Organization of IRS—Criminal Investigation

Top 10 Tax Cases of 2021

IRS Criminal Investigation group (IRS-CI) is the criminal investigative arm of the IRS.  IRS-CI is responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more.  IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, boasting a nearly 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 11 posts abroad.

The IRS Criminal Investigation group (IRS-CI) has listed its top 10 cases for 2021 on its Twitter account (yes even the IRS uses Twitter).  These cases include the IRS’s most high-profile investigations.

According to IRS_CI Chief jim Lee, “The investigative work of 2021 has all the makings of a made for TV movie – embezzlement of funds from a nonprofit, a family fraud ring that stole millions in COVID-relief funds and a $1 billion Ponzi scheme used to buy sports teams and luxury vehicles.”  But this is real life, and the IRS-CI agents are aggressively pursuing these cases to ensure the perpetrators are prosecuted.

The top 10 IRS-CI cases of 2021 include:

10.  An Albuquerque couple, Susan Harris and William Harris, who were sentenced to 47 and 15 years in federal prison, respectively for stealing funds from a nonprofit organization that provided guardianship, conservatorship and financial management to hundreds of people with special needs.

9.  A Rochester man, John Piccarreto Jr., who was sentenced to 84 months in federal prison and ordered to pay restitution totaling almost $20 million after he was convicted of conspiracy to commit mail fraud and filing a false tax return as part of an investment fraud Ponzi scheme.

8.  Two Orlando sisters, Petra Gomez and Jakeline Lumucso, who were sentenced to eight and four years in federal prison, respectively for operating a tax preparation business with five locations in central Florida that filed more than 16,000 false tax returns for clients from 2012 to 2016 with a total estimated loss to the IRS of $25 million.

7.  A Russian banker, Oleg Tinkov, aka Oleg Tinkoff, who was ordered to pay more than $248 million in taxes and sentenced to time-served and one year of supervised release after he renounced his U.S. citizenship in an effort to conceal large stock gains that were reportable to the IRS after the company he founded became a multibillion dollar, publicly traded company.

6.  An Ontario man, Hugo Sergio Mejia, who was sentenced to three years in federal prison and required to forfeit all assets derived from running an unlicensed business where he charged commissions for exchanging over $13 million in Bitcoin for cash, and vice versa, often for drug traffickers.

5.  Rossen G. Iossifov, a Bulgarian national, who was sentenced to 121 months in federal prison for participating in a scheme where popular online auction and sales websites — such as Craigslist and eBay — falsely advertised high-cost goods (typically vehicles) that did not actually exist. Once victims sent payment for the goods, the conspiracy engaged in a complicated money laundering scheme where US-based associates would accept victim funds, convert these funds to cryptocurrency, and transfer the cryptocurrency to foreign-based money launderers.

4.  Kent R.E. Whitney, the ex-pastor of the Church of the Health Self, was sentenced to 14 years in federal prison and ordered to pay restitution to victims after defrauding investors of $33 million by orchestrating a church-based investment scam. At his direction, church representatives appeared on television and at live seminars to make false and misleading claims to lure investors to invest in church entities. Victims received fabricated monthly statements reassuring them that their funds had been invested, when in reality, little to no money was ever invested.

3.  A Prairie View man was sentenced to 12 years and six months in federal prison and ordered to pay over $8 million in restitution to the IRS after selling false information or fictitious debts to payday loan businesses and not filing federal tax returns for himself or his businesses for multiple years.

2.  Jeff Carpoff, owner of California-based DC Solar, was sentenced to 30 years in federal prison and ordered to forfeit $120 million in assets to the U.S. government for victim restitution after creating a Ponzi-scheme that involved the sale of thousands of manufactured mobile solar generator units that didn’t exist. He committed account and lease revenue fraud and purchased a sports team, luxury vehicles, real estate and a NASCAR team with the proceeds.

1.  San Fernando Valley family members received sentences ranging from 17.5 years in prison to 10 months of probation for crimes ranging from bank and wire fraud to aggravated identity theft. The family used stolen and fictitious identities to submit 150 fraudulent applications for COVID-relief funds based on phony payroll records and tax documents to the Small Business Administration, and then used the funds they received to purchase luxury homes, gold coins, jewelry designer handbags and more.  Richard Ayvazyan and his wife Terabelian cut their ankle monitoring devices and absconded prior to their sentencing hearing and are currently fugitives.

If you need assistance with any federal or state income tax issue, or any other legal matter, please contact your business and tax attorney at 937-223-1130 or Jsenney@pselaw.com.

AUTHOR: Jeff Senney
jsenney@pselaw.com