IRS Criminal Investigation Annual Report — Fiscal Year 2020

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ANNUAL REPORT 2020  

TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020 
Table of Contents  
4 
Messages from the Chief and Deputy
 6 
2020 Snapshot 
8 
Organizational Chart 
10 
Tax Crimes 
16 
Digital Fornesics 
20 
Non-Tax Crimes 
24 
International Operations 
27 
Narcotics, Counterterrorism, & 
Transnational Organized Crime 
28 
Specialized Units 
29 
Asset Forfeiture 
30 
Nationally Coordinated 
Investigations Unit 
31 
Commissioner's Protection Detail 
32 
Undercover Operations 
34 
National Forensic Laboratory 
36 
National CI Training Academy 
38 
Professional Staff 
39 
Equity, Diversity & Inclusion 
42 
Communications & Education 
43 
Outreach/Community Engagement 
46 
Field Office Map 
48 
Atlanta 
52 
Boston 
56 
Charlotte 
60 
Chicago 
64 
Cincinnati 
68 
Dallas 
72 
Denver 
76 
Detroit 
80 
Houston 
84 
Las Vegas 
88 
Los Angeles 
92 
Miami 
96 
Newark 
100 
New York 
104 
Oakland 
108 
Philadelphia 
112 
Phoenix 
116 
Seattle 
120 
St. Louis 
124 
Tampa 
128 
Washington D.C. 
132 
Appendix 
3 

Message from the  
Departing Chief 
It has been the honor of my life to lead the men and 
women of IRS-CI these past three years. It’s been 
an amazing run. In my 29 years with CI, I never 
imagined I would rise from a grade 5 Special Agent 
to being the Chief of this great agency. It’s truly been 
an honor. 
We have had some tremendous successes over 
the years, and I attribute those to the great 
personnel I have worked with in CI, and with our 
partners around the world. I’ve followed one simple 
philosophy: Work hard, surround yourself with 
greatness and the rest will take care of itself. During 
my tenure as Chief, we launched some important 
initiatives and the quality of our cases has never 
been higher, but it is the people I will miss the most. 
It is the people who selflessly devote their lives 
to this mission on behalf of the American people 
because they believe in the badge and all that it 
represents. 
Throughout my time with CI, I have never forgotten 
our mission and the important role we play on tax 
administration. The deterrent effect from our work 
forms the backbone of our voluntary compliance 
tax system—a system that funds our government, 
our military and our infrastructure. While criminals 
and their methods may change from year to year, 
following the money still forms the basis for 
everything we do just as it did 100 years ago. I’m 
proud of our accomplishments from this year and I 
look forward to following future successes! 
–Don Fort, Departing Chief 
Message from the  
Incoming Deputy Chief 
In fiscal year 2020, 
we continued to 
focus on case 
selection to make 
sure we worked 
the most egregious 
tax crimes in 
the country. We 
continued to 
pursue the cases 
that have the 
biggest impact on 
tax administration, 
finding ourselves 
in the headlines 
of some of the 
most talked-about 
cases of the year. 
We validated pilot 
programs and solidified units designed to better use data 
to aide in finding and solving the best financial crime 
cases. We took another step into the center of the world 
stage in solving some of the most complex cybercrimes. 
And we nourished international partnerships, broke down 
barriers of information sharing, and showed the world’s 
criminal population that there is nowhere to hide. 
CI Special Agents are in demand when it comes to 
solving complex financial crimes. As the Chief said, we 
are the only ones who can investigate tax crimes, but 
U.S. Attorneys want CI special agents involved in all 
their financial crime cases. In the international arena, 
we continue to work with our partners to break down 
barriers and work together in areas where we share 
common goals. Perhaps there is no better example of 
these types of partnerships than our work with the Joint 
Chiefs of Global Tax Enforcement, or J5. The J5 includes 
CI and our counterparts in the United Kingdom, Australia, 
Canada, and the Netherlands and focuses on enablers of 
international tax evasion and on the use of cryptocurrency 
to evade international tax obligations. 
This annual report is a proud reflection of the tremendous 
cases the Criminal Investigation Division has worked 
during fiscal year 2020. The case summaries in this 
report touch every field office, every state and nearly 
every region of the world. Though we spend most of our 
time talking about cases, it should be noted that these 
successes are a result of having the most sophisticated 
financial crime law enforcement personnel the world has 
ever seen. I look proudly at our successes in fiscal year 
2020, but also forward to accomplishing great things in 
fiscal year 2021. 
– Jim Robnett, Deputy Chief 
Message from the 
Incoming Chief 
The people in CI change throughout the years, but our 
underlying principles and our mission remain the same. 
They are what unite us and give us the structure to move 
forward seamlessly. Honor the Badge, Preserve the 
Legacy, Master Your Craft, and Inspire the Future are the 
guiding principles that IRS Criminal Investigation lives by 
and by which 2020 was defined. 
HONOR THE BADGE. As the new Chief, I am excited to 
share the FY 2020 IRS Criminal Investigation Annual 
Report. We honor the badge by remembering that the 
IRS relies on Criminal Investigation’s ability to investigate 
and recommend prosecution of criminal tax violations 
to the Department of Justice. Criminal Tax cases which 
are prosecuted and publicized provide a strong deterrent 
message to would-be tax evaders, helping to ensure the 
integrity and fairness in the tax system. Our workforce 
honors the badge by working with a sense of urgency, 
integrity, and professionalism every day. As we look 
ahead to develop and deploy the tools that will make 
us successful in the 21st Century, we must use those 
lessons learned from the past to inform our investigations 
and investigative techniques of the future. This is how we 
continue to honor the badge and our great history. 
PRESERVE THE LEGACY. Our cases continue to be some 
of the most complex and impactful cases in the world and 
regularly appear on the front page of the nation’s largest 
newspapers and websites. We are working smarter using 
data analytics to augment good old-fashioned police work 
and find those cases that have the biggest impact on tax 
administration. We are leading the world in our ability to 
trace virtual currency in financial investigations while still 
working our foundational tax enforcement mission areas. 
Our conviction rate is among the highest in federal law 
enforcement. Although many things have changed, some 
things have remained constant. That is how we preserve 
our legacy. Most crimes are still committed for financial 
gain and we are still the only federal agency authorized 
to investigate and recommend prosecution on federal 
income tax cases. 
MASTER YOUR CRAFT. The evolution of financial crime 
mirrors the evolution of money movement in general. 
The speed at which money moves today is almost 
instantaneous and the convenience that comes with 
that opens the door for criminals to exploit the latest 
technological advancements. Money disappears in the 
blink of an eye. All that is needed is a smartphone to 
move money from one location to another, anywhere in 
the world. The internet and the dark web have facilitated 
this change and law enforcement has adjusted to keep 
up. CI made significant investments in training our 
employees in the latest tactics and techniques to be 
successful in a digital financial world. These investments 
will continue. 
INSPIRE THE FUTURE. While the tools of the trade 
may have changed, criminals are still doing the same 
things they were always doing. Skimming money from a 
business to avoid employment taxes or pretending to be 
someone else to file taxes—these are things criminals 
have done since our inception. And while it is true that 
the threat and evolution of cybercrimes is real and has 
impacted all financial crimes, I’m proud of what we have 
done as an agency to position ourselves to solve these 
sophisticated crimes. Today’s cyber criminals think we 
cannot catch them, but as evidenced by some of the great 
casework in this report, it is clear we can. I’m proud of all 
we have accomplished in fiscal year 2020. I’m proud to 
lead this agency and I look forward to helping to write the 
next chapter of investigative excellence for CI. 
–Jim Lee, Chief 
4 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020 
5  

U.S. ATTORNEY'S OFFICE 
OTHER FEDERAL AGENCIES 
26% 
29% 
IRS:CRIMINAL INVESTIGATION 
14% 
BSA DATA 
13% 
IRS:CIVIL 
7% 
PUBLIC 
8% 
STATE/LOCAL GOVERNMENT 
4% 
INVESTIGATION
SOURCES 
 
 
728 
DIRECT INVESTIGATIVE TIME SPENT* 
PERCENTAGES 
*1.8% UNCATEGORIZED 
REFUND 
FRAUD 
IDENTITY 
THEFT 
EMPLOYMENT 
TAX 
ABUSIVE 
TAX SCHEMES 
GENERAL 
TAX FRAUD 
INTERNATIONAL 
CYBER CRIMES 
PUBLIC 
CORRUPTION 
CORPORATE 
FRAUD 
GENERAL 
FRAUD 
MONEY 
LAUNDERING 
OCDETF 
Organized Crime 
Drug Enforcement 
Task Force 
TAX 73.1 
13.8 
11.3 
NON-TAX 
NARCOTICS 
2009 
2020 
2020 
2019 
2019 
PROFESSIONAL 
STAFF 
13.7% 
828 
SPECIAL AGENTS 
1% 
1226
WARRANTS EXECUTED 
90.4% 
CONVICTION RATE 
$8.4B 
OTHER FINANCIAL CRIMES 
$2.3B 
TAX FRAUD IDENTIFIED 
2030 
1.27PETABYTES 
DIGITAL DATA SEIZED 
IRS:CI STAFFING 
2020 Snapshot 
6 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
7 

 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
ORGANIZATIONAL CHART
International 
Operations 
Operations, 
Policy, 
& Support 
Strategy 
Refund & 
Cyber Crimes 
Technology 
Operations & 
Investigative 
Services 
Chief of Staff 
Review & Program 
Evaluation 
Northern Area 
Field Offices 
Midstates Area 
Field Offices 
Southern Area 
Field Offices 
Western Area 
Field Offices 
Communications 
& Education 
Equity, Diversity 
& Inclusion 
Office 
of the Chief 
Chief 
Deputy Chief 
Denver 
Las Vegas 
Los Angeles 
Oakland 
Phoenix 
Seattle 
Atlanta 
Charlotte 
Miami 
Tampa 
Washington, DC 
Boston 
Cincinnati 
Newark 
New York 
Philadelphia 
Chicago 
Dallas 
Detroit 
Houston 
St. Louis 
NCIU 
Business 
Systems 
Development 
Cybersecurity 
Digital 
Forensics 
Program 
Management, 
Acquisition, 
& Contracts 
Technical 
Operations 
Center 
User 
Support 
Program Analysis 
& Operational 
Support 
Operations, 
Scheme 
Development, 
& Support 
Cyber Crimes 
Finance 
Human 
Resources 
National CI 
Training 
Academy 
Applied 
Analytics 
Treasury 
Liaison 
FinCEN 
Liaison 
TEOAF 
Liaison 
National 
Forensic 
Laboratory 
Financial 
Crimes 
Special 
Investigative 
Techniques 
Warrants & 
Forfeiture 
Field 
Operations 
East 
Field 
Operations 
West 
Narcotics, 
Counterterrorism, 
& Transnational 
Organized Crime 
Organizational Chart 
8
9 

IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
TAX CRIMES 
Tax Crimes  
593
SENTENCED 
945
PROSECUTIONS RECOMMENDED 
1598
INVESTIGATIONS INITIATED 
ABUSIVE TAX SCHEMES 
CI focuses on the investigation of promoters and clients 
who willfully participate in domestic and offshore tax 
schemes in violation of the tax laws. Participants in 
these abusive schemes create structures such as trusts, 
foreign corporations, and partnerships to make it appear 
a trustee, nominee, non-resident alien, or other foreign 
entity is the owner of the assets and income, when in 
fact the true ownership and control remains with a U.S. 
taxpayer. 
REFUND FRAUD PROGRAM 
The Refund Fraud Program consists of three parts– 
identity theft investigations, the Questionable Refund 
Program (QRP), and the Abusive Return Preparer Program 
(RPP) for both Individual Master File (IMF) and Business 
Master File (BMF). These programs cover criminals who 
file fraudulent tax returns to steal government funds. 
This type of theft erodes voluntary compliance and 
taxpayer confidence in the integrity of the tax system. It 
also results in the loss of vital funds needed to support 
government programs, many of which impact the most 
vulnerable Americans. 
The Questionable Refund Program identifies fraudulent 
claims for tax refunds. Generally, these schemes involve 
individuals filing multiple fraudulent tax returns using 
the personally identifiable information of individuals 
who knowingly or unknowingly are used to facilitate the 
scheme. A significant number of these investigations 
include cases also considered identity theft investigations 
(stolen identity refund fraud-SIRF). In contrast, Abusive 
Return Preparer Program investigations involve the 
orchestrated preparation and filing of false income tax 
returns by corrupt return preparers. These preparers 
often claim inflated personal or business expenses, false 
deductions, excessive exemptions, and unallowable tax 
credits. The preparers’ clients may or may not know their 
returns were falsified. 
EMPLOYMENT TAX FRAUD 
Employment tax fraud takes many forms. Some of the 
most common forms include employee leasing, paying 
employees in cash, filing false payroll tax returns, 
and failing to file payroll tax returns (“pyramiding”). 
Pyramiding occurs when a business withholds taxes 
from its employees, but intentionally fails to forward 
them to the IRS. After a liability accrues, the individual 
starts a new business and begins to accrue a new 
liability. Some employers withhold taxes from their 
employees’ paychecks and use the funds for their 
personal expenses. Employment taxes include federal 
income tax withholding, Social Security taxes, and federal 
unemployment taxes. 
IDENTITY THEFT 
Identity theft refund fraud occurs when someone uses 
the personally identifiable information (PII) of another 
individual–for example name, Social Security number 
(SSN), address–without permission, to commit fraud 
or other crimes. These cases are commonly referred 
to as stolen identify refund fraud (SIRF) investigations. 
The scam usually occurs when an identity thief uses 
a legitimate taxpayer’s identity to file a fraudulent tax 
return and claim a refund. Generally, the identity thief 
will use a stolen SSN and other personally identifiable 
information to file a fraudulent tax return and attempt 
to get a refund early in the filing season before the 
legitimate taxpayer files their tax return. u
CRIMINAL INVESTIGATION’S (CI) primary resource 
commitment is to develop and investigate tax crimes, 
both legal and illegal source. Prosecution of these cases 
supports the overall IRS compliance goals and enhances 
voluntary compliance with the tax laws. CI works some 
of these investigations with our federal, state and local 
law enforcement partners and also coordinates with 
foreign tax and law enforcement agencies. The Illegal 
Source Financial Crimes Program encompasses tax and 
tax-related, money laundering and currency violations. 
These investigations focus on individuals deriving income 
from illegal sources, such as money obtained through 
embezzlement, bribery, and fraud. The individuals can 
be legitimate business owners but obtain their income 
through illegal means. These investigations focus on 
methods through which individuals seek to launder 
their ill-gotten income by making it appear the income 
is from a legitimate source. Frequent money laundering 
techniques include the manipulation of currency reporting 
requirements, layering of transactions and international 
movement of funds. 
GENERAL TAX FRAUD 
General tax fraud investigations are at the core of CI’s 
law enforcement efforts and directly influence the 
American public’s confidence and compliance with the 
tax laws. The integrity of our tax system depends heavily 
on taxpayers’ willingness to self-assess taxes owed and 
voluntarily file tax returns. CI investigations help assure 
law-abiding taxpayers that individuals who deliberately 
underreport or omit income from their tax returns are 
held accountable for their actions. Common practices 
involved in general tax fraud investigations include 
keeping two sets of books, making false entries in books 
and records, claiming personal expenses as business 
expenses, claiming false deductions or credits against 
taxes owed, and hiding or transferring assets. CI special 
agents use their financial investigative expertise to 
uncover and quantify the seriousness of these schemes. 
They also work closely with Department of Justice (DOJ) 
prosecutors to gather the necessary evidence to bring 
these cases to a successful conclusion. 
10 
11  

SINCE 2015, CI continues to build a cybercrimes 
program to address the exponential growth of 
cybercrime impacting the tax, financial, and economic 
systems of the United States. A Cyber Crime Unit (CCU) 
with locations in our Los Angeles and Washington, 
D.C. Field Offices was part of the initial launch of the 
program and a headquarters Cyber Crimes office and 
cybercrimes coordinators in each of our 21 Field Offices 
followed. CCU investigations involve the internet and 
internet based technologies that enable criminals to 
engage in illegal activity with anonymity and without 
a defined physical presence. The CCU focuses its 
efforts on multijurisdictional investigations posing the 
most significant threats to the U.S. tax and financial 
systems. These crimes typically involve the use of crypto 
currencies to facilitate the criminal activity. 
Field office special agents and professional staff working 
cybercrime investigations are focused primarily on cyber 
enabled investigations that involve theft and fraud and 
are increased in scale by the use of computers, computer 
networks, or other forms of technology. Over the past 
several years, CI has seen an increasing growth in the 
number of criminals using the cyber environment to 
facilitate Stolen Identity Refund Fraud (SIRF) and other 
refund fraud schemes. During this same period, data loss 
incidents reported to the IRS has drastically increased. 
These data loss incidents include data intrusions, 
business email compromises, phishing schemes, and 
bank account takeovers victimizing private sector entities 
involved in the tax eco-system and the IRS. These thefts 
target detailed financial data, prior year tax returns, and 
payroll records that criminals use to generate SIRF claims 
that mirror a victim’s actual tax return. During these types 
of cybercrime investigations, special agents use their 
close working partnerships with other law enforcement 
agencies and their capabilities as law enforcement 
officers to gather valuable information about SIRF, refund 
fraud crimes, and information that affects the integrity of 
IRS online systems. They share criminal intelligence in 
real-time with their IRS civil counterparts to aid taxpayer 
and revenue protection efforts. The IRS also uses this 
information to develop internal defenses that help identify 
and prevent further losses associated with fraudulent 
claims. 
CI’s cybercrime investigative efforts focus on subjects 
using the internet as an essential means to commit the 
crime, remain anonymous, elude law enforcement, and 
conceal financial transactions, ownership of assets, or 
other evidence. As with all types of crimes within CI’s 
area of responsibility, special agents working cybercrimes 
investigations use the same “follow the money” strategy 
that made CI’s involvement in complex investigations a 
mainstay since the creation of the agency in 1919. 
Treasury Secretary Steven Mnuchin presented the Secretary’s Honor Award to 
Special Agent Christopher Janczewski of the Washington Field Office. Christopher 
was recognized for playing a key role in an international investigation that brought 
down three terrorist financing schemes, leading to the largest crypto seizures in 
the history of the U.S. relating to terrorism. 
Cyber Crimes 
Cyber Crimes 
12 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
SIGNIFICANT CASES 
North Korea Crypto Hackers 
Charged 
On March 2, 2020, two Chinese 
nationals were charged with 
laundering over $100 million worth 
of cryptocurrency from a hack 
of a cryptocurrency exchange. 
In total, nearly $250 million in 
cryptocurrency was stolen by North 
Korean co-conspirators in 2018. 
The funds were laundered through 
hundreds of automated crypto­
currency transactions and multiple 
virtual currency exchanges’ Know 
Your Customer (KYC) controls were 
circumvented through the use of 
doctored photographs and falsified 
identification documentation. A 
portion of the laundered funds was 
used to pay for infrastructure used 
in North Korean hacking campaigns 
against the financial industry. The 
U.S Treasury’s Office of Foreign 
Asset Control (OFAC) also imposed 
sanctions on defendants and numerous cryptocurrency 
addresses related to their involvement in activities facili
tating North Korean sanctions evasion. 
­
Darknet Based Bitcoin Mixing Service Owner Charged 
with Laundering More Than 300 Million Dollars 
On February 13, 2020, Larry Harmon was charged with 
money laundering conspiracy, operating an unlicensed 
money transmitting business and conducting money 
transmission without a D.C. license. Harmon ran both 
Grams and Helix, respectively a darknet search engine 
and money laundering service that was integrated into 
major darknet markets such as AlphaBay, Silk Road II, 
Abraxxas, and many others. Helix worked by tumbling 
bitcoins from users and vendors on darknet markets with 
new, “clean” bitcoin so as to obfuscate the illicit source 
of the bitcoin. Approximately 356,000 bitcoins moved 
through the site between July 2014 and December 
2017 – valued at over $300 million at the time of the 
transactions. Data obtained from these servers will assist 
investigations all around the world – since criminals use 
tumblers to obfuscate the crypto trail. Evidence obtained 
from this investigation will serve as the missing link or 
puzzle piece in many investigations. 
Largest Ever Seizure of Terrorist Organizations 
Cryptocurrency Accounts Causes Global Terror 
Disruption 
On August 13, 2020, three forfeiture complaints and 
a criminal complaint were unsealed in the District of 
Columbia detailing a coordinated effort to dismantle 
three terrorist financing cyber-enabled campaigns. These 
campaigns involved the (1) al-Qassam Brigades, Hamas’s 
military wing, (2) al-Qaeda, and (3) Islamic State of 
Iraq and the Levant (ISIS). These actions represent the 
government’s largest-ever seizure of cryptocurrency in 
the terrorism context. 
These three terror finance campaigns all relied on 
sophisticated cyber-tools, including the solicitation of 
cryptocurrency donations from around the world. The 
action demonstrates how different terrorist groups 
have similarly adapted their terror finance activities to 
the cyber age. Each group used cryptocurrency and 
social media to garner attention and raise funds for 
their terror campaigns. Pursuant to judicially-authorized 
warrants, U.S. authorities seized millions of dollars, over 
300 cryptocurrency accounts, four websites, and four 
Facebook pages all related to the criminal enterprise. 
13 

AL-QASSAM BRIGADES CAMPAIGN: The first forfeiture 
complaint involves the al-Qassam Brigades (aQB), 
Hamas military wing, and its online cryptocurrency 
fundraising efforts. In early 2019, aQB posted a call on 
its social media page for bitcoin donations. The aQB then 
moved the request to its official websites and boasted 
the donations were untraceable and would be used for 
violent causes. The websites offered video instructions 
to make bitcoin donations. With judicial authorization, 
IRS:CI seized the infrastructure of the aQB websites and 
subsequently covertly operated one of the websites and a 
bitcoin wallet. Funds were received from persons seeking 
to provide material support to aQB and communications 
from persons seeking to join aQB. Financial accounts 
were seized and also included hundreds of bitcoin 
addresses from both donors and aQB in a forfeiture 
complaint. 
AL-QAEDA CAMPAIGN: The second action involves 
al Qaeda and affiliated terrorist groups, largely based 
out of Syria. These organizations operated a bitcoin 
money laundering network using Telegram channels and 
other social media platforms to solicit cryptocurrency 
donations. In some instances, they purported to act as 
charities when, in fact, they were openly and explicitly 
soliciting funds for violent terrorist attacks. IRS:CI 
identified and included 155 bitcoin addresses in the 
forfeiture complaint. 
ISIS CAMPAIGN: The final forfeiture complaint involves 
a scheme by ISIS facilitator, Murat Cakar to sell fake 
personal protective equipment via website FaceMask-
Center.com. The website claimed to sell FDA approved 
N95 respirator masks, when in fact the items were not 
FDA approved. Site administrators claimed to have near 
unlimited supplies of the masks, in spite of such items 
being officially-designated as scarce. The forfeiture 
complaint seized Cakar’s website as well as four related 
Facebook pages used to facilitate the scheme. 
Two Turkish Inidividuals charged as money 
launderers 
Mehmet Akti and Husamettin Karatas were charged 
in a criminal complaint with acting as related money 
launderers while operating an unlicensed money 
transmitting business. Akti operated a prolific virtual 
currency Money Service Business (MSB) from his account 
with a virtual currency exchange receiving approximately 
2,328 Bitcoin, 2,296 Ethereum, and U.S. dollar wires 
totaling $82.8 million. During the same time period 
withdrawals out of the account were made to more than 
250 unique cryptocurrency wallet addresses totaling 
over $90 million. Karatas opened an account at a virtual 
currency exchange which he used to operate a crypto-
currency exchange of his own. In addition to a $500,000 
wire from a company linked to Akti, Karatas received 
cryptocurrency and fiat currency valued at approximately 
$2.1 million into his virtual currency account between 
April and July 2019. During the same time period Karats 
withdrew cryptocurrency valued at approximately $2.3 
million from this account to 17 unique wallet addresses. 
HEROCOIN Owner Admits to Operating Unlicensed 
Crypto ATM Network that Laundered Millions of 
Dollars of Bitcoin and Cash for Criminals 
Kais Mohammad, a.k.a. “Superman29”, ran a variety 
of Bitcoin ATM-type kiosks under the brand name 
“Herocoin”. He was charged in a three-count criminal 
information filed on July 22, 2020, and plead guilty 
the same day. Mohammad plead guilty to one count of 
operating an unlicensed money transmitting business, 
one count of money laundering, and one count of failure 
to maintain an effective anti-money laundering program. 
Cyber Crimes 
Cyber Crimes 
14 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
From December 2014 to November 2019, Mohammad 
owned and operated Herocoin, an illegal virtual-currency 
money services business. Mohammad purchased and 
advertised on the internet a network of Bitcoin ATM-type 
kiosks, which were located in malls, gas stations and 
convenience stores in Los Angeles, Orange, Riverside 
and San Bernadino counties. These 17 kiosks allowed 
customers to use cash to buy Bitcoin, an internet-based 
cryptocurrency, or sell Bitcoin in exchange for cash that 
is dispensed onsite. The machines were seized by the 
government. In total, Mohammad admitted he exchanged 
between $15 million and $25 million from in-person 
exchanges and transactions occurring at his Bitcoin 
kiosks. 
SCAM ALERT! The BitClub Network investment 
scheme revealed 
On December 10, 2019, Matthew Goettsche, Jobadiah 
Weeks, Russ Medlin, Joseph Abel, and Silviu Balaci were 
charged for their roles in connection with defrauding 
BitClub Nework investors of at least $722 million. To 
date, Balaci and Abel have plead guilty to various charges 
associated with their roles in the scheme. 
From April 2014 through December 2019, the defendants 
operated BitClub Network, a fraudulent scheme that 
solicited money from investors in exchange for shares 
of purported cryptocurrency mining pools and rewarded 
investors for recruiting new investors. Goettsche, Weeks, 
and others conspired to solicit investments in BitClub 
Network by providing false and misleading figures 
that BitClub investors were told were “bitcoin mining 
earnings,” purportedly generated by BitClub Network’s 
bitcoin mining pool. Goettsche discussed with his 
conspirators that their target audience would be “dumb” 
investors, referred to them as “sheep,” and said he 
was “building this whole model on the backs of idiots.” 
Goettsche directed others to manipulate the figures 
displayed as “mining earnings” during the course of the 
conspiracy. 
For example, in February 2015, Goettsche directed 
another conspirator to “bump up the daily mining 
earnings starting today by 60%,” to which his conspirator 
warned “that is not sustainable, that is ponzi teritori 
[sic] and fast cash-out ponzi... but sure.” In September 
2017, Goettsche sent an email to another conspirator in 
which he suggested that Bitclub Network “[d]rop mining 
earnings significantly starting now” so that he could 
“retire RAF!!! (rich as f**k).” Weeks sent an email in June 
2017 to Goettsche and another conspirator in which he 
remarked that BitClub selling shares in BitClub and then 
not using the money to purchase mining equipment was 
“not right.” Goettsche, Weeks, and others obtained the 
equivalent of at least $722 million from BitClub Network 
investors. 
Goettsche, Weeks, Abel, and others also conspired to 
sell BitClub Network shares – which were securities – 
notwithstanding that BitClub Network did not register 
the shares with the U.S. Securities and Exchange 
Commission. Weeks and Abel created videos and traveled 
around the United States and the world to promote 
BitClub Network. In one video, a conspirator espoused 
that BitClub Network was “the most transparent company 
in the history of the world that I’ve ever seen.” In another 
video, Abel assured investors that BitClub Network was 
“too big to fail.” u
15 

The Digital Forensics section forensically acquires and 
analyzes digital data and provides testimony in legal 
proceedings about digital evidence and processes 
in ongoing criminal investigations. Digital Forensics 
currently has 68 field CISs in 47 laboratories throughout 
the United States; these labs will be consolidated to 18 
Regional Digital Forensics Laboratories in the coming 
years. Digital Forensics also has a specialized Digital 
Forensics Laboratory in Virginia staffed with six CIFAs 
and two Special Agent Senior Analysts responsible for 
policy, training, hardware and software testing, as well as 
serving as a resource in solving complex data extractions, 
data recovery, and other challenges encountered by CISs 
in the field. 
In FY 2020, Digital Forensics personnel participated in 
more than 959 search warrants or other digital forensics 
operations at more than 718 locations and seized over 
than 1.278 petabytes of data from more than 3,304 
computers, laptops, and external devices and 724 mobile 
devices. The Digital Forensics section is the primary 
source for digital analysis in IRS:CI, and IRS:CI’s Digital 
Forensics remains one of the premier digital forensic 
programs in all of U.S. law enforcement. 
SIGNIFICANT CASES 
Northern Pacific Area 
On February 25, 2020, Volodomyr Kvashuk, a 25-year-old 
former Microsoft software engineer was convicted of 
a scheme to steal over $10 million in digital currency 
from Microsoft. Kvashuck was involved in the testing of 
Microsoft’s online retail sales platform and used that 
testing access to steal “currency stored value” (CSV) gift 
cards. Kvashuck resold the value on the internet and used 
the proceeds to purchase a $160,000 Tesla vehicle and a 
$1.6 million-dollar lakefront home. 
Initially, Kvashuk started stealing smaller amounts 
totaling about $12,000 in value using his own account 
access. As the thefts escalated into millions of dollars of 
value, Kvashuk used test email accounts associated with 
other employees. Kvashuk, a knowledgeable software 
developer, attempted to mask digital evidence that would 
trace the fraud and the internet sales back to him. He 
used a bitcoin “mixing” service in an attempt to hide 
the source of the funds ultimately passing into his bank 
account. In all, over the seven months of Kvashuk’s 
illegal activity, approximately $2.8 million in bitcoin was 
transferred to his bank accounts. Kvashuk then filed fake 
tax return forms, claiming the bitcoin had been a gift from 
a relative. 
DIGITAL FORENSICS 
Digital Forensics 
16 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
IRS:CI’S ELECTRONIC CRIMES section is now Digital 
Forensics. In fiscal year 2020, Electronic Crimes was 
restructured to better provide world class digital forensic 
services to Special Agents and other law enforcement 
stakeholders. This specialized and highly technical 
section has been more appropriately named Digital 
Forensics. 
Virtually every criminal investigation now includes 
some form of digital evidence and a need for digital 
forensics. Digital forensics can range in complexity from 
running a simple keyword search on existing data to 
imaging complex server farms and analyzing terabytes 
of data in a virtual environment. The Digital Forensics 
section specializes in extracting evidence from a variety 
of sources: standalone computers, mobile devices, 
business computer networks and systems, servers, cloud 
storage, and even the dark web. As digital technologies 
and modes of concealing evidence evolve, CI’s Digital 
Forensic examiners’ evolve as well through training and 
education. Computer Investigative Specialists (CISs) 
and Computer Investigative Forensic Analysts (CIFAs) 
continually train and work to advance their technical 
acumen and skillsets. Training is primarily accomplished 
through a joint-agency training project known as the 
Treasury Computer Forensic Training Program (TCFTP), 
a collaboration with Homeland Security Investigations 
and the U.S. Secret Service. Through TCFTP training and 
additional advanced trainings and certifications, IRS:CI’s 
Digital Forensics examiners have quickly become leaders 
in the identification and extraction of data from common 
computer and mobile systems to unique devices, such 
as vehicle infotainment systems, drones, wearables, and 
various other electronic media known as the Internet of 
Things. 
17 

