Examples of International Investigations - Fiscal Year 2012
Criminal Investigation (CI) is increasing its focus on international tax compliance.
International investigations encompass a wide range of activities such as abusive tax schemes, narcotics, non-filers, money laundering, and terrorism funding. Criminal Investigation works closely with international law enforcement partners as well as federal, state, and local law enforcement agencies to investigate financial fraud.
The following examples of investigations with international links are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Abusive Tax Schemes
IRS Receives Unprecedented Amount of Information in UBS Agreement
For information pertaining to the Union Bank of Switzerland (UBS), UBS clients, and former bankers, visit the IRS web page: Offshore Tax-Avoidance and IRS Compliance Efforts.
Financial Institution Fraud Investigations
Owner of Florida Company Sentenced for Scheme to Defraud the U.S. Export-Import Bank
On November 1, 2011, in Washington, D.C., Guillermo O. Mondino was sentenced to 46 months in prison and three years of supervised release. Mondino was also ordered to pay $13.3 million in restitution and $2.7 million in forfeiture. Mondino pleaded guilty on June 23, 2010, to one count of conspiracy to commit mail fraud and one count of money laundering in connection with a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of approximately $24 million. According to court documents, Mondino was the owner of Texon Inc., an export company located in Miami, Florida, which purported to export various types of equipment to South and Central America buyers. Mondino admitted that he assisted numerous foreign buyers to obtain fraudulent loans that were insured by the Ex-Im Bank. According to court records, Mondino and others misappropriated the loan proceeds for their own use and benefit. According to court records, all of the loans involving Mondino were fraudulent. As a result of the fraud, the loans went into default, causing the Ex-Im Bank to pay claims to the lending banks on $14.1 million of loans.
"Alpha One” Foreign Currency Trader Sentenced for Securities Fraud
On February 10, 2012, in Houston, Texas, Robert Watson was sentenced to 240 months in prison and ordered to pay more than $22 million in restitution for securities fraud. According to court documents, between 2003 and 2009, Watson raised tens of millions of dollars from scores of investors and exercised custody and control over those funds under the pretense that he used them to trade, including buying and selling foreign currencies. To persuade people to invest or remain invested in his enterprises, he represented that he sought profits in the foreign currency markets using a model called Alpha One, which he claimed he developed and owned. Among other things, Watson claimed Alpha One earned high historical returns since 2000, never had a losing month and earned an annualized return of 23.04 percent between June 2006 and February 2009. Watson, however, admitted he failed to trade as he represented. Rather, he made a minimal number of trades and earned little, if any, profits. Nevertheless, he created periodic, sham account statements and sent them to investors via U.S. mail or wire communication, or to be made available to investors electronically, that tracked returns from trading profits when in fact the statements did not reflect real trades or account values. To make those sham account statements appear legitimate, he prepared phony statements of trading activity and bank accounts, which he provided to the entities’ insiders and employees and showed to inquisitive investors. When investors withdrew supposed returns or their principal investments, he admitted he paid with funds raised from other investors, not profits from foreign currency trades. Although he did minimal trading, Watson paid himself lucratively, receiving hundreds of thousands of dollars annually during the scheme.
New York Attorney Sentenced for Wire Fraud and Tax Evasion
On December 14, 2011, in Oakland, Calif., Igor Purlantov, a New York attorney, pleaded guilty and was sentenced to 24 months in prison for fraudulently transferring more than $1 million from the bank accounts of a deceased Contra Costa County resident and then failing to pay taxes on that income. According to court documents, Purlantov defrauded a deceased family friend by fraudulently adding himself on to the friend’s HSBC bank account in Geneva and then transferring more than $1 million to his own accounts in London before transferring some of the money to his accounts in New York. The scheme occurred from October 2004 through February 2005. The defendant then failed to pay taxes on the stolen income. Purlantov agreed to fully reimburse the beneficiaries of his deceased friend $1,175,666 and to pay $293,048 in back taxes to the Internal Revenue Service.
Florida Man Sentenced for Investment Fraud
On November 28, 2011, in Tampa, Fla., John S. Morgan, of Sarasota, was sentenced to 121 months in prison and ordered to forfeit a 2003 Fountain Lightning Fever Powerboat and pay a money judgment of $10,085,375. Morgan pleaded guilty on June 15, 2011 to conspiring to commit wire fraud and engaging in money laundering. According to his plea agreement, from about March 2005 through August 2009, Morgan, his wife, Marian I. Morgan, and others perpetrated an investment fraud scheme through a Danish entity named Morgan European Holdings APS (MEH), which the Morgans had formed. Morgan and others falsely represented to investors that MEH trading programs would yield returns of 30-70 percent per month or 200 percent per 90-120 day period, and that the investors' funds would never be put at risk. John Morgan and others caused investors to transfer more than $28 million to MEH accounts. Approximately $10.8 million of this total was then used by the Morgans for their personal benefit. The Morgans used investors' funds to purchase a waterfront residence and adjoining lot in Sarasota, to fund extensive renovations on a second Sarasota residence, and to purchase or lease several luxury automobiles, including a Maserati and two Jaguars. More than eighty investors located throughout the United States, Canada, and Europe entrusted the Morgans with their funds. Marian Morgan was found guilty and awaits sentencing.
