Top boss no more; wrong slide of the law; the run’s over; and other highlights of recent tax cases.
Houston: Hitesh Madhubhai Patel, a.k.a. Hitesh Hinglaj, 44, of Ahmedabad, India, has been sentenced to 20 years in prison for his role in operating and funding India-based call centers that defrauded U.S. victims out of millions.
Patel and his conspirators perpetrated a complex scheme in which employees from call centers in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services and engaged in other telephone scams to defraud victims throughout the U.S. Victims were threatened with arrest, imprisonment, fines or deportation if they did not pay money supposedly owed to the government. Those who fell victim were instructed how to provide payment, including by purchasing general purpose reloadable cards or wiring money. Upon payment, the call centers would turn to a network of runners in the U.S. to liquidate and launder the stolen funds.
Patel admitted to operating and funding several India-based call centers from which the fraud schemes were perpetrated; Patel corresponded by email and WhatsApp messaging frequently with his co-defendants to exchange credit card numbers, telephone scam scripts and call center operations instructions. The scripts included impersonations of the IRS, Immigration Services, the Canada Revenue Agency and the Australian Tax Office, as well as payday loan fraud, U.S. government grant fraud and debt collection fraud.
A co-defendant described Patel as “the top person in India and the boss for whom most of the other defendants worked,” and the owner of multiple call centers. Another stated Patel was arrested in India in 2016, but then paid a bribe and was released. Additionally, Patel admitted that “a reasonably foreseeable loss” of $25 million to $65 million was attributable to him, based on evidence.
Patel was prosecuted in the United States after being extradited from Singapore in April 2019 to face charges in this large-scale tele-fraud and money laundering scheme. The indictment, unsealed in October 2016, charged Patel and 60 other individuals and entities with general conspiracy, wire fraud conspiracy and money laundering conspiracy. Twenty-four U.S. defendants associated with this transnational criminal scheme were previously convicted and sentenced to terms of imprisonment of up to 20 years. The defendants were also ordered to pay millions in victim restitution and money judgments and to forfeit seized assets. Some defendants were ordered deported based on illegal immigration status, with another defendant having his U.S. citizenship revoked due to a separate conviction for immigration fraud.
Patel was also ordered to pay $8,970,396 in restitution to identified victims.
Durham, North Carolina: Preparers Karen Marie Jones and Audrey Renetta Odom have pleaded guilty to conspiring to defraud the U.S.
Jones owned the prep service Jones and Stone Taxes and from 2012 through 2016 she and Odom, another preparer at Jones and Stone, conspired to falsify returns by fabricating education expenses, among other items, to inflate clients’ federal refunds. The pair charged some clients up to $2,000 for preparing each return.
In total, they caused a federal tax loss of more than $1.2 million.
Odom’s sentencing is Feb. 19; Jones will be sentenced on Feb. 25. They each face a maximum of five years in prison, as well as a period of supervised release, restitution and monetary penalties.
Cassville, Missouri: Jerry Don Beebe, 67, owner of a waterslide attraction, has pleaded guilty to making a false return.
He owned and operated Beebe’s Roaring River Waterslide during the period under investigation from 2015 to 2018. Beebe admitted that he filed false federal income tax returns for those tax years because he did not want to pay additional taxes.
Beebe was interested in selling his business and met with an undercover federal agent, posing as a potential buyer, on two occasions in October 2018 and June 2019. During the meetings, Beebe showed the undercover agent records documenting the business’s true gross receipts, which differed from what Beebe reported on his federal tax returns.
Beebe’s records showed gross receipts of $135,282 for 2017 (when he reported $24,535 on his return) and $145,451 for 2018 (when he reported $29,172 on his return). Beebe told the undercover agent that he had destroyed records for 2015 and 2016 but stated he had gross receipts of at least $70,000 for each of these years. Beebe admitted that he routinely destroyed his business records, telling the agent that he was in “the mode of secrecy.” When showing the agent his 2017 and 2018 records, Beebe said he was “gun shy” and wouldn’t have these records much longer and used cash whenever possible. The records were later recovered during searches of Beebe’s business and residence in July 2019.
Beebe must pay $141,648 in restitution for unpaid federal and Missouri taxes. He faces up to three years in prison.
Orlando, Florida: Resident Douglas V. Oakes has pleaded guilty to tax evasion.
Oakes tried to dodge federal income taxes for tax years 2002 to 2005. In August 2015, after the IRS initiated collection, Oakes submitted a statement saying he was not employed or self-employed, earned no income and did not have a financial interest in any business entities. In fact, at that time Oakes was working for Dealerindustry.com, a company in which he had a significant financial interest and from which he was earning some $400,000 annually. He registered his daughters and others as managing members with the Florida Department of State, removed his name from the company’s website and bank account and closed his LinkedIn profile.
In September 2015, he submitted a sham rent agreement to the IRS saying that he and his wife were renting their lakefront home in Orlando from Dealerindustry for $1 a month. That November, he further tried to conceal his assets by using a nominee’s name when purchasing a beachfront home for $1 million. In July 2017, following the death of his daughter, Oakes and another individual caused posthumous returns to be prepared for his deceased daughter in which Dealerindustry’s income from 2010 through 2015 was falsely claimed to be entirely his deceased daughter’s income. In fact, between 2010 and 2015, Oakes earned some $2.2 million in income.
The federal tax loss totaled $1,112,651. Oakes faces a maximum of five years in prison.
Las Vegas: Preparer Baby Vasquez Beltran, 53, has pleaded guilty to preparing and filing fraudulent returns.
Since at least 2008, she operated Speed Refund Tax Services and claimed deductions to which her clients were not entitled. In total, for tax years 2012 through 2016, Beltran caused at least $1.5 million in tax loss to the IRS.
Sentencing is March 4. She faces up to three years in prison and a $250,000 fine.
Revere, Massachusetts: Gennaro Angiulo, of Nahant and Saugus, Massachusetts, and owner of a towing company, has pleaded guilty to a payroll scheme that defrauded the government of more than $3.3 million.
For tax years 2014 through at least 2017, Angiulo paid a portion of the wages to employees of his company, GJ Towing, under the table, failing to collect or pay over federal withholding and FICA taxes. The cash payments to employees were funded, at least in part, by cashing checks from clients of GJ Towing and other third parties in groups totaling not more than $10,000 in a day.
Willful failure to collect and pay over taxes is subject to a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Evading cash transaction reporting requirements provides for a sentence of up to 10 years in prison, up to five years of supervised release, a fine of $500,000 and forfeiture. Angiulo is also required to pay restitution to the IRS. Sentencing is March 2.
Johnstown, Pennsylvania: Longtime fugitive William Fabiseski, 46, of Tunkhannock, Pennsylvania, has been sentenced to 33 months in prison on his conviction of filing false claims against an agency of the U.S.
From February 2007 to August 2008, Fabiseski, while incarcerated in a state prison, prepared and filed false income tax returns using the personal ID information of his fellow inmates. The claims he prepared and filed used phony addresses and wage and withholding information. Fabiseski kept the proceeds.
After more than seven years on the run, he was caught by federal marshals in October 2019 in Scranton, Pennsylvania. Fabiseski was also sentenced to three years of supervised release and ordered to pay $82,129 in restitution to the IRS.