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Examples of International Investigations - Fiscal Year 2014

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.

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.

Abusive Return Preparer 

Accountant Sentenced on Tax Charges
On May 29, 2014, in Honolulu, Hawaii, Dennis Duban, a Los Angeles-based accountant and tax return preparer, was sentenced to 24 months in prison and ordered to pay a $30,000 fine. Duban pleaded guilty in October 2012 to conspiring to defraud the IRS and assisting in the filing of a false federal income tax return.  According to court documents, Duban was a Certified Public Accountant in Los Angeles, California. He provided accounting and tax planning services to Hawaii residents Charles Alan Pflueger, James Pflueger, and some of the Hawaii-based entities they controlled, including Pflueger, Inc. and Pflueger Properties. Beginning as early as 2003, Duban knew that personal expenses of Charles Alan Pflueger were being paid for by Pflueger, Inc. and illegally deducted on corporate income tax returns as business expenses. Duban also knew that some personal expenses of another co-defendant were being paid for and illegally deducted by Pflueger, Inc. In preparing tax returns for Charles Alan Pflueger and another co-defendant from at least 2003 to 2006, Duban did not include as additional items of income all personal expenses of which he was aware were paid for by Pflueger, Inc. and constituted income to the taxpayers. In connection with the 2007 sale of Hacienda, a San Diego, California investment property owned by Pflueger Properties, Duban agreed with another co-defendant to file a false Pflueger Properties 2007 partnership income tax return and false individual income tax return which falsely reported the gain on the sale of the property, which sold for $27,500,000. Prior to the sale of the Hacienda property, Duban and others assisted the same co-defendant in creating a nominee Cook Islands trust and opening a bank account at Wegelin Bank in Switzerland. Proceeds of the Hacienda sale, over $14 million, were sent to the Wegelin account. Duban and a New York-based firm served as investment managers for the account. Duban and the co-defendant did not timely report the co-defendant’s beneficial interest in the Swiss account on Schedule B of the individual income tax return or by filing a Report of Foreign Bank Account (FBAR). In addition, for at least 2006 and 2007, Duban failed to report his interest in at least one New Zealand account on Schedule B of his individual income tax returns or by filing an FBAR.

Abusive Tax Schemes

Israel Bank Client Sentenced for Filing False Tax Return
On Aug. 4, 2014, in Los Angeles, California, Monajem Hakimijoo, aka Manny Hakimi, a U.S. citizen, was sentenced to six months in prison and one year of home confinement for filing a false federal income tax return for tax year 2007. According to court documents, Hakimijoo and his brother maintained an undeclared bank account at Mizrahi Bank in Israel in the name of Kalamar Enterprises, a Turks and Caicos entity that was used to conceal their ownership of the account. Hakimijoo and his brother used the funds in the Kalamar account as collateral for back-to-back loans obtained from the Los Angeles branch of Mizrahi Bank. Although Hakimijoo and his brother claimed the interest paid on the back-to-back loans as a business deduction for federal tax purposes, they failed to report the interest income earned in their undeclared account in Israel as income on their tax returns. In total, Hakimijoo failed to report interest income of approximately $282,000. Hakimijoo has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the highest balance of his one-half interest in the Kalamar account. The highest balance in the Kalamar Enterprises account was approximately $4.03 million. Hakimijoo is also ordered to pay a $30,000 fine.

Accountant Sentenced on Tax Charges
On May 29, 2014, in Honolulu, Hawaii, Dennis Duban, a Los Angeles-based accountant and tax return preparer, was sentenced to 24 months in prison and ordered to pay a $30,000 fine. Duban pleaded guilty in October 2012 to conspiring to defraud the IRS and assisting in the filing of a false federal income tax return.  According to court documents, Duban was a Certified Public Accountant in Los Angeles, California. He provided accounting and tax planning services to Hawaii residents Charles Alan Pflueger, James Pflueger, and some of the Hawaii-based entities they controlled, including Pflueger, Inc. and Pflueger Properties. Beginning as early as 2003, Duban knew that personal expenses of Charles Alan Pflueger were being paid for by Pflueger, Inc. and illegally deducted on corporate income tax returns as business expenses. Duban also knew that some personal expenses of another co-defendant were being paid for and illegally deducted by Pflueger, Inc. In preparing tax returns for Charles Alan Pflueger and another co-defendant from at least 2003 to 2006, Duban did not include as additional items of income all personal expenses of which he was aware were paid for by Pflueger, Inc. and constituted income to the taxpayers. In connection with the 2007 sale of Hacienda, a San Diego, California investment property owned by Pflueger Properties, Duban agreed with another co-defendant to file a false Pflueger Properties 2007 partnership income tax return and false individual income tax return which falsely reported the gain on the sale of the property, which sold for $27,500,000. Prior to the sale of the Hacienda property, Duban and others assisted the same co-defendant in creating a nominee Cook Islands trust and opening a bank account at Wegelin Bank in Switzerland. Proceeds of the Hacienda sale, over $14 million, were sent to the Wegelin account. Duban and a New York-based firm served as investment managers for the account. Duban and the co-defendant did not timely report the co-defendant’s beneficial interest in the Swiss account on Schedule B of the individual income tax return or by filing a Report of Foreign Bank Account (FBAR). In addition, for at least 2006 and 2007, Duban failed to report his interest in at least one New Zealand account on Schedule B of his individual income tax returns or by filing an FBAR.

Credit Suisse Pleads Guilty to Conspiracy to Aid and Assist U.S. Taxpayers in Filing False Returns
On May 19, 2014, in Washington, District of Columbia, Credit Suisse AG pleaded guilty to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the IRS. Credit Suisse agreed to pay a total of $2.6 billion - $1.8 billion to the Department of Justice for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services. Earlier this year, Credit Suisse paid approximately $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.  According to court documents, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS. The investigation has also led to indictments of eight Credit Suisse executives since 2011; two of those individuals have pleaded guilty so far.

Swisspartners Group Agrees to Pay $4.4 Million to Resolve Criminal Tax Investigation  
On May 9, 2014, in Manhattan, New York, Swisspartners Investment Network AG, a Swiss-based asset management firm, and three of its wholly-owned subsidiaries (collectively, the “Swisspartners Group”), agreed to pay $4.4 million to the United States and provide approximately 110 client files for non-compliant U.S. taxpayers. Swisspartners Group admitted that it assisted certain U.S. taxpayers in maintaining undeclared foreign bank accounts in order to evade their U.S. tax obligations.  According to court documents, from about 2001 through about 2011, Swisspartners Group helped certain U.S. taxpayers conceal from the IRS by creating sham foundations and other sham entities that served as the nominal account holders; placing accounts or insurance policies in the names of non-U.S. nationals; facilitating the transportation of large amounts of cash into the United States on behalf of U.S. taxpayer-clients; and arranging for the bulk deposit of cash at Swiss depository financial institutions on behalf of U.S. taxpayer-clients.

