Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Daniel C. Alexander, Chief, Boca Raton Police Department, announce today that Brandon James, of Miami, was sentenced by U.S. District Judge Daniel T.K. Hurley to 81 months in prison, followed by two years of supervised release. James was also ordered to pay restitution in the amount of $382,444 and a special assessment of $300.
According to court documents and statements made in court, James was involved in cashing out fraudulent federal income tax refunds that had been placed electronically onto debit cards. James and his co-conspirators, Laron Larkin and Eric Fussell, attempted to defraud the IRS of more than $862,000 in fraudulent income tax refunds based on at least 121 stolen identities. The IRS paid approximately $382,484 on these refund requests.
James pled guilty earlier to conspiracy to steal government monies, in violation of Title 18, United States Code, Section 371 (count one), theft of government funds, in violation of Title 18, United States Code, Section 641 (count four), and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A (count nine).
Co-defendant Larkin was sentenced on October 7, 2013, to 36 months and one day in prison, to be followed by three years of supervised release. Larkin pled guilty to one count of conspiracy to steal monies of the United States, in violation of Title 18, United States Code, Section 641, the conspiracy being a violation of Title 18, United States Code, Section 371; and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
Mr. Ferrer commended the investigative efforts of IRS-CI, FBI, and the Boca Raton Police Department. The case is being prosecuted by Assistant U.S. Attorney Stephen Carlton.
Tuesday, April 22, 2014
Jury Convicts Former GMAC and Countrywide Loan Officer and Former New York Corrections Officer on Mortgage Fraud Charges
NEW HAVEN, CT—A federal jury has convicted two men for their roles in an extensive mortgage fraud scheme arising from the fraudulent purchases of more than 40 properties in New Haven, U.S. Attorney Paul J. Fishman, District of New Jersey, announced today.
Andrew Constantinou, of Unionville, Connecticut, and Jacques Kelly, of Poughkeepsie, New York, were convicted on April 18, 2014, of all counts charged in the indictment following a three-week trial before Chief U.S. District Judge Janet C. Hall. The jury found both men guilty of conspiracy to commit mail, wire, and bank fraud. The jury also found Kelly guilty of one count of wire fraud and one count of making a false statement to a financial institution.
According to documents filed in this case and the evidence at trial:
From 2006 to 2008, Constantinou, Kelly, and others, including Menachem Yosef Levitin, Ronald Hutchison, Charles Lesser, Jeffrey Weisman, Genevieve Salvatore, Bradford Rieger, Lawrence Dressler, and Kwame Nkrumah, conspired to defraud mortgage lenders of millions of dollars of mortgage proceeds by inflating the contract price that the sellers of the properties had actually agreed to accept. The scheme involved multi-family properties in New Haven.
The lower sale price, which ranged from approximately $30,000 to $145,000 less than the contract price, was not disclosed to the lenders from which the buyers obtained financing to purchase the properties. In most of the fraudulent transactions, the buyers did not make any deposits or down payments. Constantinou, Kelly, and their conspirators used some of the fraudulently obtained mortgage proceeds to cover the down payments and deposits. At or shortly after a closing, the borrowers would often receive thousands to tens of thousands of dollars in cash back, although these payments were not disclosed to the lender.
Constantinou, Kelly, and their conspirators submitted to mortgage lenders false HUD-1 forms that often did not match another, undisclosed HUD-1 form that was actually used to disburse the fraudulently obtained proceeds at the closing. As a result of the submission of the false HUD-1 forms and other false documentation in support of the loan, including fictitious leases and false information about the borrower’s assets and liabilities, the mortgage lenders would issue mortgages based on the inflated sales price.
Constantinou, 57, was a loan officer at GMAC Mortgage from 2006 to 2007 and at Countrywide Home Loans from 2007 to 2008. He submitted and received commissions from fraudulent loans as part of the scheme without disclosing the existence of inflated contract prices, secret contract addenda that contained large repair credits, false leases, and other false documentation. Constantinou worked with an unindicted conspirator, who was a licensed mortgage broker, to originate additional loans as part of the conspiracy.