Defendant in Advance Fee Scheme Sentenced for Defrauding Canadian Company and Others
On November 10, 2011, in Seattle, Wash., Aaron Wilmot, of Burien, Wash., was sentenced to 20 months in prison, three years of supervised release and ordered to pay $230,861 in restitution. Wilmot and Lynn Marie Abreu, an attorney, pleaded guilty to one count of wire fraud. According to court documents, between about September 2005 and continuing through about November 2006, Abreu participated in an advance fee scheme to defraud Advanomics Corporation, located in Montreal, Quebec, and others. Wilmot helped establish a company called Investcorp and helped represent that Investcorp would lease bank instruments which could be used to obtain financing. Clients were required to pay an up-front fee to lease these instruments. The advance fees were to be deposited into Abreu’s trust account and held there until the funding was provided, when they were to be returned to the clients. In reality, no financing was provided and the victim’s funds were not held in trust, but were instead used by the defendants for their personal use. Abreu’s is awaiting sentencing.
Defendant Sentenced in International Conspiracy
On May 23, 2012, in Detroit, Mich., Veniamin Gonikman, a naturalized U.S. citizen originally from Ukraine, was sentenced to 36 months in prison and three years of supervised release. Gonikman became a fugitive in 2005 following the arrests of his co-conspirators, Aleksandr Maksimenko and Michael Aronov. He was apprehended in Ukraine in January 2011 and pleaded guilty to money laundering on September 13, 2011. According to court documents, between September 2001 and February 2005, Gonikman, together with Maksimenko and Aronov, operated Beauty Search Inc., a business that brokered and managed Eastern European women who performed in exotic dance clubs in the Detroit area. The men recruited some of the women in Ukraine, facilitated their illegal entry into the United States and then harbored them for commercial advantage and private financial gain. Gonikman received a share of the proceeds the women earned and transferred the money to Ukraine to promote and carry on the Beauty Search business. The lead defendants in this case, Maksimenko and Aronov, pleaded guilty in 2006 to forced labor, immigration, and money laundering charges. Maksimenko was sentenced to 168 months in prison and ordered to pay $1,570,450 in restitution to the victims. Aronov was sentenced to 90 months in prison and ordered to pay $1 million in restitution.
Former Haitian Government Official Sentenced for Role in Scheme to Launder Bribes
On May 21, 2012, in Miami, Fla., Jean Rene Duperval, of Miramar, Fla., was sentenced to 108 months in prison for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies. Duperval was also ordered to forfeit $497,331. Duperval was the director of international relations for Telecommunications D’Haiti S.A.M. (Haiti Teleco) a Haitian state-owned telecommunications company. Haiti Teleco is the sole provider of land-line telephone service in Haiti. According to the evidence presented at trial, two Miami-based telecommunications companies had a series of contracts with Haiti Teleco that allowed the companies’ customers to place telephone calls to Haiti. The telecommunications companies collectively paid approximately $500,000 to two shell companies to funnel the bribes to Duperval.
Tennessee Woman Sentenced for Check Fraud Scheme and International Money Laundering
On November 17, 2011, in Knoxville, Tenn., Carolyn Greer, a.k.a. Carolyn Keene, of Knoxville, Tenn., was sentenced to 21 months in prison, three years of supervised release and ordered to pay restitution of $62,562 for mail fraud and international money laundering. According to court documents, Greer admitted that she perpetrated a scheme to defraud numerous individuals by placing the names of individuals on fictitious checks, sending those fictitious checks to the individuals by commercial interstate carrier, creating the false pretense that the fictitious checks were in fact valid, and then receiving, by Western Union and MoneyGram, the proceeds of the fictitious check after the recipient of the fictitious check cashed the fictitious check at a financial institution. Greer further admitted that she wired a portion of the money she received to Nigeria to promote her scheme to defraud.
Executives Sentenced for Bribing Officials at State-Owned Telecommunications Company in Haiti
On October 25, 2011, in Miami, Fla., Joel Esquenazi, of Miami, Florida, and Carlos Rodriguez, of Davie, Florida, were sentenced for their roles in a scheme to pay bribes to Haitian government officials at Telecommunications D’Haiti S.A.M. (Haiti Teleco), a state-owned telecommunications company. Esquenazi, the former president of Terra Telecommunications Corp. was sentenced to 180 months in prison. Rodriguez, the former executive vice president of Terra was sentenced to 84 months in prison. Esquenazi and Rodriguez were also ordered to forfeit $3.09 million. Esquenazi and Rodriguez were convicted in August 2011 of one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering. According to the evidence presented at trial, Terra had a series of contracts with Teleco (the sole provider of land line telephone service in Haiti) that allowed the company’s customers to place telephone calls to Haiti. At trial, the evidence showed that Esquenazi and Rodriguez participated in a scheme to commit foreign bribery and money laundering from November 2001 through March 2005, during which time the telecommunications company paid more than $890,000 to shell companies to be used for bribes to Teleco officials.