Florida Doctor Sentenced for Federal Tax Crimes
On May 9, 2014, in Fort Myers, Florida, Dr. Patricia Lynn Hough, of Englewood, was sentenced to 24 months in prison, three years of supervised release and ordered to pay $15,518,382 in restitution and $42,732 for the costs of prosecution. Hough was convicted by a jury on Oct. 24, 2013 for conspiring to defraud the IRS by concealing millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks, and filing false individual income tax returns which failed to report the existence of those foreign accounts or the income earned in those accounts. Hough conspired to defraud the IRS with her husband, Dr. David Fredrick, who is awaiting trial. According to court documents and court proceedings, Hough owned two Caribbean-based medical schools, Saba University School of Medicine located in Saba, Netherlands Antilles, and Medical University of the Americas located in Nevis, West Indies.  Hough and Fredrick carried out the conspiracy by creating and using nominee entities, including a foundation, and by using undeclared accounts in their names and the names of nominee entities at UBS and other foreign banks to conceal assets and income from the IRS. Both schools and the associated real estate were sold on April 3, 2007, for more than $35 million, all of which was deposited into undeclared accounts in the names of the nominee entities. The majority of the proceeds from the sale were not reported to the IRS on their tax returns and no tax was paid. In total, between 2003 and 2008, Hough and Fredrick failed to pay more than $15 million in taxes. The evidence at trial further proved that Hough and Fredrick used emails, telephone calls and in-person meetings to instruct Swiss bankers and asset managers to make investments and transfer funds from their undeclared accounts at UBS. Hough and Fredrick caused funds from the undeclared accounts in the names of the medical schools to be transferred to undeclared accounts in their individual names or in the names of nominee entities. Hough and her husband then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condominium in Sarasota, Florida. Hough was also convicted of three counts of filing false tax returns for 2005, 2007 and 2008. She filed false tax returns that substantially understated her total income because she failed to report substantial interest and investment income and because she failed to report her half of the proceeds from the sale of the medical schools in 2007.  In addition, Hough failed to report that she had an interest in, or signature or other authority over, bank, securities or other financial accounts located in foreign countries.  

Wyoming Businessman Sentenced for Concealing Income in Caribbean Bank Account 
On May 7, 2014, in Cheyenne, Wyoming, Robert C. Sathre was sentenced to 36 months in prison, three years of supervised release and ordered to pay $3,113,882 in restitution to the IRS. Sathre pleaded guilty on Feb. 26, 2014, to willfully evading the payment of his 1995 and 1996 tax liability. According to court documents, Sathre sold a Minnesota business and received installment payments in 1995 and 1996 of more than $3 million. Sathre concealed his income by filing a 1995 tax return in which he reported only $64,928 in total income. In addition, Sathre concealed assets by opening a foreign bank account in the Caribbean island of Nevis and by using purported trusts. In a 10-month period spanning from 2005 through 2006, Sathre sent over $500,000 to the account in Nevis to keep the funds out of reach from the IRS. When Sathre sold another business in 2007, he wired over $1,250,000 from the sale proceeds to the trust account of a Wyoming law firm. He later directed the law firm to wire $900,000 from the trust account to his account at the Bank of Nevis. Sathre also provided a false declaration and false promissory note to the Bank of Nevis to conceal the source of this transfer and obtained a debit card linked to the foreign account to access funds locally. In addition, Sathre provided the Bank of Sheridan with an IRS form on which he falsely claimed that he was neither a citizen nor a resident of the United States.

California Man Sentenced for Failure to Report Foreign Bank Account
On Feb. 26, 2014, in San Jose, Calif., Christopher B. Berg of Portola Valley, Calif., was sentenced to 12 months and one day in prison and three years of supervised release.  Prior to sentencing, Berg paid more than $250,000 in restitution to the IRS, as well as a penalty of $287,896 for failure to properly report his foreign account. Berg pleaded guilty to willfully failing to file the required report of foreign bank account for an account he controlled in 2005 at UBS in Switzerland.  According to court documents, in 2000, Berg set up a bank account at UBS in Switzerland to shelter a portion of his consulting income from taxation. Beginning in 2001 and continuing through 2005, Berg used wire transfers to deposit $642,070 in earned income into UBS accounts. Berg used money in these Swiss UBS accounts to purchase a vehicle, to obtain cash while in Europe and to pay the balance on a Eurocard he used while traveling in Europe. Berg did not disclose the existence of his accounts at UBS to his certified public accountant, and also failed to disclose the income earned by these accounts or the consulting income deposited to the accounts.

New Mexico Man Sentenced on Tax Charges
On Feb. 7, 2014, in Albuquerque, N.M., Bill Melot, a farmer from Hobbs, N.M., was sentenced to 168 months in prison, three years of supervised release and ordered to pay $18,469,998 in restitution to the IRS and $226,526 to the United States Department of Agriculture (USDA). Melot was previously convicted of tax evasion, failure to file tax returns, making false statements to the USDA and impeding the IRS.  According to court documents and evidence presented at trial and at sentencing, Melot has not filed a personal income tax return since 1986, and owes the IRS more than $25 million in federal taxes and more than $7 million in taxes to the state of Texas. In addition, Melot has improperly collected more than $225,000 in federal farm subsidies from the USDA by furnishing false information to the agency.  Specifically, Melot provided the USDA with a false Social Security number (SSN) and a fictitious employer identification number (EIN) to collect federal farm aid. Melot took numerous steps to conceal his ownership of 250 acres in Lea County, N.M., including notarizing forged deeds and titling the property in the name of nominees. Additionally, Melot used false SSNs and fictitious EINs to hide his assets from the IRS. He also maintained a bank account with a Swiss financial institution which he set up in Nassau, Bahamas, in 1992, and failed to report the account to the United States Treasury Department as required by law.

Corporate Fraud

Hewlett-Packard Russia Sentenced for Bribery of Russian Government Officials
On Sept. 11, 2014, in San Francisco, California, ZAO Hewlett-Packard A.O. (HP Russia), an international subsidiary of the California technology company Hewlett-Packard Company (HP Co.), pleaded guilty to violations of the Foreign Corrupt Practices Act (FCPA) and was then sentenced for its role in bribing Russian government officials to secure a large technology contract with the Office of the Prosecutor General of the Russian Federation. According to the plea agreement, HP Russia executives created a multi-million dollar secret slush fund, at least part of which was used to bribe Russian government officials who awarded the company a contract valued at more than €35 million. The total amount of United States criminal and regulatory penalties against HP Co. and its subsidiaries is more than $108 million.   
 

Financial Institution Fraud

BNP Paribas Pleads Guilty To Conspiring To Violate U.S. Economic Sanctions
On July 9, 2014, in Manhattan, New York, BNP Paribas S.A. (BNPP), a global financial institution headquartered in Paris, pleaded guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA). BNPP agreed to forfeit a total of $8.8336 billion, pay a criminal fine of $140 million, cooperate with U.S. authorities and be subject to a five-year term of probation, during which BNPP must enhance its compliance policies and procedures. According to court documents, BNPP processed billions of dollars of U.S. dollar transactions through the U.S. financial system on behalf of Sudanese, Iranian, and Cuban entities subject to U.S. economic sanctions from 2004 through 2012.