IRS:CI’s Digital Forensics (DF) was tasked with imaging 
and analyzing devices seized during the arrest under a 
short deadline. SA-CISs in the Nashville Digital Forensics 
lab were quickly able to do the necessary analysis. The 
work of the CISs was crucial as George’s computer was 
a major topic addressed during sentencing. Analysis 
showed George’s internet searches consisted of topics 
such as how to successfully run from authorities and how 
to erase search history. 
George plead guilty to seven counts of wire fraud, and 
one count of mail fraud, securities fraud and money 
laundering in March 2019. George was sentenced to 20 
years in federal prison for the fraud scheme and ordered 
to pay almost $3 million in restitution. During sentencing, 
Judge Wilson remarked that George had “larceny in his 
heart”. 
Eastern Area 
Ryan P. Sheridan operated two drug and alcohol 
detoxification centers in Ohio under the name Braking 
Point Recovery Center. Sheridan, with the assistance 
of multiple co-conspirators, used these detoxification 
centers to commit health care fraud by submitting false 
billings to the Ohio Department of Medicaid. On October 
4, 2019, Sheridan plead guilty to a 60-count indictment 
that included various health care fraud charges and 28 
money laundering counts. On January 22, 2020, Sheridan 
was sentenced to serve 90 months incarceration and pay 
restitution of over $24 million. 
During the course of the investigation, A Digital Forensics 
SA-CIS captured significant data on various cell phones 
and computers and elicited essential information during 
interviews of key witnesses who had text message 
communications with Sheridan. These text messages 
provided insight into the relationships Sheridan had with 
his co-conspirators. The SA-CIS assisted the prosecution 
team in determining the most efficient way to examine 
mass amounts of data seized from the electronic devices 
which proved instrumental to the investigation and 
subsequent prosecution. 
Southeast Area 
On July 10, 2020 Wade Ashley Walters, a co-owner of 
numerous compounding pharmacies and pharmaceutical 
distributors, pleaded guilty to one count of conspiracy 
to commit health care fraud and conspiracy to commit 
money laundering. As part of his guilty plea, Walters 
admitted that, between 2012 and 2016, he orchestrated 
a scheme to defraud TriCare and other health care benefit 
programs by distributing compounded medications that 
were not medically necessary. As part of the scheme, 
Walters among other things, adjusted prescription 
formulas to ensure the highest reimbursement without 
regard to efficacy; solicited recruiters to procure 
prescriptions for high-margin compounded medications 
and paid those recruiters commissions based on the 
percentage of the reimbursements paid by pharmacy 
benefit managers and health care benefit programs, 
including commissions on claims reimbursed by TriCare; 
solicited (and at times paying kickbacks to) practitioners 
to authorize prescriptions for high-margin compounded 
medications; routinely and systematically waived and/ 
or reduced copayments to be paid by beneficiaries and 
members, including utilizing a purported copayment 
assistance program to falsely make it appear as if the 
pharmacies were collecting copayments. Walters and 
his numerous co-conspirators effectuated a scheme 
to defraud health care benefit programs, including the 
TRICARE program, in the amount of $287,659,569, with 
losses to a government health care program exceeding 
$20,000,000. Walters obtained over $40,000,000 in 
proceeds derived directly or indirectly from the fraud. 
Walters is only one of fourteen guilty pleas or trials in 
which Digital Forensics played a significant part in the 
investigation. In February 2017, Digital Forensics CISs 
took the lead in analyzing the 210 terabytes of digital 
evidence originally seized by the FBI. In conducting the 
digital review and analysis, CISs used complex forensic 
software, as well as CI’s own internal digital evidence file 
sharing system known as Electronic Crimes Environment. 
The three-year review consisted of a team of CISs 
assisted by technical agents from several other agencies 
to complete and present the evidence necessary to prove 
the case. 
The IRS:CI Digital Forensics section continues to 
provide technical assistance to the investigation and US 
Attorney’s as they continue to look into the numerous 
aspects of this case. u
Digital Forensics 
Digital Forensics 
18 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
IRS:CI Digital Forensics took the lead as to the 
acquisition, processing, and analysis of the data from 
various devices, constituting approximately seven 
terabytes of data seized as evidence. A Digital Forensics 
SA-CIS and a special agent from the Western Cyber 
Crimes Unit worked together on a daily basis to triage 
and assess digital evidence in the context of the investi­
gation. Information about the tools and means of the 
fraud that were initially developed via other aspects of 
the investigation were confirmed and validated through 
the Digital Forensics’ analysis of internet and program 
artifacts found on the seized devices. For example, use of 
VPN services; meticulous analysis by the user of possible 
IP and geolocation information; Microsoft test account 
access information; stolen CSV codes; screenshots of 
fraudulent purchases made in the scheme; and a rich 
variety of data in the forms of significant internet browser 
history, saved user login/password information, and 
add-ins designed to thwart identification of the user. 
The CIS prepared video recordings of Kvashuk’s 
virtualized computer documenting user attribution 
and the operation of a custom-built software program 
used to automate the process of stealing Microsoft 
CSV codes. The CIS subsequently testified at trial using 
extracts of the video to show how the information would 
have appeared to the user behind the keyboard. When 
sentenced, Kvashuk faces up to twenty years in prison. 
Mid-Atlantic Area 
Monique Ellis was sentenced to six years in prison for wire 
fraud and aggravated identity theft. Ellis was convicted 
following a jury trial in October 2017. Ellis’s appeal was 
denied in September 2019. According to documents 
filed with the court and evidence presented at trial, Ellis 
used stolen IDs, including those of prisoners within the 
Alabama Department of Corrections, to file tax returns 
with the Internal Revenue Service seeking fraudulent 
refunds. Ellis directed the fraudulently obtained refunds 
to bank accounts that she controlled, causing a tax loss of 
$700,933. 
A Digital Forensics SA-CIS was tasked with forensically 
reviewing laptops seized during the execution of a search 
warrant at Ellis’s apartment, including two laptops seized 
from her bedroom. A forensic review of the laptops 
revealed that they were used to file over 300 electronic 
tax returns from 2008 through 2012. The forensic review 
included identifying TurboTax UIDs from the laptop’s 
internet browser history to identify the filed returns. The 
forensic review also identified that the laptops accessed 
the internet provider (IP) address associated with Ellis’s 
apartment over 300 times. The tax returns linked to the 
laptops shared certain characteristics, such as being 
filed from one of several IP addresses, including the IP 
address for Ellis’s apartment. The CIS testified at trial, as 
well as at a pretrial hearing regarding the tools/processes 
used. In addition to the prison term, Ellis has been 
ordered to serve three years of supervised release and to 
pay $352,183 in restitution. 
Mid-Atlantic Area 
George David George was indicted in the Middle District 
of Tennessee by a federal grand jury in May 2015 with 
securities fraud, mail fraud, wire fraud, and money 
laundering and subsequently charged with additional 
counts of wire fraud in February 2017. George plead guilty 
and was sentenced in March 2019. His appeal was denied 
in March 2020. George operated a fraudulent investment 
scheme where he raised money for a social networking 
platform focused on health and wellness known as Well 
City. George bilked dozens of investors out of $3 million. 
Rather than invest the funds in the business, he diverted 
a substantial portion to personal uses like gambling and 
retiring personal debts. In May 2017, George was indicted 
for failing to appear in U.S. District Court after he failed 
to appear for a bond revocation hearing and prior to the 
start of his trial scheduled for May 16, 2017. George, who 
was out on bail, cut off his ankle monitor and absconded 
from justice. He spent nineteen months as a fugitive and 
continued to deceive. He went to Texas, Alabama, and 
was caught in Jacksonville, FL. He assumed at least two 
identities while on the run to evade capture. One identity 
was that of a Harvard-trained psychiatrist where he 
unlawfully dispensed a prescription drug, Clonazepam, to 
a sixteen-year-old, landing the boy in the hospital. George 
had previously taken this medication from a woman he 
met on Match.com and whom he was having a romantic 
relationship with while deceiving her as well. George was 
apprehended and arrested by the US Marshals in January 
2019. 
19 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
NON-TAX CRIMES 
Non-Tax Crimes 
633
SENTENCED 
914
PROSECUTIONS RECOMMENDED 
998
INVESTIGATIONS INITIATED 
CRIMINAL INVESTIGATION’S (CI) Illegal Source 
Financial Crimes Program investigates tax and tax related 
crimes, money laundering, and currency violations. 
The special agent’s investigations focus on individuals 
who receive income from illegal sources, such as 
embezzlement, bribery, and fraud. They also focus on 
money-laundering schemes where individuals launder 
their ill-gotten gains by making the money appear as if it 
came from legitimate sources. Sometimes an individual 
will employ a third party or a professional money 
launderer. 
Frequent money laundering techniques include: 
• Manipulating currency reporting requirements 
• Layering transactions 
• Use of Cryptocurrency 
• Using Black Market Peso 
• Moving funds internationally 
The domestic and international law enforcement 
community recognize CI’s special agents as the premier 
experts in money laundering investigations. 
MONEY LAUNDERING 
Money laundering, as defined in the National Money 
Laundering Strategy, is criminal finance. Money 
laundering creates an underground, untaxed economy 
that harms our country’s overall economic strength. 
When criminals or criminal organizations seek to disguise 
the illicit nature of their money by introducing it into the 
stream of legitimate commerce and finance, they launder 
money. The traditional image of money laundering 
portrays someone manually washing drug money from 
city streets, and turning it into legitimate financial 
transactions, such as those for bank deposits and other 
assets. 
In contrast, criminals today can press a computer button 
to move large amounts of criminally derived funds 
into or through the United States and foreign financial 
institutions. They launder money through a wide variety 
of enterprises, such as banks and money transmitters to 
stock brokerage houses, casinos, and virtual currency 
exchanges. The flow of illegal funds around the world is 
estimated to be hundreds of billions of dollars. Whenever 
money, whether it be legal or illicit, moves through a 
financial system, it leaves behind a trail of transactions. 
Uncovered trails identify who willingly enables and 
finances crime. These people often view crime with 
deliberate blindness, negligence, or disregard. The trail 
can also reveal the crooks who made money through 
crime. 
CI special agents are experts at uncovering money trails. 
They take part in a wide variety of investigations, financial 
task forces, and narcotics task forces including Organized 
Crime Drug Enforcement Task Force (OCDETF) and the 
High Intensity Drug Trafficking Area (HIDTA). 
BANK SECRECY ACT PROGRAM 
The Bank Secrecy Act (BSA) mandates the disclosure of 
foreign bank accounts, the reporting of certain currency 
transactions conducted with a financial institution, and 
the reporting of the transportation of currency across 
United States borders. Through the analysis of BSA data, 
CI has identified significant, complex money laundering 
schemes and other financial crimes. CI is one of the 
largest law enforcement consumers of BSA data. 
The CI BSA program has grown substantially since its 
start in early 2000. The primary objective of the program 
is to analyze BSA information to identify significant 
financial criminal activity. Although Financial Crimes 
Enforcement Network (FinCEN) is the agency tasked with 
administering the BSA, they have no criminal enforcement 
authority. All criminal enforcement of BSA is delegated 
by the U.S Treasury Secretary to IRS:CI. Other federal 
agencies can investigate criminal violations of the BSA, 
but CI is the only federal agency that actively reviews 
all BSA data for leads and possible criminal violations. 
CI uses various data analytics tools to actively analyze 
BSA data and identify leads for possible investigation. CI 
leads SAR Review Teams (SAR RTs) and Financial Crimes 
Task Forces (FCTFs) in all 93 judicial districts across the 
country. 
The FCTFs and SAR-RTs focus on specific geographic 
areas and involve collaboration between CI and federal, 
state, and local law enforcement agencies for identifying 
and investigating financial crimes, including BSA 
violations, money laundering, narcotics trafficking, and 
terrorist financing. 
20 
21 

CORPORATE FRAUD 
The Corporate Fraud Program concentrates on violations 
committed by publicly-traded or private corporations 
and their senior executives. Some specific criminal acts 
involving corporate fraud include falsifying, fabricating, 
or destroying company records. Fraudsters use the false 
information to complete tax returns, financial statements, 
and reports for regulatory agencies or investors. 
Corporate Fraud can also include executives who entitle 
themselves to unauthorized compensation, or who 
receive unapproved payments and bonuses, corporate 
funds, or bogus loans to pay for personal expenses. 
GENERAL FRAUD 
CI special agents also investigate healthcare and financial 
institution fraud. When CI brings income tax and money 
laundering charges to a criminal case, it enhances 
prosecutors’ effectiveness to combat these and other 
types of fraud. CI special agents work with federal, state, 
and local law enforcement partners, as well as with 
foreign tax and law enforcement agencies, to follow and 
uncover a trail of illicit money in these investigations. 
SIGNIFICANT CASE 
Former Milton City Mayor and Ex-Head of United Way 
of Santa Rosa County Sentenced to 51 Months Federal 
Prison for Fraud and Tax Evasion 
Guyland W. Thompson, a former mayor of Milton, Florida, 
and ex-executive director of the United Way of Santa Rose 
County Florida, was sentenced to 51 months in federal 
prison after pleading guilty to wire fraud and tax evasion 
in relation to a complex embezzlement scheme. Between 
at least 2011 and 2018, Thompson embezzled over 
$650,000 from the United Way. He used his position and 
access to the charity’s records and bank accounts to steal 
money from the charity for years by conducting a series 
of complicated financial transactions to cover his tracks. 
He also made false representations to board members, 
employees, bank tellers, and United Way Worldwide to 
keep his fraud undetected for so long. Thompson then 
failed to report to the Internal Revenue Service the extra 
income from his embezzlement scheme. 
Prior to sentencing, Thompson pled guilty to 20 counts of 
wire fraud and three counts of tax evasion stemming from 
his embezzlement of funds from United Way of Santa 
Rosa County while he ran the organization. Thompson 
was ordered to forfeit $221,868 seized from his bank 
accounts and pay an additional money judgment of 
$430,132. u
Non-Tax Crimes 
Non-Tax Crimes 
22 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Each of the SAR RTs and FCTFs operate in slightly 
different fashion, based on direction and oversight from 
their respective U.S Attorney’s offices (USAO), but once 
CI special agents identify leads in their respective areas, 
they meet with participating law enforcement agencies 
to discuss and disseminate the leads for action. It should 
be noted that all of the major federal agencies use BSA 
data to supplement their investigations, but only CI 
regularly triages BSA data for leads and possible criminal 
violations. CI’s financial investigative focus allows them 
to leverage BSA data better than any other U.S law 
enforcement agency. As a result, 13% of all CI investi­
gations initiated in fiscal year 2020 were the direct result 
of BSA data. CI currently has upwards of 200 special 
agents and investigative analysts working on SAR RTs and 
FCTFs around the country. 
CI strengthens the BSA program area by maintaining 
excellent working relationships with anti-money 
laundering officials within the financial industry. During 
the past year, CI participated in numerous local, regional, 
national, and international anti-money laundering 
forums and conferences presenting on various topics 
including CI’s role in investigating financial crimes, case 
studies, and typologies. CI also continues to partner with 
FinCEN and other federal law enforcement agencies to 
provide feedback and outreach to the financial industry. 
Additionally, CI is collaborating with the financial industry 
and federal regulators to examine the US Anti-Money 
Laundering regime to make it more effective and efficient 
through the BSA Advisory Group. 
PUBLIC CORRUPTION 
CI investigates elected and appointed individuals who 
violate the public’s trust. 
These individuals are from all levels of government 
including local, county, state, federal, and foreign 
officials. Public corruption investigations include criminal 
offenses, such as bribery, extortion, embezzlement, 
kickbacks, tax fraud, and money laundering. 
Corruption by public officials results in the loss of 
taxpayer dollars. Public officials who violate the public 
trust are often prosecuted to the full extent of the law, 
with large fines and increased jail time for offenders. In 
addition, the United States is often a desirable destination 
for the monies of corrupt foreign officials. This type 
of corruption undermines democratic institutions and 
threatens national security. 
23 

IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
INTERNATIONAL OPERATIONS  
THE HAGUE 
LONDON 
FRANKFURT 
OTTAWA 
WASHINGTON, D.C. 
DUBAI 
MEXICO CITY 
HONG KONG 
BARBADOS 
PANAMA CITY 
BOGOTA 
THE GLOBAL FIGHT against tax and 
economic crimes transcends borders and 
requires innovative approaches. IRS:CI’s 
Office of International Operations (IO) 
works collaboratively in support of 
agency goals, objectives, and activities. 
IO enhances IRS’s international strategy 
by combating offshore tax, money 
laundering, transnational organized 
crime, terrorism financing and other 
financial crimes. It unites our domestic, 
foreign tax, and law enforcement 
agency partners. IO also works with 
other organizations to leverage bi- and 
multilateral agreements and resources. 
CANBERRA 
SYDNEY 
Headquarters 
Attaché 
Attaché (J5) 
BRANCH A: 
OTTAWA 
LONDON 
THE HAGUE 
DUBAI 
CANBERRA & SYDNEY 
BRANCH B: 
MEXICO CITY 
PANAMA CITY 
BOGOTA 
BARBADOS 
FRANKFURT 
HONG KONG 
24 
25 

IRS:CI NARCOTICS AND COUNTERTERRORISM (NCT) 
program supports these programs: 
• President’s Strategy for  
Transnational Organized Crime 
• The U.S. National Drug Control Strategy 
• The National Money Laundering Strategy 
• The U.S. Government’s National  
Counterterrorism Strategy 
IRS:CI contributions include reducing or eliminating 
the profits and financial gains of individuals, entities, 
and transnational criminal organizations whose crimes 
involve financing terrorism, narcotics trafficking, and 
money laundering. Our special agents investigate criminal 
violations of the Internal Revenue Code, Bank Secrecy 
Act and Federal Money Laundering statutes. In addition, 
we use our unique financial investigation skills to trace 
profits from illegal activities to individuals or criminal 
organizations to dismantle or disrupt schemes and 
prosecute criminals. 
NCT assigns CI personnel to the White House Office 
of National Drug Control Policy to support its related 
strategy and the National Money Laundering Strategy. 
Other personnel have assignment to multi-agency task 
forces. Here are some examples: 
• Organized Crime Drug Enforcement Task Force 
(OCDETF) 
• OCDETF Fusion Center (OFC) 
• High Intensity Drug Trafficking Area (HIDTA) 
• High Intensity Financial Crimes Area (HIFCA) 
• Drug Enforcement Administration Special Operations 
Division (SOD) 
• El Paso Intelligence Center 
IRS:CI focuses its narcotics investigations on high-priority 
OCDETF investigations because its contributions can have 
the greatest effect on dismantling large criminal organi-
zations. In 2019, NCT partnered with the Organization 
for Economic Cooperation and Development (OECD) Task 
Force on Tax Crimes and Other Crimes to update their 
Money Laundering and Terrorist Financing Awareness 
Handbook for tax examiners and tax auditors. The 
purpose of this handbook is to raise awareness on money 
laundering and terrorist financing techniques. 
One of the largest drug rings ever prosecuted in Buffalo, 
NY tried to hide their drug proceeds as income from sea 
cucumbers. While on the witness stand, IRS Special 
Agent David Turri painted the picture of an organization 
so big, it shipped its cocaine and heroin – anywhere 
from 30 to 70 kilograms at a time – on pallets in tractor 
trailers. Another witness said that in 2013, the organi-
zation shipped 100 kilograms of cocaine to a house on 
Niagara Falls Boulevard in the Town of Tonawanda, New 
York. During his testimony, Turri took the jury through a 
series of false bank deposit records and purchase orders 
to demonstrate how the organization took in $19 million 
during a 2-year period ending in 2015. He added that 
the drug ring laundered its money by setting up front 
companies in California, such as seafood wholesalers 
with names like Triton Foods. They relied on sales 
records to falsely show the distribution of large amounts 
of sea cucumbers in Buffalo. Indicted with multiple other 
defendants, the courts accused Herman Aguirre of being 
a leader of the organization and, with co-defendant Jose 
Ruben Gil, a link to the Sinaloa cartel. Gil, who claims he 
met with “El Chapo,” pleaded guilty in February 2019 and 
testified against Aguirre. u
Section Title
International Operations 
NARCOTICS, COUNTERTERRORISM &
TRANSNATIONAL ORGANIZED CRIME 
26 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Internationally, IO has Special Agent Attachés strate­
gically stationed in 11 foreign countries: 
• Mexico 
• Germany 
• Canada 
• The Netherlands– 
Europol 
• Colombia 
• Panama 
• England 
• Barbados 
• Australia 
• China 
• Dubai 
Attachés continuously build and maintain strong alliances 
with foreign governments, and law enforcement and 
industry partners. These alliances give CI the ability to 
develop leads for domestic and international investi­
gations that have an international nexus. The vigilance 
of IRS:CI Special Agent Attaches serves to uncover 
emerging schemes perpetrated by promoters, profes­
sional enablers, and financial institutions. These entities 
facilitate tax evasion of federal tax obligations by U.S. 
taxpayers. 
IO also educates foreign governments and agencies on 
crime detection, investigative techniques, case studies, 
emerging trends, and best practices. Special Agents train 
foreign governments through collaborative efforts with 
the International Law Enforcement Academies (ILEA) in 
Budapest, Hungary; Bangkok, Thailand; San Salvador, 
El Salvador; and Gaborone, Botswana. In addition, IO 
conducts training at the International Academy for Tax 
Crime Investigation at Guardia di Finanza Economic and 
Financial Police School in Ostia, Italy. The Organization 
for Economic Cooperation and Development (OECD) and 
the U.S. Department of State sponsors the training. 
In FY 2020, IO had several significant 
accomplishments: 
The Assistant Secretary of the U.S. Treasury and the 
Ambassador of U.S. Embassy Mongolia were concerned 
with counter-threat finance, counter narcotics, and border 
security of Mongolia. They pledged to provide support 
to Mongolia. Hong Kong Post coordinated a week-long 
Financial Investigation Technique 
training in Mongolia. The training was 
attended by judges, prosecutors and 
law enforcement from Mongolia’s 
National Police Agency, Dept of Taxation, 
Financial Regulatory Commission, 
Financial Intelligence Unit, Independent 
Authority Against Corruption, General 
Prosecutors Office, General Intelligence 
Agency, Judicial General Council and 
Internal Affairs University of Mongolia. 
An important partnership initiative, of 
CI’s International Strategy, involves 
strengthening agency participation in The Joint Chiefs of 
Global Tax Enforcement (J5), is an alliance between the 
criminal tax authorities of the U.S., Australia, Canada, 
the Netherlands, and the United Kingdom. J5’s focus is 
combatting international tax and financial crimes through 
proactive collaboration using each country’s collective 
resources. Areas of emphasis for the J5 presently 
include: 
• Professional Enablers 
• Virtual Currency Crimes 
• Tax Evasion 
• Technology Sharing 
• Innovation 
The first major operational activity for the J5 occurred 
on January 23, 2020, when a globally coordinated 
enforcement activity was carried out in the United 
Kingdom, Canada, Australia, the Netherlands and the U.S. 
The action occurred as part of a series of investigations 
into an international financial institution located in Central 
America whose products and services are believed 
to be facilitating money laundering and tax evasion 
for customers across the globe, using the institution’s 
sophisticated system. The coordinated day of action 
involved collection of intelligence, and evidence through 
interviews, search warrants and subpoenas. 
On November 22, 2019, Mexico City Post, U.S. 
Ambassador to Mexico, Christopher Landau, along with 
the Phoenix Field Office, hosted a meeting with Mexico’s 
Financial Intelligence Unit, Banking Commission, Banking 
Unit, and AML Compliance Officers of Mexican financial 
institutions. The Mexico City Post increased communi­
cation and collaboration with local bankers, and provided 
a history of CI, and how they collaborated with AML 
officials to facilitate the detection and referral of BSA 
investigative leads to IRS:CI. u
27 

IRS:CI ASSET FORFEITURE program uses seizure and 
forfeiture authority as an investigative tool to disrupt and 
dismantle criminal enterprises. 
The program seeks to deprive criminals of property 
used in, or acquired through, illegal activities. CI takes 
a leading role in these investigations because of their 
financial expertise and resources. IRS:CI is one of the 
largest contributors to the Treasury Forfeiture Fund (TFF), 
which the Treasury Executive Office for Asset Forfeiture 
manages. These funds are used to reimburse victims of 
criminal activity and to pay for law enforcement related 
expenses, such as training, equipment, and the cost 
of conducting significant investigations. In addition, CI 
shares a portion of forfeited funds with federal, state and 
local law enforcement agencies. As of September 30, 
2020, IRS:CI seized 775 assets worth an estimated value 
of $821 million and forfeited approximately $162 million 
in ill-gotten proceeds. 
FY2020 Significant Forfeiture - $71,850,000 
HSBC Private Bank (Suisse) SA (HSBC Switzerland), a 
private bank headquartered in Geneva, entered into 
a deferred prosecution agreement (DPA) with the 
Department of Justice in the U.S. District Court for the 
Southern District of Florida. HSBC Switzerland admitted 
to conspiring with U.S. taxpayers to evade taxes and, 
as part of the agreement, HSBC Switzerland will pay 
$192.35 million in penalties, to include a civil forfeiture 
of $71.8 million, for proceeds illegally derived from their 
conduct. HSBC Switzerland admitted that between 2000 
and 2010 it conspired with its employees, third-party 
and wholly owned fiduciaries, and U.S. clients to: 1) 
defraud the United States with respect to taxes; 2) 
commit tax evasion; and 3) file false federal tax returns. 
In 2002, the bank had approximately 720 undeclared 
U.S. client relationships, with an aggregate value of 
more than $800 million. When the bank’s undeclared 
assets under management reached their peak in 2007, 
HSBC Switzerland held approximately $1.26 billion in 
undeclared assets for U.S. clients. 
FY2020 Significant Forfeiture - $18,920,865 
Thomas Edward Spell Jr., Glenn Doyle Beach Jr., and 
other co-conspirators pled guilty to their role in a $200 
million compounding pharmacy scheme to defraud health 
care benefit programs, including TRICARE, which is the 
program that covers U.S. military service members and 
their families in the Southern District of Mississippi. The 
charges consisted of conspiracy to commit health care 
fraud, conspiracy to commit money laundering and tax 
evasion. Both Spell and Beach owned and operated 
separate pharmacies that marketed compounded 
medications at their respective pharmacies. Rather 
than formulating compounded medications based on 
the individualized needs of patients, formulas were 
selected to maximize profit based upon reimbursements 
from TRICARE and other health care benefit programs. 
Numerous assets were seized and forfeited from 
Spell, Beach and other co-conspirators to include bank 
accounts, U.S. currency, real estate, and vehicles. u
WARRANTS & FORFEITURES 
SPECIALIZED UNITS 
28 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GLOBAL ILLICIT 
FINANCIAL TEAM (GIFT) 
GIFT is an IRS:CI-led task force to investigate organi­
zations that illicitly move money used to support 
international crime organizations. These investigations 
are conducted with various partner agencies, including 
Homeland Security Investigations (HSI) and the 
Defense Criminal Investigative Service (DCIS). An IRS:CI 
supervisory special agent (SSA) oversees the task force, 
which includes special agents and professional staff from 
CI and partner agencies. The SSA reports to the special 
agent-in-charge in the Washington, D.C., field office. The 
GIFT is a major conduit of IRS:CI’s money laundering 
strategy and a focal point for the newly formed CI money 
laundering cadre. The cadre consists of special agents 
from all 21 field offices who coordinate activities and 
allocate resources to effectively execute CI’s money 
laundering strategy. GIFT investigations include: 
•  Illegal money transfer businesses 
•  International real estate fraud 
•  Financial institutions concealing and  
disguising illegal transactions  
•  Identity theft 
•  Public corruption and extortion 
•  Government contract fraud 
•  Sale of contraband goods 
ALCOHOL AND  
TOBACCO  
TAX AND TRADE  
BUREAU (TTB)  
Reminiscent of Eliot Ness and Elmer  
Irey’s “T-Men,” IRS:CI continues  
its partnership with the Alcohol  
and Tobacco Tax and Trade Bureau  
(TTB) to combat illicit tobacco and  
alcohol trade. The TTB was created  
in January 2003, when the Bureau  
of Alcohol, Tobacco, Firearms and  
Explosives or ATF, was extensively  
reorganized under the provisions of  
the Homeland Security Act of 2002  
and realigned to the Department of  
Justice. The act called for the tax  
collection functions to remain with  
the Department of the Treasury, thereby creating TTB. 
TTB regulates and collects taxes on trade and imports 
of alcohol, tobacco, firearms, and ammunition within the 
United States. In 2009, TTB entered into an inter-agency 
agreement with CI to provide special agents to enforce 
TTB’s criminal provisions. These special agents are 
strategically dispersed across the country and overseen 
by an SSA. This group’s sole focus is combating the illicit 
tobacco and alcohol trade. The TTB reports to the special 
agent-in-charge in the Washington, D.C., field office. Since 
the agreement began, the group has initiated over 180 
investigations with great success. 
INTERNATIONAL 
TAX GROUP (ITG) 
As the Swiss Bank Program winded down in 2017, CI 
ramped up an International Tax Group (ITG) to continue 
their focus on this type of work. An SSA leads this group 
of special agents, investigative analysts, and professional 
staff, which report to a special agent-in-charge in the 
Washington, D.C., field office. The ITG’s focus is on 
investigations concerning international financial entities, 
ultra-high net worth individuals, and tax fraud promotors. 
Additionally, ITG remains involved in CI’s J5 tax 
enforcement efforts with the governments of the United 
Kingdom, Canada, Australia, and the Netherlands. u
29 

THE COMMISSIONER’S PROTECTION DETAIL (CPD) 
is a specially trained cadre of IRS:CI Special Agents, 
who provide personal security and protection of the IRS 
Commissioner. Since 1999, this dedicated team has been 
charged with protecting the Commissioner during official 
business operations. CPD agents provide protection of 
the Commissioner within the National Capital Region and 
while in travel status, foreign and domestically. 
As the leader of the IRS, the Commissioner frequently 
attends meetings, conferences, publicized hearings and 
speaking engagements in locations such as the White 
House, U.S. Capitol, U.S. Treasury, and other venues in 
Washington, D.C., as well as around the globe. In a typical 
year, the CPD protects the Commissioner on approxi-
mately 500 protective movements, 20 domestic trips, 
and 2-3 international visits. 
CPD agents are trained in protective service operations 
with an emphasis on operational planning, motorcade 
operations, protective intelligence, and preventing and 
responding to attacks. Protective operations are a team 
effort and require detailed advanced preparations aimed 
at identifying and mitigating potential risks, threats, and 
vulnerabilities. u
NATIONALLY COORDINATED
INVESTIGATIONS UNIT 
COMMISSIONER’S
PROTECTION DETAIL 
30 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SINCE ITS LAUNCH IN FISCAL YEAR 2017, the 
Nationally Coordinated Investigations Unit (NCIU) 
has continued to provide critical support to Criminal 
Investigation’s (CI) efforts in using a data driven process 
in identifying, selecting, and developing cases. As in 
previous years, the NCIU’s resources are focused on case 
development efforts that are national and international 
initiatives. 
The NCIU continues to modernize IRS criminal investi­
gative tools to make them more reliant on data analytics 
with a centrally led, team-based approach. The NCIU 
is proactively addressing key issues in non-compliance 
and emerging threats by building strategic partnerships 
with internal and external stakeholders. In addition to 
innovative, national case development, the NCIU offers 
continuous support to CI field offices by offering initia­
tive-specific training and investigative research. The NCIU 
also works closely with multiple IRS business operating 
divisions to facilitate a collaborative, service-wide 
approach to enforcement, and to promote data analytics 
throughout the entire IRS. 
The NCIU has focused its current case development 
efforts on several national initiatives that CI’s Executive 
Steering Committee identified as priorities. The unit’s 
current priorities are: COVID-19 related fraud, virtual 
currency, international tax, significant money laundering, 
employment tax, the Department of Homeland Security’s 
National Targeting Center, and the Whistleblower 
Program. The NCIU successfully developed data models 
for multiple initiatives that lead to significant, impactful 
investigations in the field. More importantly, the unit 
demonstrated the power of data analytics and its benefit 
for law enforcement through the significant number of 
referrals it made, and through quantitative and qualitative 
controls. 
During FY 2020, the NCIU continued to support the CI 
field offices through existing national initiatives: 
•  International – Foreign Account Tax Compliance Act  
(FATCA)  
•  International – U.S. Citizens Living Abroad (USCLA) 
•  Virtual Currency 
•  Employment Tax 
In addition, during FY 2020, the NCIU expanded their 
data driven methods of case development by adding a 
new national initiative involving Form 1099K data. 
In FY 2020, due to the global COVID-19 pandemic, the 
NCIU also brought data driven methodologies to identify 
and develop cases specific to the growing fraud in this 
area. Several referrals were made to the field offices to 
include hording/price gouging of critical supplies, false 
applications for Small Business loans, and false claims of 
tax credits made via the new Form 7200. Creativity and 
the ability to quickly adjust resources allowed the NCIU to 
successfully address this emerging threat. 
In FY 2020, the NCIU had several notable 
accomplishments, including the referral of 117 cases to 
field offices across the country. In addition, the efforts 
of NCIU team members involved in the employment tax 
initiative were recognized with a Commissioner’s Award 
in October of 2019 for their innovation and use of data 
analytics to identify non-compliance. 
The NCIU leadership also provided a briefing to United 
States Treasury Secretary Mnuchin on the Employment 
Tax Initiative and the data driven process used by the 
team to identify, select and develop employment tax 
investigations. u
31 

