San Ramon Attorney Charged with Tax Evasion and Unlawfully Intercepting Communications

Used Private Investigator to Install Listening Devices

OAKLAND, CA—A six-count indictment was unsealed today charging San Ramon attorney Mary Nolan with tax evasion and unlawfully intercepting communications, United States Attorney Melinda Haag announced. Nolan, 60, was arrested today in her home in Oakland, prior to making her initial appearance in federal court.

The indictment, which was returned September 6, 2012, alleges that Nolan, the owner of The Law Offices of Mary Nolan in San Ramon, California, willfully attempted to evade and defeat a large part of her income tax due and owing by causing false tax returns to be filed with the Internal Revenue Service from 2005 through 2008. For the tax years 2005, 2006, 2007, and 2008, Nolan reported taxable income of -$21,395, -$12,472, -$53,934, and -$48,146, respectively, when in fact she knew her taxable income was $306,543, $410,581, $574,769 and $414,319. The unreported taxable income totaled $1,842,159, resulting in additional tax due of approximately $593,916.

The indictment further alleges that, between approximately August 9, 2007, and at least September 9, 2007, Nolan conspired to and procured another person to unlawfully intercept wire, oral, and electronic communications. Specifically, the indictment alleges that Nolan referred clients to private investigator Christopher Butler for Butler to install concealed listening devices in the clients’ spouses or significant others’ cars. The indictment also alleges that on numerous occasions, Nolan and her staff, acting on Nolan’s instructions, accessed the listening devices to eavesdrop on conversations by Nolan’s clients’ spouses and significant others with the intent to use the intercepted information to assist Nolan’s client’s legal proceedings.

The maximum statutory penalty for tax evasion, in violation of 26 U.S.C. § 7201, is five years in prison and a $250,000 fine. The maximum statutory penalty for conspiracy to unlawfully intercept communications, in violation 18 U.S.C. § 371 is five years in prison and a $250,000 fine. The maximum statutory penalty for unlawful interception of communications, in violation 18 U.S.C. § 2511(1)(a) and (4)(a) is five years in prison and a $250,000 fine. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Upon posting $50,000, Nolan will be released on a bond that includes $250,000 of security in the form of a deed that must be posted within two weeks. She is next scheduled to appear in federal court in Oakland on Sept. 25, 2012, for arraignment before Magistrate Judge Donna M. Ryu. The case is assigned to U.S. District Court Judge Phyllis J. Hamilton.

Hartley M.K. West is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rania Ghawi. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Nolan must be presumed innocent unless and until proven guilty.

Rossville Man Sentenced in Health Care Fraud and Tax Evasion Case

HAMMOND, IN—United States Attorney David Capp announced that Chad Shedron, 36, of Rossville, Indiana, was sentenced by Chief Judge Philip Simon to 57 months’ imprisonment and one year of supervised release after pleading guilty to a two-count Information charging him with the felony offenses of executing a scheme to defraud the Indiana Medicaid health benefit program and evading federal income tax.

According to the plea agreement filed in this case, Shedron agreed to a money judgment in the amount of $3,521,961.22, which represents the dollar amount of proceeds derived from the health care fraud. He also agreed that the tax loss for 2007 was approximately $189,009.00, and further agreed that he is responsible for tax losses of $164,728.99 in 2008; $141,623.00 in 2009; and $32,310.00 in 2010. Further, Shedron agreed to forfeit his personal residence, $65,000 in cash, a brokerage account, jewelry, and a baseball card collection with an estimated value of over $200,000.

This case was the result of an investigation by the Department of Health and Human Services-Office of the Inspector General; the Internal Revenue Service-Criminal Investigations; the Federal Bureau of Investigation; and the Indiana Medicaid Fraud Control Unit. This case was prosecuted by Assistant United States Attorney Diane Berkowitz.

Binghamton-Area Businessman Admits $700,000 Theft and Tax Evasion

Richard S. Hartunian, United States Attorney for the Northern District of New York; Clifford C. Holly, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation; and Toni Weirauch, Acting Special Agent in Charge, New York Field Office, Internal Revenue Service-Criminal Investigations, make the following announcement:

William P. Stiles, 42, of Deposit, Broome County, New York, pled guilty today in United States District Court to the felony crimes of wire fraud and tax evasion. Sentencing is scheduled for December 21, 2012, at 9:30 a.m. in Binghamton.