Gaming

Two Conspirators of Russian-American Organized Crime Enterprise Sentenced
On April 29 and April 30, 2014, respectively, in Manhattan, New York, Anatoly Golubchik and Vadim Trincher were each sentenced to 60 months in prison and ordered to forfeit more than $20 million in cash, investments, and real property. Both were charged in April 2013 along with 32 other alleged members and associates of two Russian- American organized crime enterprises in an indictment that included racketeering, money laundering, extortion, and various gambling offenses. According to court documents, both participated in a racketeering conspiracy in connection with their roles as members of a Russian-American organized crime enterprise. The enterprise operated a high-stakes, illegal sports gambling business out of New York City that catered primarily to Russian oligarchs living in Ukraine and Russia. Golubchik and Trincher were U.S.-based participants in the enterprise. Golubchik and Trincher booked sports bets that reached into the millions of dollars and laundered the proceeds of the Organization’s international sports booking. Twenty-eight defendants in this case have pleaded guilty, and two have entered into deferred prosecution agreements. The defendants who have pleaded to date have agreed to forfeit, in total, more than $68 million.

General

California Man Sentenced for Economic Espionage and Other Federal Charges
On July 10, 2014, in San Francisco, California, Walter Lian-Heen Lie, aka Liu Yuanxuan, was sentenced to 180 months in prison and ordered to forfeit $27.8 million in illegal profits and to pay $511,667 in restitution. Liew was convicted on March 6, 2014, on violations of the Economic Espionage Act, tax evasion, bankruptcy fraud and obstruction of justice. The jury found that Liew, his company, USA Performance Technology, Inc. (USAPTI), and another individual conspired to steal trade secrets from E.I. du Pont de Nemours & Company regarding their chloride-route titanium dioxide (TiO2) production technology and sold those secrets for large sums of money to state-owned companies of the People’s Republic of China (PRC). This case marks the first federal jury conviction on charges brought under the Economic Espionage Act of 1996. Liew, as co-owner of USAPTI, entered into contracts worth nearly $28 million to convey TiO2 trade secret technology to Pangang Group companies. Liew received millions of dollars of proceeds from these contracts. The proceeds were wired through the United States, Singapore, and ultimately back into several bank accounts in the PRC in the names of relatives of Christina Liew. Liew, USAPTI, and another individual obtained and sold DuPont’s TiO2 trade secrets to the Pangang Group companies for more than $20 million. Liew filed a false income tax return for his company, Performance Group (a predecessor company to USAPTI) for calendar years 2006, 2007, and 2008 and for USAPTI in 2009 and 2010. In addition, Liew made false statements and a false oath in connection with filing for bankruptcy for Performance Group in 2009.

West Virginia Resident Sentenced for Role in Nigerian Fraud Scheme
On July 8, 2014, in Abingdon, Virginia, Audrey Elaine Elrod, of Bluefield, W.Va., was sentenced to 52 months in prison. Elrod previously pleaded guilty to one count of structuring transactions to avoid reporting requirements and one count of conspiracy to commit wire fraud. At sentencing, Elrod testified that an individual who identified himself as “Duke McGregor” befriended her on Facebook. “Duke” eventually asked her to send money to his friend, “Sinclair,” in Nigeria. Over time, “Duke” caused hundreds of thousands of dollars to be sent to accounts controlled by Elrod. These amounts were unwittingly sent to Elrod by victims of a fraud scheme. Elrod then structured the money out of her accounts, keeping the amounts below $10,000 to avoid the filing of currency transaction reports. She then sent the money by Western Union and MoneyGram to accounts in Nigeria. Elrod played an important role in the scheme because using her accounts disguised from the victims the fact that their money was ending up in Nigeria. Between March 2012 and July 2013, Elrod received $446,927 in wire transfers into bank accounts she controlled. Between July 2012 and July 2013, Elrod structured $411,411 in cash transactions in an effort to hide her activity from the government. Elrod was arrested on federal charges on April 15, 2013. After the Court released her on bond, Elrod continued to receive and send money as part of the fraud scheme. She then fled to Charlotte, North Carolina, and continued the scheme there.

Medical Device Inventor Sentenced on Tax Charges
On July 7, 2014, in San Jose, California, Ashvin Desai was sentenced to six months in prison and six months and one day of home confinement for concealing more than $8 million in foreign bank accounts. In addition, Desai was assessed by the IRS to pay a penalty of $14,229,744 for failing to file Reports of Foreign Bank and Financial Accounts (FBARs). Desai, a medical device manufacturer, was convicted by jury in October 2013, for failing to report his family’s foreign bank accounts on tax returns and FBARs. Desai also failed to disclose more than $1.2 million in interest income generated by these accounts between 2007 and 2009. According to the evidence presented in court, Desai controlled several foreign bank accounts at HSBC in India and Dubai, including accounts held in the name of his wife and adult children. Desai funded these accounts by mailing checks from the United States and by transferring money from other undeclared bank accounts in Singapore and the United Kingdom to his family’s accounts in India. Desai also sold medical devices abroad, and, on at least one occasion, directed that his customer wire funds directly to his undeclared HSBC India account. Desai’s deposits into his foreign accounts also far exceeded the income he disclosed on his tax returns each year. In 2008, for example, he deposited nearly $1.1 million into foreign accounts while only reporting income of $115,810 on his tax return.

California Man Sentenced for Tax Evasion
On October 23, 2013, in San Jose, Calif., Jonathan Jianguo Jiang was sentenced to 16 months in prison, three years of supervised release and ordered to pay $467,336 in restitution. Jiang also paid his civil tax liability, which includes penalties and interest, of over $3,000,000. On March 3, 2013, Jiang pleaded guilty to one count of income tax evasion for the 2004 tax year. According to court documents, Jiang, of Saratoga, Calif., incorporated SecureM in the Cayman Islands on January 28, 2004. He was the director, president, and sole shareholder of SecureM. On April 17, 2004, SecureM was sold to a United Kingdom company for at least $8,600,000. Jiang willfully omitted the capital gains from his 2004, 2005 and 2006 federal income tax returns, notwithstanding the fact that he received capital gains of at least $2.9 million between 2004 and 2006 from the sale of SecureM.

Two Men Sentenced for Their Roles in International High-Yield Investment Scheme
On October 18, 2013, in Boston, Mass., Alan Gilner, of New Smyrna Beach, Fla., and Randi A. Bochinski, of British Columbia, Canada, were sentenced for their roles in a scheme to defraud investors out of millions of dollars. Gilner was sentenced to 84 months in prison, three years of supervised release and ordered to pay $5.2 million in restitution.  Bochinski was sentenced to 72 months in prison, three years of supervised release and ordered to pay $5.2 million in restitution. In June 2012, Gilner was convicted of conspiracy, mail fraud, wire fraud and money laundering following a seven-day jury trial. In May 2013, Bochinski pleaded guilty to wire fraud, mail fraud, and money laundering for his role in the scheme.  According to court documents, Gilner and Bochinski promoted a series of purported high-yield investment programs to investors throughout the United States. The men promised extraordinary rates of return on the investments within a short period of time, and also pledged that investors’ principal would be insured or maintained in an escrow account. Once investors sent their money to either Gilner or Bochinski, the defendants diverted the funds for other uses, including their own personal use.  In order to lull investors into believing that their funds had been invested as promised, Bochinski and Gilner typically made at least some purported “return” payments using money from other investors.  In some instances, Bochinski and Gilner attempted to return principal to frustrated investors by using counterfeit checks.