CI’S UNDERCOVER PROGRAM HISTORY 
In 1929, Michael Malone successfully infiltrated 
Al Capone’s Chicago gang for nearly two years. 
Because of his work, the government successfully 
prosecuted Capone and his top enforcer, Frank Nitti, 
for tax crimes. In 1963, the Undercover Operation 
(UCO) was centralized into the National Office. UCO 
focused on illegal gambling and organized crime, 
and most operations lasted longer than one year. 
In the late 1960s, CI initiated the Courier Project to 
corroborate persistent allegations concerning the 
movement of casino receipts by couriers to offshore 
tax havens. UCO infiltrated organized crime organi-
zations that used fall guys to operate casinos. 
In the late 1970s, the UCO was decentralized. The 
National Office retained review, approval, funding 
and training authority, and districts were responsible 
for the initiation and daily management of the 
operation. This organization continues today. In the 
1980s, UCO focused on offshore banking schemes 
and illegal tax shelters. The estimated revenue 
loss from these shelters was about $120 billion by 
1985. With the advent of money laundering laws, 
undercover agents became proficient at conducting 
investigations into the laundered illegal proceeds of 
narcotics traffickers. 
Today, CI uses undercover operations in investi-
gations on unscrupulous tax return preparers, 
offshore tax schemes, money launderers, dark 
web marketplace operators, and those who seek to 
conceal the movement of money for illegal purposes, 
including tax evasion. 
UNDERCOVER OPERATIONS 
Undercover Operations 
32 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
CRIMINAL INVESTIGATION (CI) has a long history 
of using undercover techniques to investigate crime. 
These techniques are well-documented, and they play 
a significant role to bring criminals to justice. Special 
Investigative Techniques (SIT) oversees CI’s undercover 
activities and reviews, approves, funds, and trains 
personnel who carry out undercover operations. Special 
agents and leadership teams initiate and manage 
day-to-day operations in their respective field offices. 
CI has a cadre of active undercover agents that use 
sophisticated means to initiate contact with individuals 
perpetrating tax crimes and gain evidence needed to 
prosecute their crimes. In FY 2020, agents conducted 
approximately 293 undercover operations. 
SIGNIFICANT CASES 
IN FEBRUARY 2020, the United States District Court out 
of the Northern District of Illinois sentenced Mohammad 
Khatib, owner of Trendsetter, a business located in 
Harvey, Illinois, to 24 months in prison for one count 
of submitting a false income tax return. Lisa Khatib, 
Mohammad’s wife, also plead guilty to a count of the 
same and was ordered to serve two years of probation, 
including 6 months of home confinement and 120 hours 
of community service. In addition, the two were ordered 
to pay restitution in the amount of $822,265. 
According to their plea agreements, Mohammad Khatib 
owned Trendsetter, which sold tobacco products, 
marijuana paraphernalia, and additives used to cut 
certain controlled substances, including heroin and 
cocaine. Lisa Khatib was in charge of bookkeeping, 
payroll and making bank deposits for the business. 
Two sets of books were kept for Trendsetter, one which 
listed the total amount of cash generated from the sale 
of merchandise and the other which underreported 
cash sales. The false set of books was provided to their 
accountant to prepare their U.S. Income Tax Returns for 
the years 2010 through 2015, resulting in a federal tax 
loss of $822,266. 
During the investigation, IRS undercover agents posed as 
businesspeople interested in purchasing Trendsetter. In 
a recorded meeting between Mr. Khatib and the agents 
at Trendsetter, Mr. Khatib bragged about millions of 
dollars in income he had concealed from the IRS, and 
encouraged the agents to run Trendsetter in the same 
fraudulent way if they purchased it from him: “How are 
you going to pay taxes on the $3.5 mill[ion] that I got 
hidden? I can’t pay taxes on that. If you guys want to run 
it different than what I’m running it, you will be paying 
over 200 grand.” Later the same day, the undercover 
agents met with Lisa Khatib at the defendants’ residence, 
and she explained to them how she maintained two 
sets of records to conceal the tax evasion, and doubled 
down on the concealment by making sure the balances 
provided to the defendants’ accountants reflected what 
was contained in the false, clean books. 
This evidence lead to the Khatibs entering into a plea 
agreement admitting to violating Title 26, United States 
Code, Section 7206(1), the submission of a false return. 
IN MARCH 2020, the United States District Court of New 
Hampshire sentenced Michael A. Albert, owner of Mike’s 
Affordable Auto, LLC, a business located in Chichester, 
New Hampshire, to six months imprisonment and ordered 
him to forfeit $434,201 for structuring cash deposits for 
the purpose of evading bank reporting requirements, 
money laundering, and evading reporting requirements 
with respect to cash transactions in excess of $10,000. 
According to the plea agreement, Albert knew that if he 
deposited cash in amounts more than $10,000, the bank 
was required to file reports of those transactions with the 
IRS. To evade the reporting requirements, he structured 
cash deposits from his business. Additionally, Albert 
failed to file required Forms 8300 with the IRS identifying 
cash receipts in his business in excess of $10,000. 
During the investigation, IRS undercover agents 
purchased two vehicles from Albert, representing that 
the cash was proceeds of illegal drug trafficking. In one 
transaction of $17,800, Albert instructed the undercover 
agent to make two payments in amounts less than 
$10,000 and said “so I’m not doing over ten grand. I don’t 
have to do nothing.” In the other transaction of $19,500, 
Albert altered the bill of sale to reflect a paid price of less 
than $10,000. Albert failed to file IRS Forms 8300 related 
to either of the vehicle sales. 
This evidence ultimately lead to Albert entering into a 
plea agreement admitting to violating Title 31, United 
States Code, Section 5324, Structuring cash deposits 
to evade bank reporting requirements, Title 18, United 
States Code, Section 1956, Money laundering and 
Title 31, United States Code, Sections 5331 and 5322, 
Failing to file IRS Forms 8300 for cash transactions by a 
nonfinancial business in excess of $10,000. u
33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
to consider closing a case. Bottomline, the NFL adds 
evidentiary and incriminating value in nearly every case 
or can aid with the investigator’s decision to move onto 
the next one. u
Thanks to the talented men and women of the NFL and 
their dedication to science and their technical services, 
as well as the mission of IRS:CI, the customers of 
the laboratory have come to know and expect their 
high-quality work. The successes of the cases they assist 
in speak for themselves and nothing is more gratifying 
to the NFL than seeing them get fully adjudicated. But 
equally important is helping investigators know when 
59
DATA PROCESSING CENTER 
147
TRIAL GRAPHICS & DESIGN 
120
SCIENTIFIC SERVICES 
The laboratory’s work is critical in ensuring the efficient 
processing of crucial evidence in CI investigations. The 
NFL consists of three sections, each offering specific 
scientific or technical services. For instance, the 
Scientific Services section offers forensic disciplines that 
include electronics (audio, video, and image intelligi
bility), latent prints (finger and palm print development 
and comparison), polygraph, questioned documents, 
chemistry, and DNA collection. The Trial Graphics 
and Design section is responsible for breaking down 
complicated cases into succinct effective visuals that 
help show, rather than tell, all the elements of extremely 
complex investigations. Although these services are 
primarily for CI Special Agents preparing for trial, Trial 
Graphics and Design also assists in the creation of 
high-level presentations and other special projects such 
as CI branding and marketing outreach. Furthermore, 
the Data Processing Center (DPC) located in Florence, 
Kentucky is responsible for taking information, either hard 
copy or electronic, and compiling it into a database that 
is delivered to the customer and can be used to more 
efficiently manage and analyze case-related data. By 
doing so, the DPC saves investigators countless hours of 
tedious labor, while enabling them to focus their energy 
on other key areas of the investigation. 
­
When the experts at the NFL are not working on evidence, 
they are providing tours to agents and various IRS:CI 
stakeholders at their building located in downtown 
Chicago. One of the most effective ways to educate 
others about the NFL’s capabilities is by demonstrating 
their state-of-the-art equipment and sharing stories. 
NATIONAL FORENSIC LABORATORY 
National Forensic Lab Requests 
SINCE THE EARLY 1970’S, scientists and technical 
experts at the National Forensic Laboratory (NFL) have 
reported the results of forensic testing and technical 
services to investigators for use in both exploring 
potential criminal violations and for adjudication of the 
Internal Revenue Code and related financial crimes. 
Results of the NFL’s work are used by CI Special Agents, 
or other customers of the laboratory to analyze elements 
to provide pivotal direction in their investigations. Often, 
support provided by the NFL doesn’t end with delivery 
of a scientific report or product. Whether it be a visual 
information specialist providing and adjusting graphics 
before or at trial, or a forensic scientist testifying to their 
findings, an important function of the NFL is to support 
judicial proceedings where and when required. 
34 
35 

In addition to SAIT, the NCITA provides 
advance training to special agents in 
the use of force, firearms instruction, 
building entry and defense tactics. 
The NCITA also provides leadership 
development programs for all levels, 
from pre-management through 
senior management, to ensure the 
identification and development of 
future leaders. Each year, the NCITA 
develops continuing professional 
education courses for special agents 
and professional staff with an emphasis 
on emerging trends such as cybercrime 
and crypto currencies. 
The NCITA also provides foreign governments and 
agencies training in crime detection, investigative 
techniques, case studies, developing trends, and best 
practices. CI trains foreign governments in partnership 
with the International Law Enforcement Academies 
located in Budapest, Hungary; Bangkok, Thailand; San 
Salvador, El Salvador; and Gaborone, Botswana. CI also 
partners with the Guardia di Finanza Economic and 
Financial Police School’s International Academy for 
Tax Crime Investigation in Ostia, Italy. The Organization 
for Economic Cooperation and Development (OECD) 
sponsors this training. 
IRS:CI special agents receive refresher training regularly. 
They attend quarterly firearms, defensive tactics and 
semi-annual building entry training. Through frequent use 
of force training, they maintain their skills and abilities, 
so they always use good judgement and the appropriate 
degree of force necessary to safely carry out enforcement 
activities. These activities include issuing search 
warrants, arrests, surveillance, armed escorts, dignitary 
protection, undercover activities and seizures. 
FLETC cancelled all trainings throughout the United 
States on March 20, 2020, due to the Covid-19 virus. On 
June 16, 2020, students were allowed back after new 
pandemic policies were set in place by FLETC. Despite 
this setback, the NCITA still trained new employees and 
trained future IRS:CI leaders. u
FY 2020 HIGHLIGHTS 
• 5 Special Agent Basic Training (SABT) classes held 
for approximately 103 new students. 
• 2 Frontline Leadership Readiness Program (FLRP) 
classes held for future IRS:CI leaders. 
• 15 slot classes held at NCITA 
• 1 B
 
asic Instructor Facilitator Training (BIFT) class. 
• 1 S
 
mith and Wesson Armor Training class. 
• 2 Use of Force Instructor Trainings (UOFIT) classes. 
NATIONAL CI TRAINING ACADEMY 
TRAINING AND NCITA 
36 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
IRS:CI SPECIAL AGENTS are the best trained and finest 
financial investigators in the world. They begin their 
training at the National Criminal Investigation Training 
Academy (NCITA). The NCITA is located at the Federal 
Law Enforcement Training Center (FLETC) in Brunswick, 
Georgia and is dedicated to fostering the highest levels 
of professionalism and ethical behavior throughout the 
CI workforce. The NCITA’s primary focus is training 
new special agents in the fundamentals of financial 
investigations. Agents learn to recognize the elements of 
tax offenses, and methods of proof unique to federal tax 
investigations. They acquire all the knowledge, skills, and 
abilities required to be federal law enforcement’s finest 
financial investigators. 
New special agents complete six months of training 
including the 11-week Criminal Investigator Training 
Program (CITP) run by FLETC. The CITP covers basic 
criminal investigation skills, federal criminal law, 
courtroom procedures, enforcement operations, 
interviewing skills, and firearms training common to all 
federal law enforcement agents. 
Following the CITP, new special agent trainees take the 
NCITA Special Agent Investigative Techniques (SAIT) 
course. The SAIT program trains recruits in tax law, 
evidence gathering, interviewing, report writing, methods 
of proving unreported income, and money laundering 
violations. It also provides physical fitness conditioning 
and use of force training. 
37 

THE MISSION OF the Criminal Investigation (CI) Equity, 
Diversity, and Inclusion Office (EDI) is to identify, 
examine, and address the organization’s employment 
practices, policies, guidelines, and procedures to ensure 
that all employees and applicants for employment 
achieve equal opportunity in every facet of the CI’s 
programs, activities, and services. We work to ensure that 
employment practices and decisions are made with the 
highest level of integrity and fairness for every employee. 
CI EDI endeavors to provide excellent customer service, 
advice, and education to management, employees, and 
stakeholders to ensure compliance with appropriate 
federal Equal Employment Opportunity (EEO) laws 
and regulations that prohibit discrimination on the 
basis of age, color, disability, equal pay, national origin, 
pregnancy, race, religion, retaliation, sex (gender), and 
sexual harassment. 
The EDI Director reports directly to the Chief and Deputy 
Chief and provides strategic advice and assistance 
on Management Directive 715 (MD-715), diversity 
strategies, policies, directives, and guidance to the Senior 
Staff and Senior Leadership Team. EDI staff members 
also advise managers on how to effectively capitalize 
on the strengths of all employees while embracing 
their differences and unique perspectives to create an 
environment that engages and supports all employees. 
CI EDI is dedicated to providing diversity and inclusion 
training and education, recognizing that education 
is essential for bringing diversity awareness to the 
workforce. Our efforts for educating the CI workforce is 
an ongoing process of creating the awareness needed 
to manage an inclusive and diverse workforce. Presen-
tations, products/reports, guidance, and seminars are 
customized and provided to the workforce to ensure that 
employees have the awareness, skills, and knowledge 
to carry the message of diversity into their personal 
work environments. The goal of our diversity training 
program is to convey the importance of a respectful 
work environment, thereby maximizing every individual’s 
potential. 
When field offices need to obtain EEO information, we 
can provide an in-depth demographic report of the field 
office as well as an overview of the data so the requestor 
understands the information they have received. We 
can also give advice, guidance, and recommendations 
on any EDI Diversity questions concerns you may have 
while providing you all reference points and sources 
for any information we provide to you. Part of our job 
is to educate the employees of where the written and 
electronic sources can be obtained and what impact it 
has on their job/role in CI. 
EEO PROGRAM STATUS REPORT 
Additionally, the EDI staff prepares CI’s Federal Agency 
Annual EEO Program Status report, also known as 
the Management Directive 715 (MD-715) report. This 
Directive requires agencies to take appropriate steps 
to ensure that all employment decisions are free from 
discrimination. It also sets forth the standards by which 
EEOC will review the sufficiency of agency Title VII and 
Rehabilitation Act programs, which include periodic 
agency self-assessments and the removal of barriers 
to free and open workplace competition. They also 
monitor and evaluate the organization’s compliance 
with the directive and other policies established by the 
Equal Employment Opportunity Commission (EEOC). 
The directive helps identify program limitations and 
uncover potential discrimination of equal opportunities 
for all employees. It also provides EEO plans to remove 
barriers and respond to problems. The EDI staff develops 
action plans to eliminate barriers and correct program 
deficiencies to ensure compliance with the following six 
essential elements of a model EEO program as defined by 
MD-715: 
 
PROFESSIONAL STAFF 
EQUITY, DIVERSITY
 & INCLUSION OFFICE 
38 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
IRS:CI EMPLOYS 828 professional staff serving in 
many administrative and investigative capacities. Our 
Budget Analysts, Management and Program Analysts, 
Administrative Officers, Secretaries and computer 
support professionals all work tirelessly behind the 
scenes to support the mission of IRS CI at Headquarters 
and in the field offices across the United States and 
abroad. Professional staff team members actively 
participate in programs like the Chief’s Advisory Council 
illustrating their hard work and dedication and providing 
crucial insight to CI leadership. 
Our investigative professional staff are critical to 
advancing the law enforcement efforts of CI and 
include: Tax Fraud Investigative Assistants (TFIA) and 
Investigative Analysts (IA). They process and maintain 
investigative files, conduct extensive research, interview 
witnesses, schedule and analyze bank records, prepare 
written summaries of their findings and recommen­
dations, and other actions to support criminal investi­
gations and prosecutions. 
Assigned to the field offices, the Nationally Coordinated 
Investigations Unit (NCIU), Refund Crimes, and Interna­
tional Operations, CI’s Investigative Analysts use sophis­
ticated analytical software to develop leads and support 
complex cases for the special agents in the field. In FY 
2020, Analysts attended training at the e-Crimes Lab in 
Woodbridge, VA, learning about specialized tax and law 
enforcement research skills and advanced investigative 
data analysis. 
During FY 2020, professional staff in multiple CI job 
series received comprehensive training in a virtual 
environment due to COVID travel restrictions. Virtual 
training continues into FY2021 ensuring our professional 
staff have the resources and skills needed to maximize 
their impact and allowing professional staff to keep 
abreast of emerging tax fraud trends like crypto-currency 
and COVID related financial fraud. In addition to core 
mission tax, Investigative Analysts also support criminal 
investigations relating to the opioid crisis, terrorist 
financing, and ID theft through work with the High 
Intensity Drug Trafficking Areas (HIDTA), Joint Terrorism 
Task Forces (JTTF) and other federal law enforcement 
taskforces. 
During FY 2020, CI capitalized on the Veteran Volunteer 
Program, an umbrella program that enabled CI to recruit 
two disabled veteran interns as volunteers from the 
Department of Defense (DoD) and Veteran’s Affairs (VA). 
Interns were provided challenging assignments to include 
extracting and analyzing critical information from investi­
gative databases. Through this program, CI provided 
training and work experience to those who served our 
country and have now returned to the civilian workforce. 
Also, during FY 2020, CI focused on the permanent hiring 
of veterans and hired 54 new veterans through various 
programs, 44 of these veterans are disabled veterans. 
These veterans were placed throughout CI. This veteran 
hiring accounted for 34% of CI’s overall hiring, which 
greatly exceeded the Treasury FY 2020 veteran hiring 
goal of 14%. CI also hired several disabled non-veterans 
through Schedule-A hiring authority. 
There are also many specialty professional staff positions 
related to technology, cyber security, data analytics and 
other areas. All of our administrative, investigative, and 
technical professional staff employees are critical to CI 
accomplishing our law enforcement mission. u
39 

Goal 1: Cultivate a well-equipped, collaborative, 
and inclusive work environment that leverages 
diversity and empowers all contributors to 
Honor the Badge. 
CI endeavors to cultivate a culture that encourages 
collaboration, flexibility, and fairness to enable 
individuals to contribute to their full potential and 
further retention. In order to reap the benefits 
of workforce diversity, work environments must 
cultivate the facilitating conditions that enable 
diverse perspectives to be heard and empower all 
participants to contribute. This requires deliberate 
efforts by our leadership to provide flexibility with 
respect to where, when, and how work gets done; 
promote robust collaboration through teamwork, 
participatory work processes, and cross-functional 
work experiences; and engage all employees through 
cultural competency, leadership development, 
reasonable accommodation, and constructive conflict 
management. 
Goal 2: Build a diverse, high performing 
workforce that reflects all segments of society 
and preserves the CI Legacy. 
Federal agencies are required to take appropriate 
actions to ensure there is equal opportunity in the 
workplace by identifying and removing barriers to 
EEO. Actions include comparing the demographic 
composition of the workforce to the demographic 
composition of the relevant labor market, removing 
internal barriers, conducting strategic outreach to 
communities and utilizing special hiring authorities for 
members of groups with less than expected partici-
pation rates. 
Goal 3: Create an environment that maximizes 
employee engagement in a psychologically 
safe setting that encourages individual 
growth toward continuous learning, pursuit of 
excellence, and engagement with internal and 
external stakeholders and enables employees to 
Master Your Craft. 
CI will endeavor to develop structures and strategies 
to equip leaders with the ability to manage diversity 
and accountability, measure results, refine 
approaches based on such data, and engender a 
culture of inclusion. This will facilitate the creation of 
a workplace approach resulting in the right conditions 
for employee engagement where employees can 
give their best each day, committed to the organiza-
tion’s mission, goals and guiding principles. This will 
motivate employees to contribute to our continued 
organizational success with an enhanced sense of 
their own well-being. 
Goal 4: Recognize the importance of sustaining 
the current workforce while cultivating the 
next generation of managers and leaders that 
Inspires the Future. 
Research has shown that a diverse workforce and 
inclusive workplace are associated with greater 
organizational performance. The goal of having a 
diverse workforce and an inclusive work environment 
is to deliver better services to our customers (internal 
and external) and meet the needs of our stakeholders, 
which come from all segments of society. Effective 
leadership and accountability are critical to sustaining 
this organization-wide commitment. 
GOALS ALIGNED WITH GUIDING PRINCIPLES 
Equity, Diversity and Inclusion Office 
Equity, Diversity and Inclusion Office 
40 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Demonstrated commitment from agency leadership 
This Directive requires agency heads and other senior 
management officials to demonstrate a firm commitment 
to equality of opportunity for all employees and 
applicants for employment. Even the best workplace 
policies and procedures will fail if they are not trusted, 
respected and vigorously enforced. Agencies must 
translate equal opportunity into everyday practice and 
make those principles a fundamental part of agency 
culture. This commitment to equal opportunity must 
be embraced by agency leadership and communicated 
through the ranks from the top down. It is the respon­
sibility of each agency head to take such measures as 
may be necessary to incorporate the principles of equal 
employment opportunity into the agency’s organizational 
structure. 
Integration of EEO into the agency’s strategic mission 
Equality of opportunity is essential to attracting, 
developing and retaining the most qualified workforce 
to support the agency’s achievement of its strategic 
mission. 
Management and program accountability 
A model Title VII and Rehabilitation Act program will 
hold managers, supervisors, EEO officials and personnel 
officers accountable for the effective implementation and 
management of the agency’s program. 
Proactive prevention of unlawful discrimination 
Agencies have an ongoing obligation to prevent discrimi­
nation on the basis of race, color, national origin, religion, 
sex, age, reprisal and disability, and eliminate barriers 
that impede free and open competition in the workplace. 
As part of this on-going obligation, agencies must 
conduct a self-assessment on at least an annual basis 
to monitor progress, identify areas where barriers may 
operate to exclude certain groups and develop strategic 
plans to eliminate identified barriers. 
Efficiency 
Agencies must have an efficient and fair dispute 
resolution process and effective systems for evaluating 
the impact and effectiveness of their EEO programs; and 
Responsiveness and legal compliance 
Federal agencies must ensure that they are in full 
compliance with the law, including EEOC regulations, 
orders and other written instructions. 
Other responsibilities include monitoring the organiza­
tion’s effort to enhance diversity initiatives and analyzing 
trends in the following areas: 
• EEO complaints 
• Disciplinary actions 
• Performance Appraisals 
• Promotions 
• Awards 
• Separations 
• Employee development and training 
• Recruitment and hiring initiatives and practices 
• Retention 
EDI SUPPORT DURING 
THE COVID-19 PANDEMIC 
While the CI organization has spread throughout the 
globe, different segments of our employee population 
have been impacted by the COVID-19 crisis in drastically 
different ways. Some employees are dealing with 
inconveniences while others are seeing their families 
and communities fight to stay alive. We recognize these 
situations are impactful on the organization when 
employees feel isolated during a humanitarian crisis 
along with feeling marginalized, in forms such as racism, 
ageism and parental status pertaining to having young 
children, closed school systems, and ad hoc distance 
learning. 
CI EDI staff works diligently at supporting and coaching 
managers to incorporate inclusion in a remote and 
high-stress work environment. It has been a priority to 
ensure managers know what inclusive behaviors look like 
in a remote environment, are modeling them properly, 
are prepared for how they will be tested in a stressed 
environment and know how they can help all employees 
to be inclusive. As a result of these overlapping concerns, 
CI EDI implemented the following steps to assist in 
addressing these concerns: 
CI EDI collaborates with our embedded Human 
Resources office on expanding opportunities to partner 
more closely and support critical engagement and 
employee experience projects, especially in developing 
emotional well-being resources and remote work 
best-practices. 
Leveraged CI’s Communication and Education office to 
communicate and connect a wider network of employees 
throughout the organization on EDI concerns/issues 
and create social connections that might be missing in a 
remote work environment. 
The EDI and HR Director facilitated having the IRS EAP 
representative present several training segments to CI’s 
senior leadership team on topics that help to mitigate the 
tangible and intangible impact COVID-19 is having not 
only on employees in their workplace, but also at home. 
As multiple inquiries were being received from employees 
and managers related to their concerns related to the 
advent of social reform protests and the upcoming 
election cycle, the CI EDI staff realized that training 
needed to be provided to employees to help manage their 
concerns on these pressing issues. In response, the staff 
created a training presentation on Cultural Competency 
which was delivered to all 21 Field Offices and HQ 
organizations. Cultural Competency refers to the ability 
to interact effectively with people of different cultures. 
Cultural competence comprises four components: (a) 
awareness of one’s own cultural worldview; (b) attitude 
towards cultural differences; (c) knowledge of different 
cultural practices and worldviews; and (d) cross-cultural 
skills. 
During the monthly meetings with the Special Agents 
in Charge and in conjunction with requested training 
presentations, EDI staff members conveyed to all partic­
ipants that all of the EEO laws, including the ADA and 
Rehabilitation Act, continue to apply during the time of 
the COVID-19 pandemic. These laws do not interfere with 
or prevent employers from following the guidelines and 
suggestions made by the CDC or state/local public health 
authorities about steps employers should take regarding 
COVID-19. u
41 

IN 2020, IRS:CI employees continued to help their 
communities in time of need. When catastrophe strikes, 
the President has the authority to approve sending 
Federal support to states impacted by natural disasters 
including hurricanes, tropical storms, flooding and the 
like. As part of the Emergency Support Function #13, IRS 
Special Agents were deployed to assist with the nation’s 
Coronavirus response. Our agents were deployed to 
Travis AFB in Fairfield, CA where they worked to cover 
perimeter security at the base quarantine zone where 
approximately 845 people were being housed. 
IRS:CI employees across the country also assisted their 
local communities where they live in many different ways. 
From buying meals for local hospital employees working 
tirelessly to take care of sick COVID-19 patients to 
participating in local law enforcement torch run events to 
support the Special Olympics, IRS CI employees continue 
to show their human spirit and inherent nature to want to 
support the communities they serve. u
Section Title
COMMUNICATIONS
AND EDUCATION 
42 
IRS:CI Annual Report 2020
43 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OUTREACH AND
COMMUNITY ENGAGEMENT 
CRIMINAL INVESTIGATION (CI) serves the American 
public by investigating potential criminal violations of 
the Internal Revenue Code and related financial crimes. 
It does so in a way that encourages compliance with 
the law and confidence in the tax system. One of the 
most effective ways to encourage compliance is by 
publicizing CI activities that enforce the laws within its 
jurisdiction. Making taxpayers aware of the enforcement 
efforts undertaken by CI is crucial to deterrence. It builds 
confidence with the public that our tax system is fair 
and just and that potential violators will be caught and 
brought to justice. 
The Communications and Education Office (C&E) is the 
function within CI that makes taxpayers aware of these 
enforcement activities. It directly supports CI’s mission 
by raising the level of awareness of all stakeholders— 
internally and externally—about the important work that CI 
does to protect the financial interests of the United States. 
C&E’s communication efforts in FY 2020 expanded in two 
important areas – in the international arena, and on social 
media. CI’s work has an increasingly global reach, and we 
partner with the Joint Chiefs of Global Tax Enforcement 
(J5), which is a transnational committee comprised of 
tax organizations from five countries. The J5 combats 
tax crime through collaboration, by sharing intelligence, 
conducting operations and building the capacity of tax 
crime enforcement officials. In FY 2020 alone, more 
information has been shared regarding cryptocurrency, 
tax crimes, and related enforcement, than in the previous 
ten years combined. 
In May 2020, C&E launched a dedicated IRS:CI Twitter 
account, @IRS_CI, with the purpose of supplementing 
IRS compliance and enforcement messaging. This 
account provides real-time information on criminal cases 
to the media and public and creates awareness about 
CI. Since its launch, CI’s Twitter account has earned 
thousands of impressions and generated hundreds of 
tweets and continues to grow exponentially. 
All CI communicators work to balance media outreach 
with training and education opportunities for the general 
public, federal and Congressional communities, and 
our global partners. C&E is structured to react swiftly to 
unplanned communication needs. CI communicators face 
unique challenges when engaging external audiences 
due to the sensitive nature of CI’s work with grand 
juries, taxpayer information, law enforcement material 
and relationships with U.S. Attorneys’ Offices around 
the country. C&E works through these challenges to 
support CI’s mission. Their work directly contributes to the 
deterrent effect surrounding financial crimes and promotes 
voluntary compliance and confidence in our tax system. u

AS WE WRAPPED up 2019 by celebrating our 100th 
year as a law enforcement agency, 2020 began with 
something unprecedented in our agency’s history: the 
worldwide COVID-19 pandemic. Of utmost importance 
during the pandemic has been the safety of our 
employees and their families. Unfortunately, criminals 
don’t stop committing crimes just because there is 
a national health emergency. In fact, some criminals 
pounce on the opportunity to take advantage of others 
as well as government programs designed to help the 
American people in times of crisis. IRS CI developed a 
quick plan of action to adapt investigative techniques to 
this new environment so our employees could continue to 
do their jobs in a safe and efficient manner. 
CI is heading up investigations into fraudulent claims 
for economic impact payments, Paycheck Protection 
Program (PPP) loans, and refundable payroll tax credits 
from the Coronavirus Aid, Relief, and Economic Security 
(CARES) Act (P.L. 116-136). The PPP offers billions of 
dollars in potentially forgivable loans to keep workers on 
the payroll, guaranteed by the Small Business Adminis-
tration (SBA). 
The division is also exercising its nontax jurisdiction to 
investigate other pandemic-related fraud, including fake 
cures and masks. Working with our law enforcement 
partners, CI has opened investigations involving various 
allegations of individuals attempting to take advantage 
of the government programs designed to help struggling 
individuals and businesses. 
Some examples of these investigations include: 
The charges in the case examples above are merely 
allegations, and the defendants are presumed innocent 
until proven guilty beyond a reasonable doubt in a court 
of law. u
The arrest of David T. Hines, 29, of Miami, Florida, who 
was charged by criminal complaint with fraudulently 
obtaining $3.9 million in PPP loans 
and using those funds, in part, 
to purchase a 2020 Lamborghini 
Huracan sports car worth $318,000. 
At the time of his arrest, authorities 
seized the Lamborghini and $3.4 
million in bank accounts from Hines. 
Georgia federal prosecutors have 
accused five individuals with 
attempting to steal $4.1 million from 
the Paycheck Protection Program 
designed to provide relief to small 
business owners. The indictment 
charges these individuals with 
conspiracy to commit bank and wire 
fraud, bank fraud, wire fraud, false 
statements to a financial institution 
and money laundering. At the time 
of their arrests, authorities seized a Range Rover worth 
approximately $125,000, jewelry, over $120,000 in cash, 
and over $3 million from ten bank accounts. 
The owner of a Florida talent management company 
and four others were charged in complaints for their 
alleged participation in a scheme to file fraudulent loan 
applications seeking more than $24 million in forgivable 
PPP loans guaranteed by the SBA under the CARES Act. 
Terror groups based in the Middle East are targeting 
American first responders in an online scam. The groups 
are allegedly trying to raise money by offering bogus 
personal protective equipment at a time of desperate 
shortages amid the coronavirus pandemic. ISIS allegedly 
used the website facemaskcenter.com as a front for 
peddling fake N-95 masks. Their targets allegedly 
included hospitals, nursing homes and first responders. 
Investigators found that terrorists from al-Qaida and 
Hamas used social media and cryptocurrency to raise 
money for weapons and operations. U.S. authorities 
seized $2 million and over 300 cryptocurrency accounts 
in what was described as the biggest case of its kind. 
A Washington, D.C., man was arrested and charged by 
a criminal complaint with fraudulently obtaining over 
$2.1 million in PPP loans and Economic Injury Disaster 
Loans (EIDL). He used those funds, in part, to purchase 
a $300,000 yacht, a $1.13 million rowhouse, and a 
$46,000 luxury sports sedan. 
Wildfire Response 
COVID-19 Pandemic 
44 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
45  