Gateway Hotel and Owner Sentenced for Smuggling and Harboring Undocumented Aliens, Money Laundering, and Income Tax Fraud
On October 21, 2011, in El Paso, Texas, Song Chon was sentenced to 180 months in prison, three years of supervised release and ordered to pay $481,812 in restitution for money laundering, tax fraud and conspiracy to smuggle, transport and/or harbor undocumented aliens. According to court documents, Chon was the President of YCL, Inc, and owner of the Gateway Hotel. YCL, Inc., dba The Gateway Hotel was also sentenced to five years probation and to ordered to pay a $5,000 fine. Beginning in June 2003 and continuing to May 2009, the defendants conspired and devised a plan to smuggle hundreds of undocumented aliens into the United States from the Republic of Mexico, Central America, South America, Eastern Europe and Southwest Asia, and harbor them in El Paso using the Gateway Hotel and other locations. The defendants supplied them with shelter, food and clothing until their family or “sponsor” paid a fee, approximately $2,000. Once the fee was paid, the defendants would then transport the undocumented aliens to their final destination in the United States. Chon laundered the proceeds of the alien smuggling conspiracy and concealed the nature, source and ownership of the proceeds by skimming and hiding between $300 and $400 per day from the gross receipts. In addition, Chon willfully made false statements on the corporate income tax records for the years 2005, 2006 and 2007 by understating the yearly gross receipts for the Gateway Hotel by an estimated $250,000-$300,000 per year. In all, 25 defendants were convicted and sentenced in connection with this scheme. Sentence terms ranged from five years probation to 15 years in prison.
Former Pennsylvania State Auditor Sentenced for Tax Evasion, Obstructing and Impeding IRS
On April 10, 2012, in Harrisburg, Pa., Troy A. Beam, of Shippensburg, was sentenced to 74 months in prison. Beam was convicted on May 4, 2011, by a federal jury of tax evasion, obstructing and impeding the due administration of the Internal Revenue laws, and willful failure to file federal income tax returns. According to evidence introduced at trial, Beam, a former certified public accountant and state auditor in the Pennsylvania Auditor General’s Office, operated a home construction business known as “Sunbeam Builders,” as well as owned and operated two real estate businesses that purchased, rented and sold real estate. Despite earning substantial income from these businesses, as well as other activities, Beam failed to file any federal income tax returns since April 1996. In April 1996, Beam also filed false amended federal income tax returns for 1992, 1993 and 1994, seeking tax refunds for taxes he previously had paid for those years. The evidence at trial proved that from 1999 to 2007, Beam earned more than $10.3 million in gross income from his various home construction and rental property businesses. Beam obstructed the IRS in its attempt to calculate and collect his taxes by using numerous sham trusts and other entities, including North Star Investment Holdings Ltd. to hide his income and assets. He used North Star to set up a bank account in the Cayman Islands into which he deposited nearly $3 million of income derived from his construction business.
Questionable Refund Program (QRP)
Delaware Woman Sentenced for Defrauding U.S. Treasury of More Than $3 Million
On April 6, 2012, in Dallas, Texas, Lorna Moseti, of Clayton, Delaware, was sentenced to 120 months in prison and ordered to pay approximately $1.5 million in restitution. Moseti was convicted in October 2011 on one count of conspiracy to commit mail fraud and wire fraud. At trial, the government presented evidence that between 2007 and 2010, Moseti conspired with others to obtain tax refunds by submitting multiple fraudulent tax returns containing false information about employment and income. Moseti and the other conspirators obtained the identifying information of prison inmates and submitted false tax returns using the inmates’ social security numbers and variations of their names. They prepared and submitted false Forms W-2, Wage and Tax Statements, claiming fictitious wage and withholding amounts and false Schedules C, Profit or Loss From Business-Sole Proprietorship, to show a substantial business loss to offset the falsely claimed wages, which resulted in a refund of most of the purported withholding. The false returns were either filed electronically or mailed to the Internal Revenue Service requesting that the refunds be either electronically deposited or mailed to bank accounts or addresses controlled by Moseti and the other conspirators. Evidence presented showed that once the funds were deposited into the controlled bank accounts, Moseti and the other conspirators would transfer all or part of the false refunds to other conspirators either by mail or wire transfers to various locations, including Kenya, United Arab Emirates and Italy. On some occasions, Moseti and the other conspirators would use the false refunds for their own personal benefit.