Kelly, 48, was a corrections officer for the Westchester County Department of Corrections in New York. From December 2006 to May 2007, Kelly purchased eight multi-family properties in New Haven and attempted to purchase a ninth property. He paid no money to purchase the properties and received more than $56,000 from his closings. Kelly also made a fraudulent sale of a New Haven property he owned to conspirator Hutchison in September 2006 but for which Hutchison paid no money at closing.
Nearly all the properties purchased as part of this conspiracy went into default and have been foreclosed upon, causing losses of more than $7 million to lenders.
Constantinou faces a maximum potential penalty of 30 years in prison; his sentencing is scheduled for July 15, 2014. He has been free on bond since February 25, 2013. Kelly faces a maximum potential penalty of 30 years for conspiracy, 20 years for wire fraud, and 30 years for making a false statement; his sentencing is scheduled for July 14, 2014. Kelly has been free on bond since October 6, 2011.
Ten defendants have been charged and convicted for their participation in this mortgage fraud conspiracy, including two loan officers, four attorneys, and a real estate agent. Salvatore, Rieger, Dressler, and Nkrumah have previously been sentenced. Levitin, Hutchison, Lesser, and Weisman each await sentencing.
U.S. Attorney Fishman credited the FBI, the U.S. Postal Inspection Service, the U.S. Department of Housing and Urban Development-Office of Inspector General, and the Federal Housing Finance Agency-Office of Inspector General, which identified multiple Fannie Mae and Freddie Mac loans that went into foreclosure, for the investigation leading to the guilty verdicts.
The government is represented in the criminal cases by Assistant U.S. Attorney David T. Huang and Special Assistant U.S. Attorney John McReynolds of the U.S. Attorney’s Office, District of Connecticut; the parallel civil forfeiture cases are being handled by Assistant U.S. Attorney Julie G. Turbert, U.S. Attorney’s Office, District of Connecticut. The U.S. Attorney for the District of New Jersey has been overseeing the case because of the recusal of the U.S. Attorney’s Office for the District of Connecticut.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
Andrew Constantinou, of Unionville, Connecticut, and Jacques Kelly, of Poughkeepsie, New York, were convicted on April 18, 2014, of all counts charged in the indictment following a three-week trial before Chief U.S. District Judge Janet C. Hall. The jury found both men guilty of conspiracy to commit mail, wire, and bank fraud. The jury also found Kelly guilty of one count of wire fraud and one count of making a false statement to a financial institution.
According to documents filed in this case and the evidence at trial:
From 2006 to 2008, Constantinou, Kelly, and others, including Menachem Yosef Levitin, Ronald Hutchison, Charles Lesser, Jeffrey Weisman, Genevieve Salvatore, Bradford Rieger, Lawrence Dressler, and Kwame Nkrumah, conspired to defraud mortgage lenders of millions of dollars of mortgage proceeds by inflating the contract price that the sellers of the properties had actually agreed to accept. The scheme involved multi-family properties in New Haven.
The lower sale price, which ranged from approximately $30,000 to $145,000 less than the contract price, was not disclosed to the lenders from which the buyers obtained financing to purchase the properties. In most of the fraudulent transactions, the buyers did not make any deposits or down payments. Constantinou, Kelly, and their conspirators used some of the fraudulently obtained mortgage proceeds to cover the down payments and deposits. At or shortly after a closing, the borrowers would often receive thousands to tens of thousands of dollars in cash back, although these payments were not disclosed to the lender.
Constantinou, Kelly, and their conspirators submitted to mortgage lenders false HUD-1 forms that often did not match another, undisclosed HUD-1 form that was actually used to disburse the fraudulently obtained proceeds at the closing. As a result of the submission of the false HUD-1 forms and other false documentation in support of the loan, including fictitious leases and false information about the borrower’s assets and liabilities, the mortgage lenders would issue mortgages based on the inflated sales price.