Guam 
WESTERN AREA 
MIDSTATES AREA 
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Puerto Rico 
U.S. Virgin Islands 
SOUTHERN AREA 
FIELD OFFICE MAP 
Click on a location to go to that Field Office section. 
46 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
47 
DALLAS
HOUSTON
DENVER
SEATTLE
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LOS ANGELES
PHOENIX
ATLANTA
BOSTON
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CHICAGO
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PHILADELPHIA

Mississippi Pharmacy Owners Sentenced in $200 
Million Compounding Pharmacy Scheme 
On July 23, 2020, Glenn Doyle Beach, Hope Thomley 
and Howard “Randy” Thomley, were sentenced for 
conspiring to commit health care fraud, conspiring to 
commit money laundering and tax evasion. Beach was 
sentenced to 13 years in prison; Hope Thomley was 
sentenced to 14 years in prison and Randy Thomley 
was sentenced to 8 years in prison. Beach was ordered 
to pay a monetary judgment of $9,109,872 along with 
restitution of $185,407,641. Hope Thomley was ordered 
to pay a monetary judgement of $29,249,018 along with 
restitution of $189,200,787. Randy Thomley was ordered 
to pay a monetary judgement of $3,651,173, along with 
restitution of $3,651,173. Beach and Thomley were 
both owners of Advantage Pharmacy in Hattiesburg, 
and Thomley also owned and operated a compound 
prescription distributor for Advantage Pharmacy. Beach 
and Hope Thomley were involved in a scheme to defraud 
health care benefit programs, including TRICARE, out of 
at least $200 million. Beach and Hope Thomley were also 
sentenced for their role in a money laundering and tax 
evasion scheme that was used to conceal the fraudulent 
proceeds of the scheme and evade taxes. 
Pharmacy Owner Sentenced to 10 Years in Prison 
for Role in Largest Health Care Fraud Case Ever in 
Mississippi 
On October 31, 2019, Thomas J. Spell, of Ridgeland, 
Mississippi, was sentenced to 10 years in prison 
for his involvement in a $243 million compounding 
pharmacy fraud scheme. Spell was also ordered to pay 
$243,550,503 in restitution and forfeiture of $26 million. 
Spell previously pleaded guilty to participating in the 
scheme to defraud TRICARE, the health care benefit 
program serving our nation’s military, veterans, and 
their respective family members. From approximately 
December 2014 and January 2016, Spell owned and 
operated a pharmacy in Madison County, Mississippi, 
and several other pharmacies across the United States. 
Spell and other co-conspirators marketed compounded 
medications at his pharmacies. Rather than formulating 
compounded medications based on the individualized 
needs of patients, formulas were selected to maximize 
profit based upon reimbursements from TRICARE and 
other health care benefit programs. The result was 
that TRICARE reimbursed Spell’s pharmacies on these 
fraudulent claims totaling over $243 million. Spell’s 
case is part of the largest health care fraud scheme ever 
investigated and prosecuted in the State of Mississippi. 
The investigation is ongoing, and prosecutions are 
continuing nationwide, including in states such as 
California, Tennessee, Arkansas, and Connecticut. 
ATLANTA FIELD OFFICE 
401 W. PEACHTREE STREET NW, ATLANTA, GA 30308 | (470) 639-2228 | AtlantaFieldOffice@ci.irs.gov 
AUGUSTA, GA 
BATON ROUGE, LA 
BIRMINGHAM, GA 
COLUMBUS, GA 
DECATUR, GA 
GULFPORT, MS 
HATTIESBURG, MS 
HUNTSVILLE, AL 
JACKSON, MS 
LAFAYETTE, LA 
MACON, GA 
MOBILE, AL 
MONTGOMERY, AL 
NEW ORLEANS, LA  
OXFORD, MS 
SAVANNAH, GA 
SHREVEPORT, LA 
Atlanta Field Office Case Files 
48 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE ATLANTA FIELD OFFICE covers the states of Georgia, Alabama, 
Mississippi, and Louisiana and consists of eleven judicial districts. We work a 
wide variety of criminal investigations across the four state region which includes 
legal and illegal source income tax fraud, payroll tax fraud, stolen identity theft 
/ tax refund fraud, public corruption, terrorism, general fraud, money laundering 
and narcotics cases. With the recent merger of two field offices (the Atlanta 
Field Office with the former New Orleans Field Office), the newly constituted 
and expanded Atlanta Field Office has a diverse mix of employees with different 
backgrounds who are finding creative ways to investigate our cases. The Atlanta 
Field Office is continually building and strengthening its relationships with our 
law enforcement partners, the United States Attorney’s Office and the public in 
an effort to identify, investigate and refer quality cases for prosecution that will 
encourage compliance with and confidence in the Internal Revenue laws. 
49 

Former Medical Center Foundation President 
Sentenced for Wire Fraud and Money Laundering 
On October 24, 2019, John Paul Funes, of Baton Rouge, 
Louisiana, was sentenced to nearly 3 years in prison 
following his conviction for wire fraud and money 
laundering. Funes has already forfeited $796,309, and 
he was also ordered to pay an additional $50,000 as a 
fine. Funes executed a scheme to defraud Our Lady of 
the Lake Foundation (the “Foundation”), a non-profit 
organization that supports the Our Lady of the Lake 
Regional Medical Center. The fraudulent scheme caused 
a specific loss of $796,309. Funes prepared, signed, and 
submitted numerous fraudulent vouchers to cause the 
Foundation’s accounting personnel to issue checks for 
payees, amounts, and purposes falsely reflected on the 
vouchers. In furtherance of the scheme, for example, 
Funes submitted numerous fraudulent vouchers in which 
he represented that Foundation funds were necessary 
to pay a charter flight company to make time-sensitive 
“outbound patient transports” from Our Lady of the Lake 
Children’s Hospital, when in fact Funes was repeatedly 
using the flight company’s services for his own personal 
benefit, unbeknownst to the Foundation. On numerous 
occasions, Funes fraudulently caused the Foundation 
to issue payments to other individuals and he directed 
those individuals to funnel the majority of the funds back 
to him. In August of 2018, when the Foundation’s finance 
department began an internal audit of the expenses 
described above, Funes created numerous false 
documents in an effort to conceal the scheme. 
Atlanta Field Office Case Files 
Atlanta Field Office Case Files 
50 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
‘Sovereign Citizen’ Who Targeted Federal Judges and 
Government Officials Sentenced to 25 Years in Prison 
On January 28, 2020, Timothy Pate, aka Akenaten Ali, of 
Augusta, Georgia, was sentenced to 25 years in prison. 
Pate was convicted in October 2019 on 15 counts of 
filing false retaliatory liens against federal officials and 
five counts of making a false bankruptcy declaration, 
which stem from his efforts to put federal officials into 
bankruptcy against their will. Pate filed tax returns from 
2016 through 2018 falsely claiming he was owed more 
than $7 million in tax refunds. Pate also attempted to 
have the IRS pay his past-due child support. After the 
IRS repeatedly rejected his false returns, Pate – a U.S. 
citizen and Georgia resident who claimed to be a Moorish 
national not subject to U.S. law – filed a federal civil case 
against the IRS commissioner seeking tax refunds. Pate 
attempted to have the court order the arrest of the IRS 
commissioner and filed false liens against judges, the IRS 
commissioner and other federal officials. 
City of Atlanta Official Sentenced 
for Wire and Tax Fraud 
On January 7, 2020, Larry Scott, the former City of 
Atlanta Director of the Office of Contract Compliance, 
was sentenced to 2 years in prison and was ordered to 
pay $125,000 in restitution. Scott previously pleaded 
guilty to wire and tax fraud. The charges stemmed from 
Scott’s failure to disclose to the City of Atlanta that 
while he served as the Director of Contract Compliance, 
he also secretly worked as the business manager for 
consulting firm that was hired by businesses who wanted 
construction contracts in the Atlanta-metropolitan 
area. From 2012 to 2017, Scott earned approximately 
$220,000 from Cornerstone while serving as a full-time 
management or executive level employee with the City 
of Atlanta. Scott never disclosed to the City of Atlanta 
his employment with and income from Cornerstone. 
Scott knew that if he had disclosed his income from 
Cornerstone on his annual Financial Disclosure 
Statements, the City of Atlanta could have terminated 
Scott. From 2012 to 2017, Scott also filed six false and 
fraudulent federal income tax returns – in that Scott 
failed to report the majority of the income that he earned 
from Cornerstone on his tax returns. For example, in 
2015, Scott earned approximately $156,036 in income 
– (a) $99,136 as the City of Atlanta’s Director of Contract 
Compliance; and (b) $56,900 as Cornerstone’s business 
manager. Yet, on his 2015 federal income tax return, 
Scott falsely listed his “total income” as only $101,630. 
51 

Varsity Blues - Investigations of College Admissions 
and Testing Bribery Scheme 
Since June 2019, 24 individuals have been sentenced 
for their involvement in a nationwide conspiracy that 
facilitated cheating on college entrance exams and the 
admission of students to elite universities as purported 
athletic recruits. Athletic coaches from Yale, Stanford, 
USC, Wake Forest and Georgetown, among others, are 
implicated, as well as parents and exam administrators. 
The investigation into the conspiracy was named 
Operation Varsity Blues. At least 22 parents have been 
sentenced. William Rick Singer, the organizer of the 
scheme, used part of the money to fraudulently inflate 
entrance exam test scores and bribe college officials. A 
principal purpose and object of the tax fraud conspiracy 
was to allow clients of Singer to improperly deduct 
the cost of the bribes from their federal income taxes, 
resulting in an underpayment of federal income taxes. 
Below is a list of some of the sentenced defendants. 
These defendants have received sentences ranging from 
weeks to months of probation and/or prison as well as 
fines and orders of restitution. 
RI Businesswoman Sentenced in $10M Ponzi Scheme 
that Defrauded 23 Individuals 
On February 11, 2020, Monique N. Brady, an East 
Greenwich attorney and businesswoman, was sentenced 
to 8 years in prison and was ordered to pay back her 
victims a total of $4.78 million. Brady duped family 
members, friends, and business associates as she 
operated a $10.3 million Ponzi scheme to help finance 
an extravagant lifestyle. As part of the scheme, Brady 
fraudulently told investors that her company, MNB, had 
secured contracts to perform large scale rehabilitation 
projects on foreclosed properties in Rhode Island, 
Connecticut, Massachusetts, and New Hampshire. She 
represented to a total of 31 investors that payments 
ranging from approximately $20,000 to $80,000 were 
needed to pay subcontractors. She promised investors 
a return of fifty percent of the profit realized. In reality, 
MNB was hired by banks to perform menial tasks, the 
majority of which were for less than $1,000. By the time 
the scheme ended, 23 individuals had lost approximately 
$4.8 million. Additionally, Brady attempted to obstruct 
the IRS criminal investigation by asking investors to 
delete or destroy all email correspondence, texts, 
and documents relating to their investments in MNB 
rehabilitation projects. After Brady became aware of the 
investigation, she met with the Rhode Island Department 
of the Attorney General and the Rhode Island State Police 
to request an investigation of her victims for usury. As 
the case proceeded toward federal indictment, Brady 
purchased a one way ticket to Vietnam. Ms. Brady was 
arrested one day before her scheduled flight. 
• Abbott, Gregory 
• Abbott, Marcia 
• Bizzack, Jeffrey 
• Buckingham, Jane 
• Caplan, Gordon 
• Center, Michael 
• Flaxman, Robert, 
• Henriquez, Elizabeth 
• Hodge, Douglas 
• Huneeus, Agustin 
• Janavs, Michelle 
• Klapper, Marjorie 
• Littlefair, Karen 
• MacFarlane, Toby 
• Sartorio, Peter Jan 
• Sidoo, David 
• Sui, Xiaoning 
• Henriquez, Manuel 
• Lori Loughlin 
• Mossimo Giannulli 
BOSTON FIELD OFFICE
15 NEW SUDBURY STREET, BOSTON MA, 02203 | 617.316.2080 | 
 
BostonFieldOffice@ci.irs.gov 
Boston Field Office Case Files 
BRIDGEPORT, CT 
BURLINGTON, VT 
HARTFORD, CT 
MANCHESTER, NH 
NEW HAVEN, CT 
NORWALK, CT 
PORTSMOUTH, NH 
SOUTH PORTLAND, ME 
SPRINGFIELD, MA 
STONEHAM, MA 
WARWICK, RI 
WORCESTER, MA 
52 
IRS:CI Annual Report 2020
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE BOSTON FIELD OFFICE covers six New England states, each with one 
judicial district: Massachusetts, Connecticut, Rhode Island, New Hampshire, 
Vermont and Maine. The field office’s relationship with the U.S. Attorney’s Office 
and our law enforcement partners is one of the best in the country. IRS:CI 
special agents are vital members of several task forces including Organized 
Crime Drug Enforcement Task Force (OCDETF), Joint Terrorism Task Force 
(JTTF), cybercrimes, securities fraud and health care fraud. 
53 

Portland Tax Return Preparer Sentenced to Prison  
for Preparing False Returns 
On February 25, 2020, Ashraf Eldeknawey was sentenced 
to six months in prison and was ordered to pay $97,191 
in restitution to the IRS. Eldeknawey operated a tax 
return preparation business located inside the Ahram 
Halal Market in Portland from 2015 to 2018. He prepared 
fraudulent tax returns for clients on which he reported 
self-employment income that they did not earn. As a 
result, the clients received tax refunds to which they were 
not entitled. Eldeknawey also filed a 2014 tax return for 
himself on which he overstated the expenses associated 
with a painting business he operated. 
Boston Field Office Case Files 
Boston Field Office Case Files 
54 
IRS:CI Annual Report 2020
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Former Assistant Director of Real Estate 
for City of Boston Sentenced 
for Accepting $50,000 in Bribes 
On January 24, 2020, John M. Lynch was sentenced 
to more than three years in prison and was ordered to 
pay restitution of $14,400 and to forfeit $50,000. Lynch 
was a former Assistant Director of Real Estate in the 
Boston Planning and Development Agency (BPDA). In 
2017, a Boston real estate developer sought to sell a 
parcel of residential real estate in Boston, but needed 
Boston Zoning Board of Appeals (ZBA) approval to 
extend a permit that would allow the property to be 
sold as a multi-unit development. In order to secure a 
permit extension, the developer agreed to pay $50,000 
in bribes to Lynch, in return for Lynch using his influence 
at the BPDA to secure a vote from a ZBA member. In 
May 2017, the ZBA member voted to grant the permit 
extension, enabling the developer to sell the property at 
an additional half a million dollar profit that the developer 
otherwise would not have received. Per their agreement, 
the developer then paid Lynch $25,000 in cash and gave 
Lynch a $25,000 check. Lynch then failed to report those 
and another $10,000 payment he had received from the 
real estate developer on this 2018 tax returns. 
Stamford Man Sentenced to 9 Years in Prison 
for Surgical Glove Investment Scheme 
On December 19, 2019, Thomas J. Connerton was 
sentenced to nine years in prison for operating an 
investment scheme that defrauded more than 70 
individuals, including several women he met on a dating 
website, of more than $2 million. Connerton was the 
founder, president, and CEO of Safety Technologies, LLC 
(“Safety Tech”), a Connecticut company. Safety Tech 
was founded in 2006, purportedly for the purpose of 
developing and commercializing what was represented 
to be a highly durable material to be used in the surgical 
glove market and other related markets. Connerton made 
numerous false representations to fraudulently induce 
victim-investors to provide him funds and to purchase 
Safety Tech securities. Connerton actually used invested 
funds to pay personal expenses and to repay loans to 
an earlier investor. Through this scheme, Connerton 
defrauded more than 70 victim-investors of more than 
$2.2 million. Additionally, Connerton willfully failed to pay 
$293,033 in federal income taxes between 2003 and 
2015. The government is seeking full restitution for the 
victim-investors and forfeiture of the two engagement 
rings that Connerton purchased with proceeds of the 
fraud scheme. Connerton also owes more than $500,000 
in back taxes, interest and penalties. 
55 

Charlotte Man Sentenced for Conspiring  
to Defraud the Government 
On November 12, 2019, Arthur Joseph Gerard III, of 
Charlotte, NC, was sentenced to nearly four years in 
prison and was ordered to pay $567,665 in restitution to 
the IRS. Gerard was previously convicted of conspiracy 
to defraud the U.S. Government. Gerard conspired with a 
client to hide over $2.7 million in gross receipts earned by 
his client from the IRS. He assisted his client in funneling 
income through multiple layers of straw companies and 
bank accounts held by nominees for a fee of between 
$1,000 and $2,500 for each straw company. He assisted 
his client in preparing and filing false documents with the 
IRS. Additionally he assisted in filing false liens to give the 
appearance that his client had no equity in his property in 
effort to avoid IRS debt collection. 
Tennessee Woman Sentenced  
for Wire Fraud and Tax Evasion 
On November 1, 2019, Barbara Butler, of Murfreesboro, 
Tennessee, was sentenced to two years in prison. 
Butler was also ordered to pay more than $1.3 million 
in restitution to Davis Stokes Collaborative, P.C., and 
$521,207 in restitution to the IRS. Butler previously 
pleaded guilty to wire fraud and tax evasion. Butler had 
been the comptroller for D.S. Collaborative in Brentwood, 
Tennessee, for over 20 years and was responsible for all 
of the company’s financial affairs. Between December 
2009 and July 2016, Butler wrote company checks to 
herself and used the company’s credit cards for personal 
use and for the use of her family members, without the 
knowledge or approval of the company’s owners. She also 
opened additional credit cards in the company name and 
those credit lines were used to make personal purchases 
for herself and family. During the course of the scheme, 
Butler embezzled more than $1.8 million from the 
company. In 2016, after learning that the company was 
subjected to an IRS audit, Butler provided false financial 
documents to the IRS auditor in an attempt to conceal the 
fact that she had written company checks to herself, and 
she altered general ledgers to make it appears as though 
the checks were written to legitimate vendors. During tax 
years 2010-2015, Butler failed to report to the IRS the 
income resulting from the embezzlement and caused a 
tax loss of $521,207. 
CHARLOTTE FIELD OFFICE 
10715 DAVID TAYLOR DRIVE, CHARLOTTE NC, 28262 | 705.548.4241 | CharlotteFieldOffice@ci.irs.gov 
CHARLESTON, SC 
CHATTANOOGA, TN 
COLUMBIA, SC 
GREENSBORO, NC 
GREENVILLE, SC 
JACKSON, TN 
JOHNSON CITY, TN 
KNOXVILLE, TN 
MEMPHIS, TN 
MYRTLE BEACH, SC 
NASHVILLE, TN 
RALEIGH, NC 
WILMINGTON, NC 
Charlotte Field Office Case Files 
56 
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57 
IRS:CI Annual Report 2020
THE CHARLOTTE FIELD OFFICE covers the states of North Carolina, which has 
three judicial districts, South Carolina, which has a single judicial district, and 
Tennessee, which has three districts. We work a diverse mix of cases throughout 
the two states, including general tax fraud, refund fraud, terrorist financing, 
public corruption, Organized Crime Drug Enforcement Task Force (OCDETF) and 
employment tax fraud. The field office has excellent partnerships both internally 
and externally. Charlotte is the second largest banking center in the United 
States after New York City. Our office works closely with the respective U.S. 
Attorney’s priority task forces, including the Joint Terrorism Task Force (JTTF), 
Financial Crimes Task Force, and OCEDTF. 

Former Controller Sentenced  
For Embezzlement Scheme 
On July 17, 2020, Shain A. Chappell, formerly of Johnson 
City, Tennessee, was sentenced to more than 3 years in 
prison. Chappell was ordered to pay restitution of over 
$1 million to the victim and over $350,000 to the United 
States. In October 2015, Greentech Environmental 
LLC hired Chappell as its controller. During his time at 
Greentech, Chappell developed a scheme to deceive 
Greentech into paying for Chappell’s personal credit card 
purchases, subsequently hiding the thefts by showing the 
payments as purchases of inventory in Greentech’s books 
and records. By July 2017, less than two years after his 
hiring, Chappell had embezzled over a $1 million from 
his former employer, using the embezzled funds to pay 
for lavish lifestyle expenditures. In addition to stealing 
from Greentech, Chappell filed false tax returns for 2017 
and 2018 that failed to include as income the money he 
stole from his employer, resulting in additional income tax 
owed of over $350,000. 
Charlotte Field Office Case Files 
Charlotte Field Office Case Files 
58 
IRS:CI Annual Report 2020
 
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Multi-Million Dollar Investment Fraud Scheme and 
Income Tax Evasion Nets Nearly 22 Years in Prison 
On August 29, 2019, Treyton Lee Thomas was sentenced 
to nearly 22 years in prison for wire fraud and income 
tax evasion. Thomas was also ordered to pay approx
imately $7.3 million in restitution to the victims of the 
investment and bank fraud schemes, the IRS and the 
U.S. Attorney’s Office and to forfeit an additional $7.3 
million to the United States. Thomas, who represented 
himself as a successful Harvard-educated investment 
advisor, defrauded his father’s used car warranty 
company, several of its customers, his wife and his 
father-in-law. Thomas claimed he was conservatively 
investing their money, but instead, he conducted risky 
trades in the commodities and futures market. Thomas 
provided victims and various financial institutions with 
false information and fabricated bank and brokerage 
statements. Thomas used the same false information and 
fabricated statements to defraud financial institutions 
out of approximately $1.9 million in loan proceeds. In 
addition to losing the victims’ money in risky trades, 
Thomas spent more than $1.6 million to pay personal 
expenses. Thomas failed to file tax returns or pay taxes 
for two decades. To conceal his income, Thomas used 
offshore entities in the Cayman Islands, the British 
Virgin Islands and Nevis, and employed individuals from 
offshore corporation management companies to act 
as his nominee in numerous business ventures. These 
foreigners opened and managed bank accounts through 
which Thomas moved the victims’ funds in and out of the 
United States. 
­
South Carolina Drug Dealer Sentenced to 35 Years 
in Prison After Offering Cellmate $10,000 
to Kill Prosecutor and Witness 
On March 13, 2020, Detric McGowan, aka “Fat,” of 
Piedmont, South Carolina, was sentenced to 35 years 
in prison. McGowan pleaded guilty to participating in a 
drug conspiracy involving cocaine, heroin, fentanyl, and 
tramadol; possessing a kilogram or more of heroin with 
the intent to distribute; conspiring to launder money; 
obstruction of justice/witness tampering; and obstruction 
of justice/retaliation. McGowan was a member of a drug 
trafficking organization operating in the Upstate of South 
Carolina, primarily in Laurens and Greenwood Counties. 
The organization was responsible for the distribution of 
in excess of $1 million dollars’ worth of heroin, cocaine, 
and/or fentanyl in the Upstate and elsewhere. McGowan 
was indicted along with several co-conspirators in 
February 2019 and taken into custody. In July 2019, 
McGowan began to discuss with a person who was 
incarcerated about his desire to have his prosecutor and 
a witness killed. McGowan was recorded agreeing to pay 
the person $10,000 to kill the prosecutor and witness 
and providing information about how to find the targets. 
59 

 
d
Former Lawyer Sentenced for Tax Evasion  
on Income Received over Two Decades, Including 
Income Derived From Illinois Tobacco Litigation 
On March 3, 2020, Daniel Soso, of Alsip, Illinois was 
sentenced to 2 years in prison and was ordered to pay 
nearly $1.8 million in restitution to the IRS. Soso, was an 
associate of former Alderman Edward R. Vrdolyak. Soso 
previously pleaded guilty to one count of tax evasion in 
connection with payments both he and Vrdolyak received 
from Illinois’ multibillion-dollar settlement negotiated 
with tobacco companies. The investigation was centered 
on the state of Illinois’ $9.2 billion court settlement 
with tobacco companies decades ago, which included 
payments to outside law firms that helped with the 
litigation. Soso was not authorized to perform any work 
for the State of Illinois on the lawsuit against the tobacco 
companies. Vrdolyak paid Soso $1.9 million between 
2000 and 2005. 
Husband and Wife Sentenced to Prison  
for Attempting to Bilk the IRS out of $1.3 Million 
On December 19, 2019, Tillman Liggins III was 
sentenced to more than 5 years in prison and his wife, 
Chinita Williams-Liggins, was sentenced to 3 ½ years in 
prison. The couple was also ordered to pay $331,154 
in restitution to the IRS. The couple obtained personal 
identifying information, including names, Social Security 
numbers, and dates of birth, of at least ten individuals 
without their knowledge or consent. They used that 
information to prepare and file false and fraudulent 
individual federal income tax returns (Forms 1040) for 
the tax years 2011, 2012, 2013, and 2014. In total, the 
pair caused to be filed with the IRS at least 219 false and 
fraudulent tax returns seeking refunds of approximately 
$1,323,793. As a result of the scheme, the IRS deposited 
approximately $331,154 in fraudulent refunds into bank 
accounts controlled by the couple and others. 
CHICAGO FIELD OFFICE 
230 S DEARBORN STREET, CHICAGO IL, 60604 | 312.292.4500 | ChicagoFieldOffice@ci.irs.gov 
CARMEL, IN 
DOWNERS GROVE, IL 
DULUTH, MN 
EAU CLAIRE, WI 
EVANSVILLE, IN 
FORT WAYNE, IN 
GREEN BAY, WI 
INDIANAPOLIS, IN 
MADISON, WI 
MATTESON, IL 
MERRILLVILLE, IN 
MILWAUKEE,WI 
MINNEAPOLIS, MN 
ORLAND PARK, IL 
PEORIA, IL 
ROCHESTER, MN 
ROCKFORD, IL 
SCHILLER PARK, IL 
SOUTH BEND, IN 
SPRINGFIELD, IL 
Chicago Field Office Case Files 
60 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE CHICAGO FIELD OFFICE is one of the largest field offices in the country 
consisting of sixteen groups of agents and professional staff. We cover a 
large geographical area working in the states of Illinois, Indiana, Minnesota, 
and Wisconsin with seven judicial districts. We investigate a wide variety 
of cases and have excellent relationships with the U.S. Attorney’s Offices. 
Our agents participate in numerous task forces including HIDTA, OCDETF, 
JTTF, cybercrimes, and political corruption. We work complex and diverse 
investigations such as tax evasion, corporate fraud, employment tax fraud, 
public corruption, cybercrimes, health 
care fraud, and drug trafficking. 
The field office has exceptional 
partnerships, both internally working 
with our civil counterparts, and 
externally with other federal, state, an
local law enforcement agencies. 
61 

La Crosse Dentist Sentenced for Tax Evasion 
On May 19, 2020, Frederick G. Kriemelmeyer, of La 
Crosse, Wisconsin, was sentenced to 6 years in prison 
and was ordered to pay $226,839 in restitution to the 
United States. Kriemelmeyer, a dentist, took a number 
of actions to evade paying the taxes he owed. By 2012, 
the IRS had assessed Kriemelmeyer for more than 
$450,000 in taxes, interest, and penalties. From at least 
2013 through 2015, Kriemelmeyer did not file tax returns
reporting the income from his dental practice, directed 
his patients to pay him in cash or by check with blank 
payee lines, and paid his business and personal expenses
with third-party checks and cash. 
 