Insurance Fraud

Texan Sentenced for Massive Fraud Scheme 
On March 6, 2014, in Houston, Texas, Kelly Taylor Gipson, of Rockwall, Texas, was sentenced to prison for 48 months and three years of supervised release. In addition, Gipson was ordered to jointly pay $9,651,660 in restitution with Charles Craig Jordan to 503 victims of a life settlement investment fraud scheme. According to court documents, Gipson and Jordan misappropriated investor funds which ultimately resulted in policies lapsing and investors losing their investment.  A life settlement is an investment in which a person, who is typically elderly or terminally ill, sells his or her life insurance policy for a cash payment, which is a percentage of the life insurance policy’s face value or death benefit payable by the insurance company upon the insured’s death. The scheme defrauded investors from around the United States and Canada who invested millions in the life settlement offerings of Secure Investment Services and American Settlement Associates. Jordan was sentenced in December 2013 to 156 months in federal prison.

Identity Theft

Leader of Large-Scale Identity Theft Ring Sentenced for Role in Fraud Enterprise  
On Feb. 11, 2014, in Newark, N.J., Sang-Hyun Park, of Palisades Park, N.J., was sentenced to 144 months in prison, five years of supervised release and ordered to pay $4,774,116 in restitution. He will also be deported upon his release from prison. Park previously pleaded guilty to conspiracy to unlawfully produce identification documents and false identification documents, conspiracy to commit wire fraud, aggravated identity theft, money laundering and conspiracy to defraud the IRS. According to court documents, Park was the leader of a criminal organization (the “Park Criminal Enterprise”) headquartered in Bergen County, N.J., that obtained, brokered, and sold identity documents to customers for the purpose of committing credit card fraud, bank fraud and tax fraud. As part of the scheme, the Park Criminal Enterprise obtained social security cards beginning with the prefix “586” which were issued by the United States to individuals, usually from China, employed in American territories. The Park Criminal Enterprise sold the cards to its customers and then took steps assist these customers to obtain fraudulent identification cards and driver’s licenses, build fraudulent credit scores and open bank accounts and credit cards. Park relied on several collusive merchants who possessed credit card processing machines and who would, for a fee, charge the fraudulently obtained credit cards, although no transaction took place. After receiving the money into their merchant accounts from the credit card related to these fraudulent transactions, the collusive merchants gave the money to Park and his conspirators. Park laundered portions of the money he obtained through the fraud by wiring the money to various accounts in South Korea. Park defrauded various credit card companies, banks, and lenders out of $4 million. He and his conspirators also claimed more than $182,000 in tax refunds from the IRS through the filing of false and fictitious tax returns and accompanying documents.

Nurse’s Aide Sentenced for Conspiracy to Defraud the Government 
On January 24, 2014, in Norfolk, Va., Festus Ighalo, of Virginia Beach, Va., was sentenced to 57 months in prison. Ighalo pleaded guilty on October 8, 2013 to conspiracy to defraud the government. According to court documents, Ighalo and his co-defendant Emmanuel Effiong, both originally from Nigeria and now naturalized United States citizens, were formerly nurse’s aides at a hospital in Virginia Beach. They used their positions there to obtain personally identifiable information, such as dates of birth and social security numbers, from thousands of patients. Then, with the help of others located elsewhere in the United States and Nigeria, they used that information to submit fraudulent federal tax returns with the IRS and receive tax refunds in the patients’ names. Effiong was sentenced to 81 months for conspiracy and aggravated identity theft on January 10, 2014.

Leader of Massive Tax Refund Fraud Scheme Sentenced 
On November 13, 2013, in New York, N.Y., Melvin Duarte was sentenced to 120 months in prison, three years of supervised release and ordered to forfeit $15 million. In June 2013, Duarte pleaded guilty to one count of conspiracy to defraud the United States, one count of conspiracy to steal mail and one count of mail theft. According to court documents, Duarte participated in a massive tax and mail theft scheme. As part of the scheme, co-conspirators operating out of the Dominican Republic and other places electronically filed thousands of fraudulent federal tax returns, seeking tens of millions of dollars in tax refunds. The fraudulent returns were filed using social security numbers and other identifying information stolen from residents of Puerto Rico. Each of the tax returns at issue falsely represented that the taxpayer resided at an address in the Bronx, N.Y., where the refund check was to be sent. The checks were then stolen by letter carriers assigned to the mail routes where the checks were sent who had been recruited beforehand to participate in the scheme. The letter carriers participating in the scheme were paid a kickback for each check they stole. The letter carriers passed the checks on to other co-conspirators, who cashed them at various banks and check-cashing businesses located in the U.S. and the Dominican Republic.

Money Laundering

Head of International Narcotics Trafficking and Money Laundering Organization Sentenced
On Sept. 29, 2014, in Miami, Florida, Alvaro López Tardón, of Miami Beach and Madrid, Spain, was sentenced to 150 years in prison and ordered to pay a $14 million forfeiture money judgment and $2 million fine. Tardón was also ordered to forfeit a significant number of assets, including luxury real estate, cars and bank accounts. Tardón was convicted on one count of conspiracy to commit money laundering and 13 substantive counts of money laundering. Tardón was the head of an international narcotics trafficking and money laundering syndicate which distributed over 7,500 kilograms of South American cocaine in Madrid and laundered over $14,000,000 in narcotics proceeds in Miami by buying high-end real estate, luxury and exotic automobiles and other high-end items. The proceeds were smuggled into Miami by couriers, wire transferred to South Florida by co-conspirators, wire transferred to third parties internationally on behalf of Tardón, and wire transferred directly to Tardón and his co-conspirators in Miami through Tardón’s exotic car dealership and other companies controlled by him located in Madrid, Spain.

Greek National Sentenced for Role in Multi-Million Dollar Scheme to Defraud Developers
On Sept. 9, 2014, in Boston, Massachusetts, Evripides Georgiadis, of Larisa, Greece, was sentenced to 102 months in prison and ordered to pay $8.4 million in restitution. In May 2014, Georgiadis was convicted of conspiracy to commit wire fraud, 11 counts of wire fraud and conspiracy to commit money laundering. According to court documents, between 2007 and 2011, Georgiadis participated in a conspiracy to defraud developers who were seeking financing for large-scale alternative energy and commercial projects by pretending to be a representative of a multi-billion dollar fund located in Luxembourg. Georgiadis and his co-conspirators convinced developers to give deposits between $300,000 and $1 million to this fraudulent fund with the promise that the deposit would be fully refundable. Georgiadis and his co-conspirators spent and transferred the developers' deposit money out of the country, and the fraudulent fund never financed any projects. Over $7 million was stolen from victims, including $600,000 which had originally been provided by a financial adviser, Sean Mansfield. Mansfield, in turn, had stolen the funds from his clients. In 2011, Mansfield was sentenced to 60 months in prison for defrauding his clients. Georgiadis’s co-defendants, John Condo, Frank Barecich, and Michael Zanetti, have all been sentenced to prison. Condo and Barecich were sentenced to 90 months and 12 months in prison, respectively. Zanetti was sentenced to 37 months in prison.