In entering his guilty plea before Senior United States District Court Judge Thomas J. McAvoy, Stiles admitted that, as chief operating officer and part-owner of Aeden Waterford Inc. (AWI), a payroll and human services company located in the city of Binghamton, he stole a total of more than $700,000 from approximately 100 business clients of AWI between November 2005 and November 2010.

The money stolen by Stiles was supposed to be used by Stiles to pay client employment witholding taxes but instead was deposited by Stiles into Stiles’ personal bank accounts. Stiles used the funds stolen from AWI clients for his own personal benefit. Stiles further admitted he evaded income taxes due on the stolen money.

Stiles faces a maximum penalty of 20 years’ imprisonment and a $250,000 fine. The case was investigated by the Internal Revenue Service-Criminal Investigation and the Federal  Bureau of Investigation, Binghamton Resident Office and is being prosecuted by Assistant United States Attorney Thomas P. Walsh. Further inquiries may be directed to the United States Attorney’s Office, Binghamton Branch Office, at (607) 773-2887.

Federal Jury Convicts Rio Rancho Couple on Federal Tax Evasion Charges

ALBUQUERQUE—Late this afternoon, a federal jury sitting in Albuquerque found Joseph C. Kupfer, 49, and Elizabeth D. Kupfer, 50, guilty of federal tax evasion charges after a five-day trial, announced U.S. Attorney Kenneth J. Gonzales.

On December 15, 2010, a federal grand jury returned a three-count indictment charging Mr. and Mrs. Kupfer with willfully failing to report at least $768,333 in taxable income during tax years 2004 through 2006, thus evading $286,175 in federal taxes. On July 27, 2011, the indictment was superseded by an 11-count superseding indictment that, in addition to adding Armando G. Gutierrez, 64, of Corpus Christi, Texas, as a defendant, included conspiracy and theft of government property charges against Mr. Kupfer and Mr. Gutierrez, and obstruction charges against Mr. Gutierrez.

In April 2012, the U.S. District Judge presiding over the case severed the three tax evasion counts from the other eight counts in the superseding indictment for purposes of trial. The judge then scheduled separate trials for Mr. and Mrs. Kupfer on the three tax evasion charges, and for Mr. Kupfer and Mr. Gutierrez on the conspiracy, theft and obstruction charges.

Trial as to Mr. and Mrs. Kupfer on the three tax evasion charges commenced on Aug. 13, 2012. The evidence established that, during the years 2004 through 2006, Mr. Kupfer received income from his business Kupfer Consulting, and Mr. and Mrs. Kupfer reported income from Kupfer Consulting on their joint personal tax returns. Although Mr. Kupfer received $1,304,421 in revenue from Kupfer Consulting, Mr. and Mrs. Kupfer reported only $502,541 on their federal tax returns. Instead, they attempted to conceal approximately $768,333 in income by providing incomplete information to their tax preparer, and signed false and fraudulent tax returns, which they submitted to the IRS.

More specifically, the evidence established that Mr. and Mrs. Kupfer claimed $125,969 in taxable income for tax year 2004 but failed to include at least another $140,000 in income, thus evading at least $51,054 in federal taxes. Mr. and Mrs. Kupfer claimed $170,625 in taxable income for tax year 2005 but failed to include another $170,000 in income, thus evading $64,651 in federal taxes. They claimed $125,734 in taxable income for tax year 2006 but failed to include at least another $458,333 in income, thus evading $170,470 in federal taxes.

The jury deliberated approximately six hours before finding Mr. and Mrs. Kupfer guilty on each of the three tax evasion counts.

Mr. and Mrs. Kupfer remain on conditions of release pending their sentencing hearings, which have yet to be scheduled. Each faces up to five-years of imprisonment on each count of the indictment.

Mr. Kupfer and Mr. Gutierrez are scheduled for trial on Oct. 15, 2012, on the eight remaining counts of the superseding indictment. Because charges in indictments are only accusations, they are presumed innocent unless proven guilty beyond a reasonable doubt.

This case was investigated by the IRS-Criminal Investigations and the FBI, and is being prosecuted by Assistant U.S. Attorneys Tara C. Neda and Cynthia L. Weisman.