 
Chicago Field Office Case Files 
Chicago Field Office Case Files 
62 
IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Leader of Drug Trafficking Organization 
Sentenced to 30 years in prison 
On October 30, 2019, Ricardo Ochoa-Beltran, of San 
Mateo, California, was sentenced to 30 years in federal 
prison. Ochoa-Beltran was the leader of a drug trafficking 
and money laundering organization that operated out of 
California and Indiana to distribute methamphetamine, 
heroin, and cocaine. Ochoa-Beltran’s drug trafficking 
organization obtained drugs in various ways, including 
via packages shipped from California to Indiana. Law 
enforcement intercepted hundreds of thousands of 
dollars’ worth of controlled substances over the course of 
their two-year investigation. Ochoa-Beltran laundered the 
funds generated by the drug trafficking organization by 
funneling drug proceeds through 30 different individual 
bank accounts, sending international wire transfers to 
Mexico (primarily, Sinaloa) using false sender names 
through InterCambio Express wire transfers, and by 
smuggling cash in bulk across the country. 
The remaining defendants were sentenced as follows: 
• Joel Alvarado-Santiago, 7 ½ years 
• Miguel Lara-Leon, more than 21 years 
• Angelica Guzman-Cordoba, 20 years 
• Cesar Salgado, more than 11 years 
• Megan Castleton, 7 ½ years 
• Bryan Stocker, 5 years 
• Lissa Garcia, more than 3 years 
• Roberto Martinez-Hernandez, 1 ½ years 
Wisconsin Man Sentenced to 12 Years 
for Mortgage Rescue Fraud Scheme 
On March 17, 2020, Aston Wood, of New Richmond, 
Wisconsin and Miami, Florida, was sentenced to 12 years 
in prison for a mortgage rescue scheme. Wood pleaded 
guilty to wire fraud and bankruptcy fraud on January 6, 
2020. Between 2014 and 2019, Wood defrauded more 
than 70 Wisconsin homeowners out of approximately 
$390,000. Many homeowners unfortunately lost their 
homes in connection with the scheme. Using the names 
ASC Financial, LLC and Maywood Capital II, LLC, Wood 
solicited people facing the possibility of foreclosure and 
falsely represented to them that he could help them stay 
in their home by obtaining loan refinancing or modifi­
cation. He told customers to immediately make mortgage 
payments to businesses he controlled while he worked 
out the details. Although the homeowners believed their 
payments were going to their mortgage lenders, Wood 
spent their money on his own travel and living expenses. 
Wood defrauded some homeowners out of additional 
money even after they lost their homes by falsely telling 
them that he would use the money to help them buy back 
their foreclosed property or use the money to sue the 
mortgage companies. 
As part of his fraud scheme, Wood advised many 
customers to file bankruptcy. The automatic stay 
triggered by the bankruptcy filings temporarily stalled 
the foreclosures, which extended the time in which Wood 
could collect the monthly mortgage payments. Despite 
a court order barring Wood from these actions, Wood 
continued to engage in mortgage rescue fraud under a 
new business name. 
63 

Ohio Woman Sentenced to 17 Years in Prison  
for Stealing the Identities, Filing False Tax Returns 
On October 4, 2019, Aesha Johnson was sentenced to 
more than 17 in prison and was ordered to pay $63,708 
in restitution to the IRS for stealing the identities of more 
than a dozen people and filing false tax returns. Johnson 
was previously convicted on one count of conspiracy 
to commit wire fraud, 14 counts of wire fraud, and 14 
counts of aggravated identity theft relative to stealing the 
identities of more than a dozen people and filing false 
tax returns. Aesha’s daughter, Brittany Williams, was 
sentenced to three years of probation and was ordered 
to pay $63,708 in restitution to the IRS on one count of 
conspiracy to commit wire fraud, 14 counts of wire fraud, 
and 14 counts of aggravated identity theft. Williams and 
Johnson, when she was living in West Virginia, conspired 
together to use stolen identities to file false tax returns 
with the IRS, seeking tax refunds. Johnson acquired 
many of these identities through a previous criminal 
fraud scheme. Johnson and Williams used an address 
in Cleveland associated with the family as the address 
of record for many of the false tax returns. They often 
communicated with each other using a code that referred 
to the victims using numbers 1 through 31 and created 
and used fictitious email accounts in the names of the 
victims to communicate with the IRS. Williams filed the 
false tax returns online, obtained prepaid debit cards in 
the names of the identity-theft victims, and requested the 
IRS deposit the refunds onto those cards. Williams then 
withdraw cash or made purchases with the cards. 
Ohio Glass Company Owner Sentenced  
for Not Paying Employment Taxes 
On October 29, 2019, Gail Cooper was sentenced to more 
than a year in prison and was ordered to pay restitution 
to the IRS of $659,262 for failing to truthfully account for 
and pay over employment taxes. Cooper was the owner 
of Greenville Architectural Glass (GAG). GAG paid wages 
to its employees during the years 2013 through 2015, 
and as the person responsible for GAG’s finances, Cooper 
was required to withhold federal income taxes and Social 
Security and Medicare taxes from the employees’ wages 
and pay those amounts over to the IRS. Cooper was also 
required to file quarterly employment tax returns with 
the IRS. Although Cooper caused GAG to withhold taxes 
from employees’ wages, she neither filed the required 
quarterly returns for the first quarter of 2013 through the 
second quarter of 2015, nor paid the withheld amounts 
over to the IRS. Cooper also failed to pay over to the IRS 
unemployment taxes. In all, Cooper caused more than 
$280,000 in payroll taxes not to be paid. 
Cooper also filed false individual income tax returns for 
2008, 2009, and 2010, on which she understated GAG’s 
gross receipts and overstated its expenses. Cooper 
caused GAG’s bookkeeper to manipulate and delete 
entries in the company’s accounting records. Specifically, 
she directed the bookkeeper to delete invoices from the 
software after GAG received payment from a client to 
make it appear as if GAG had not received the payment. 
Cooper also paid personal expenses with business 
funds, including utility bills for her residence and rental 
properties, and caused these to be classified as business 
expenses. After filing fraudulent returns for 2008-2010, 
Cooper did not file any individual income tax returns for 
the next several years. In total, Cooper’s conduct caused 
a tax loss of $587,516 to the United States. 
CINCINNATI FIELD OFFICE 
550 MAIN STREET, CINCINNATI OH, 45202 | 513.975.6343 | CincinnatiFieldOffice@ci.irs.gov 
AKRON, OH 
BOWLING GREEN, KY 
CANTON, OH 
CLEVELAND, OH 
COLUMBUS, OH 
DAYTON, OH 
FLORENCE, KY 
INDEPENDENCE, OH 
LEXINGTON, KY 
LOUISVILLE, KY 
TOLEDO, OH 
Cincinnati Field Office Case Files 
64 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE CINCINNATI FIELD OFFICE covers the states of Ohio and Kentucky, which 
includes two federal judicial districts in each state. We work closely with our 
federal, state, and local law enforcement partners to investigate and prosecute 
tax, money laundering, Bank Secrecy Act, and related financial crimes that affect 
the southern and northern judicial districts of the “Buckeye State” as well as 
the eastern and western judicial districts of the “Bluegrass State.” Our special 
agents and professional staff provide unparalleled financial expertise to lead 
investigations of the most egregious white-collar criminals. We work in concert 
with the United States Attorney’s office as well as our civil and law enforcement 
partners to significantly impact regional and national priorities that include: 
income tax evasion, questionable tax refund/return preparer fraud, ID theft, 
cybercrimes, counterterrorism and narcotics related crimes, including opioid-
related drug investigations. 
65 

Kentucky Man Sentenced to Wire and Tax Fraud 
On May 11, 2020, Joseph Peavler was sentenced to 2 ½ 
years in prison for committing wire fraud and assisting 
in the preparation of a false income tax return. Peavler 
was also ordered to pay an excess of $1.6 million in 
restitution, of which, $246,637 is payable to the IRS. 
Between 2004 and 2018, Peavler managed a warehouse 
owned by someone else and, during that time, he 
devised a plan to rent space in the warehouse to two 
separate entities, keeping the money for himself without 
knowledge or authority by the owners. Peavler’s fraud 
scheme was furthered by interstate wire communi-
cations. Peavler also admitted to failing to declare this 
rent money on his tax returns, for each of the years he 
received the rent. 
Cincinnati Field Office Case Files 
Cincinnati Field Office Case Files 
66 
IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Ohio Man Sentenced for $2.6 Million 
Auto Loan Scheme 
On January 7, 2020, Albert Watson, of Columbus, Ohio, 
was sentenced to 5 years in prison and was ordered 
to pay $2,680,423 in restitution to the victim financial 
institutions on one count of conspiracy to commit bank 
fraud and one count of conspiracy to commit money 
laundering relative to an auto-loan scheme in Texas and 
Columbus, Ohio. From at least August 2014 through April 
2018, Watson recruited people who were qualified for 
membership in eligibility-based financial institutions like 
USAA, Navy Federal Credit Union and Pentagon Federal 
Credit Union to create accounts at those institutions. 
Watson then caused fraudulent loan applications to 
be submitted to the financial institutions. Initially, he 
simply inflated the sales price of actual vehicle sales to 
pocket the difference. Eventually, loan applications were 
submitted when there was no actual transfer of vehicle. 
In many cases, multiple fraudulent auto loan applications 
were submitted on a single vehicle, with no intention that 
the vehicle’s ownership would transfer in accordance with 
the information submitted on the auto loan applications. 
The loans obtained were as large as $40,000. 
Man Sentenced in Costa Rica-Based 
Telemarketing Scheme 
On April 22, 2020, Nicholas Richer, of Nashua, New 
Hampshire, was sentenced to more than 4 years in prison 
and was ordered to pay restitution, jointly and severally, 
of $1,102,448 on one count each of international money 
laundering, conspiracy to commit money laundering, 
and conspiracy to commit wire and mail fraud relative 
to his role in a Costa Rica-based telemarketing scheme 
that defrauded victims in the United States, including the 
elderly. Richer participated and facilitated a sweepstakes 
telemarketing scheme from call centers located in Costa 
Rica that convinced U.S. residents to pay money in an 
effort to claim a fictitious sweepstakes prize. Richer 
worked as a bridge defrauding the victims in the U.S. 
and sending victims’ money to Costa Rica. The scheme 
involved telephoning U.S. residents from call centers in 
Costa Rica and falsely informing them that they had won 
second prize in a lottery or sweepstakes. The victims 
were told that in order to receive the prize money they 
had to pay a purported tax or fee via Western Union, 
MoneyGram, bank wire transfers, or through shipment 
of postal money orders. Once a victim made an initial 
payment, the victim received additional calls claiming a 
mistake had been made and that the victim had actually 
won first prize of a greater amount, or an issue had 
occurred, and the victim needed to pay additional fees 
to claim the prize. Calls were made to the victims for as 
long as those victims were willing and able to continue to 
transfer funds. Richer and his co-conspirators kept the 
victims’ funds and never provided any prizes to them. 
67 

Forest Park Anesthesiologist Sentenced  
to 5 ½ Years in Prison 
On August 10, 2020, Richard Ferdinand Toussaint Jr. 
was sentenced to 5 ½ years in prison and ordered to 
pay more than $82.9 million in restitution. Toussaint, 
an anesthesiologist, was at the center of the $200 
million Forest Park Medical Center fraud. Before this 
sentencing, Toussaint had already been sentenced to 
more than 3 years in prison for a separate health care 
fraud conviction and he will serve the two sentences 
concurrently. In March 2018, Toussaint pleaded guilty 
to his involvement in the Forest Park scheme, admitting 
to conspiracy to pay health care bribes and kickbacks 
and illegal remuneration under the Travel Act. In 2008, 
Dr. Toussaint teamed up with co-defendant Dr. Wade 
Neal Barker, a bariatric surgeon, to launch Forest Park 
Medical Center, a physician-owned hospital for bariatric 
and spinal surgery patients. Together with Forest 
Park hospital manager Alan Andrew Beauchamp, Dr. 
Toussaint, Dr. Barker, and their colleagues conspired to 
steer lucrative patients – particularly those with high-re-
imbursing, out-of-network private insurance – to the now 
defunct hospital by paying surgeons for referrals. Most 
of the kickbacks, which totaled more than $40 million, 
were disguised as consulting fees or “marketing money,” 
doled as a percentage of surgeries each doctor referred 
to Forest Park. Dr. Toussaint was one of 18 convicted in 
the scheme. 
Tax Preparer Sentenced for Claiming $35 Million  
in Fraudulent Refunds 
On January 9, 2020, Ebenezer Olayiwola, was sentenced 
to 5 years in prison and was ordered to pay more than 
$30 million in restitution to the IRS. Olayiwola owned and 
operated Peak Insurance and Tax Service. Between 2010 
and 2013, Olayiwola and his preparers filed thousands of 
tax returns claiming more than $35 million in fraudulent 
tax refunds. Olayiwola trained his preparers to prepare 
fraudulent tax returns. Olayiwola’s organization generated 
millions of dollars in tax preparation fees during that 
period. Juana Gabriela Ortiz, who worked for Ebenezer 
Olayiwola, prepared a significant number of false tax 
returns, and was ordered to pay restitution totaling nearly 
$4 million. 
DALLAS FIELD OFFICE 
1100 COMMERCE, DALLAS TX, 75242 | 214.413.5929 | DallasFieldOffice@ci.irs.gov 
AMARILLO, TX 
BEAUMONT, TX 
FARMERS BRANCH, TX 
FAYETTEVILLE, AR 
FORT SMITH, AR 
FORT WORTH, TX 
IRVING, TX 
LITTLE ROCK, AR 
LUBBOCK, TX 
MUSKOGEE, OK 
OKLAHOMA CITY, OK 
TULSA, OK 
TYLER, TX 
Dallas Field Office Case Files 
68 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE DALLAS FIELD OFFICE covers the Northern and Eastern Districts of 
Texas, Oklahoma and Arkansas. Our agents work a diverse mix of criminal 
investigations, which include tax fraud, identity theft, public corruption, 
narcotics, and terrorism investigations. Our agents hold pivotal roles on the 
respective U.S. Attorney’s Office priority task forces, including the Organized 
Crime and Drug Enforcement Task Force (OCDETF), the High Intensity Drug 
Trafficking Area Task Force (HIDTA), the Financial Crimes Task Force and the 
Joint Terrorism Task Force (JTTF). 
69 

Tulsa Software Developer Sentenced  
for $1 Million Payroll Tax Fraud 
On October 29, 2019, Earenest J. Grayson Jr. was 
sentenced to 2 years in prison and was ordered to pay 
restitution of 904,091. Grayson, a computer software 
development company owner, failed to account for and 
pay over employment taxes withheld from his employees’ 
wages. As the owner and operator of Tulsa-based 
Zealcon Corporation, Grayson was responsible for 
withholding, accounting for and paying over to the IRS 
payroll taxes and withholdings due on the wages paid to 
Zealcon employees. From January 2014 through June 
of 2016, Grayson caused a total tax loss of approxi-
mately $1 million by intentionally not paying to the IRS 
income, Social Security and Medicare taxes withheld 
from Zealcon employees’ wages and Social Security and 
Medicare taxes due from Zealcon on those wages. 
Northwest Arkansas Man Sentenced to 14 Years  
in Prison for Drug Trafficking and Money Laundering 
Dallas Field Office Case Files 
Dallas Field Office Case Files 
On March 12, 2020, Bryant Keethe Smith Ford, of 
Fayetteville, Arkansas, was sentenced to 14 years 
in prison and was ordered to pay a $20,000 fine for 
conspiracy to distribute more than 100 kilograms of 
marijuana. Ford was also sentenced to 10 years in 
prison for money laundering. The sentences will run 
concurrently. From around the beginning of January 
2017, and continuing into July 2019, the Bryant Ford 
Drug Trafficking Organization (DTO) operated in Arkansas 
and was responsible for trafficking large quantities of 
marijuana into the Fayetteville, Arkansas area from other 
states. Once the marijuana was brought to Fayetteville by 
Ford, he, or others he directed, distributed the marijuana 
to others. Ford used proceeds from his unlawful 
marijuana sales to pay for luxury cars in cash and he then 
titled the luxury vehicles in another individual’s name. 
As a result of search warrants conducted on the day of 
his arrest, more than $260,000 in U.S. Currency, two 
loaded firearms, and three luxury vehicles were seized. 
During the course of the investigation, over 300 pounds of 
marijuana were seized. 
70 
IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Beaumont Family Sentenced for Tax Evasion 
and Laundering of Gambling Proceeds 
On June 12, 2020, Tillery, a Beaumont businessman, was 
sentenced to nearly 3 years in prison. Tillery was also 
ordered to pay restitution of $1,000,040 and to forfeit 
approximately $2 million in cash, jewelry, and sports 
memorabilia that were proceeds of his illegal gambling 
enterprise. Additionally, he was ordered to pay a money 
judgment of $32,758,541. From 1985 until April 2017, 
Larry Tillery was engaged in the business of accepting 
illegal wagers on sporting events. Tillery owned and 
operated Daylight Motors, a used car dealership, and 
Lamar Capital, a holding company for Daylight Motors, 
and used these two companies as a front to launder illicit 
proceeds from his illegal gambling enterprise. Between 
2011 and 2016, Larry Tillery accepted at least $52 
million in illegal wagers on sporting events. Larry did 
not report these wagers to the IRS or pay gross excise 
taxes. The gross wagering taxes that resulted from 
wagers Larry Tillery accepted between 2011 and 2016 
total $1,040,000. The investigation traced a total of 125 
financial transactions in excess of $10,000 derived from 
illegal gambling that utilized the United States banking 
system. These financial transactions total $32,383,841 
and occurred between 2010 and 2016. 
Judy Tillery assisted her husband in laundering cash 
proceeds of his illegal gambling activities by structuring 
deposits into her personal bank account (in amounts 
under $10,000 to evade federal currency transaction 
reporting requirements) and then writing checks to 
bank accounts controlled by her husband. Judy Tillery 
was sentenced to 2 years of probation and shares the 
forfeiture judgment with her husband. Brian Tillery took 
various actions to aid his father’s bookmaking enterprise. 
Brian Tillery was sentenced to 2 years of probation and was 
ordered to forfeit approximately $245,477 and a residence 
with an appraised value of approximately $600,000. 
71 

VA Employee Sentenced for Orchestrating  
$19 Million Corruption Scheme 
On June 11, 2020, Joseph Prince, of Aurora, Colorado 
was sentenced to 16 years in prison for health care fraud, 
conspiracy, payment of illegal kickbacks and gratuities, 
money laundering, and conflict of interest charges. Prince 
was also ordered to pay $18,777,134 in restitution to the 
Veteran’s Health Administration. Prince, as a Veteran’s 
Administration Spina Bifida (SB) Health Care Benefits 
Program beneficiary specialist, recruited family and 
friends, including Roland Vaughn, to open “home health 
agencies” knowing they lacked the proper licensing or 
credentials to fraudulently bill the VA for SB beneficiaries 
home services. Between June 2017 and June 2018, 
Prince referred approximately 45 SB beneficiaries to 
the sham home health entities which then submitted 
claims totaling over $20 million to the VA. Prince 
received approximately $1.5 million in kickbacks from 
two of the home health entities in a six month period. 
Co-conspirator, and long-time friend, Roland Vaughn was 
sentenced on June 25, 2020, to 8 months in prison and 
was ordered to pay $1,007,205 in restitution for paying 
an illegal gratuity to a public official. 
Denver CPA Sentenced for Conspiracy  
to Defraud Xcel Energy and the IRS 
On June 15, 2020, Stephen Yobst, a former CPA, of 
Denver, Colorado, was sentenced to more than 2 years 
in prison for wire fraud, conspiracy to defraud the United 
States, filing false tax returns and theft of government 
funds. Yobst was also ordered to pay restitution totaling 
$1,167,273, including $806,216 to Xcel Energy and 
$361,057 to the IRS. While working for Xcel Energy, 
Yobst, and co-conspirator James Brittain, created an 
entity, Pacific Exchange Group (PEG) to hold proceeds 
from the sale of utility properties, such as vehicles and 
transformers, until Xcel needed the funds to purchase 
replacement assets. Yobst and Brittain failed to provide 
an accounting of the funds to Xcel and instead used 
the proceeds to support their personal lifestyles while 
failing to report this income on their individual income 
tax returns. Brittain was sentenced on June 21, 2019, 
to a year in prison and was ordered to pay restitution of 
$806,216 to Great American Insurance Company and 
$215,094 to the IRS. 
DENVER FIELD OFFICE 
1999 BROADWAY, DENVER CO, 80202 | DenverFieldOffice@ci.irs.gov 
BILLINGS, MT 
BOISE, ID 
CHEYENNE, WY 
COEUR D'ALENE, ID 
COLORADO SPRINGS, CO 
DURANGO, CO 
FORT COLLINS, CO 
GRAND JUNCTION, CO 
HELENA, MT 
MISSOULA, MT 
WESTMINSTER, CO 
Denver Field Office Case Files 
72 
IRS:CI Annual Report 2020
 
 
 
 
 
 
IRS:CI Annual Report 2020
THE DENVER FIELD OFFICE covers a large geographic area (approximately 
432,500 square miles) that includes the states of Colorado, Montana, Idaho 
and Wyoming.  Our Special Agents work a varied mix of criminal investigations 
including all manners of tax fraud, money laundering and other federal frauds 
with a financial nexus which impact regional and national priorities based on our 
diverse geographic region. 
73 

Coeur d’Alene Woman Sentenced for Embezzling  
More Than a Million Dollars 
On October 2, 2019, Sue Ann Larson was sentenced to 
more than 3 ½ years in prison for embezzling funds from 
her employer and subsequently failing to report the illegal 
income on her personal income tax returns. Larson was 
ordered to pay restitution to her employer of $1,281,552 
and restitution to the IRS of $175,054. Larson, a 
bookkeeper for a local custom cabinet shop, embezzled 
over $1.2 million from her employer between 2009 and 
February 2018. During that time, Larson also falsified her 
tax returns, failing to pay $175,000 in taxes. 
Denver Field Office Case Files 
Denver Field Office Case Files 
74 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Colorado Tax Defier Sentenced for Tax Evasion 
On October 31, 2019, Lawrence Martin Birk, homebuilder 
and owner of Tarryall River Log Homes was sentenced to 
5 years in prison. Birk was also ordered to pay restitution 
of $1,858,826 for tax evasion. Birk operated a profitable 
business but did not voluntarily pay taxes on its income. 
When IRS began collection efforts, Birk contracted a tax 
firm to prepare eight years’ delinquent returns but failed 
to provide pertinent information, including funneling 
$400,000 of retirement funds through a sham company. 
Birk also sent the IRS threatening correspondence 
containing frivolous tax arguments and purchased 
cashier’s checks to thwart collection efforts. 
Fairfield Man Who Defrauded Family 
of More Than $700,000 Sentenced 
On May 7, 2020, Michael Lee Van Auken was sentenced 
to more than 2 years in prison and was ordered to pay 
restitution of $719,340 to the victimized family and 
$165,195 to the IRS. Van Auken, posing as a financial 
services manager with both law and accounting degrees, 
offered various financial services, including investments 
opportunities, filing personal and business tax returns, 
and wealth management planning as part of the scheme. 
Van Auken created various business entities to perpetrate 
the embezzlement while failing to provide the promised 
services. He used the funds for personal expenses and 
investing in foreign currency trading. The investigation 
also showed that Van Auken owed $165,195 in taxes for 
the years 2013-2015. 
75 

Former Director of Finance Sentenced to Three Years 
in Prison for Wire and Tax Fraud 
On June 3, 2020, Brian John Scalabrino, formerly of 
East Grand Rapids, Michigan, was sentenced to 3 years 
in prison for committing wire and tax fraud. He was 
also ordered to pay $348,365 in restitution to Metal 
Standard, and pay $112,363 in restitution to the IRS. 
Scalabrino, who was the former Director of Finance 
for Metal Standard Corporation of Holland, altered his 
payroll records to show a negative federal income tax 
withholding amount for most pay periods. This fraudu-
lently raised his income so that his net income exceeded 
his reported gross income. He used this method to 
fraudulently increase his annual pay by approximately 
$50,000 each year. Scalabrino filed false federal income 
tax returns, causing a loss to taxpayers of $112,363. 
He also submitted false IRS Form W-2 Wage and Tax 
Statements which showed fictitious amounts of federal 
tax withheld from his paychecks. 
Physician Sentenced for Obstructing  
Tax Investigation 
On July 21, 2020, Richard MacAuley, M.D., of 
Farmington Hills, Michigan, was sentenced to 2 years 
in prison. MacAuley previously pleaded guilty to 
corruptly endeavoring or obstruct and impede the due 
administration of the internal revenue laws, including 
by misleading IRS officers, withholding records from 
the IRS, and providing a false document in response 
to an IRS summons. In December 2017, the IRS was 
investigating Dr. MacAuley’s chain of sleep study clinics, 
Sleep Diagnostics of Michigan, P.C. (“SDM”), for failing 
to pay over $500,000.00 in federal payroll taxes. The 
IRS sought to determine whether there was any basis 
to transfer and collect SDM’s outstanding taxes from an 
Okemos-based provider, Advanced Sleep Diagnostics of 
Michigan, P.C. (“ASDM”). While Dr. MacAuley was ASDM’s 
owner on paper, he withheld the ownership document 
from the IRS and falsely denied any relationship between 
the companies. Dr. MacAuley then falsely claimed that he 
sold SDM’s assets to ASDM in 2016. When the IRS issued 
a summons for the sales contract—a document that 
did not exist—two individuals created a fraudulent and 
backdated Asset Purchase Agreement for Dr. MacAuley 
to give the IRS. Dr. MacAuley signed the fake Asset 
Purchase Agreement and gave it to the IRS in May 2018 
along with a cover letter claiming that the agreement was 
“in effect as of July 18, 2016.” 
DETROIT FIELD OFFICE 
985 MICHIGAN AVENUE, DETROIT MI, 48226 | DetroitFieldOffice@ci.irs.gov 
ANN ARBOR, MI 
CLINTON TOWNSHIP, MI 
EAST LANSING, MI 
FLINT, MI 
GRAND RAPIDS, MI 
PONTIAC, MI 
TRAVERSE CITY, MI 
Detroit Field Office Case Files 
76 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
THE DETROIT FIELD OFFICE area of responsibility encompasses the state 
of Michigan and its two judicial districts. With Michigan’s diverse cultures and 
proximity to the Canadian international border, Detroit CI special agents are 
involved in a variety of criminal investigations including traditional tax, corporate 
fraud and money laundering. To address the various priorities affecting Michigan, 
agents are embedded on a variety of task forces such as the Joint Terrorism 
Task Force (JTTF), Public Corruption, Organized Crime Drug Enforcement Task 
Force (OCDETF), Border Enforcement Security Task Force, Southeast Michigan 
Trafficking and Exploitation Crimes Task Force, Cybercrimes Task Force, and the 
Healthcare Fraud Strike Force. 
77 

Ludington Man Sentenced to More Than 5 Years 
in Prison for Embezzling from The Lake Michigan 
Carferry and Filing False Tax Return 
On September 4, 2020, Paul Patrick Piper, of Ludington, 
Michigan, was sentenced to more than 5 years in prison 
on charges of bank fraud and filing a false federal income 
tax return. Piper served for many years as the financial 
controller for Lake Michigan Carferry, the company 
operating the SS Badger ferry between Ludington, 
Michigan, and Manitowoc, Wisconsin. Between 2007 and 
May 2018, Piper embezzled in excess of $1,700,000, 
by overriding normal company accounting systems 
and writing checks directly to himself and to two of his 
affiliated businesses, Piper Tax & Accounting and Piper 
Group. Piper either forged the signatures of company 
owners on these checks or used a signature stamp 
without the authorization of the owners. Piper hid these 
transactions in the accounting system by booking these 
checks to an insurance expense code and by otherwise 
making false entries to balance company accounts. 
Additionally, Piper filed false personal income tax returns 
with the IRS because he knowingly failed to include the 
income he stole from the Carferry, and other income 
earned from his tax business, on his federal income tax 
returns. 
As part of his sentence, Piper is required to pay a 
forfeiture money judgment of $1,740,037. Piper also 
forfeited a 2018 Ram Truck, a 2008 Glacier Bay 5th 
Wheel Recreational Vehicle, and cash in lieu of the 
forfeiture of other assets. Additionally, the court will 
impose mandatory restitution for the victim of at least 
$1,740,037.  
Detroit Man Sentenced for Drug Trafficking and 
Money Laundering 
On November 26, 2019, Sedrick Jackson was sentenced 
to 12 years in prison for conspiracy to distribute 
controlled substances and conspiracy to commit 
money laundering. Jackson, a drug dealer, distributed 
and possessed with the intent to distribute controlled 
substances, including cocaine and fentanyl. Jackson 
conspired with others, including a former Detroit Police 
officer, Christopher Staton. Jackson was assisted by 
Staton on various occasions. For example, Staton 
conducted a staged traffic stop of Jackson, who was 
transporting drugs and/or drug proceeds, in order to fool 
a drug supplier to think that police had taken the drugs 
and the money. 
Detroit Field Office Case Files 
Detroit Field Office Case Files 
78 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Former Senior UAW Official Sentenced to 28 Months 
for Taking Over $1.5 Million in Bribes and Kickbacks 
On February 19, 2020, Michael Grimes, a former 
high-level official in the UAW’s General Motors 
Department, was sentenced to more than 2 years 
in prison and was ordered to forfeit money and real 
property totaling over $1.5 million. Grimes conspired 
with other UAW officials to engage in honest services 
fraud by taking over $1.5 million in bribes and kickbacks 
from UAW vendors and contractors and for conspiring 
to launder the proceeds of the scheme. In September, 
Michael Grimes, of Ft. Myers, Florida, who is a native of 
Grand Blanc, Michigan, pleaded guilty to conspiring with 
two other high-level UAW officials—Joseph Ashton and 
Jeffrey Pietrzyk—to take millions of dollars in bribes and 
kickbacks from vendors doing business with the joint 
UAW-GM Center for Human Resources (CHR). Ashton, of 
Ocean View, New Jersey, and Pietrzyk, of Grand Island, 
New York, have since pleaded guilty. This “pay to play” 
scheme which began in 2006, and lasted over twelve 
years, reaped Grimes over $1.5 million which he spent 
on property, houses, cosmetic surgery for a relative, and 
a host of other items which never benefited the UAW 
membership. In another scheme to defraud, Grimes, 
Ashton and Pietrzyk demanded kickbacks on a $3.9 
million contract for the CHR to buy 58,000 watches for 
all UAW members employed by GM. The UAW officials 
demanded over $300,000 in kickbacks on the watch 
contract. 
Grimes also conspired to launder the proceeds of the 
kickback scheme by using a series of complicated 
schemes, including funneling the money through a sham 
consulting company run by a relative, to conceal and 
disguise the bribes and kickbacks. 
Grimes is one of many to plead guilty and be sentenced 
in connection with the ongoing criminal investigation into 
corruption within the UAW. The following individuals have 
already been sentenced for their roles in the scheme: 
•  former FCA Vice President for Employee Relations 
Alphons Iacobelli (66 months in prison), 
•  former FCA Financial Analyst Jerome Durden (15  
months in prison),  
•  former Director of FCA’s Employee Relations 
Department Michael Brown (12 months in prison), 
•  former senior UAW officials Virdell King (60 days in 
prison), 
•  Keith Mickens (12 months in prison), 
•  Nancy A. Johnson (12 months in prison), 
•  Monica Morgan, the widow of UAW Vice President 
General Holiefield (18 months in prison), 
•  former UAW Vice President Norwood Jewell (15  
months in prison),  
•  and most recently, former UAW Region 5 Director 
Vance Pearson pleaded guilty last week. 
79 

Texas Businessman Sentenced to Nearly 6 Years in 
Prison for Venezuela Bribery Scheme  
and Obstruction of Justice 
On February 19, 2020, Alfonzo Eliezer Gravina Munoz, of 
Katy, Texas, was sentenced to nearly 6 years in prison 
and was ordered to pay $214,849 in restitution to the 
IRS. Gravina previously forfeited $590,446 in connection
with this case. Gravina was a former procurement officer 
of Venezuela’s state-owned and state-controlled energy 
company, Petroleos de Venezuela S.A. (PDVSA). While 
employed as a purchasing manager at PDVSA, Gravina 
accepted bribes from U.S.-based businessmen Abraham 
Jose Shiera Bastidas and Roberto Enrique Rincon 
Fernandez to enable their companies to win lucrative 
energy contracts with PDVSA. Gravina accepted over 
$590,000 in bribes from 2007 to 2014. 
 