Caribbean-Based Investment Advisor Sentenced For Using Offshore Accounts to Launder and Conceal Funds
On Sept. 5, 2014, in Alexandria, Virginia, Joshua Vandyk, an investment advisor, was sentenced to 30 months in prison. Vandyk, a U.S. citizen, pleaded guilty on June 12, 2014 to conspiring to launder monetary instruments. Co-defendants Eric St-Cyr and Patrick Poulin, Canadian citizens, pleaded guilty and are scheduled to be sentenced at a later date. According to court documents, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based there. Vandyk, St-Cyr and Poulin conspired to conceal and disguise property believed to be the proceeds of bank fraud, specifically $2 million. Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government, including the IRS. Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure. The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the U.S. client, Vandyk and St-Cyr liquidated investments and transferred money, through Poulin, back to the United States.

Former President of Guatemala Sentenced for Laundering Millions of Dollars Through United States Banks  
On May 22, 2014, in Manhattan, New York, Alfonso Portillo, the former President of Guatemala, was sentenced to 70 months in prison and ordered to pay $2.5 million in forfeiture. On March 18, 2014, Portillo pleaded guilty to laundering millions of dollars through bank accounts located in the United States. According to court documents, from December 1999 through August 2002, while serving as President of Guatemala, Portillo received $2.5 million in bribery payments from the Government of Taiwan. Portillo received the payments in exchange for using his influence to have Guatemala continue to recognize Taiwan diplomatically. Knowing that the $2.5 million was the proceeds of illegal payments from Taiwan, Portillo conspired with others to launder the $2.5 million through bank accounts located in the United States. Portillo and others carried the illegally obtained funds from Guatemala to the United States and then deposited the funds into the United States bank accounts. Portillo designed the transactions to conceal and disguise the source and ownership of the money. Some of the funds were further laundered through financial institutions in Luxembourg and Switzerland, among other places.

California Man Sentenced for Cash Smuggling 
On May 13, 2014, in Greensboro, North Carolina, Adolfo Pulido was sentenced to 50 months in prison, three years of supervised release and ordered to pay a special assessment of $100. Pulido pleaded guilty to bulk cash smuggling. According to court documents, Pulido traveled to Asheboro, North Carolina, with the intent to transport over $1.5 million in cash back to California and then to Mexico without reporting the movement of the cash across the Mexican border as required by federal law. Cash in the amount of $1,567,576 was seized from Pulido during the investigation.

Illinois Man Sentenced for Selling Peptides, HGH from China over the Internet 
On May 12, 2014, in Pittsburgh, Pennsylvania, Ronald J. DeFranco, of Norridge, Illinois, was sentenced to 27 months in prison and three years of supervised release. DeFranco previously pleaded guilty to mail fraud, distribution of human growth hormone and money laundering. According to court documents, DeFranco maintained a website for the illegal distribution of peptides (chemical compounds which require a prescription for dispensation, but which are illegitimately sought by body builders for muscle enhancement). DeFranco deceived the Internet service provider and the FDA by falsely representing on the website that he was selling these substances for research purposes only rather than for human consumption. In addition to sales of peptides, DeFranco also allegedly sold human growth hormone (HGH) without the required physician's prescriptions. During the period from May 2010, until January 2011, DeFranco allegedly paid $94,777 in Western Union and bank wire transfers to acquire these substances from suppliers in the People’s Republic of China.

Online Clothing Business Owners Sentenced for Customs Fraud and Money Laundering 
On May 5, 2014, in Fresno, California, Hoang Minh Nguyen and Dung Hang Dao, husband and wife from San Jose, were sentenced to 12 months of time-served and ordered to pay $70,000 in restitution and to forfeit bank accounts and a property valued at more than $400,000. Nguyen and Dao pleaded guilty on Feb. 12, 2014 to customs fraud and money laundering. According to court documents, from November 2008 through January 2013, Nguyen and Dao owned an online clothing company that utilized several websites to sell clothing imported from China to customers in the United States. As part of their scheme, Nguyen and Dao declared the imported clothing as samples even though they would later sell it to customers. By declaring the clothing as samples, Nguyen and Dao were able to avoid paying customs duties. With the proceeds from their business, Nguyen and Dao sent significant amounts of cash to China via Western Union money transfers. They broke up the cash deposits into amounts of $10,000 or less in an attempt to prevent Western Union from filing currency transaction reports on those transactions. In addition, Nguyen and Dao laundered the proceeds of their business by purchasing properties in Patterson and San Jose.

Dual Chinese and United States Citizen Sentenced for Money Laundering 
On April 3, 2014, in Corpus Christi, Texas, Kin Fu Chow, of Chicago, Ill., was sentenced to 15 months in prison and three years of supervised release. Chow pleaded guilty on Jan. 2, 2014 to one count of money laundering. According to court documents, Chow was a leader in a large money laundering conspiracy operating in the Southern District of Texas. The money laundering was accomplished through other illegal activity including alien smuggling and drug trafficking. Chow purchased a 1975 Cessna 310R aircraft to enable the criminal organization to smuggle illegal money, aliens and drugs. He was responsible for the smuggling of Chinese nationals into the United States via Mexico. Chow’s co-conspirators were arrested in 2010 and the aircraft was seized as part of their prosecution. At the time of their arrest, Chow fled to China. He returned to the United States in October 2013 and was immediately arrested.

Multiple Defendants Sentenced for International Money Laundering Conspiracy 
On March 31, 2014, in Anchorage, Alaska, several defendants were sentenced for their roles in an international conspiracy to launder the proceeds of drug trafficking. Claritza Natera was sentenced to 24 months in prison and ordered to forfeit $239,990 to the United States. The court ordered a money judgment in that amount to be entered against Natera. Natera pleaded guilty to international money laundering. According to court documents, in 2010 and 2011, Natera repeatedly deposited currency that she knew to be the proceeds of drug trafficking into her bank account in Alaska and then immediately wired the funds to persons in the Dominican Republic. She was paid cash for conducting these transactions by a person known to her to be a cocaine dealer and an illegal alien. Joel Paredes Henriquez was sentenced to four years of probation and ordered to forfeit $25,500 to the United States. Joel Paredes Henriquez pleaded guilty to being a member of an international money laundering conspiracy. He deposited cash that he received from a man he knew to be an illegal alien and a cocaine dealer into his bank account. He wired over $25,000 between March 2010 and February 2011 to the Dominican Republic. Nerido Paredes Henriquez was sentenced to three years of probation and ordered to forfeit $15,400 to the United States. Nerido Paredes Henriquez pleaded guilty to one count of structuring financial transactions. He and others made several currency deposits at different bank branches to avoid the currency transaction reporting requirements. On March 27, 2014, Randin Paredes Henriquez was sentenced to a term of time-served in jail. Randin Paredes Henriquez pleaded guilty to one count of international money laundering. In December 2011, Randin flew from Anchorage to Philadelphia enroute to the Dominican Republic. Customs agents discovered that he was smuggling cash, which he admittedly knew to be the proceeds of cocaine trafficking in Alaska. Cash in the amount of $55,720 was seized and forfeited to the United States. Randin Paredes Henriquez had been in federal custody for approximately two years, since his return to Alaska from the Dominican Republic in March 2012. On March 14, 2014, Concepcion Egea was sentenced to four years of probation and fined $5,000. Egea pleaded guilty to one count of structuring financial transactions to avoid the currency reporting requirements. Evidence presented in court established that the defendants shared joint financial accounts, shared an address, and made multiple cash transactions in a single day or over several days at various branches to avoid suspicion. Most of the currency deposits were approximately $5,000. The funds were almost always immediately wired to persons in the Dominican Republic. Randin, Joel, and Nerido Paredes Henriquez are lawful permanent residents of the United States, but remain citizens of the Dominican Republic. Concepcion Egea and Claritza Natera are naturalized U.S. citizens, and were formerly citizens of the Dominican Republic.

