Date: March 20, 2024 Contact: newsroom@ci.irs.gov PHILADELPHIA — United States Attorney Jacqueline C. Romero announced that defendant Abdur Rahim Islam, the former Chief Executive Officer of Universal Community Homes and defendant Shahied Dawan, the former Chief Financial Officer and Secretary of Universal, both of Philadelphia, PA, were convicted today at trial of conspiring to defraud the United States. Islam was also convicted of six counts of honest services wire fraud, five counts of wire fraud, and six counts of filing false tax returns. Details of the charges follow. Count 1 – Conspiracy to defraud the United States (Islam and Dawan convicted) The defendants conspired to defraud the United States by impeding, impairing, obstructing, and defeating the lawful functions of the Internal Revenue Service of the Department of the Treasury in the ascertainment, computation, assessment, and collection of income taxes, and in the regulation of tax-exempt charitable organizations, from at least in or about 2011 until at least in or about 2018. The object of the conspiracy was to conceal from the Internal Revenue Service taxable income, including unapproved bonuses and payments to both defendants, and improperly reimbursed personal expenses to Islam. The defendants hid the true nature of these payments from Universal’s auditors as they prepared the IRS Forms 990 for Universal. As a result, the tax returns for Universal and its related companies were false. Because Universal was able to maintain its tax-exempt status as a Section 501(c)(3) organization, the defendants were able to take advantage of the benefits of Universal’s tax-exempt status, including the ability to solicit donations based on representations that such donations would be tax deductible. Counts 2-7 – Honest services wire fraud (bribery) (Islam convicted) Islam devised and participated in a scheme and artifice to defraud and to deprive the citizens of Milwaukee, Wisconsin, of their right to the honest services of then-Milwaukee Public Schools Board President Michael Bonds, from in or about December of 2014 to in or about February of 2018. The scheme involved the payment of an $18,000 bribe to Bonds, who previously pleaded guilty, in exchange for Bonds using his official position to take a series of official actions to financially benefit Universal. These actions included advocating for and voting in favor of Universal’s expansion of charter school operations in Milwaukee, and for favorable lease terms for Universal. Counts 8-12 – Wire fraud (Islam convicted) Islam devised and participated in a scheme and artifice to defraud and to obtain money and property, that is, at least $491,000, from the Universal Companies, by means of materially false and fraudulent pretenses, representations, and promises, from in or about December of 2014 to in or about February of 2018. He stole significant sums of money from Universal, even while Universal was losing significant amounts of money due to the failed charter school expansion in Milwaukee. The thefts included unapproved bonuses of $280,000 for Islam and at least $211,000 in fraudulent expense reimbursements to him. Counts 13-18 – Filing false tax returns (Islam convicted) Islam filed false tax returns for tax years 2011, 2012, 2013, 2014, 2015, and 2016, underreporting his taxable income by approximately $573,823, resulting in a tax loss to the government of approximately $196,577. The defendant did not report any of the money he took from Universal during the execution of the wire fraud scheme that is the subject of Counts 8-12. “Islam and Dawan conspired to defraud the government — and therefore, taxpayers — out of revenue,” said U.S. Attorney Romero. “Today’s verdict holds them accountable for doing so and holds Islam responsible for his years-long pattern of criminal activity. He treated Universal like a virtual ATM, shortchanging its charter schools’ students, and the community, in the process.” “The outcome today is due to the dedicated efforts of IRS Criminal Investigation special agents and our law enforcement partners,” said Yury Kruty, Special Agent in Charge of IRS Criminal Investigation (CI). “CI is proud to have provided its financial expertise in this investigation, and we will continue to aggressively investigate individuals who engage in money laundering, tax fraud, or other types of white-collar crimes.” “Public corruption is a top FBI criminal investigative priority, as it erodes public confidence in the systems built to better our communities,” said Wayne A. Jacobs, Special Agent in Charge of FBI Philadelphia. “The FBI and our law enforcement partners remain steadfast in our commitment to combating public corruption at any level and aggressively pursue those who abuse their positions for personal profit.” The case was investigated by the IRS Criminal Investigation and the Federal Bureau of Investigation, with assistance from the Department of Education Office of Inspector General and is being prosecuted by Assistant United States Attorneys Mark B. Dubnoff and Linwood C. Wright, Jr. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