In order to conceal the corrupt payments, Gravina 
received the funds in accounts outside of the U.S. in the 
names of Gravina’s associates and relatives. Gravina 
underreported his income by not reporting the bribe 
payments as income on his 2010 tax return. 
“Compound King” and Wife Sentenced in $21 Million 
Health Care Fraud Scheme; Fugitive Sought 
On June 25, 2020, pharmacist George Philip Tompkins, 
of Houston, Texas, the self-proclaimed “Compound 
King” and former owner of Piney Point Pharmacy, 
was sentenced to 10 years in prison. His wife, Marene 
Kathryn Tompkins, the former vice president of Piney 
Point Pharmacy, was sentenced to 30 days of home 
confinement and three years of supervised release. 
George Tompkins was ordered to pay restitution (and 
forfeiture) of $12.3 million and Marene Tompkins was 
ordered to pay restitution (and forfeiture) of $950,745. 
The pair were sentenced for their roles in a $21.8 million 
Department of Labor (DOL) - Office of Workers Compen-
sation Programs and Federal Employees Compensation 
Act fraud scheme. 
George Tompkins and others billed the DOL for medically 
unnecessary compound gels and creams that were 
predicated on illegal kickback payments. George 
Tompkins and Anoop Chaturvedi, a legal permanent 
resident from India who remains a fugitive on related 
charges, created the scheme to generate compounded 
pain cream prescriptions and bill health care programs 
for injured state and federal employees. George Tompkins 
and Chaturvedi used separate entities—including George 
Tompkins’s company, Wellington Advisors—to receive and 
launder the proceeds of their crimes. 
Houston Field Office Case Files 
HOUSTON FIELD OFFICE 
8701 S. GESSNER, HOUSTON TX, 77074 | 281.721.8390 | HoustonFieldOffice@ci.irs.gov 
AUSTIN, TX 
BROWNSVILLE, TX 
CORPUS CHRISTI, TX 
EL PASO, TX 
LAREDO, TX 
MCALLEN, TX 
SAN ANTONIO, TX 
WACO, TX 
80 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE HOUSTON FIELD OFFICE area of responsibility encompasses the Southern 
and Western judicial Districts of Texas. Due to the proximity to the Mexican 
international border and having some of the fastest-growing cities and counties 
in the United States within its jurisdiction, Houston special agents are able to 
work a variety of cases with emphasis in traditional tax-related crimes such as 
employment tax, corporate fraud, identity theft, unscrupulous return preparers 
and general fraud. The Houston Field Office also provides crucial support to their 
respective U.S. Attorney’s priority task forces involving counterterrorism, public 
corruption, human trafficking, drugs and complex money laundering violations. 
81 

Texan Sentenced for Fraudulent  
“Sweepstakes” Scheme 
On March 9, 2020, Akintola Akinmadeyemi was 
sentenced to 10 years in prison for his role in an 
estimated $340 million intended-loss fraudulent 
“sweepstakes” scheme. Akinmadeyemi was also  
ordered to pay $111,870 in restitution. Akinmadeyemi, 
and others, carried out a a sweepstakes fraud by sending 
letters to victims notifying them that they had won a 
sweepstakes. Each mailer included a fraudulent check 
issued in the name of the victim, usually in the amount 
of $8,000, and a pre-addressed envelope. Victims were 
instructed to deposit the check into their bank account, 
immediately withdraw between $5,000 and $7,000 
dollars in cash or money orders and send the money 
to a “sweepstakes representative” to facilitate the 
victim collecting his or her prize. By the time the victim 
was notified by the bank that the deposited check was 
fraudulent, the cash or money order had been sent by the 
victim and received by the defendants or conspirators. 
The intended loss from this scheme was in excess of 
$250 million, with an actual loss of more than $900,000. 
Houston Field Office Case Files 
Houston Field Office Case Files 
82 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Owner of Bullion Direct, Inc. Sentenced Investment 
and Wire Fraud Scheme 
On February 13, 2020, Charles McAllister was sentenced 
to ten years in prison and three years of supervised 
release. McAllister was also ordered to pay restitution of 
$16,186,212 to over 5,800 victims. McAllister, the CEO 
and owner of Bullion Direct, Inc. (BDI), was convicted by 
jury of two counts of wire fraud and one count of engaging 
in a monetary transaction with criminally derived 
property. From at least January 2009 through July 2015, 
McAllister perpetrated a scheme that falsely represented 
that funds obtained from individual customers would 
be used to purchase precious metals on behalf of the 
customer and either shipped directly to the customer 
or stored in BDI’s vault. Instead of buying the precious 
metals with the customer’s funds and storing customer 
metals, McAllister spent customer property on BDI 
corporate expenses, on other investment activities, and 
for his own personal use and benefit. 
Texas Tax Return Preparer Sentenced for Defrauding 
the United States 
On October 9, 2019, Stacey Anderson was sentenced 
to more than 7 years in prison and was ordered to 
pay restitution of $8,100,492. Anderson owned a tax 
return preparation business, Anderson Professional Tax 
Services, and operated the business out of her residence. 
With the assistance of co-defendant Janell Lightner, 
Anderson prepared tax returns claiming false business 
items and/or education tax credits, in order to fraudu­
lently increase their clients’ tax refunds. These returns 
were prepared for clients in Texas, Maryland, and the 
District of Columbia. Anderson also filed a false 2014 tax 
return for herself. The total tax loss generated from this 
scheme exceeded $10 million. 
83 

Nevada Return Preparer Sentenced  
to More than 3 Years in Prison for Tax Crimes 
On January 30, 2020, Michael A. Sandoval, of Las 
Vegas, Nevada, was sentenced to more than 3 years in 
prison. Sandoval was also ordered to pay restitution of 
$281,630 to a client and $100,138 to the United States. 
Sandoval previously pleaded guilty to tax evasion, aiding 
and assisting in the preparation and filing of a false tax 
return and making and subscribing a false tax return. 
Sandoval, a tax return preparer, provided payroll and 
tax preparation services for individuals and companies 
through his business, Nevada Financial Solutions Inc. 
(NFS). When two of Sandoval’s clients provided NFS 
with $471,178 in payments to be forwarded to the IRS 
as money due for their quarterly employment taxes, 
Sandoval did not provide those payments to the IRS, 
but instead spent the funds for his personal benefit. At 
NFS, Sandoval also filed and caused the filing of false 
individual income tax returns for a substantial number of 
clients by reporting fraudulent deductions, including false 
Schedule C business losses, charitable contributions, 
and state and local tax deductions. These fraudulent 
deductions caused a tax loss of over $2.8 million. On 
his own individual tax returns, Sandoval fraudulently 
understated his income from NFS for the years 2010 
through 2017, causing an additional tax loss of $100,138. 
In total, Sandoval caused a tax loss totaling $3,425,654 
to the IRS. 
Utah Man Sentenced for Conducting  
Fraudulent Investment Scheme 
On October 15, 2019, Claud R. (“Rick”) Koerber was 
sentenced to more than 14 years in prison and was 
ordered to pay more than $45 million in restitution to his 
victims. Koerber was previously convicted on charges 
of fraud in the offer or sale of securities, wire fraud and 
money laundering. From approximately 2004 to 2008, 
Koerber ran an investment scheme with his businesses 
Franklin Squires and Founders Capital. Through real 
estate seminars and other means, Koerber solicited 
investment in a real estate scheme he dubbed the “equity 
mill.” Koerber described the equity mill as the “holy 
grail” of real estate investing and claimed investor money 
would be used to make “hard money” or bridge loans to 
acquire residential real estate. As part of the inducement, 
Koerber presented his scheme as being wildly profitable 
and promised investors exorbitant monthly returns, 
typically between 1-5% per month. In total, from 2004 to 
2007, Koerber raised approximately $98.6 million for the 
scheme. However, in reality, Koerber’s businesses and 
scheme were not profitable. And he spent only a fraction 
of the $98.6 million on real estate. Instead, without 
telling investors, Koerber used a substantial portion of 
the money raised to (1) make interest payments to earlier 
investors, (2) buy expensive cars, (3) mint his own coins, 
and (4) fund pet projects that included a hamburger 
chain, an unprofitable academy, and a movie, among 
other things. He also used investor money for various 
personal expenses, including fixing his teeth. 
LAS VEGAS FIELD OFFICE 
110 N. CITY PARKWAY, LAS VEGAS NV, 89106 | 702.868.5091 | LasVegasFieldOffice@ci.irs.gov 
OGDEN, UT 
RENO, NV 
SALT LAKE CITY, UT 
Las Vegas Field Office Case Files 
84 
IRS:CI Annual Report 2020
 
 
 
 
 
  
 
 
IRS:CI Annual Report 2020
THE LAS VEGAS FIELD OFFICE covers the District of Nevada, as well as the 
District of Utah, comprising two judicial districts. We work a diverse mix of cases 
across the geographic area to include: criminal tax fraud, money laundering and 
cyber crimes. We also hold pivotal roles on the respective U.S. Attorney’s priority 
task forces, including the Joint Terrorism Task Force, Organized Crime Drug 
Enforcement Task Force (OCDETF), and the Financial Crimes Task Force. 
In addition, we cover a large part of the casino industry for the United States and 
an outstanding narcotics program in Utah. 
85 

Former Intelligence Officer Sentenced to 10 Years 
in Prison for Attempted Espionage 
On September 24, 2019, Ron Rockwell Hansen, of 
Syracuse, Utah, was sentenced to 10 years in prison 
and was ordered to forfeit property acquired from 
or traceable to his offense, including property used 
to facilitate the crime. Hansen, a former Defense 
Intelligence Agency (DIA) officer, pleaded guilty in 
March 2019, to attempting to communicate, deliver, or 
transmit information involving the national defense of the 
United States to the People’s Republic of China. Hansen 
was arrested June 2, 2018, on his way to the Seattle-
Tacoma International Airport in Seattle, Wash., as he was 
preparing to board a flight to China while in possession of 
secret military information. 
Hansen pleaded guilty to the lead count of a 15-count 
indictment returned in June 2018, charging him with 
attempt to gather or deliver defense information, 
acting as an agent of a foreign government, bulk cash 
smuggling, structuring monetary transactions, and 
smuggling goods from the United States. 
Hansen retired from the U.S. Army as a Warrant Officer 
with a background in signals intelligence and human 
intelligence. He speaks fluent Mandarin-Chinese and 
Russian, according to court documents. Upon retiring 
from active duty, DIA hired Hansen as a civilian 
intelligence case officer in 2006. Hansen held a Top 
Secret clearance for many years and signed several 
non-disclosure agreements during his tenure at DIA and 
as a government contractor. 
In early 2014, agents of a Chinese intelligence service 
targeted Hansen for recruitment, and he began meeting 
with them regularly in China. During these meetings, the 
agents described to Hansen the type of information that 
would interest Chinese intelligence. Hansen stipulated 
that during the course of his relationship with Chinese 
intelligence, he received hundreds of thousands of dollars 
in compensation for information he provided them. 
Between May 24, 2016, and June 2, 2018, Hansen 
solicited national security information from an 
intelligence case officer working for the DIA. Hansen 
knew the Chinese intelligence services would find the 
information valuable, and he agreed to act as a conduit 
to sell that information to the Chinese. He advised the 
DIA case officer how to record and transmit classified 
information without detection, and how to hide and 
launder any funds received as payment for classified 
information. Unbeknownst to Hansen at the time, the 
DIA case officer reported his conduct to the DIA and 
subsequently acted as a confidential human source in the 
investigation. 
Hansen met with the DIA case officer on June 2, 2018 
and receiving individual documents containing national 
defense information that he had previously solicited. The 
documents he received were classified. The documents 
included national security information related to U.S. 
military readiness in a particular region -- information 
closely held by the federal government. Hansen did not 
possess a security clearance, nor did he possess a need 
to know the information contained in the materials. 
Hansen reviewed the documents, queried the case 
officer about their contents, and took written notes which 
contained information determined to be classified. He 
advised the DIA case officer that he would remember 
most of the details about the documents he received that 
day and would conceal notes about the material in the 
text of an electronic document he would prepare at the 
airport before leaving for China. He intended to provide 
the information he received to the agents of the Chinese 
Intelligence Service with whom he had been meeting. He 
also knew the information was to be used to the injury 
of the United States and to the advantage of a foreign 
nation. 
Las Vegas Field Office Case Files 
Las Vegas Field Office Case Files 
86 
IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Former IRS Employee Sentenced 
to Prison for Tax Evasion 
On October 22, 2019, Craig Orrock, of Salt Lake City, 
Utah, was sentenced to nearly 3 years in prison for 
tax evasion and obstructing the IRS. Orrock was also 
ordered to pay $923,666 in restitution. Orrock, a former 
IRS employee and former attorney evaded the payment 
of federal income taxes and obstructed IRS efforts to 
collect those taxes. Orrock filed tax returns for the years 
1993 through 2015, but did not pay the income taxes 
reported as due on those returns. Orrock attempted to 
prevent the IRS from collecting the reported income 
taxes by using entities, bank accounts, and trusts in other 
names to hide his income and assets from IRS collection 
officers, filing frivolous bankruptcy petitions, and filing an 
offer-in-compromise falsely representing to the IRS that 
he had virtually no assets. For example, Orrock used an 
entity known as Arville Properties, LLC to conceal from 
the IRS his ownership of real property that he sold in 
2007 for $1.5 million. In all, Orrock evaded the payment 
of over $500,000 in federal income taxes. 
Man Sentenced for Utah Drug and 
Money Laundering Conspiracies 
On November 6, 2019, Randall Heath was sentenced to 
13 years in prison for conspiracy to distribute Fentanyl 
and conspiracy to commit money laundering. From 
approximately October 2015 through at least May 2017, 
Health and other co-conspirators distributed 400 grams 
or more of a substance containing Fentanyl. Heath also 
conspired to launder the proceeds of unlawful Fentanyl 
and marijuana sales. Heath conspired to engage in 
various financial transactions to promote the drug 
trafficking efforts and conceal the nature of the drug 
proceeds. The conspirators transferred money in and 
out of bank accounts with business names to attempt 
to make the money appear to be derived from lawful 
commerce. 
87 

Goldman Sachs Charged in Foreign Bribery Case  
and Agrees to Pay Over $2.9 Billion 
On October 22, 2020, the Goldman Sachs Group Inc. 
(Goldman Sachs or the Company), a global financial 
institution headquartered in New York, New York, and 
Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), its 
Malaysian subsidiary, admitted to conspiring to violate the 
Foreign Corrupt Practices Act (FCPA) in connection with 
a scheme to pay over $1 billion in bribes to Malaysian 
and Abu Dhabi officials to obtain lucrative business 
for Goldman Sachs, including its role in underwriting 
approximately $6.5 billion in three bond deals for 
1Malaysia Development Bhd. (1MDB), for which the bank 
earned hundreds of millions in fees. Goldman Sachs 
will pay more than $2.9 billion as part of a coordinated 
resolution with criminal and civil authorities in the United 
States, the United Kingdom, Singapore, and elsewhere. 
Goldman Sachs entered into a deferred prosecution 
agreement in connection with a criminal information 
charging the Company with conspiracy to violate the 
anti-bribery provisions of the FCPA. GS Malaysia pleaded 
guilty to conspiracy to violate the anti-bribery provisions 
of the FCPA. In addition to these criminal charges, in 
excess of $1 billion in assets for Malaysia associated with 
and traceable to the 1MDB money laundering and bribery 
scheme have been recovered. 
Former Tax Lawyer Sentenced to 5 Years in Prison  
for Evading Back Taxes Owed to IRS 
On February 3, 2020, James Roy McDaniel, of Long 
Beach, was sentenced to 5 years in prison and was 
ordered to pay $1.54 million in restitution. McDaniel 
previously pleaded guilty to tax evasion. McDaniel, a 
former tax and estate-planning lawyer, set up shell 
companies to evade the payment of more than $1.4 
million he owed to the IRS. This was McDaniel’s second 
criminal tax offense. In 2004, McDaniel pleaded guilty 
to filing a false income tax return for failing to report 
income he earned from 1997 – 2001, creating a tax loss 
of $677,368. In that case, McDaniel was sentenced to 2 
years in prison and he was ordered to surrender his law 
license in California. IRS assessed McDaniel more than 
$1.4 million in taxes, interest and penalties. Following 
this conviction, McDaniel attempted to evade payment 
of the $1.5 million he owed the IRS by creating two shell 
companies – Davis Bell Consulting LLC and James Roy 
Consulting LLC – where he directed payments for tax 
and estate planning consulting work he performed after 
he was released from prison. Between May 2008 and 
late 2018, McDaniel attempted to mislead federal tax 
authorities and conceal his income by directing other 
people to sign documents identifying themselves as 
the sole managing members of the shell companies. 
McDaniel directed them to open bank accounts where he 
deposited checks for his tax and estate planning work. 
LOS ANGELES FIELD OFFICE 
300 N. LOS ANGELES ST, LOS ANGELES CA, 90012 | 213.372.4129 | LosAngelesFieldOffice@ci.irs.gov 
CAMARILLO, CA 
EL MONTE, CA 
LAGUNA NIGUEL, CA 
LONG BEACH, CA 
SAN BERNARDINO, CA 
SAN DIEGO, CA 
SAN MARCOS, CA 
SANTA ANA, CA 
SANTA MARIA, CA 
VAN NUYS, CA 
Los Angeles Field Office Case Files 
88 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
AS THE NATION’S largest field office by population, the Los Angeles Field Office 
serves a population of approximately 22 million people, stretching over nine 
counties from San Luis Obispo to the United States-Mexico border. The LAFO 
covers two judicial districts in California--the Central and the Southern. The 
LAFO works a diverse mix of financial investigations across this large geographic 
area, including cybercrime, international tax fraud, identity theft, public 
corruption, and Bank Secrecy Act violations. We play crucial roles in the U.S. 
Attorney’s priority task forces, including the Joint Terrorism Task Force (JTTF) 
and the Organized Crime Drug Enforcement Task Force (OCDETF). 
89 

Former Homeland Security Investigator  
Sentenced to More Than 10 Years  
for Money Laundering, False Statements  
and Tax Evasion Convictions 
On August 5, 2020, Tyrone Cedric Duren, of Bonsall, 
California, was sentenced to more than 10 years in 
prison. Duren was also ordered to forfeit his primary 
residence, pay a money judgment of $275,000 and pay 
restitution to the IRS. Duren previously pleaded guilty to 
19 counts including charges of money laundering, making 
false statements, and tax evasion. While working as a 
federal agent specializing in the investigation of bulk cash 
smuggling, Duren stole money from individuals smuggling 
drug proceeds to Mexico. Duren then laundered those 
funds by depositing them into personal and business 
accounts, and used the stolen cash for personal 
purchases. Over several years, Duren used his position 
as a federal agent to place GPS trackers on vehicles used 
to transport proceeds from drug sales. Duren then took 
some of the drug money after it was seized, laundered 
it into his own accounts, and spent it on real estate and 
international travel. 
Los Angeles Field Office Case Files 
Los Angeles Field Office Case Files 
90 
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IRS:CI Annual Report 2020
Inglewood-based Tax Preparer Sentenced 
to More Than 5 Years in Prison for Scam 
that Sought $5.6 Million in Bogus Tax Refunds 
On December 16, 2019, Cubby Wayne Williams, of 
Alhambra, was sentenced to more than 5 years in prison 
and was ordered to pay $490,289 in restitution to the 
United States Treasury. Williams was previously found 
guilty of 22 counts of assisting in the preparation of false 
tax returns for his clients and four counts of subscribing 
to false tax returns for himself. Williams owned and 
operated a tax services company, Williams Financial 
Network; he formerly worked at the California Franchise 
Tax. Williams fraudulently claimed OID withholdings 
on 22 tax returns for his clients and sought hundreds 
of thousands in bogus tax refunds. Williams took a cut 
of many of these refunds often by directing the IRS to 
deposit a portion into a bank account under his control. 
Between 2012 and 2019, Williams submitted 222 false 
client tax returns claiming approximately $5,648,809 in 
fabricated income tax withholdings. 
L.A. County Public Official Sentenced to One Year 
in Federal Prison for Accepting Bribes 
and Cheating on Income Tax Returns 
On June 23, 2020, Mohammad R. Tirmazi, a Los Angeles 
County Internal Services Department official, was 
sentenced to 12 months in federal prison for accepting 
nearly $300,000 in bribes from an electrical contractor. 
Tirmazi committed tax evasion for failing to report the 
income he received from the accepted bribes as well 
as additional illegal income from a side business on his 
federal tax returns. 
Man Sentenced for Role 
in International Money Laundering Scheme 
On July 16, 2020, Juan Duarte-Tello was sentenced 
to 18 years in prison for his role in a drug trafficking 
organization (DTO) that engaged in laundering narcotics 
proceeds for the Sinaloa Drug Cartel. Duarte-Tello 
was part of an indictment unsealed on March 8, 2018, 
charging 40 members of the DTO with conspiring to 
launder tens of millions of dollars in drug money. In 
addition to the indictments in San Diego, a total of 75 
defendants nationwide have been charged across the 
United States with crimes ranging from drug distribution 
to money laundering, all stemming from this investigation, 
including defendants in the Southern District of Ohio, the 
Eastern District of Kentucky, the District of Kansas, and 
the Eastern District of Washington. 
91 

 
Mastermind of $1.3 Billion Investment Fraud  
(Ponzi) Scheme - One of the Largest Ever -  
Sentenced to 25 Years in Prison  
for Conspiracy and Tax Evasion 
On August 8, 2019, in Miami, Florida, Robert Shapiro 
was sentenced to 25 years in prison. Shapiro, a Sherman 
Oaks, California native, previously pleaded guilty to 
orchestrating and leading a massive investment fraud 
scheme, in which more than 7,000 victims suffered 
financial losses, as well as tax evasion. Shapiro is the 
former owner, president, and CEO of Woodbridge Group 
of Companies LLC (“Woodbridge”). Shapiro spearheaded 
and concealed an enormous Ponzi scheme through his 
business, Woodbridge. Woodbridge employed approxi-
mately 130 people and had offices located throughout 
the United States. The scheme ran from at least July 
2012 to December 2017, when Woodbridge filed for 
Chapter 11 bankruptcy and defaulted on its obligations to 
investors. 
Throughout the conspiracy, Woodbridge’s main business 
model was to solicit money from investors and, in 
exchange, issue investors promissory notes reflecting 
purported loans to Woodbridge that paid high monthly 
interest rates. Shapiro and his co-conspirators falsely 
claimed that Woodbridge was profitable, however, there 
was insufficient cash to pay investors. To make up for 
the cash deficiency, Shapiro and his co-conspirators 
resorted to making Ponzi payments, whereby hundreds 
of millions of dollars invested by new investors were 
used to pay “returns” to older, existing Woodbridge 
investors. The Woodbridge sales operation functioned as 
a “boiler room” and featured high-pressure sales tactics, 
deception, and manipulation. 
In total, Shapiro and his co-conspirators convinced more 
than approximately 9,000 investors to invest more than 
$1.29 billion to Woodbridge, including many who invested 
their retirement savings. Of that, Shapiro misappropriated 
approximately $25 million to $95 million in investor 
money for himself and for the benefit of his immediate 
family members. Shapiro spent millions on personal 
expenditures, such as $3.1 million for chartering private 
planes and travel, $6.7 million on a personal home, $2.6 
million on home improvements, $1.8 million on personal 
income taxes, and over $672,000 on luxury automobiles. 
Shapiro also pled guilty to tax evasion based upon his 
failure to pay more than $6 million in taxes due and owing 
to the IRS for calendar years 2000 through 2005. 
As part of his plea, Shapiro and his wife agreed to forfeit 
certain assets, including, but not limited to: artworks by 
Pablo Picasso, Alberto Giacometti, Marc Chagall, and 
Pierre-August Renoir; a collection of 603 bottles of wine; 
a 1969 Mercury convertible; and luxury jewelry and 
diamonds. 
Florida Man Sentenced for Participation  
in Narcotics Organization 
On October 4, 2019, Cory Lamar Johnson aka “ThePar-
tyFactory” was sentenced to more than 12 ½ years in 
prison. Johnson was also ordered to forfeit all funds 
held in several bank accounts. Johnson participated in 
a conspiracy to distribute heroin, cocaine, MDMA, LSD 
and 28 grams or more of cocaine base and conspiracy to 
commit money laundering. Johnson mass marketed his 
narcotics distribution business by means of computer. 
MIAMI FIELD OFFICE 
51 SW 1ST AVENUE, MIAMI, FLORIDA 33130 | 954.991.4322 | MiamiFieldOffice@ci.irs.gov 
GUAYNABO, PR 
PLANTATION, FL 
PORT ST. LUCIE, FL 
ST. THOMAS, VI 
WEST PALM BEACH, FL 
Miami Field Office Case Files 
92 
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IRS:CI Annual Report 2020
THE MIAMI FIELD OFFICE covers the Southern Judicial District of Florida, 
and the judicial districts of Puerto Rico and the United States Virgin Islands. 
The Southern Judicial District of Florida includes the counties of Miami-Dade, 
Broward, Monroe, Palm Beach, Martin, St. Lucie, Indian River, Okeechobee 
and Highlands. The field office works a diverse mix of criminal investigations 
including violations of tax law, identity theft, return preparer fraud, money 
laundering, Bank Secrecy Act, cybercrime, political and public corruption, and 
healthcare fraud. We participate on the Organized Crime Drug Enforcement Task 
Force (OCDETF) and on other priority task forces at the U.S. Attorney’s Offices in 
our areas of responsibility targeting identity theft, financial crimes, health care 
fraud and disaster fraud. 
93 

Tax Preparer Sentenced to More Than Eight Years  
in Federal Prison for Tax Fraud Scheme 
On January 28, 2020, in Fort Myers, Florida, Augustin 
Dalusma was sentenced to 8 years in prison for filing 
false claims and tax fraud. Dalusma was also ordered 
to pay more than $2 million to the IRS in restitution. 
Dalusma was found guilty on November 1, 2019. 
According to court documents, between 2012 and 
2015, Dalusma falsified information in tax returns for at 
least 630 of his clients, fraudulently qualifying them for 
thousands of dollars in tax refunds that they were not 
lawfully entitled to collect. Additionally, Dalusma falsified 
his own tax returns from 2012 through 2014, significantly 
underreporting his own income to evade more than 
$30,000 in personal income tax in each of those years. 
Palm Beach County Tax Return Preparer Sentenced 
for Filing False Tax Returns and  
Theft of Government Funds 
On February 21, 2020, Paul Senat was sentenced 
to 7 ½ years in prison for aiding and assisting in the 
preparation of false tax returns and theft of government 
funds. Senat was also ordered to pay nearly $10,000 
in restitution. From at least 2012 to 2016, Paul Senat 
was the owner and operator of multiple tax return 
preparation businesses in Palm Beach and surrounding 
areas. Through the businesses, Senat falsified his clients’ 
returns by reporting fictitious business losses and false 
education credits in order to fraudulently inflate their 
refunds. 
Fort Lauderdale Father and Daughter Sentenced  
for Involvement in $100 Million Fraudulent  
Tax Refund Scheme 
On February 21, 2020, Danielle Takeila Edmonson and 
Kenneth Roger Edmonson, both of Fort Lauderdale, 
Florida, were sentenced to prison for their involvement in 
a scheme that involved the filing of false and fraudulent 
tax returns seeking large-dollar tax refunds. D. Edmonson 
was sentenced to 6 years in prison and K. Edmonson 
was sentenced to more than 4 years in prison. From 
2015 through 2018, D. Edmonson and K. Edmonson 
filed large-dollar tax refund claims with the IRS totaling 
over $100 million, including individual refund claims 
ranging from hundreds of thousands of dollars to as high 
as eighty million dollars. The Department of Treasury 
paid out approximately $3.4 million in refunds through 
the issuance of U.S. Treasury checks. D. Edmonson was 
convicted on four counts of filing false, fictitious and 
fraudulent claims, two counts of mail fraud, and one 
count of false statements. K. Edmonson was convicted at 
trial of two counts of filing false, fraudulent, and fictitious 
claims, one count of mail fraud, and one count of false 
statements. 
Miami Field Office Case Files 
Miami Field Office Case Files 
94 
IRS:CI Annual Report 2020
IRS:CI Annual Report 2020
95 

Monmouth County Man Sentenced to Two Years  
in Prison for Evading More Than $2 Million in Taxes 
On November 5, 2019, Tito Viteri, of Cream Ridge, New 
Jersey, of Monmouth County, New Jersey, was sentenced 
2 years in prison for evading more than $2.3 million in 
personal and corporate income taxes between 2002 and 
2011, and in 2015. Since 2002, Viteri was the owner and 
operator of numerous commercial trucking companies 
that performed delivery services. Between 2002 and 
2011, and in 2015, Viteri evaded the payment of more 
than $2 million in personal and business-related taxes by: 
• “pyramiding” companies and using nominees as 
the purported owners of several of the companies 
in order to shield business assets while incurring 
employment tax liabilities; 
• failing to file timely and accurate quarterly federal 
tax returns by falsely categorizing employees as 
independent contractors, for whom employment 
taxes did not have to be paid; 
• receiving unreported kickback income from an 
employee; 
• concealing personal income and assets by using 
nominees, and depositing substantial amounts of 
income into nominee bank accounts and failing to 
report that income on his personal tax returns. 
In 2008, an IRS audit determined that Viteri owed 
approximately $785,000 in unpaid taxes for one of his 
companies, and that he himself owed approximately 
$315,000 in unpaid personal income taxes. 
Although Viteri began making payments to the IRS in 
August 2011, he stopped making those payments in 
December 2013, claiming he was not “bringing enough 
money home.” 
Despite his claims, from February 2013 to February 2016 
Viteri made approximately $111,000 in rental payments 
(approximately $3,000 per month) for a property in 
Chesterfield. In 2016, although he still had substantial 
outstanding tax liabilities, Viteri purchased a home in 
Cream Ridge for more than $920,000. To conceal from 
the IRS the source of the funds used to purchase the 
home, Viteri arranged for the home to be purchased in his 
mother’s name. 
Tax Preparer Sentenced to 2 ½ Years in Prison  
for Tax Fraud Scheme and Witness Tampering 
On October 25, 2019, Samuel Davis Jr., a Plainfield, 
New Jersey, tax preparer was sentenced to 2 ½ years in 
prison for conspiring to defraud the IRS, falsifying his tax 
returns, and witness tampering. Davis was also ordered 
to pay restitution of $71,558 to the IRS. Davis was an 
active detective sergeant in the N.J. State Police while 
also owning and operating a tax preparation business, 
Get Organized Tax & Accounting (GOTA). He retired from 
the state police in 2016 after 28 years. For tax years 
2011 to 2016, Davis and a conspirator prepared false 
individual income tax returns for various GOTA clients. 
NEWARK FIELD OFFICE 
955 S. SPRINGFIELD AVE, SPRINGFIELD NJ, 07081 | 973.921.4130 | NewarkFieldOffice@ci.irs.gov 
CHERRY HILL, NJ 
EDISON, NJ 
FREEHOLD, NJ 
MAYS LANDING, NJ 
PATERSON, NJ 
SPRINGFIELD, NJ 
TRENTON, NJ 
Newark Field Office Case Files 
96 
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IRS:CI Annual Report 2020
THE NEWARK FIELD OFFICE is exposed to a wide array of investigations, as the 
investigative inventory in the field office represents each major program area for 
IRS-Criminal Investigation. The dedicated agents and professional staff in New 
Jersey have an excellent working relationship with the U.S. Attorney’s Office and 
all our law enforcement partners that result in many high profile, challenging and 
diverse investigations. 
97 

Delaware County Business Owner Sentenced  
to 4+ Years in Prison for Stealing Funds from Clients, 
Filing False Forms with the IRS 
On February 14, 2020, Myles Hannigan, of Newtown 
Square, Pennsylvania, was sentenced to more than 4 
years in prison and was ordered to pay $3,270,566 in 
restitution for filing false tax information with the IRS 
on behalf of his clients. Hannigan pleaded guilty in July 
2019 to obstructing the due administration of the IRS and 
seventeen counts of preparing materially false income tax 
returns, in connection with owning and operating Payroll 
Professionals, Incorporated (“PPI”) located in Media, 
Pennsylvania. PPI is a third-party payroll processor, 
which assists its clients by issuing payroll checks and 
forwarding tax payments to federal, state, and local 
authorities. PPI’s clients were small- to medium-sized 
businesses, and the clients relied on Hannigan to prepare 
and file tax Form 941, among others, with the IRS. 
Form 941 details employee wages that were paid by a 
company, and payroll tax withheld and paid to the IRS 
based on those wages. 
Beginning in January 2012 until December 2016, 
Hannigan prepared and submitted Forms 941 that 
falsely reported information to the IRS. Hannigan 
reported depositing more money to pay tax debt than he 
had actually sent to the IRS, causing 35 of PPI’s client 
companies (who are considered victims in this case) to 
collectively underpay the IRS $3,270,566 for those tax 
years. These victims/companies gave Hannigan access to 
all necessary funds to pay the full tax debt, but Hannigan 
failed to do so. Hannigan hid his behavior from these 
victims/companies by presenting bogus documents 
that purported to be confirmation of payments he had 
made to the IRS on their behalf, and by re-directing IRS 
correspondence to his business address. 
Newark Field Office Case Files 
Newark Field Office Case Files 
98 
IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
  
  
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
They used a number of fraudulent practices, including 
falsely claiming deductions, fabricating educational 
credits, and submitting fake receipts, in order to obtain 
refunds for their clients in amounts substantially greater 
than those to which the taxpayers were entitled. For tax 
years 2012 through 2014, Davis also filed false personal 
income tax returns by underreporting business income 
that he derived from GOTA, defrauding the IRS of tens 
of thousands of dollars in taxes. In October 2018, Davis 
discovered that his son had received a subpoena to 
appear and testify before a grand jury, and he attempted 
to persuade his son to provide false testimony. 
Bergen County Man Sentenced to 6 Years in Prison 
for Filing Phony Tax Returns Using Information 
Stolen from U.S. Service Members 
On February 21, 2020, Shope Oluwo, of Fort Lee, 
New Jersey, was sentenced to 6 years in prison for 
generating phony tax refunds using personal identifying 
information stolen from current and former members of 
the U.S. army. Oluwo was also ordered to pay $11,170 in 
restitution. From January through February 2016, Oluwo 
conspired with others, including Dermot Sutherland, of 
Philadelphia, to obtain personal identifying information 
that was stolen from current or former members of the 
U.S. Army. Oluwo used that stolen information to create 
fake military identification cards and fraudulent W-2 
forms bearing the victims’ names. Oluwo provided the 
phony cards and W-2 forms to Sutherland, who posed as 
the victims and filed phony returns with a tax preparation 
company. Afterwards, Sutherland received debit cards 
from the tax preparation company that contained the 
ill-gotten refunds. Sutherland previously pleaded guilty 
to his role and was sentenced in February 2019 to three 
years of probation. 
Tax Preparer Sentenced to Four Years in Prison 
for Conspiring to File False Income Tax Returns 
On April 29, 2020, Tony V. Russell, of Stone Mountain, 
Georgia, was sentenced to 4 years in prison for conspiring 
to defraud the United States by filing false income tax 
returns. Russell was also ordered to pay restitution 
of $241,185. Russell was a former employee of Tax 
Pro’s and Tax Solutions & Associates, tax preparation 
businesses located in Essex and Union counties. From 
at least 2009 to April 2015, to boost their business, 
Russell conspired with others, including Joseph Kenny 
Batts, the owner of the businesses, to falsify their clients’ 
federal income tax returns to generate refunds from the 
IRS in amounts that their clients were not entitled to 
receive. Russell and other members of the conspiracy 
also permitted, Batts to use their Preparer Tax Identifi­
cation Numbers (PTIN) – the identification number that 
paid tax preparers are required to place on tax returns 
they have prepared – when preparing tax returns to 
conceal Batts’ identity as the actual tax return preparer; 
Batts had a prior federal tax fraud conviction. After law 
enforcement executed a search warrant at Tax Pro’s in 
April 2015, Batts opened Tax Solutions and Associates 
in Union, where Russell, and others, continued preparing 
false federal income tax returns. By fraudulently inflating 
the amounts of the tax refunds, the conspirators caused 
a total tax loss to the IRS in excess of $900,000. Other 
members of the conspiracy, including Damien Askew, of 
Union, New Jersey; Rudolph Sanders, of Newark, New 
Jersey; Joseph Kenny Batts, of Elkridge, Maryland; and 
Angelo K. Thompson, of Reistertown, Maryland, await 
sentencing. 
99 