Worldwide Drug Trafficker Sentenced 
On Feb. 20, 2014, in Sacramento, Calif., Shiraz Malik, a Pakistani national residing in Warsaw, Poland, was sentenced to 180 months in prison. Malik was arrested at the Prague International Airport on Sept. 8, 2011, and was extradited on June 22, 2012, from the Czech Republic to the United States. He pleaded guilty on Oct. 7, 2013 to conspiring to distribute controlled substances and listed chemicals, conspiring to import controlled substances and ephedrine into the United States, and conspiring to launder money.  According to court documents, from June 1, 2008, through Sept. 8, 2011, Malik sold pharmaceuticals and highly regulated chemicals to customers in the United States, Europe and other countries and conspired to launder the profits of that activity. Malik took orders from customers via the Internet and coordinated with people in Pakistan to fill the orders. In the course of the three-year investigation, law enforcement agents made eight undercover purchases of various drugs from Malik that were shipped from a post office in Lahore, Pakistan to addresses in the Sacramento area. In each instance, the purchase request was sent to Malik via email and payment instructions were sent by Malik to the undercover agent. Malik maintained at least two bank accounts in Poland that he used to receive payments for Internet drug purchases from undercover agents.

Two Men Sentenced for Roles in Drug Trafficking Organization 
On January 27, 2014, in Phoenix, Ariz., Jonathan Ortiz Troncoza was sentenced to 120 months in prison and five years of supervised release. David Ortiz Troncoza, Jr. was sentenced to 70 months in prison and five years of supervised release. Jonathan Troncoza pleaded guilty on August 6, 2012 to conspiracy to possess with intent to distribute cocaine and marijuana and conspiracy to commit money laundering. David Troncoza pleaded guilty on July 30, 2012 to conspiracy to possess with intent to distribute cocaine and marijuana and conspiracy to commit money laundering. According to court documents, beginning on or about March 29, 2005 and continuing through June 1, 2010, Jonathan Troncoza operated a marijuana and cocaine distribution organization. Jonathan and David Troncoza and others distributed large amounts of marijuana and cocaine and laundered the drug proceeds. Specifically, the drug organization receive marijuana and cocaine from sources in the Republic of Mexico. The defendants used stash houses and warehouses to store the drugs for further distribution. A portion of the proceeds were used to acquire additional quantities of drugs for sale, pay for the expenses of the stash houses, cars, couriers, communication equipment and other needs of the drug organization. In addition, business entities were used in furtherance of the conspiracy in order to conceal the identities of the defendants and the true nature of the drug trafficking organization.

Leader of “Pump and Dump” Stock Fraud Scheme Sentenced 
On January 24, 2014, in New York, N.Y., David Levy was sentenced to 108 months in prison and three years of supervised release. Levy was also preliminarily ordered to forfeit $12 million, his home in Florida, certain luxury vehicles and certain bank accounts. Levy previously was found guilty by a federal jury for orchestrating “pump and dump” stock fraud schemes that used the Internet and social networking sites, among other tools, to manipulate the price of penny stocks as well as participating in an international money laundering scheme. Levy’s wife and co-defendant, Donna Levy, who also was found guilty by the federal jury for her role in this and other schemes, is scheduled to be sentenced at a later date.  According to court documents, David and Donna Levy offered to help start-up companies obtain financing, take the start-up companies public, and coordinate marketing and investor relations for the companies, in exchange for company shares. Once they had helped the companies go public, Donna Levy put out press releases on behalf of the target companies, and she worked with her husband to secretly fund and distribute misleading third-party recommendations concerning the targeted companies. This misleading promotional campaign, along with other manipulative conduct, generated demand for stock in the targeted companies, and caused the price of the stocks to rise. David Levy also was convicted of a money laundering conspiracy in connection with his efforts to conceal more than $2.3 million in proceeds of the fraudulent schemes in Panamanian shell company bank accounts maintained by a co-conspirator at a bank in Panama. In connection with the scheme, Levy wire transferred $150,000 in fraud proceeds to a Panamanian shell company bank account through a bank account in New York. Levy carried more than $2 million in cashier’s checks, representing proceeds from stock fraud, to Panama and caused them to be deposited into the shell company bank accounts.

Father and Son Sentenced for Bank Fraud and Money Laundering 
On January 23, 2014, in Pensacola, Fla., Gary Wayne Thomas, of Daphne, Ala., and his son, Brian Keith Thomas, of Birmingham, Ala., were sentenced to 72 months and 24 months in prison, respectively. Both men were charged with conspiracy to structure cash withdrawals and structuring cash withdrawals to avoid the Currency Transaction Reporting (CTR) requirement, conspiring to commit bank fraud and conspiracy to commit money laundering. Gary Thomas was also charged with money laundering, failure to appear, possession of a firearm and ammunition by a person under indictment, and possession of a firearm and ammunition by a fugitive from justice. Brian Thomas went to trial during the week of July 22, 2013, and was convicted of all counts. Gary Thomas pleaded guilty to all charges on October 30, 2013. The evidence showed that between January 1, 2008, and November 1, 2008, Gary and Brian Thomas caused approximately $4,550,000 to be deposited into their domestic bank accounts and then wired to offshore bank accounts in the Cayman Islands and Belize. Shortly thereafter, Gary Thomas stopped making payments on the loans he and his various entities had obtained from a bank. The total amount of the loans was approximately $56 million. In the summer of 2009, the bank filed civil suits against Gary Thomas on these loans. In a three-year period between 2010 and 2013, Gary Thomas wired approximately $2,150,000 from the offshore banks into several domestic accounts including five accounts that Brian Thomas opened in banks.  Thereafter, the father and son conspired to structure withdrawals of cash under $10,000 to avoid the CTR requirement and to hide Gary Thomas’s interest in the funds from his creditor bank. The structured withdrawals were done on roughly 194 occasions and totaled more than $1.6 million. Gary Thomas used some of these funds to purchase five airplanes, numerous vehicles, and homes. Thus far, the government has successfully forfeited the five airplanes; approximately $387,413 in cash, which represents the proceeds of the sale of the home in Alabama; and a $60,000 Hyundai Equus.  The government has also obtained monetary judgments of forfeiture against Gary and Brian Thomas in the amounts of $4,970,000 and $1,197,148 respectively.  