Florida Man Convicted of Selling Stolen Art, Evading Taxes on More Than $1.4 Million in Income, and Structuring Financial Transactions

LOS ANGELES—A Florida man was convicted today on federal charges of selling and possessing paintings stolen from a Los Angeles art gallery, tax evasion on more than $1.4 million in income, and structuring financial transactions of $226,000 to avoid federal reporting requirements while released on bond.

Matthew Taylor, 44, of Vero Beach, Florida, was found guilty by a federal jury after a trial lasting two weeks and one day. The jury convicted Taylor of wire fraud, possession of stolen property that had been transported across state lines, tax evasion, and structuring financial transactions while on pretrial release.

The jury determined that Taylor sold a stolen Granville Redmond painting from a gallery in Los Angeles to a different gallery for $85,000, falsely claiming that his mother had owned it since the 1990s. The jury also found that Taylor knowingly possessed a Lucien Frank painting stolen from the same gallery in Los Angeles, after that painting had been taken across state lines. The evidence at trial showed that Taylor tried to pass the Lucien Frank painting off as by another artist, and sell it, by erasing or obliterating Lucien Frank’s signature.

Taylor was also convicted of evading federal income taxes that he owed on more than $1.4 million earned in income in 2005 and 2006. The evidence at trial showed that Taylor had not filed income tax returns for those two years and had taken elaborate steps to evade paying the taxes that he owed, including by creating or having others create corporations with names such as Microsoft Holdings, AIG Investments, and ING Investments.

Taylor was also convicted of structuring cash transactions totaling $226,000 in December 2011 in order to avoid federal reporting requirements, while he was released on bond in this case. Taylor was remanded into custody before trial.

Taylor is scheduled to be sentenced on November 8, 2012, by United States District Judge John Kronstradt.

The wire fraud and possession of stolen property charges each carry a statutory maximum sentence of 20 years in federal prison, the tax evasion charges each carry a statutory maximum of five years in federal prison, and the structuring charge carries a statutory maximum of 10 years in federal prison because the crime was committed while Taylor was released on bond. Therefore, Taylor faces a maximum possible sentence of 55 years in federal prison.

The investigation into Taylor was conducted by the FBI’s Art Crime Team, the Los Angeles Police Department’s Art Theft Detail, and IRS-Criminal Investigation.

Former Employee of Nursing Home Company Operating in North Carolina and Virginia Sentenced to Serve 63 Months in Prison for Kickback Schemes and Tax Evasion

WASHINGTON—The former director of corporate maintenance and renovations at Medical Facilities of America Inc. (MFA) was today sentenced to serve 63 months in prison for accepting kickbacks from contractors and evading federal income taxes, the Department of Justice announced. MFA operates health care and nursing home facilities throughout Virginia and North Carolina.

John D. Henderson, of Colonial Heights, Virginia, was sentenced in U.S. District Court in Roanoke, Virginia, by Judge Samuel G. Wilson. In addition to his prison sentence, Henderson was ordered to pay a total of $698,088 in restitution and additional taxes, penalties, and interest to the Internal Revenue Service for his participation in two separate conspiracies. The conspiracies involved steering contracts for the repair, maintenance, and renovation at MFA health care and nursing home facilities. One of the conspiracies took place from about June 1998 until at least December 2006, and the other conspiracy took place from about July 2005 until at least December 2006. Henderson pleaded guilty on March 14, 2012, to two counts of conspiracy to commit mail and honest services fraud for the kickback schemes and to two counts for failing to include the kickbacks and other income he received on his federal income tax returns for years 2005 and 2006.

According to the four-count felony charge, Henderson oversaw the bidding process for repair, maintenance, and renovation contracts at MFA facilities. To facilitate the conspiracies, Henderson steered contracts to several venders in return for kickbacks; created fictitious competitor bids that were higher than the quotes submitted by the venders who paid him, in order to create the appearance of competition; and directed subordinates to solicit quotes only from vendors who paid him. Henderson received more than $560,000 in kickbacks and had at least $101,000 more paid to a co-conspirator, and in return steered MFA contracts totaling more than $5 million.