Manager of Medical Clinics Sentenced to 13 Years  
in Prison for Multimillion-Dollar Money Laundering 
and Health Care Kickback Scheme 
On August 31, 2020, Aleksandr Pikus was sentenced to 
13 years in prison for his role in a massive healthcare 
kickback and money laundering conspiracy. Pikus was 
also ordered to pay restitution of $23 million to Medicare, 
$16 million to Medicaid, $433,297 to the IRS and forfeit 
$2,614,233. Pikus was convicted by a federal jury in 
November 2019 of one count of conspiracy to commit 
money laundering, two counts of money laundering, 
one count of conspiracy to pay and receive health care 
kickbacks and one count of conspiracy to defraud the 
United States by obstructing the IRS. 
Over the course of nearly a decade, Pikus and his 
co-conspirators perpetrated a scheme through a series 
of medical clinics in Brooklyn and Queens that employed 
doctors, physical and occupational therapists and 
other medical professionals who were enrolled in the 
Medicare and Medicaid programs. In return for illegal 
kickbacks, Pikus referred beneficiaries to these health 
care providers, who submitted claims to the Medicare 
and Medicaid programs. Pikus and his co-conspirators 
then laundered a substantial portion of the proceeds of 
these claims through companies he controlled, including 
by cashing checks at several New York City check-cashing 
businesses. Pikus also failed to report the cash income 
to the IRS. Instead, Pikus used the cash to enrich himself 
and others and to pay kickbacks to patient recruiters, 
who, in turn, paid beneficiaries to receive treatment at 
the medical clinics. Pikus and his co-conspirators used 
sham shell companies and fake invoices to conceal their 
illegal activities. Pikus used violent threats to protect his 
scheme. 
More than 25 other individuals have pleaded guilty to or 
been convicted of participating in the scheme, including 
physicians, physical and occupational therapists, 
ambulette drivers and the owners of several of the shell 
companies used to launder the stolen money. 
New York Field Office Case Files 
NEW YORK FIELD OFFICE
290 BROADWAY, 4TH FLOOR, MANHATTAN NY, 10007 | 212.436.1761 | NewYorkFieldOffice@ci.irs 
.gov 
ALBANY, NY 
BETHPAGE,NY 
BRONX, NY 
BROOKLYN, NY 
BUFFALO, NY 
HAUPPAUGE, NY 
MANHATTAN, NY 
NEW WINDSOR, NY 
ROCHESTER, NY 
STATEN ISLAND, NY 
SYRACUSE, NY 
WHITE PLAINS, NY 
100 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
SPECIAL AGENTS AND professional staff in the New York Field Office conduct 
complex financial investigations in partnership with the most dynamic U.S. 
Attorney’s Offices in the country. This is the largest field office of IRS-Criminal 
Investigation, with its members serving on virtually every multi-agency task 
force in a fast-paced environment. This collaboration strengthens our ability to 
identify emerging threats to taxpayers and the U.S. Treasury, with a laser focus 
on domestic and international tax evasion. We take action daily to serve our 
primary mission to maintain integrity and public trust in the federal tax system. 
101 

Member Of Eastern European Organized Crime 
Syndicate Sentenced to 16½ Years in Prison for 
Racketeering and Other Violent Crimes 
On December 3, 2019, Leonid Gershman, aka “Lenny,” 
a leading member of a violent, Brooklyn-based Eastern 
European organized crime syndicate was sentenced 
to 16½ years in prison following his conviction for 
racketeering – including predicate acts of illegal 
gambling, loansharking, extortion, arson and marijuana 
distribution – and conspiring to traffick firearms. 
Between 2011 and May 2017, Gershman and his co-con-
spirators, born in states of the former Soviet Union, 
including Russia, Ukraine and Moldova, operated as a 
racketeering syndicate. The syndicate members were 
linked to high-level members of Russian organized crime, 
known as “thieves in law,” or “thieves,” who authorized 
syndicate members to use violence to protect their 
criminal activities. 
Beginning in 2016, Gershman partnered in an illegal 
high-stakes poker game on Coney Island Avenue 
that generated substantial profits for the syndicate. 
Gershman’s syndicate was responsible for the complete 
destruction by arson of a mixed-use building that housed 
a rival poker game in the spring of 2016. Two residents 
of the building, including a young boy, were trapped 
in their apartment by the resulting fire, and had to be 
rescued by firefighters. Both residents and firefighters 
suffered smoke inhalation, and one firefighter’s injuries 
required surgeries. The families living in the building were 
displaced from their homes due to the damage from the 
fire. 
Gershman’s syndicate also preyed upon extortion victims. 
For example, Gershman enlisted the help of “thieves” 
in Russia to locate the father of an extortion victim in 
Moscow to locate his son, who owed the syndicate more 
than $40,000. After locating the victim, Gershman was 
recorded on a wiretap stating, the “Thieves have found 
him... in Israel,” and “they were at [his] place today.” 
Rochester Man Sentenced to 10 Years in Prison for 
Wire Fraud and Identity Theft 
On October 2, 2019, Emanuel Guobadia, of Atlanta, 
Georgia, was sentenced to 10 years in prison for wire 
fraud and identity theft. Guobadia obtained the personal 
information of thousands of individuals across the country 
and used that information to file over 880 fraudulent tax 
returns. The refunds were transferred through victims’ 
accounts in Rochester, New York, and laundered into 
Guobadia’s bank account in Georgia. In total, Guobadia 
attempted to obtain $2.8 million in fraudulent tax 
refunds. The IRS denied most of the requests. 
New York Field Office Case Files 
New York Field Office Case Files 
102 IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Cooperstown Man Sentenced to 78 Months 
for Money Laundering, Filing False Tax Return 
On December 11, 2019, Thomas K. Lagan, of 
Cooperstown, New York, and formerly of Slingerlands, 
New York, was sentenced to 6 ½ years in prison 
for money laundering and filing a false tax return in 
connection with the theft of approximately $11.8 million 
from estates for which he served as a fiduciary. Lagan 
was also ordered to pay $7.7 million in restitution, and 
to forfeit the following as proceeds of his crimes: 10 
bank and brokerage accounts; an additional $255,000 
already paid to the Government; three properties in 
Otsego County; a 2016 Mercedes Benz S550; a 2015 
Jeep Wrangler Sport; a 2015 Lexus RX450; and a 2015 
Sea-Doo jet ski and accompanying trailer. In a related 
case, Lagan pleaded guilty to grand larceny in the first 
degree, and was sentenced to 4 to 12 years in prison. 
The federal and state terms of imprisonment will run 
concurrent to one another. 
Lagan, an investment advisor and attorney, conspired 
with Richard J. Sherwood, also an attorney, to steal 
millions of dollars and launder the scheme proceeds. 
Starting in 2006, Lagan and Sherwood provided estate 
planning and related legal services to philanthropists 
Warren and Pauline Bruggeman, and to Pauline’s sister, 
Anne Urban. After Pauline Bruggeman’s death, Lagan and 
Sherwood stole millions of dollars from her estate as well 
as from Anne Urban, who died in 2013. Their conspiracy 
came to include the diversion and transfer to themselves 
of several million dollars belonging to Julia Rentz, a 
resident of Ohio, who was suffering from dementia at the 
time of the thefts and died in 2013. Lagan and Sherwood 
stole nearly $12 million, and nearly $6.3 million was 
transferred outright to him. Lagan also filed false federal 
tax returns in 2013 and 2015 which did not reflect the 
millions of dollars that he received from the fraudulent 
scheme. 
Williamsville Man Sentenced for Wire Fraud – Again 
On January 16, 2020, Robert C. Logel, of Williamsville, 
New York, was sentenced to more than 4 years in prison 
for wire fraud and tax evasion. Logel was previously 
sentenced in 2009 to 4 years in prison for wire fraud 
related to defrauding two victims out of nearly $3 million. 
Logel told the victims that he invested their money in 
various businesses when, in fact, he used the funds 
himself. 
Within months of being released from prison, Logel 
entered into a scheme involving the production, distri­
bution, and sale of two skin and healthcare products. 
During the course of the scheme, the defendant made 
false representations regarding his ability to distribute 
and market such products. As a result, victims, including 
QuadPharma, a pharmaceutical manufacturing company, 
transferred funds to Logel which they believed would 
be used to ready the products for distribution and sale. 
Instead, Logel used the vast majority of the funds for his 
personal use. QuadPharma suffered a loss of approxi­
mately $417,120. Six other victims suffered a total loss of 
approximately $143,176. In addition, Logel failed to file 
income tax returns for the tax years 2004 through 2007, 
resulting in a loss of more than $5.5 million to the IRS. 
103 

East Bay Resident Sentenced in Scheme to Sell 
Fraudulent Financial Instruments 
On October 18, 2019, Kenneth Taylor, was sentenced 
to 3 years in prison and ordered to pay $90,000 in 
victim restitution for conspiracy to commit wire fraud 
and $1,100,774 in restitution to the IRS for tax fraud. 
From 2009 through 2012, Taylor conspired with his 
codefendants to sell to customers fraudulent standby 
letters of credit and proof of funds statements for 
submission to banks. These financial instruments were 
fraudulent because they reported false client credit-
worthiness and client balances that exceeded Success 
Bullion USA, LLC’s (SBUSA) assets. The fraudulent 
financial instruments were issued by SBUSA, an entity 
for which Taylor established a website, and which falsely 
purported to be an authorized U.S. subsidiary of a large 
Hong Kong financial institution. The fraudulent financial 
instruments were transmitted to banks by Centerlink LLC, 
another entity Taylor controlled, in a format that rendered 
the instruments unenforceable. Taylor sent proceeds he 
received through SBUSA and Centerlink to an account in 
Belize that he controlled. Taylor received more than $3 
million from the scheme and that his false returns caused 
a tax loss of more than $550,000. 
Former General Manager of Car Dealerships 
Sentenced for Embezzlement Scheme 
On October 29, 2019, Amir Bakhtiari, of Newport Beach, 
California, was sentenced to 4 ½ years in prison. Bakhtiari 
was also ordered to pay $6,618,639 in restitution to 
Sonnen and $1,443,911 in restitution to the IRS for 
embezzling millions of dollars from auto dealerships 
in Marin County, California. Bakhtiari orchestrated an 
embezzlement scheme at Sonnen Motorcars (“Sonnen”). 
Sonnen owned and operated three car dealerships in 
Marin County—Sonnen, Audi Marin, and Porsche Marin. 
From 2009 to 2016, Bakhtiari managed the Volkswagen 
and Audi dealerships. Bakhtiari took advantage of his role 
to initiate a scheme wherein Sonnen made payments on 
fraudulent invoices to fake advertising shell companies 
under the control of his friends, who then forwarded the 
majority of the proceeds back to Bakhtiari. Bakhtiari also 
initiated other fraudulent payments to himself, including 
fake bonus payments. Between 2010 to 2016, Bakhtiari 
directed approximately $6.6 million in fraudulent 
transfers from Sonnen. Bakhtiari also filed multiple years 
of false tax returns by intentionally failing to report the 
millions of dollars in proceeds he made from the fraud 
scheme, causing over $1.4 million in losses to the IRS. 
OAKLAND FIELD OFFICE 
1301 CLAY ST, OAKLAND CA, 94612 | 510.907.5249 | OaklandFieldOffice@ci.irs.gov 
FRESNO, CA 
MODESTO, CA 
REDDING, CA 
SACRAMENTO, CA 
SAN FRANCISCO, CA 
SAN JOSE, CA 
SAN RAFAEL, CA 
SANTA ROSA, CA 
Oakland Field Office Case Files 
104 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE OAKLAND FIELD OFFICE is responsible for covering the Northern and 
Eastern Judicial Districts of California, which is more than half of the state of 
California. The judicial districts run from the Sierra’s to the west coastline and 
from Bakersfield to the Oregon border. The field office’s top law enforcement 
priorities are designed to promote tax compliance, address emerging areas of 
fraud (for example, cybercrimes), and meet the needs of the law enforcement 
community by supporting national crime initiatives. Criminal Investigation 
assists in the prosecution of significant financial investigations to generate the 
maximum deterrent effect, enhance voluntary compliance, and promote public 
confidence in the tax system. 
105 

Stockton Woman Sentenced  
for Two Separate Fraud Conspiracies 
On November 19, 2019, Kioni M. Dogan was sentenced to 
4 years in prison for criminal conspiracies to submit false 
claims for federal income tax refunds and to commit mail 
fraud in connection with California state unemployment 
insurance benefits. For over five years Dogan was the 
driving force in two schemes seeking over $2 million from 
the California and federal governments through fraud. 
From May 2011 through April 2012, Dogan filed at least 
98 fraudulent tax returns $940,000 in refunds, of which 
approximately $708,188 was paid out by the IRS. Dogan 
and other conspirators obtained personal identifying 
information from family, friends, and others, and then 
submitted returns containing false statements regarding 
income, withholding, and losses. From 2010 through 
2015, Dogan filed over 100 fraudulent unemployment 
insurance claims with the California Employment 
Development Department (EDD) seeking $1.29 million 
using fictitious businesses. Dogan created fictitious 
employers with EDD and then caused the submission of 
information for employees of the fictitious entities. Dogan 
subsequently filed unemployment claims in the names of 
the fake employees. Approximately $972,319 was paid 
out by EDD. 
Part Owner of International Trading Business 
Sentenced to Three Years in Prison for Tax Fraud 
On February 11, 2020, Jyh-Chau “Henry” Horng was 
sentenced to 3 years in prison and was ordered to pay 
restitution of $1.1 million to the United States. Horng 
was a minority owner of a home-based international 
trading business that sold scrap metal to China while that 
country was undergoing its economic and infrastructure 
boom. From 1999 through 2008, Horng failed to report 
on his tax returns millions of dollars in profits from the 
business. Horng and his wife used the business profits to 
buy residential properties in New York City and the San 
Francisco Bay area, invest over $5 million in a Milpitas 
shopping center, and purchase a Bentley. During an IRS 
audit of the returns, Horng made false statements to the 
IRS, including that neither he nor his wife had any foreign 
bank accounts. After the audit, Horng failed to file any tax 
returns from 2009 through 2018. 
Oakland Field Office Case Files 
Oakland Field Office Case Files 
106 IRS:CI Annual Report 2020
 
IRS:CI Annual Report 2020
107 

Former CEO of Lancaster County Oil & Gas Company 
Sentenced to 14 Years in Prison  
for $65 Million Bank Fraud 
On July 15, 2020, Jeffrey Lyons, of Lancaster, 
Pennsylvania, was sentenced to fourteen years in prison, 
and ordered to pay restitution of $53 million to Fulton 
Bank and $550,000 to the IRS. In October 2019, Lyons 
pleaded guilty to one count of defrauding Fulton Bank 
of over $65 million between 2003 and 2018. Lyons also 
pleaded guilty to one count of tax evasion. 
Lyons was the former CEO of Worley & Obetz, an oil and 
gas company in Manheim, Pennsylvania, that provided 
services and home heating oil, gasoline, diesel, and 
propane to its customers. Lyons, along with Worley & 
Obetz’s two controllers, Karen Connelly and Judith Avilez, 
committed bank fraud by providing Fulton Bank with 
dozens of fraudulent financial statements and a fraudu-
lently altered supply agreement between Worley & Obetz 
and its largest customer, Giant Food. 
Fulton Bank relied on the fraudulent financial statements 
when it lent Worley & Obetz over $65 million. Lyons 
used the Fulton loans to pay Worley & Obetz expenses, 
which included his annual salary of over $500,000. He 
also used the borrowed money to make Worley & Obetz 
appear profitable when it was actually operating at a 
loss, to pay interest on the earlier loans he borrowed 
from Fulton and to fund some of his personal expenses 
including real estate worth millions. Additionally, from 
2012 through 2017, Lyons failed to report over $1.4 
million of income to the IRS. 
After Lyons’ scheme was discovered, Worley & Obetz 
and its related companies did not have the assets to 
repay the massive amount of Fulton loans that Lyons had 
accumulated. In June 2018, Worley & Obetz declared 
bankruptcy. It notified its approximately 275 employees 
that they no longer had jobs and, after 72 years, the 
family-owned company closed its doors forever. 
As a result of Lyons’ fraud, many in the Manheim, 
Pennsylvania, community suffered greatly – both 
financially and emotionally. 
PHILADELPHIA FIELD OFFICE 
600 ARCH ST, PHILADELPHIA PA, 19106 | 267.941.6187 | PhiladelphiaFieldOffice@ci.irs.gov 
BETHLEHEM, PA 
CRANBERRY TOWNSHIP, PA 
ERIE, PA 
HARRISBURG, PA 
JOHNSTOWN, PA 
KING OF PRUSSIA, PA 
NEWARK, DE 
PITTSBURGH, PA 
SCRANTON, PA 
Philadelphia Field Office Case Files 
108 IRS:CI Annual Report 2020
  
109 
IRS:CI Annual Report 2020
THE PHILADELPHIA FIELD OFFICE serves a broad geographic area that 
includes the entire states of Pennsylvania and Delaware. Within this area of 
responsibility, the field office also serves four judicial districts, each with its own 
U. S. attorney and leadership structure. We work in partnership with all major 
federal law enforcement agencies throughout Pennsylvania and Delaware. These 
include FBI, DEA, HSI, ATF, US Postal Investigation Service (USPIS), US Secret 
Service (USSS), Department of Labor-Office of Inspector General (DOL-OIG), 
as well as numerous state and local law enforcement departments. We work 
a diverse mix of criminal investigations that includes income tax evasion, 
employment tax, corporate fraud, international tax fraud, return preparer 
fraud, ID theft, cybercrimes, public corruption, counterterrorism and narcotics 
related financial crimes. The field office holds pivotal roles on the respective 
U.S. Attorney’s priority task forces, including Suspicious Activity Report review 
teams, health care fraud, cybercrimes, Joint Terrorism Task Forces (JTTF) and 
Organized Crime Drug Enforcement Task Forces (OCDETF). 

Insurance Company Owner Sentenced  
to Prison for Tax Evasion 
On March 5, 2020, Robert Rionda Jr., of Pittsburgh, 
Pennsylvania, was sentenced to 2 ½ years in prison 
and fined $10,000. Rionda solely owned and operated 
Arms Insurance Group, Inc. (Arms Inc.), a subchapter S 
corporation, from 2002 through May 2014. In October 
2011, the Collection Division of the IRS opened a case 
on Rionda for unpaid income taxes for the 2009, 2010 
and 2011 tax years. In May 2012, after several attempts 
to receive payments from Rionda, the IRS levied his 
personal bank accounts for unpaid taxes. Rionda then 
directed the controller/bookkeeper of Arms Inc. to do 
several things, such as stop salary checks to Rionda 
and his wife and to start to pay all of Rionda’s personal 
bills from the company’s bank accounts rather than his 
personal bank account. Over the next several years, 
Rionda continued to file apparently accurate corporate 
returns on behalf of Arms Inc., as well as personal 
income tax returns, but he only made minimal payments 
to the IRS for his personal income taxes and he took 
multiple actions to evade collection of his taxes. Rionda 
sold Arms Inc. to his son and he stayed on as a part 
owner of the son’s new business, Arms Insurance Group, 
LLC (Arms LLC). After the sale of the business, Arms 
LLC began making payments to Rionda but, despite 
receiving very large distributions, Rionda chose not to 
make substantial payments towards his taxes. Rionda 
did, however, make payments towards his personal 
expenses and transferred millions of dollars - at least 
$2.7 million of his own funds - to an associate, Joseph 
Duva, as a purported investment. The total criminal tax 
loss, including assessed interest and penalties, was 
$1,539,117. 
Delaware Businessman Sentenced  
to Federal Prison for Tax Fraud 
On February 14, 2020, Peter Coker, of Dover, Delaware, 
was sentenced to 21 months in prison for willfully failing 
to pay over $1.1 million in payroll taxes to the IRS. In 
addition to the term of incarceration, Coker was also 
ordered to pay $1.145 million in restitution. According to 
court documents, Coker was the sole owner of Sitework 
Safety Supplies Inc., a flagging company in Delaware. 
Between tax years 2012-2014 and 2016, Coker willfully 
failed to remit federal income, Medicare, and Social 
Security taxes he withheld from Sitework employees’ 
paychecks, as well as Sitework’s taxes due and owing, to 
the IRS. 
Philadelphia Field Office Case Files 
Philadelphia Field Office Case Files 
110 IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Pennsylvania Man Sentenced to 14 Years 
in Prison for Money Laundering Conspiracy 
On June 23, 2020, Jonathan Jacome, of Mountain Top, 
Pennsylvania, was sentenced to more than 14 years in 
prison. Jacome was also ordered to pay over $7.7 million 
in restitution and he must forfeit certain properties 
acquired with stolen funds. Jacome was a leader and 
organizer in a sophisticated scheme that used stolen 
identities to file fraudulent tax returns in 2011 and 2012, 
and obtained over $7.7 million in fraudulent federal tax 
refunds. Jacome opened three check cashing businesses 
in Luzerne County solely to carry out the fraud scheme, 
and through which he processed the fraudulently 
obtained Treasury checks. Jacome committed underlying 
crimes of theft of public money, wire fraud and bank 
fraud. Jacome also conspired with others to present 
false testimony to a federal grand jury investigating the 
scheme. The fabricated testimony was intended to hide 
the fact that Jacome used stolen funds to purchase a 
house in Mountaintop, and to otherwise shield Jacome 
from criminal liability. Jacome’s sentence reflected an 
enhancement for the obstruction. 
Philadelphia Bookkeeper Sentenced 
to 8 ½ Years in Prison for Embezzling 
Almost $1.6 Million from Former Employer 
On October 17, 2019, Peter Goodchild, of Philadelphia, 
Pennsylvania, was sentenced to 8 ½ years in prison. 
He was also ordered to pay $1,589,315 restitution. 
Goodchild engaged in a scheme to embezzle from his 
former employer, QwikSource, over a ten-year period 
from 2005 until 2015. Goodchild was convicted in April 
2019 on 48 counts of wire fraud, 10 counts of money 
laundering, one count of aggravated identity theft and six 
counts of filing false income tax returns. As the former 
bookkeeper for QwikSource LLC/GMI Technical Sales 
LLC of Florham Park, New Jersey, Goodchild operated 
his scheme by opening various PayPal accounts. He 
used the accounts to move funds from his employer’s 
bank account through various PayPal accounts then 
finally to one of his personal bank accounts. Goodchild 
further concealed the embezzlement by making false 
financial entries on files he maintained for QwikSource 
that increased the cost of goods sold by the same amount 
of money that he had stolen from QwikSource’s bank 
account. 
111 

Valley Man Sentenced to 30 Months in Prison  
for Filing False Claims with the IRS 
On March 2, 2020, Kevin Jeffory Rocheteau was 
sentenced to 2 ½ years in prison and was ordered to pay 
restitution of $11,255. Rocheteau previously pleaded 
guilty to false claims. Beginning in 2016, Rocheteau, 
through video calls from a Maricopa County jail facility, 
recruited Kathie Bonenberger to file false claims with 
the IRS at his direction. Rocheteau and Bonenberger 
did this by preparing false federal tax returns and filing 
these false returns with the IRS. On the two occasions 
when the scheme was successful, Bonenberger, acting 
at Rocheteau’s direction, also received tax refund 
checks related to these returns, endorsed the checks, 
and deposited the checks into bank accounts that 
Bonenberger owned and controlled. During the course 
of the false tax filings in the name of third parties, 
Bonenberger at Rocheteau’s direction filed 35 false tax 
returns and claimed $165,000 in refunds. Rocheteau 
directed the use of several techniques in order to falsely 
inflate the tax refunds, including claiming wages from 
fake or out-of-business employers, claiming wages on 
behalf of a person who never worked for a particular 
employer, and arranging to send the returns to multiple 
IRS Service Centers in an effort to conceal the scheme. 
Jewelry Store Owner from Albuquerque  
Sentenced for Tax Evasion 
On March 10, 2020, David Castle, of Albuquerque, New 
Mexico, was sentenced to more than 2 years in prison 
for federal tax evasion. Castle previously pleaded 
guilty to this offense on December 3, 2019. Between 
2010 through 2013, Castle was the sole owner and 
operator of Gold and Silver Exchange (GSE), a business 
in Albuquerque specializing in the purchase, sale, and 
repair of jewelry. Castle did not file any tax returns for 
his business, his business provided no tax withholdings 
to the IRS, and he paid no taxes either for his business 
or his household. Castle acknowledged relying on cash 
transactions to operate GSE and using bank accounts 
that appeared to be unassociated with GSE to conceal 
the business’s revenue. Castle’s criminal conduct during 
tax years 2010 through 2013 resulted in a tax loss to the 
United States of $211,829. 
PHOENIX FIELD OFFICE 
4041 N. CENTRAL AVE, PHOENIX AZ, 85012 | 602.636.9721 | PhoenixFieldOffice@ci.irs.gov 
ALBUQUERQUE, NM 
GLENDALE, AZ 
LAS CRUCES, NM 
MESA, AZ 
SANTA FE, NM 
TUCSON, AZ 
Phoenix Field Office Case Files 
112 IRS:CI Annual Report 2020
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE PHOENIX FIELD OFFICE covers the southwestern states of Arizona and 
New Mexico. The office’s special agents investigate both legal and illegal source 
tax crimes, including cases with an international nexus. The office operates a 
financial crimes task force named DeTECT that identifies and investigates a wide 
variety of complex financial crimes. Located on the U.S. / Mexico border, the 
office provides significant participation in the high level Organized Crime Drug 
Enforcement Task Force (OCDETF). 
113 

Arizona Man Sentenced for Role  
in Drug Trafficking Organization 
On February 3, 2020, in Phoenix, Arizona, Juan Labrada-
Zazueta was sentenced to 11 years in prison. Labrada-
Zazueta previously pleaded guilty to conspiracy to 
possess with intent to distribute controlled substances. 
From March of 2017 and continuing until March of 2018, 
Juan Labrada-Zazueta, aka “Chapo,” was part of a 
Phoenix-based drug trafficking organization that imported 
methamphetamine and cocaine into Arizona from Mexico, 
for further distribution throughout the United States. 
The drug trafficking organization was also responsible 
for sending drug proceeds back to Mexico. In addition, 
$272,960 in currency, five handguns, and three rifles 
were forfeited by the government. 
Phoenix Field Office Case Files 
Phoenix Field Office Case Files 
114 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Defendants Sentenced for Roles in $11 Million 
Ayudando Guardians Financial Fraud Scheme 
On March 2, 2020, Sharon A. Moore, of Albuquerque, 
New Mexico, was sentenced to 20 years in prison for 
conspiracy and other financial crimes committed in 
connection with the operation of Ayudando Guardians, 
Inc., a non-profit corporation based in Albuquerque 
that previously provided guardianship, conservatorship, 
and financial management to hundreds of people with 
special needs. Moore and co-defendant Susan Harris 
admitted to conspiracy, mail fraud, aggravated identity 
theft, money laundering, and conspiracy to commit 
money laundering. Susan Harris was the 95% owner 
of Ayudando and acted as president; Moore was a 5% 
owner and acted as chief financial officer of Ayudando. 
They engaged in a decade-long pattern of sophisticated 
criminal conduct from November 2006 to July 2017. 
This included unlawfully transferring money from 
client accounts to a comingled account without any 
client-based justification as part of the fraud scheme and 
money laundering conspiracy. Moore and Harris wrote 
and endorsed numerous checks, often of more than 
$10,000, from these comingled accounts to themselves, 
family members, cash, and other parties where payment 
would benefit their families. The stolen funds were used 
to fund a luxury lifestyle and were used to purchase 
homes, vehicles, luxury RVs and cruises, as well as a 
private box at “the Pit” at the University of New Mexico. 
The stolen funds were also utilized to pay off more than 
$4.4 million in American Express charges incurred by the 
defendants and their families. Co-defendant Craig Young 
was sentenced to nearly 6 years in prison. 
Defendant Sentenced for Laundering Funds 
from Lottery Fraud Scheme Targeting the Elderly 
On February 6, 2020, Morgan Alek Forrester was 
sentenced to more than 1 ½ years in prison and was 
ordered to pay $176,000 in restitution. Forrester 
previously pleaded guilty to conspiracy to commit money 
laundering. Forrester participated in scheme where 
Jamaican-based scammers called elderly U.S. victims 
and falsely stated they had won a lottery. In order to 
receive their winnings, the elderly victims were told they 
must first submit money for taxes and fees. Forrester’s 
role in this conspiracy was to help launder the fraudulent 
proceeds to Jamaica. 
115 

 
Los Angeles Man Sentenced to 10 Years in Prison for 
Drug and Money Laundering Conspiracies 
On October 8, 2019, Michael Joseph Nicholson, of Los 
Angeles, California, was sentenced to 10 years in prison. 
Nicholson participated in a drug and money laundering 
conspiracy that distributed cocaine, heroin, and metham-
phetamine in Anchorage, Alaska. Nicholson, along with 
Wendy Del Carmen Recinos, Jonathan Toliver Jr. and 
Reon Jordan, were part of a drug and money laundering 
conspiracy that began in 2016 and continued through 
2017. The conspirators agreed to distribute heroin and 
cocaine in Alaska. Members of the conspiracy flew back 
and forth between California and Alaska to distributed 
these illegal controlled substances. The conspirators 
used multiple methods to launder their drug proceeds, 
including deposits into bank accounts, wire transfers 
and shipments of bulk currency between Alaska and 
California. The deposited drug proceeds were used to 
pay travel expenses of the drug trafficking conspiracy. 
Approximately $147,998 in U.S. currency, a Rolex “Sky 
Dweller” wristwatch, and four firearms were seized by the 
government as property constituting proceeds of the drug 
trafficking. The other conspirators were sentenced to 
terms ranging from probation to six years in prison. 
Washington State Couple and Companies Sentenced 
for Fraud and False Statement in Connection With 
Renewable Energy Fraud Scheme 
On January 23, 2020, Hector Garza was sentenced to 
2 years in prison for his role in a biofuel fraud scheme. 
Hector’s wife, Tammy Garza, was sentenced to four 
months in prison and their companies, HTG Trucking, 
LLC and Freedom Fuel, Inc., were sentenced as well. The 
defendants were ordered to pay restitution to the U.S. 
Treasury of $284,546 and a fine of $100,000. 
Hector and Tammy Garza and their companies, HTG 
Trucking and Freedom Fuel, were participants in a 
conspiracy involving Gen-X Energy Group Inc. (Gen-X), 
a renewable energy company formerly located in Pasco 
and Moses Lake, Washington. Between January 2013 
and April 2013, Hector Garza and his co-conspirators 
falsely claimed the production of hundreds of thousands 
of marketable renewable energy credits, which they then 
sold for more than $296,000, and filed false claims with 
the IRS for $284,546 in excise credit refunds. Throughout 
this period, much of the renewable fuel claimed to be 
produced at the Gen-X facilities was either not produced 
or it was re-processed multiple times. Hector Garza 
conspired to use the Garzas’ companies to “round” 
supposed renewable fuel by driving the same material 
back and forth between Gen-X’s Moses Lake facility 
and the Garzas’ businesses in Othello, Washington. This 
activity enabled the conspirators to generate fraudulent 
renewable energy credits and tax credits each time the 
material was “rounded.” 
Seattle Field Office Case Files 
SEATTLE FIELD OFFICE 
915 SECOND AVE, SEATTLE WA, 98174 | SeattleFieldOffice@ci.irs.gov 
AGANA, GU 
ANCHORAGE, AK 
BEND, OR 
EUGENE, OR 
HONOLULU, HI 
MEDFORD, OR 
PORTLAND, OR 
SPOKANE, WA 
TACOMA, WA 
VANCOUVER, WA 
116 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
117 
IRS:CI Annual Report 2020
THE SEATTLE FIELD OFFICE covers the states of Alaska, Hawaii, Oregon, and 
Washington, the U.S. Territory of Guam and the Commonwealth of the Northern 
Marianas Islands. Planning and collaboration take on added importance when 
faced with the geographic challenges of seven judicial districts and four time 
zones. Specific regions within the field office provide opportunities for a diverse 
case load. Our investigations include domestic and international tax crimes, 
public corruption, identity theft fraud, cybercrime and drug related financial 
crimes. The Seattle Field Office (with our respective U.S. Attorney’s Offices) 
plays a pivotal role in combating financial crime in the Western states. 