International Fugitives Sentenced for Asset Tracing Scheme 
On January 16, 2014, in Newport News, Va., Elaine White, formerly a resident of Toronto, Canada, and her husband, Cullen Johnson, were both sentenced to 66 months in prison, three years of supervised release and ordered to pay $1,021,738 in restitution for their role in an international asset tracing scheme. Johnson and White pleaded guilty to participating in a conspiracy to engage in money laundering.  According to court documents, starting in 2006, Johnson and White owned and/or operated an asset location business called “Internal Affairs,” “World Solutions” and then “Occipital.”  Clients seeking to locate funds that had been stolen from them or trying to trace lost, missing or stolen assets, hired White and Johnson to investigate the location of such assets. White and Johnson then produced reports of information to clients, which purported to contain financial and other information subject to the clients’ requests. Rather than providing valid information, White and Johnson provided the client-victims with fabricated banking records, purporting to show that the assets or money that clients sought had been moved from one banking institution to another in locations such as Monaco, Greece, Hong Kong, Switzerland, Latin America and the Caribbean. For additional payments, White and Johnson claimed that they could continue to trace the funds to their final destination. On any occasion where the client-victims determined that the information provided by the defendants was false, the defendants claimed that the information was valid and accused the client-victims or their representatives of improperly trying to collect the funds. Court documents also state that, in or about 2009, White and Johnson were charged by the Ontario Provincial Police in Canada with crimes related to this asset tracing fraud. The couple fled Canada, travel to the Turks & Caicos Islands, where they continued to operate this fraudulent asset tracing business on U.S. and Canadian victims. The couple resided there until they were apprehended by Turks & Caicos authorities. All told, the couple solicited more than $1,000,000 from U.S. and Canadian victims, including about $500,000, which they wired to one of their co-conspirators.

Couple Sentenced for Conspiracy and Money Laundering 
On November 19, 2013, in Portland, Ore., Hossein Lahiji and Najmeh Vahid Dasterjerdi, aka Najmeh Lahiji, from McAllen, Texas, were both sentenced to 12 months and one day in prison and ordered to jointly pay $973,503 in restitution to the IRS.  In addition, Lahiji and Dasterjerdi were each ordered to pay $200,000 in fines and to forfeit an additional $600,000. In June 2013, Lahiji and Dasterjerdi were convicted for conspiracy to defraud the United States and money laundering. According to court documents, Lahiji and Dasterjerdi conspired to impede and impair the functions of the IRS in the collection of income taxes and the Office of Foreign Assets Control of the Treasury Department in the enforcement of the Presidential Embargo against Iran. Trial evidence showed that the defendants provided funds to a Portland charity, the Child Foundation, between 1998 and 2006. The Child Foundation, in turn, gave the defendants charitable donation receipts and transferred the funds to Iran. Lahiji and Dasterjerdi claimed charitable deductions from their income taxes for these payments. Some of the funds were used to purchase a building in Tehran in the name of Hossein Lahiji’s sister. Additional funds were used to invest in an interest-bearing account in an Iranian bank or committed to be spent at the discretion of an Iranian Ayatollah. Some of the payments were backdated to facilitate claims of charitable donations for a year prior to the year of actual payment. Many of the uses of the funds violated the Presidential embargo against Iran, instituted in 1995.

Businessman Sentenced for Fraudulently Importing $30 Million of Chinese-Made Textiles 
On October 21, 2013, in San Diego, Calif., Sunil Jiwat Mirwani was sentenced to 27 months in prison and five years of supervised release. In addition, Mirwani was ordered to forfeit over $30,000 in cash, the contents of a Hong Kong-based bank account, and an inventory of more than 220,000 pairs of blue jeans valued at more than $1 million. According to the evidence presented at a trial in June 2012, Mirwani hired a group of San Diego-based businessmen and logistics professionals to initiate shipments of Chinese-made merchandise from ports in China to the Port of Long Beach, California. When the goods arrived at Long Beach, Mirwani and his conspirators would ensure that the merchandise was classified as “in bond” which is a special customs classification meaning that they had to be shipped directly to Mexico. However, rather than complete the shipment to Mexico, Mirwani and his conspirators forged documents and falsified database entries, allowing them to send the merchandise to warehouses in the Los Angeles area. Mirwani would then sell his merchandise throughout the United States, effectively evading customs duties on more than $30 million in Chinese-made wearing apparel.  Mirwani laundered his ill-gotten gains through a complex web of international wire transfers. Mirwani transmitted nearly $10 million from M Trade, Inc.’s bank account to the account of Mirvana International, a Hong Kong-based company. In addition, Mirwani transmitted similar sums to the Mirvana International account through a series of intermediary accounts in the United States and Mexico and even sent money from M Trade Inc.’s account directly to accounts in mainland China.

New York Man Sentenced for Conspiracy to Import and Distribute Synthetic Drug 
On October 11, 2013, in Syracuse, N.Y., Rosario Gambuzza, of East Syracuse, N.Y., was sentenced to 188 months in prison and three years of supervised release. In May 2013, Gambuzza was convicted after a jury trial on charges of a drug conspiracy and money laundering. According to court documents, between January 2010 and April 2011, Gambuzza conspired to import and distribute a controlled substance analogue, known on the street as “Molly” in Syracuse, N.Y.  Gambuzza was also convicted of 19 counts of money laundering relating to $73,000 he wired to a co-conspirator in Shanghai, China, in order to purchase the drug.  

Narcotics

Head of International Narcotics Trafficking and Money Laundering Organization Sentenced
On Sept. 29, 2014, in Miami, Florida, Alvaro López Tardón, of Miami Beach and Madrid, Spain, was sentenced to 150 years in prison and ordered to pay a $14 million forfeiture money judgment and $2 million fine. Tardón was also ordered to forfeit a significant number of assets, including luxury real estate, cars and bank accounts. Tardón was convicted on one count of conspiracy to commit money laundering and 13 substantive counts of money laundering. Tardón was the head of an international narcotics trafficking and money laundering syndicate which distributed over 7,500 kilograms of South American cocaine in Madrid and laundered over $14,000,000 in narcotics proceeds in Miami by buying high-end real estate, luxury and exotic automobiles and other high-end items. The proceeds were smuggled into Miami by couriers, wire transferred to South Florida by co-conspirators, wire transferred to third parties internationally on behalf of Tardón, and wire transferred directly to Tardón and his co-conspirators in Miami through Tardón’s exotic car dealership and other companies controlled by him located in Madrid, Spain.

Worldwide Drug Trafficker Sentenced 
On Feb. 20, 2014, in Sacramento, Calif., Shiraz Malik, a Pakistani national residing in Warsaw, Poland, was sentenced to 180 months in prison. Malik was arrested at the Prague International Airport on Sept. 8, 2011, and was extradited on June 22, 2012, from the Czech Republic to the United States. He pleaded guilty on Oct. 7, 2013 to conspiring to distribute controlled substances and listed chemicals, conspiring to import controlled substances and ephedrine into the United States, and conspiring to launder money.  According to court documents, from June 1, 2008, through Sept. 8, 2011, Malik sold pharmaceuticals and highly regulated chemicals to customers in the United States, Europe and other countries and conspired to launder the profits of that activity. Malik took orders from customers via the Internet and coordinated with people in Pakistan to fill the orders. In the course of the three-year investigation, law enforcement agents made eight undercover purchases of various drugs from Malik that were shipped from a post office in Lahore, Pakistan to addresses in the Sacramento area. In each instance, the purchase request was sent to Malik via email and payment instructions were sent by Malik to the undercover agent. Malik maintained at least two bank accounts in Poland that he used to receive payments for Internet drug purchases from undercover agents.

