R I P button likely stands for Resides In Prison cause that’s where these two will go if the charges alleged are proven.

According to the US Attorney’s office in LA – two women – allegedly participated in a scheme to cash life insurance policies for fictitious individuals and istock_000006314744xsmallstage  funerals to create the appearance that the individuals had died.

According to the indictment, Shilling, a phlebotomist, and Crump, an employee at a now-defunct Long Beach mortuary, defrauded multiple insurance companies over a three-year period by cashing life insurance policies for non-existent identities, whom they claimed had died. As part of the scheme, Shilling and Crump allegedly caused the preparation of bogus death certificates, purchased burial plots and staged phony funerals to lend credibility to the scheme. When staging the funerals, the women allegedly filled caskets with various materials to make it appear they contained actual corpses.

Shilling and Crump allegedly defrauded several lending companies that advance cash to cover funeral expenses in exchange for a portion of the decedent’s life insurance policy. Shilling, Crump and their accomplices allegedly filed false documents with the County of Los Angeles stating the remains of one man were cremated and scattered at sea, when in fact no corpse existed. The indictment further alleges that defendant Crump offered a medical doctor $50,000 to create records supporting the fake death certificate.

According to a report in Connectingdirectors.com:

The US Attorney stated said the “dead” were likely fictitious people, but said identities of real people may have been stolen.

In one funeral at a Long Beach mortuary, authorities alleged that the women loaded a casket with various items to simulate the weight of a corpse they called “Jim Davis.” They purchased a plot in a Compton graveyard, had a funeral and had the casket buried.

In addition to the life insurance claims, which included a $250,000 policy, prosecutors said the women secured payments from financing companies to pay for inflated funeral costs.  We talked with representatives from American Funeral Financial (one of our sponsors) to ask about precautions for such activity.

We (at American Funeral Financial) work hard to provide service to our customers – the many funeral homes and cemeteries across the country that rely on us for funeral funding.  This story is quite amazing and not remotely normal in the standard course of business.  We make sure that we know our customers and have a comfort level of their viability before we enter into any funding transactions.  The steps we deal with to make funeral funding decisions should prevent this type of fraud from happening.  Still this is quite amazing.

Shilling and Crump were charged with mail fraud and wire fraud in connection with a scheme to defraud insurance companies and lending companies out of more than $750,000.  Two other women, Lydia Eileen Pearce, 37, owner of a mortuary in Long Beach, and Barbara Lynn, 54, a notary from Los Angeles, previously pleaded guilty in the alleged scam, said Montero, and he believed that more arrests were likely.

If convicted, they could face 20 years in prison.

YOUR COMMENTS WELCOME!