Guam Ambulance Company Owners  
Sentenced to Prison 
On June 30, 2020, Clifford P. Shoemake, of Guam, was 
sentenced to nearly 6 years in prison and Kimberly 
Clyde “Casey” Conner, of Saipan, was sentenced to 
more than 5 years in prison. Both were ordered to pay 
nearly $11 million in restitution and to forfeit the same 
amount. Shoemake and Conner were owners Guam 
Medical Transport (GMT). For approximately four years, 
the pair engaged in a conspiracy to defraud Medicare 
and TRICARE by submitting claims for reimbursement 
for medically unnecessary ambulance services that GMT 
provided to patients. The pair were aware that GMT was 
transporting patients who did not qualify for ambulance 
transportation and, as part of the scheme, the defendants 
directed GMT employees to change patient information in 
internal documents. GMT submitted claims to Medicare 
totalling approximately $32 million, which resulted in 
improper payments to GMT of approximately $10.8 
million. The pair further conspired to engage in money 
transactions involving the proceeds of their health care 
fraud scheme. They used the proceeds of their health 
care fraud scheme to pay for personal expenses, such as 
vacations, personal income taxes, a personal residence 
and other items. They then caused these expenses to be 
falsely categorized as business expenses of GMT, thereby 
improperly reducing GMT’s taxable income and GMT’s 
corresponding tax liability. 
Seattle Field Office Case Files 
Seattle Field Office Case Files 
118 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Oregon Physician Sentenced to Prison for Tax Evasion 
On November 22, 2019, Kenneth Wenberg, a medical 
doctor from Heppner, Oregon, was sentenced to a year 
in prison for failing to report income resulting in a tax 
loss of approximately $128,000. On February 12, 2019, 
Wenberg pleaded guilty to one count of tax evasion. Dr. 
Wenberg created nominee entities to hide assets and 
income he personally earned while serving as a physician 
at the Morrow County Health District (MCHD) and Urgent 
Health Care Center (UHCC) in Heppner. Dr. Wenberg 
instructed MDHD and UHCC to make payments for 
services he performed directly to sham entities to avoid 
income tax liabilities. Dr. Wenberg opened numerous 
bank accounts and purchased real property in the 
names of his nominee entities. He also paid for his and 
his family’s personal living expenses out of the nominee 
accounts. Dr. Wenberg failed to report his income to 
the IRS, despite knowing he owed taxes. Wenberg was 
ordered to pay $128,964 in restitution to the IRS. 
Former Union Official Sentenced for Identity Theft 
and Failure to File Tax Returns 
On January 29, 2020, Nathan Y.G. Lum, of Honolulu, 
Hawaii, was sentenced to 2 ½ years in prison. Lum was 
also ordered to pay restitution of $314,178. On March 28, 
2019, Lum pleaded guilty to aggravated identity theft in 
connection with theft of government funds and failure to 
file a tax return. Lum was the former division director of 
the International Longshore and Warehouse Union Local 
142, Longshore Division (ILWU). From 2011 through 
2017, Lum willfully failed to file any federal or State of 
Hawaii tax returns that should have reported his income 
from the ILWU and other sources. In failing to do so, he 
failed to pay the IRS and State of Hawaii approximately 
$280,743 that he owed in taxes. Further, after Lum’s 
father passed away, between 2013 and 2016, Lum forged 
his father’s signature on over fifty checks that Lum wrote 
from his deceased father’s bank account and deposited 
into Lum’s personal account. In total, Lum obtained 
approximately $33,435 in his father’s Social Security 
benefits that Lum was not entitled to receive. Lum spent 
these funds on his personal expenses. 
119 

KC Man Sentenced for $2.5 Million Tax Fraud Scheme 
On June 19, 2020, Michael A. Kheop, of Kansas City, 
Missouri, was sentenced to 8 ½ years in prison. Kheop 
was also ordered to pay restitution of $24,322. Kheop 
was convicted for a scheme to attempt to obtain more 
than $2.5 million in fraudulent federal income tax 
refunds, in part by stealing his children’s identities. The 
sentence includes an enhancement for obstruction of 
justice because Kheop testified falsely at his trial that he 
paid income tax withholding. Kheop created a fraudulent 
business entity in 2013. He then created fraudulent 
W-2 forms that contained false income and withholding 
in order to fraudulently claim refunds in his own name 
and using his three minor children’s names. Kheop filed 
12 fraudulent claims for refunds on behalf of his three 
minor children for tax years 2014 through 2017. He filed 
four fraudulent claims for refunds in his own name for 
tax years 2015 through 2017. By filing the 15 fraudulent 
claims for refunds, Kheop attempted to defraud the 
government of $2,591,706 and actually received 
fraudulent refunds of $24,322. 
Bettendorf Doctor Sentenced to Prison  
for Failure to Pay Employment Taxes 
On January 16, 2020, Narinder Kumar, a physician, 
was sentenced to 6 months in prison. Kumar previously 
pleaded guilty to failing to pay employment taxes 
on four businesses. Kumar was also ordered to pay 
$721,394 in restitution, which has been paid in full. In 
July of 2014 Kumar was responsible for paying withheld 
employment taxes on behalf of Jai Mata Lakshmi, doing 
business as Echelon Sports Bar and Embers of Phoenix. 
Kumar willfully failed to pay the second quarter 2014 
employment taxes on behalf of Jai Mata Lakshmi. From 
2010-2016, Kumar was responsible for paying employee 
withholding taxes for four businesses: Bettendorf 
Pediatric, Echelon Sports Bar, Embers of Phoenix and 
Funky Desi. In total $461,390 in employment taxes 
were not paid. Also, $260,004.16 in Social Security and 
Medicaid taxes were not paid. Kumar’s license to practice 
medicine was suspended. 
ST. LOUIS FIELD OFFICE 
1222 SPRUCE ST, ST. LOUIS MO, 63103 | 314.339.1400 | StLouisFieldOffice@ci.irs.gov 
CEDAR RAPIDS, IA 
CHESTERFIELD, MO 
DAVENPORT, IA 
DES MOINES, IA 
FAIRVIEW HEIGHTS, IL 
FARGO, ND 
JEFFERSON CITY, MO 
LEE'S SUMMIT, MO 
OMAHA, NE 
OVERLAND PARK, KS 
RAPID CITY, SD 
SIOUX FALLS, SD 
SPRINGFIELD, MO 
WICHITA, KS 
St. Louis Field Office Case Files 
120 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE ST. LOUIS FIELD OFFICE covers the states of Missouri, Iowa, Kansas, 
Nebraska, North Dakota, South Dakota, and Southern Illinois which comprises 
nine judicial districts. We work a diverse mix of criminal investigations across 
this large geographic area that includes tax evasion, failure to pay employment 
taxes, return preparer fraud and narcotics. We also hold pivotal roles on the 
respective U.S Attorney’s priority task forces, including cybercrime, financial 
fraud, Organized Crime Drug Enforcement Task Force (OCDETF), and joint 
terrorism task forces. 
121 

Sioux Falls Man Sentenced for Wire Fraud  
and Money Laundering 
On July 6, 2020, Paul Erickson, of Sioux Falls, South 
Dakota, was sentenced to 7 years in prison. Erickson 
previously pleaded guilty to wire fraud and money 
laundering. Erickson solely operated a business venture 
to develop land in the Bakken oil fields in North Dakota. 
He solicited numerous individuals about investing in 
his business. He falsely represented to investors that 
he would use the money to purchase real estate and 
build single-family homes in North Dakota. Instead, he 
defrauded investors of $5.3 million. Former classmates, 
family members and even Erickson’s godmother were 
victims of his investment schemes. 
Man Sentenced for Large-Scale Meth Conspiracy 
On February 10, 2020, Justin Christensen was sentenced 
for his involvement in a large-scale conspiracy to 
distribute methampetamine. He was sentenced to 280 
months in prison and 10 years probation after release. 
St. Louis Field Office Case Files 
St. Louis Field Office Case Files 
122 IRS:CI Annual Report 2020
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Payroll Tax Executive Sentenced 
for His Role in a $9 Million Scheme 
On March 10, 2020, David L. Downey, of Indianapolis, 
Indiana, was sentenced to 6 years in prison and was 
ordered to pay restitution of nearly $9 million to clients 
of his payroll service. Downey ran a payroll services 
business in Indiana under the name Time Payroll from 
2013 to 2017. He had clients in Indiana, Illinois, Kentucky 
and Missouri. Downey deflected money from his clients’ 
accounts to his brokerage accounts and failed to pay 
substantial amounts of those client funds to the IRS for 
the clients’ employment taxes. Downey effectively ran a 
Ponzi scheme with his client’s money and funded exotic 
travel to destinations such as St. Bart’s with the stolen 
funds. Downey caused a loss to the clients and to the IRS 
of $9,428,160. After closing his business in late 2017, 
Downey cashed out his remaining brokerage and bank 
accounts and headed to California. There he attempted to 
get a U.S. passport using his brother’s name and a recent-
ly-issued California driver’s license showing his brother’s 
name and Downey’s picture. Special Agents from the IRS 
Criminal Investigation unit in St. Louis tracked Downey 
to California and, on November 16, 2018, arrested him. 
Downey was in possession of $955,956 in cash at the 
time of his arrest. He had also used $53,990 in cash 
to purchase a 2018 Jeep Cherokee in California. The 
vehicle was bought in his brother’s name. The cash and 
the vehicle were seized by the IRS Special Agents. The 
court ordered the cash and the car to be forfeited for the 
benefit of his clients. 
Business Owner Sentenced for False Tax Return 
On October 23, 2019, Steven J. Strauss, of Paola, Kansas, 
was sentenced to more than 2 years in prison and was 
ordered to pay $684,792 in restitution. Strauss, who 
owns and operates Classic Tree Care, pleaded guilty on 
January 23, 2019, to filing a false tax return. Strauss 
did not provide accurate information to his tax preparer. 
Strauss vastly understated the gross receipts for his 
business, which caused corresponding understatements 
of taxable income and tax liability. From 2012 through 
2015, Strauss deposited approximately $1,467,682 in 
business income into his bank account, over and above 
what was reported on his tax returns. As a result of his 
fraudulent conduct in understating his tax liabilities, 
Strauss owed $684,792 to the IRS. 
123 

Jacksonville Man Sentenced to 10 Years in Prison 
On November 5, 2019, Duane Allen Sikes, of Jacksonville, 
Florida was sentenced to 10 years in prison for mail 
fraud, embezzlement of credit union funds and filing 
a false federal income tax return. Sikes was ordered 
to pay more than $1 million in restitution to the IRS in 
addition to restitution of $178,161 to VyStar Credit Union 
and more than $5 million to CUMIS Insurance Society, 
Inc. Sikes was also ordered to forfeit two pieces of real 
property, which are traceable to proceeds of the offenses, 
and pay a forfeiture money judgment in the amount 
of $3,663,200, the proceeds of the charged criminal 
conduct. 
Over a 10-year period, Sikes, a mailroom employee 
of Vystar Credit Union, embezzled funds intended for 
Vystar’s postage costs. Sikes used the funds to purchase 
U.S. Postal Service stamps, which he sold to a third-party 
vendor. Sikes then used the proceeds from the stamp 
sales for his own benefit. This included grooming and 
enticing young boys to engage in sexual acts for money. 
Upon discovery of the crime, Vystar Credit Union alerted 
the authorities and assisted with the investigation. The 
embezzlement did not impact account holders’ accounts 
but rather internal Vystar accounts. Additionally, Sykes 
failed to report the funds he had embezzled on his 
federal income tax returns for the years 2007 through 
2017, resulting in a total tax loss to the government of 
$1,009,175. 
CEO Sentenced For Wire, Tax and Bankruptcy Fraud 
On November 13, 2019, David Martin “Marty” Golloher 
was sentenced to 3 years in prison for wire fraud, tax 
fraud, and bankruptcy fraud. Golloher was the President 
and Chief Executive Officer of OATH Corporation, a 
bullet-manufacturing company based in Brevard County. 
In that capacity, Golloher recruited individuals to invest 
significant sums of money in OATH Corporation. He 
defrauded two investors through embezzlement and 
false representations. In addition, for six quarters in 2015 
and 2016, Golloher collected payroll taxes on behalf 
of OATH Corporation employees, but failed to pay over 
that tax to the IRS. Golloher also failed to pay over OATH 
Corporation’s payroll tax obligations, resulting in a total 
tax loss of more than $458,000. Eventually, Golloher filed 
for bankruptcy on behalf of OATH Corporation. During the 
course of the bankruptcy proceeding, Golloher knowingly 
made false declarations by understating his compen-
sation from OATH Corporation. 
TAMPA FIELD OFFICE 
9450 KOGER BLVD, ST. PETERSBURG FL, 33702 | 941.378.6416 | TampaFieldOffice@ci.irs.gov 
FORT MYERS, FL 
GAINESVILLE, FL 
JACKSONVILLE, FL 
MAITLAND, FL 
PENSACOLA, FL 
SARASOTA, FL 
ST. PETERSBURG, FL 
TALLAHASSEE, FL 
Tampa Field Office Case Files 
124 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE TAMPA FIELD OFFICE covers the middle and northern judicial districts of 
Florida. The field office has nine posts-of-duty with agents working a diverse mix 
of criminal investigations across a large geographic area. Our agents embrace 
traditional tax cases as well as money laundering involving narcotics, terrorist 
financing and other local compliance issues. The Tampa Field Office benefits 
from well-established partnerships with other law enforcement agencies and 
has excellent working relationships with both United States Attorney’s Offices. 
125 

Canadian Citizen Sentenced for Role in Complex 
International Fraud and Money Laundering Ring 
On August 7, 2020, Brooks Thomas Nesbitt, of Ontario, 
Canada, was sentenced to 10 years in prison for 
conspiracy to commit wire fraud. Nesbitt was also 
ordered to forfeit various assets, and entered a money 
judgment of $500,000, representing the proceeds of 
the charged criminal conduct. In addition, Nesbitt was 
ordered to pay more than $14 million in restitution to the 
victims. Nesbitt was a member of a large, international 
fraud and money-laundering ring, led by Mary Kathryn 
Marr. Between at least 2014 and 2019, Nesbitt operated 
boiler rooms located outside of the United States. He 
set up the boiler rooms, recruited their sales agents and 
other employees, and oversaw their operations. Nesbitt 
contracted with Marr so that, for a set percentage, she 
and her network could launder the fraud proceeds that 
his boiler rooms had obtained from victims. 
The co-conspirators employed a mass marketing scam in 
which high-pressure sales techniques originating out of 
so-called “boiler rooms” were used to defraud individuals 
who believed that they were investing substantial 
amounts of money in regulated financial products or 
markets, particularly shares of stocks. In reality, however, 
the investments were a sham and the victims received 
nothing. In total, Nesbitt, Marr, and their co-conspirators 
unlawfully obtained approximately $14.5 million from 
victims through various boiler room fraud schemes. On 
January 30, 2019, Thai authorities provisionally arrested 
Nesbitt at his residence in Hua Hin, Thailand. Nesbitt 
was subsequently extradited to the United States for 
prosecution. 
Tampa Field Office Case Files 
Tampa Field Office Case Files 
126 IRS:CI Annual Report 2020
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Former Milton Mayor And Ex-Head 
of United Way of Santa Rosa County 
Sentenced for Fraud and Tax Evasion 
On January 19, 2020, Guyland W. Thompson, a former 
mayor of Milton, Florida, and ex-executive director of the 
United Way of Santa Rose County, was sentenced to more 
than 4 years in prison. Thompson was also ordered to 
forfeit $221,868 seized from his bank accounts and pay 
an additional money judgment of $430,132. Thompson 
previously pleaded guilty to 20 counts of wire fraud 
and three counts of tax evasion stemming from his 
embezzlement of funds from United Way of Santa Rosa 
County while he ran the organization. Between at least 
2011 and 2018, Thompson embezzled over $650,000 
from the charity. He used his position and access to 
the charity’s records and bank accounts to steal money 
from the charity for years by conducting a series of 
complicated financial transactions to cover his tracks. 
He also made false representations to board members, 
employees, bank tellers, and United Way Worldwide to 
keep his fraud undetected for so long. Thompson then 
failed to report to the IRS the extra income from his 
embezzlement scheme. 
As a result of Thompson’s crimes, United Way of Santa 
Rosa County lost its charter with the international organi­
zation and was forced to close. The restitution Thompson 
was ordered to pay will be divided between United Way of 
Santa Rosa County and 15 local charities that previously 
had been supported by it. 
Marketing Firm Owner Sentenced 
for Healthcare Fraud 
On December 18, 2019, Frank V. Monte was sentenced 
to 2 years in prison for conspiracy to offer and pay health 
care kickbacks, solicit and receive health care kickbacks 
and health care fraud. Monte was also ordered to pay 
$4.6 million in restitution to TRICARE. Monte was the 
president of Centurion Compounding, Inc., a marketing 
company. Centurion recruited over 2,000 marketing 
representatives as independent contractors to market 
expensive compounded medications, such as creams 
for pain and scars, to beneficiaries of healthcare benefit 
programs, primarily TRICARE. Centurion directed the 
patient recruits and the physicians in its “network” to 
send all of their prescriptions to Centurion, which, in 
turn, sent the prescriptions to LifeCare Pharmacy to be 
filled. LifeCare was owned and operated by pharmacists 
who were co-conspirators of Monte. LifeCare agreed to 
pay Centurion a percent of each claim that Centurion 
submitted, a violation of federal anti-kickback laws. 
Because the creams were inexpensive to make relative to 
their reimbursement rates, the profit on these TRICARE 
claims was over $10.35 million. Monte used his proceeds 
from the scheme to purchase real estate, throw a party 
and buy luxury vehicles. 
127 

West Virginia Pharmacist Sentenced  
to 10 Years for Drug Charges 
On January 29, 2020, Scott D. Tingler, of Morgantown, 
West Virginia, was sentenced to more than 10 years 
in prison for illegally distributing oxycodone and filing 
false tax returns. Tingler was ordered to pay $507,942 in 
restitution to the IRS and former employees. Additionally, 
Tingler was ordered to pay a money judgement of 
$1,845,000. Tingler, who was a pharmacist, conspired 
with others to distribute more than 7,400 grams of 
oxycodone in Monongalia County and elsewhere from 
August 2014 to August 2018. Tingler also filed a false 
tax return in April 2015, grossly understating his taxable 
income. Also as part of the plea, Tingler agreed to 
relinquish his pharmacy license and he will not seek 
to reinstate it, nor will he seek any future employment 
that would require him to handle or dispense controlled 
substances during incarceration or his period of 
supervised release. 
Ericsson Agrees to Pay More Than $1 Billion  
to Resolve Foreign Corrupt Practices Act Case 
On December 6, 2019, Ericsson Egypt Ltd. was charged 
with, and pled guilty to, one count of conspiring to violate 
the anti-bribery provisions of the FCPA in the Southern 
District of New York. Ericsson Egypt Ltd. and its parent 
company, Telefonaktiebolaget LM Ericsson (“Ericsson”) 
entered into a deferred prosecution agreement and 
will pay a total criminal penalty of $520,650,432 to the 
United States, which includes a $9,520,000 criminal fine 
which Ericsson agreed to pay on behalf of Ericsson Egypt 
Ltd. From approximately 2000 to 2016, Ericsson and 
Ericsson Egypt, through various executives, employees, 
and affiliated entities, used third-party agents and 
consultants to bribe foreign government officials and/ 
or manage off-the-books slush funds in countries where 
it pursued contracts to conduct telecommunications 
business. The agents were often engaged through sham 
contracts and paid pursuant to false invoices, with 
those payments accounted for improperly in Ericsson’s 
books and records. As part of the agreement, Ericsson 
will must implement rigorous internal controls, retain 
an independent compliance monitor for a term of three 
years, and cooperate fully with the Government in any 
ongoing investigations. Ericsson also reached a civil 
resolution with U.S. Securities and Exchange Commission 
in which it will pay $539,932,000. 
WASHINGTON D.C. 
FIELD OFFICE 
1200 FIRST ST. NE, WASHINGTON DC, 20002 | WashingtonDCFieldOffice@ci.irs.gov 
BALTIMORE, MD 
BRIDGEPORT, WV 
CHARLESTON, WV 
FREDERICK, MD 
HAMPTON, VA 
LANDOVER, MD 
NORFOLK, VA 
PARKERSBURG, WV 
RICHMOND, VA 
ROANOKE, VA 
ROCKVILLE, MD 
SALISBURY, MD 
VIENNA, VA 
Washington D.C. Field Office Case Files 
128 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
  
IRS:CI Annual Report 2020
THE WASHINGTON D.C. FIELD OFFICE is home to groups located in 
Washington, D.C., Maryland, Virginia and West Virginia. Serving six judicial 
districts, the field office is comprised of a dedicated group of professional staff 
and CI special agents who work a wide array of significant investigations. The 
diverse geographical location allows the field office the opportunity to work 
the entire spectrum of financial investigations, including legal source tax cases, 
public corruption, corporate fraud, narcotics, and health care fraud, among many 
others. The field office also includes the Global Illicit Financial Crimes Group, the 
Cybercrimes Unit, the Alcohol and Tobacco Tax and Trade Bureau Group, and the 
International Tax and Financial Crimes Group. The field office enjoys outstanding 
relationships with the U.S. Attorney’s Offices it serves, as well as other law 
enforcement agencies throughout the region. 
129 

Former Billings coal mining official sentenced  
to prison for $20 million wire fraud scheme,  
false kidnapping 
Larry Wayne Price Jr., John Howard Boothe Jr., and 
others, engaged in monetary and financial transactions 
by using the proceeds of a Specified Unlawful Activity, 
namely Wire Fraud, for the years 2013 – 2018, in 
violation of Title 18, United States Code Section 1956(h), 
which is Conspiracy to Commit Money Laundering. Larry 
Wayne Price Jr. was the Vice President of Surface Mining 
Operations for Signal Peak Energy (SPE) located Billings, 
Montana. Price used his position as VP of Surface Mining 
Operations to defraud SPE of approximately $31,000,000 
by using various entities over which he exercised control, 
several Co-Conspirators and the Co-Conspirators’ 
entities. Boothe waived his indictment and has worked 
out a plea deal with prosecutors who said Boothe and 
two others developed a scheme to defraud Signal Peak 
Energy of $10 million and deposit that money into bank 
accounts in Southwest Virginia. 
Boothe was sentenced to 36 months on September 29, 
2020 and ordered to pay $285,000 to SPE. Price was 
sentenced to 60 months on October 2, 2020. The ruling 
on restitution is reserved; amount still to be determined. 
Washington D.C. Field Office Case Files 
Washington D.C. Field Office Case Files 
130 IRS:CI Annual Report 2020
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020
Former Baltimore Mayor Catherine Pugh Sentenced 
to Three Years in Prison for Fraud Conspiracy 
and Tax Charges 
On February 27, 2020, Catherine Elizabeth Pugh, of 
Baltimore, Maryland, was sentenced to 3 years in prison 
for conspiracy to commit wire fraud, conspiracy to 
defraud the United States and two counts of tax evasion. 
Pugh was also ordered to pay $411,948 in restitution and 
to forfeit $669,688 including property on Ellamont Road 
in Baltimore and $17,800 from the Committee to Re-elect 
Catherine Pugh. In December 2016, Pugh became mayor 
of Baltimore. Pugh owned Healthy Holly, LLC, a company 
formed in Maryland on January 14, 2011. She used the 
company to publish and sell children’s books she had 
written. Pugh did not maintain a personal bank account, 
instead she used her business bank accounts for personal 
and business finances. Between June 2011 and August 
2017, four Healthy Holly books were published, with each 
book listing “Catherine Pugh” as author. The vast majority 
of books published by Healthy Holly were marketed and 
sold directly to non-profit organizations and foundations, 
many of whom did business or attempted to do business 
with the Maryland and Baltimore City governments. 
From November 2011 until March 2019, Pugh conspired 
with Gary Brown, to defraud purchasers of Healthy Holly 
books in order to enrich themselves, promote Pugh’s 
political career, and fund her campaign for mayor. Brown 
was Pugh’s legislative aide to Pugh from 2011 to 2016. 
Pugh also conspired to evade taxes on the income 
received from the sales of Healthy Holly books. Pugh filed 
false income tax returns for 2015 and 2016, in which 
she underreported her income. For example, for tax year 
2016 Pugh claimed her taxable income was $31,020 
and the tax due was $4,168, when in fact, Pugh’s taxable 
income was $322,365, with an income tax due of approx­
imately $102,444. 
Businessman Sentenced for Fraud 
that Targeted Elderly Homeowners 
On May 5, 2020, Gregory J. Ziglar, of Virginia Beach, 
Virginia, was sentenced to 11 years in prison for 
conducting a home modification loan fraud scheme 
that primarily targeted elderly homeowners in the 
Tidewater area. In January 2020, Ziglar was convicted 
at trial on 16 counts, including money laundering and 
failure to file income tax returns. From 2014 to 2017, 
Ziglar orchestrated the extensive home improvement 
loan fraud scheme. Ziglar conducted this scheme 
in the guise of a legitimate business using various 
company names and a fake name for himself in dealing 
with clients, banks and contractors. He exploited a 
federal program designed to assist homeowners and 
tradesmen and falsely advertised to homeowners that 
such funds could be used for any purpose. In order to 
obtain these loans, Ziglar submitted false estimates or 
purported agreements from contractors to justify these 
improvements. The homeowners received the loans and 
paid Ziglar an unlawful service fee for moving their loan 
application through the bank. They also paid him for the 
home improvements he promised to get done, but many 
times little or no work was done leaving the individual 
homeowners with a loan debt and no improvements, 
while leaving Ziglar with thousands in loan proceeds 
which he failed to report to the IRS. 
131 

APPENDIX
 FY 2020 Combined Results 
2020 
2019 
2018 
Investigations 
Initiated 
2596 
2485 
2886 
Prosecution 
Recommendations 
1859 
1893 
2130 
Informations/ 
Indictments 
1512 
1800 
2011 
Sentenced 
1226 
1726 
2111 
Incarceration Rate 
80% 
79% 
82% 
Average Months to 
Serve 
44 
43 
45 
 
 
 
Abusive Return Preparer Program 
2020 
2019 
2018 
Investigations 
Initiated 
140 
163 
224 
Prosecution 
Recommendations 
145 
203 
177 
Informations/ 
Indictments 
128 
138 
170 
Sentenced 
112 
154 
148 
Incarceration Rate 
80% 
78% 
78% 
Average Months to 
Serve 
21 
24 
25 
 
 
 
Abusive Tax Schemes 
2020 
2019 
2018 
Investigations 
Initiated 
109 
69 
80 
Prosecution 
Recommendations 
45 
45 
34 
Informations/ 
Indictments 
26 
25 
37 
Sentenced 
26 
34 
36 
Incarceration Rate 
85% 
71% 
72% 
Average Months to 
Serve 
32 
31 
28 
Bank Secrecy Act (BSA) 
2020 
2019 
2018 
Investigations 
Initiated 
489 
424 
515 
Prosecution 
Recommendations 
345 
285 
285 
Informations/ 
Indictments 
253 
268 
278 
Sentenced 
226 
287 
345 
Incarceration Rate 
75% 
76% 
79% 
Average Months to 
Serve 
34 
34 
38 
Corporate Fraud 
2020 
2019 
2018 
Investigations 
Initiated 
55 
57 
74 
Prosecution 
Recommendations 
48 
32 
48 
Informations/ 
Indictments 
38 
32 
47 
Sentenced 
21 
57 
35 
Incarceration Rate 
76% 
72% 
83% 
Average Months to 
Serve 
23 
25 
32 
Employment Tax 
2020 
2019 
2018 
Investigations 
Initiated 
298 
250 
207 
Prosecution 
Recommendations 
151 
104 
81 
Informations/ 
Indictments 
67 
73 
64 
Sentenced 
52 
50 
48 
Incarceration Rate 
83% 
84% 
77% 
Average Months to 
Serve 
18 
23 
21 
Financial Institution Fraud 
2020 
2019 
2018 
Investigations 
Initiated 
50 
37 
46 
Prosecution 
Recommendations 
33 
26 
39 
Informations/ 
Indictments 
22 
24 
45 
Sentenced 
21 
33 
40 
Incarceration Rate 
86% 
79% 
70% 
Average Months to 
Serve 
44 
35 
36 
Healthcare Fraud 
2020 
2019 
2018 
Investigations 
Initiated 
69 
67 
105 
Prosecution 
Recommendations 
63 
71 
95 
Informations/ 
Indictments 
63 
70 
83 
Sentenced 
46 
48 
84 
Incarceration Rate 
89% 
83% 
80% 
Average Months to 
Serve 
58 
54 
44 
Appendix 
This appendix includes investigation data appearing in the annual report 
as well as extended information regarding incarceration rates. 
132 IRS:CI Annual Report 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS:CI Annual Report 2020 
133  

Money Laundering 
2020 
2019 
2018 
Investigations 
Initiated 
838 
856 
1054 
Prosecution 
Recommendations 
745 
780 
901 
Informations/ 
Indictments 
650 
706 
851 
Sentenced 
379 
508 
617 
Incarceration Rate 
83% 
87% 
87% 
Average Months 
to Serve 
66 
74 
70 
Narcotics 
2020 
2019 
2018 
Investigations 
Initiated 
587 
636 
723 
Prosecution 
Recommendations 
513 
558 
634 
Informations/ 
Indictments 
463 
511 
610 
Sentenced 
336 
472 
550 
Incarceration Rate 
82% 
85% 
88% 
Average Months 
to Serve 
78 
79 
77 
Identity Theft 
2020 
2019 
2018 
Investigations 
Initiated 
124 
93 
164 
Prosecution 
Recommendations 
100 
137 
222 
Informations/ 
Indictments 
106 
177 
217 
Sentenced 
108 
226 
387 
Incarceration Rate 
82% 
81% 
86% 
Average Months 
to Serve 
37 
39 
40 
International Operations 
2020 
2019 
2018 
Investigations 
Initiated 
242 
214 
233 
Prosecution 
Recommendations 
213 
185 
218 
Informations/ 
Indictments 
180 
190 
210 
Sentenced 
138 
149 
148 
Incarceration Rate 
77% 
85% 
84% 
Average Months 
to Serve 
47 
57 
55 
Non-Filer 
2020 
2019 
2018 
Investigations 
Initiated 
279 
271 
254 
Prosecution 
Recommendations 
146 
128 
128 
Informations/ 
Indictments 
96 
114 
110 
Sentenced 
80 
111 
104 
Incarceration Rate 
83% 
78% 
80% 
Average Months 
to Serve 
36 
26 
34 
Public Corruption 
2020 
2019 
2018 
Investigations 
Initiated 
73 
73 
107 
Prosecution 
Recommendations 
63 
58 
69 
Informations/ 
Indictments 
51 
67 
51 
Sentenced 
40 
59 
64 
Incarceration Rate 
68% 
81% 
86% 
Average Months 
to Serve 
21 
36 
40 
Questionable Refund Program 
2020 
2019 
2018 
Investigations 
Initiated 
70 
65 
149 
Prosecution 
Recommendations 
81 
94 
195 
Informations/ 
Indictments 
75 
151 
205 
Sentenced 
107 
204 
382 
Incarceration Rate 
80% 
76% 
81% 
Average Months 
to Serve 
30 
31 
36 
Terrorism 
2020 
2019 
2018 
Investigations 
Initiated 
41 
30 
34 
Prosecution 
Recommendations 
41 
18 
18 
Informations/ 
Indictments 
22 
20 
23 
Sentenced 
15 
14 
15 
Incarceration Rate 
53% 
86% 
80% 
Average Months 
to Serve 
51 
52 
32 
 
 
  
Appendix 
This appendix includes investigation data appearing in the annual report 
as well as extended information regarding incarceration rates. 
134 IRS:CI Annual Report 2020
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
IRS:CI Annual Report 2020 
135  
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