Two Men Sentenced for Roles in Drug Trafficking Organization 
On January 27, 2014, in Phoenix, Ariz., Jonathan Ortiz Troncoza was sentenced to 120 months in prison and five years of supervised release. David Ortiz Troncoza, Jr. was sentenced to 70 months in prison and five years of supervised release. Jonathan Troncoza pleaded guilty on August 6, 2012 to conspiracy to possess with intent to distribute cocaine and marijuana and conspiracy to commit money laundering. David Troncoza pleaded guilty on July 30, 2012 to conspiracy to possess with intent to distribute cocaine and marijuana and conspiracy to commit money laundering. According to court documents, beginning on or about March 29, 2005 and continuing through June 1, 2010, Jonathan Troncoza operated a marijuana and cocaine distribution organization. Jonathan and David Troncoza and others distributed large amounts of marijuana and cocaine and laundered the drug proceeds. Specifically, the drug organization receive marijuana and cocaine from sources in the Republic of Mexico. The defendants used stash houses and warehouses to store the drugs for further distribution. A portion of the proceeds were used to acquire additional quantities of drugs for sale, pay for the expenses of the stash houses, cars, couriers, communication equipment and other needs of the drug organization. In addition, business entities were used in furtherance of the conspiracy in order to conceal the identities of the defendants and the true nature of the drug trafficking organization.

Five Men Sentenced for Prescription Drug Trafficking 
On January 24, 2014, in Sherman, Texas, Khuda Balouch Buksh, of Duncanville, Texas; Sikander Ali Teepu, of Wantagh, N.Y.; and Haroon Ahmad Tanooli, of Sugarland, Texas, were sentenced to 36 months, 18 months and 18 months in prison, respectively. On January 22, 2014, Mustajab Ali Raza, of Brighton, Minn., and Saaim Aslam, of Irvine, Calif., were both sentenced to 12 months and one day in prison. Buksh and Raza were ordered to be deported following the completion of their prison sentences.  According to information presented in court, beginning in 2009, the defendants conspired to import and distribute controlled substances to others by way of a large on-line pharmaceutical operation. The defendants conspired to import and distribute drugs that were unlawfully imported from China, Singapore, Hong Kong, Pakistan, and elsewhere by use of the United States Postal Service and other foreign and domestic common carriers. The drugs consisted primarily of misbranded, adulterated, and counterfeit pills made to look like, and sold to customers as if they were, FDA-approved substances manufactured and approved for use within the United States.

Pennsylvania Man Sentenced in Drug Conspiracy Case 
On October 22, 2013, in Wilmington, Del., Kevin Morris, of Franklin Township, Pa., was sentenced to 57 months in prison, three years of supervised release and ordered to forfeit $22,172 in drug proceeds. Morris pleaded guilty on July 25, 2012, to conspiracy to smuggle five kilograms of cocaine and one kilogram of heroin from the Republic of Panama into the United States and money laundering.  According to facts introduced during the plea hearing, Morris acted as a recruiter, facilitator, and financier for an organization and was involved on multiple occasions in which couriers smuggled or attempted to smuggle heroin and cocaine from Panama to Delaware.  He made cocaine and heroin sales to customers based primarily in Pennsylvania, including to confidential informants under the control of the Pennsylvania State Police.  Morris further admitted his involvement in purchasing approximately one-half kilogram of cocaine in Washington, D.C., which had been smuggled into the United States through a military contractor based in Afghanistan. In connection with his plea agreement, Morris laundered his drug proceeds in part by purchasing two vehicles.

New York Man Sentenced for Conspiracy to Import and Distribute Synthetic Drug 
On October 11, 2013, in Syracuse, N.Y., Rosario Gambuzza, of East Syracuse, N.Y., was sentenced to 188 months in prison and three years of supervised release. In May 2013, Gambuzza was convicted after a jury trial on charges of a drug conspiracy and money laundering. According to court documents, between January 2010 and April 2011, Gambuzza conspired to import and distribute a controlled substance analogue, known on the street as “Molly” in Syracuse, N.Y.  Gambuzza was also convicted of 19 counts of money laundering relating to $73,000 he wired to a co-conspirator in Shanghai, China, in order to purchase the drug. 

Non-filer

International “Con Man” Sentenced for Scamming Investors and Dodging Taxes
On August 21, 2014, in San Diego, California, Svein Erik Ulsteen, a former executive and shareholder of Anturion Limited, a company formed in the Channel Islands, was sentenced to 46 months in prison. Restitution will be ordered at a later date. According to court documents, between October 2011 and June 2013, Ulsteen solicited investors by pretending to either: (1) sell them shares of Anturion stock; or (2) borrow money on behalf of Anturion, which would be paid back with interest. In fact, however, Ulsteen was neither authorized to sell company stock nor borrow money on its behalf. To support his deceptive solicitations, Ulsteen created fake “subscription agreements” and phony “loan” documents that purported to be authentic securities of Anturion. Using these counterfeit securities, Ulsteen convinced investors throughout the United States to send more than $2 million to Ulsteen’s nominee accounts. In addition to selling forged securities, Ulsteen admitted to corruptly obstructing the IRS’s attempts to assess his true tax liability. Between 2010 and 2012, Ulsteen earned over $1 million from various activities, including the sale of his Anturion stock. Although the IRS notified Ulsteen that he needed to file federal income tax returns as he owed taxes, penalties and interest, Ulsteen refused to file for any of these years, and took several steps to prevent the IRS from learning how much income he had earned. These steps included depositing investor funds into the nominee accounts he controlled and paying his personal expenses out of these company accounts.

Connecticut Man Who Used Offshore Accounts Sentenced for Tax Evasion and Conspiracy 
On May 28, 2014, in Hartford, Connecticut, John Cote III, formerly of Danielson, Connecticut, was sentenced to 46 months in prison, three years of supervised release and ordered to pay $222,691 in restitution. Cote was convicted in January 2014 of four counts of tax evasion along with conspiracy to defraud the IRS. According to court documents and evidence produced at trial, Cote did not file a timely or valid tax return for the years 1995 through 2009, despite earning income from his work as a consultant in the high-technology welding industry. Cote and his wife responded to IRS efforts to assess and collect taxes by concealing income and assets from the government, and by submitting obstructive letters and other documents, including false criminal complaints against IRS employees. Cote had the companies he worked for pay his compensation to nominee entities, sometimes through accounts in Costa Rica and Sweden. Cote also used a nominee entity in his wife’s name to conceal income and assets from the IRS; and in 2003, Cote's wife conveyed their personal residence to this entity.

Public Corruption

Owner of Military Support Services Company Sentenced for Failing to Report Millions in Income
On Sept. 5, 2014, in Santa Ana, California, Nadim “Nick” Saifan Jr., of Huntington Beach, was sentenced to 48 months in prison. Saifan pleaded guilty in May 2014 to two counts of attempted tax evasion and admitted that he substantially underreported income on his company’s 2005 corporate tax return and his personal tax return for 2006. According to court documents, Saifan was the owner and operator of Defense Logistical Support & Services Corporation (DLSS), which provided services to the military and some civilian companies in Iraq. From August 2004 through October 2007, DLSS received nearly $16 million from the United States military for services in Iraq. Saifan reported only a small fraction of this income on DLSS’s corporate tax returns filed with the IRS. Saifan used foreign bank accounts, specifically in Lebanon, to conceal his assets and profits from DLSS Corp. Saifan used corporate money to make approximately $880,000 in down payments on real estate and approximately $292,000 in payments towards vehicles that included a Ferrari and a Rolls-Royce.

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