From the Crime Desk, December 2023

This version of From the Crime Desk covers guilty pleas, convictions, sentences and more for the month of December 2023.

Sentenced.

Joaquin Sosa, of New Bedford, Massachusetts, was sentenced to 18 months in prison for evading taxes on income he earned as a commercial fisherman. Despite receiving approximately $1.9 million in income between 2012 and 2021, Sosa did not file tax returns reporting the income and did not pay the income taxes owed on that income. To conceal the source and disposition of his income, Sosa cashed his paychecks from fishing companies at check-cashing businesses, at times using false identities, and used the cash to fund his personal lifestyle. In total, Sosa caused a tax loss to the IRS of $520,415.

A Maryland man, Ronald Eugene Watson, also known as Sabir Muhammad, was sentenced to 27 months in prison for preparing and filing false tax returns on behalf of his clients following his conviction by a federal jury in Greenbelt. Watson was a self-employed tax return preparer in Largo, Maryland. According to the evidence, Watson willfully prepared and electronically filed tax returns with the IRS on behalf of his clients, which falsely reported income and deduction information, including fictitious or overstated business and unreimbursed employee expenses. The false deductions reduced clients’ tax liability, often resulting in large, inflated refunds to which they were not entitled. According to witness testimony, Watson varied his preparation fees depending on the amount of the refund requested, with fees typically ranging from $500 to $1,500.

Former Illinois resident, Erica Early, a postal worker who also worked as a tax preparer, was sentenced to 14 months in prison for willfully preparing false tax returns on behalf of her clients. Based on court documents, Early was a “ghost preparer,” who falsely inflated her clients’ income to maximize the Earned Income Tax Credit and falsely claimed education-related credits on their behalf. She also falsified her own tax returns, claiming education credits she knew she was not eligible to receive. Initially, Early directed her fees and client refunds to her personal bank account that was then closed by the bank after detecting fraudulent activity. Early then began requiring her clients to obtain prepaid debit cards in their names that Early would use to deposit her clients’ refunds as well as receive her preparation fee, avoiding the use of traditional banks.

Las Vegas CPA Dustin M. Lewis, was sentenced to 13 months in prison for his role in separate bribery and tax fraud conspiracies. According to court documents, for about a year, Lewis conspired with and paid a public official with the US Department of Interior’s Bureau of Reclamation (USBR) more than $150,000 in bribes and kickbacks. In exchange for those payments, Lewis’ co-conspirator, who was a member of a selection committee responsible for awarding government contracts to perform auditing services for USBR programs, steered an audit contract to Lewis’s accounting firm. In addition, Lewis and his co-conspirator also conspired to file a false 2013 corporate tax return and other tax forms on behalf of six business entities that collectively claimed over $11 million in fraudulent business deductions. Lewis’ conduct caused a tax loss to the IRS of more than $1.5 million.

Deferred prosecution agreement.

Swiss private bank Banque Pictet et Cie SA admitted to conspiring with US taxpayers and others to hide more than $5.6 billion in 1,637 secret bank accounts in Switzerland and elsewhere and to conceal the income generated in those accounts from the IRS. Banque Pictet admitted that it used coded accounts, foreign trusts and entities, nominee beneficiaries, and other deceits to conceal its US clients’ income and assets. Banque Pictet entered into a deferred prosecution agreement with the Justice Department and agreed to pay approximately $122.9 million to the US Treasury.

Guilty plea.

Kassius Orlando Benson, who owned and operated Kassius Benson Law P.A., a law practice in Hennepin County, Minnesota pleaded guilty to failing to file quarterly employment tax returns and pay over taxes withheld from his employees’ wages to the IRS. In total, Benson caused a tax loss to the IRS of approximately $213,000.

Swiss national and former financial services company executive, Rolf Schnellmann, pleaded guilty to conspiring to defraud the United States for his role in a scheme to help high-net-worth US taxpayers conceal their income and assets in offshore accounts. According to court documents, Schnellmann was the former head of Allied Finance Trust AG, a Zurich-based financial services company and a subsidiary of the Allied Finance Group in Liechtenstein. From approximately 2008 to 2014, Schnellmann and his co-conspirators defrauded the IRS by concealing income and assets of high-net-worth US taxpayer-clients in undeclared bank accounts at Privatbank IHAG Zurich AG (IHAG), a Swiss private bank.

Convictions.

Ehrenfriede Kauapirura, a Brooklyn hospital dietician, was convicted by a jury of filing and aiding in the filing of false tax returns, obstructing the IRS and willfully failing to file tax returns. The IRS paid Kauapirura $500,000 in refunds she claimed on two returns that reported hundreds of thousands of dollars in fictitious tax withholding. After the IRS determined that Kauapirura’s claims were fraudulent, it began collection activity to recoup the funds it had paid to her. To thwart the IRS’s collection efforts, Kauapirura transferred money from her personal bank account to a bank account that she controlled held in the name of a purported trust. Kauapirura also submitted a bogus $1 million dollar check drawn on a nonexistent bank as payment of her tax obligations.

A federal jury convicted Kevin M. Kennedy, of East Longmeadow, Massachusetts of conspiring to defraud the United States and making a false statement to a financial institution related to his purchase of real estate. According to the evidence, Kennedy conspired with two individuals to evade taxes he owed on income from his ownership of a company that managed two municipal golf courses on behalf of the City of Springfield. Kennedy paid, mostly in cash, to construct two custom homes in East Longmeadow and on Cape Cod. To induce the bank to provide him a mortgage for part of the East Longmeadow home, Kennedy submitted a home purchase contract to the bank that falsely reflected a total purchase price reduced by the $160,000 cash down payment he had made.