“Through this kickback scheme, Henderson and his co-conspirators deprived MFA of competitive pricing to its financial detriment,” said Acting Assistant Attorney General Joseph Wayland in charge of the Antitrust Division. “Today’s sentencing demonstrates the division’s commitment to holding executives accountable for disrupting the competitive bidding process for service contracts.”

Henderson is the fifth individual to plead guilty in the department’s fraud investigation into the award of repair, maintenance, and renovation contracts at facilities owned by MFA. On October 18, 2011, both Donald R. Holland and Larry R. Sumpter pleaded guilty in U.S. District Court in Roanoke to participating in the scheme. On January 31, 2012, Holland and Sumpter were each sentenced by Judge Samuel G. Wilson to serve two years of probation and were fined $50,000 and $15,000, respectively. On April 4, 2011, Edward T. Fodrey pleaded guilty in U.S. District Court in Norfolk, Virginia, and was sentenced by Judge Mark S. Davis on January 31, 2012, to serve 37 months in prison and was ordered to pay $326,799 in restitution. Gary L. Johns pleaded guilty on December 12, 2011, in U.S. District Court in Roanoke and was sentenced by Judge Wilson on March 14, 2012, to serve three years of probation and to pay $169,341 in restitution.

The investigation is being conducted by the Antitrust Division’s Philadelphia Field Office, the U.S. Attorney’s Office for the Western District of Virginia, the FBI in Roanoke, and the Internal Revenue Service-Criminal Investigation in Roanoke. Anyone with information concerning fraudulent behavior relating to the award of contracts by MFA should contact the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or visit www.justice.gov/atr/contact/newcase.htm.

Former CFO at Bixby Energy Sentenced for Securities Fraud and Tax Evasion

MINNEAPOLIS—Earlier today in federal court in St. Paul, the former acting chief financial officer for Bixby Energy Systems Inc. was sentenced for lying to investors to get them to commit large sums of money to the business and for failing to file federal tax returns and reporting his income for three years, which resulted in a tax loss for the Internal Revenue Service of $825,866.

United States District Court Judge Susan Richard Nelson sentenced Dennis Luverne Desender, age 65, to 97 months on one count of securities fraud and one count of tax evasion. On September 14, 2011, Desender was charged and pleaded guilty to securities fraud. On February 23, 2011, he was charged and pleaded guilty to tax evasion.

In his plea agreement, Desender admitted that from January 2010 through May 2011, he and others used manipulative and deceptive practices in an effort to sell securities. During that time, Desender was a consultant for Bixby Energy but had previously been the company’s chief financial officer in charge of raising funds for Bixby projects, including a coal gasification energy system. Desender also admitted soliciting unqualified investors to invest in the company. In exchange for investment funds, investors were sold Bixby securities.

While some investment money was used by Bixby, Desender spent a significant portion of the funds on salaries and commissions for himself and others. Desender routinely provided false information to investors to induce them into remaining financially involved with Bixby and to potential investors to entice them into initiating investments. Among other things, Desender concealed information regarding the coal gasification project, telling investors and potential investors that it was ready for market, when, in fact, it was not. Desender was responsible for approximately $4.3 million in investor losses.

Desender also admitted that he failed to file tax returns for tax years 2005 to 2008. In addition, he admitted that on October 17, 2005, he filed a false Form 1040 tax return for the tax year 2004, failing to report gross receipts of $31,878 and falsifying $314,885 in business deductions relative to his Blooming Prairie, Minnesota, financial consulting business.

As a result of the criminal investigation against him, Desender already has filed the appropriate tax returns and intends to file an amended 2004 return.

On June 19, 2012, the founder of Bixby Energy, Robert Walker, was charged in a superseding indictment for lying to investors in an effort to induce them to commit large sums of money to the business. On February 28, 2012, Gary Albert Collyard pleaded guilty to conspiring to mislead investors into committing large sums of money to Bixby. In December of 2011, BixbyEnergy Systems admitted defrauding investors of between $2.5 and $7 million and took responsibility for the acts of its former officers and agents.

These cases were the result of an investigation by the Internal Revenue Service-Criminal Investigation Division, the U.S. Postal Inspection Service, and the Federal Bureau of Investigation. They were prosecuted by Assistant U.S. Attorney Christian S. Wilton.