Constantinou, 57, was a loan officer at GMAC Mortgage from 2006 to 2007 and at Countrywide Home Loans from 2007 to 2008. He submitted and received commissions from fraudulent loans as part of the scheme without disclosing the existence of inflated contract prices, secret contract addenda that contained large repair credits, false leases, and other false documentation. Constantinou worked with an unindicted conspirator, who was a licensed mortgage broker, to originate additional loans as part of the conspiracy.
Kelly, 48, was a corrections officer for the Westchester County Department of Corrections in New York. From December 2006 to May 2007, Kelly purchased eight multi-family properties in New Haven and attempted to purchase a ninth property. He paid no money to purchase the properties and received more than $56,000 from his closings. Kelly also made a fraudulent sale of a New Haven property he owned to conspirator Hutchison in September 2006 but for which Hutchison paid no money at closing.
Nearly all the properties purchased as part of this conspiracy went into default and have been foreclosed upon, causing losses of more than $7 million to lenders.
Constantinou faces a maximum potential penalty of 30 years in prison; his sentencing is scheduled for July 15, 2014. He has been free on bond since February 25, 2013. Kelly faces a maximum potential penalty of 30 years for conspiracy, 20 years for wire fraud, and 30 years for making a false statement; his sentencing is scheduled for July 14, 2014. Kelly has been free on bond since October 6, 2011.
Ten defendants have been charged and convicted for their participation in this mortgage fraud conspiracy, including two loan officers, four attorneys, and a real estate agent. Salvatore, Rieger, Dressler, and Nkrumah have previously been sentenced. Levitin, Hutchison, Lesser, and Weisman each await sentencing.
U.S. Attorney Fishman credited the FBI, the U.S. Postal Inspection Service, the U.S. Department of Housing and Urban Development-Office of Inspector General, and the Federal Housing Finance Agency-Office of Inspector General, which identified multiple Fannie Mae and Freddie Mac loans that went into foreclosure, for the investigation leading to the guilty verdicts.
The government is represented in the criminal cases by Assistant U.S. Attorney David T. Huang and Special Assistant U.S. Attorney John McReynolds of the U.S. Attorney’s Office, District of Connecticut; the parallel civil forfeiture cases are being handled by Assistant U.S. Attorney Julie G. Turbert, U.S. Attorney’s Office, District of Connecticut. The U.S. Attorney for the District of New Jersey has been overseeing the case because of the recusal of the U.S. Attorney’s Office for the District of Connecticut.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
Bay Area Man Pleads Guilty to Securities Fraud by Insider Trading in The Walt Disney Company’s Acquisition of Marvel Entertainment in August 2009
LOS ANGELES—A San Francisco man who made approximately $192,000 in profits by purchasing Marvel Entertainment Inc. stock options immediately prior to its acquisition by The Walt Disney Company in August 2009 pleaded guilty this morning to a federal securities fraud charge.
Toby G. Scammell, 29, pleaded guilty today to one count of securities fraud before United States District Judge S. James Otero.
According to a plea agreement filed in federal court, Scammell learned that Disney planned to acquire another company “that people would recognize right away” from his then-girlfriend, who was an extern at Disney in the summer of 2009 and who worked on the deal to acquire Marvel. Scammell later learned from a supervisor at his then-employer—which had periodically provided corporate consulting services to Disney and had confidentiality obligations to Disney—that Disney had previously been interested in acquiring Marvel. Scammell admitted that he learned the planned acquisition by Disney was estimated to close by Labor Day 2009, based on his observations of his girlfriend’s work schedule at Disney and their own travel plans at the time.
Scammell used the information that he learned from his girlfriend to acquire 659 call options to purchase Marvel stock for $5,465. He purchased more than half the options in his brother’s account. Scammell did not tell his girlfriend or his brother about the purchases of the Marvel call options.
Marvel’s stock rose approximately 25 percent after the deal with Disney was announced on August 31, 2009. After the acquisition was publicly disclosed by Disney, Scammell immediately sold his options, realizing more than $192,000 in profits. Scammell transferred $100,000 of the profits out of his brother’s account to conceal the trading and profits from his brother.
As a result of the guilty plea, Scammell faces a maximum statutory sentence of 25 years in federal prison when he is sentenced by Judge Otero on July 28, 2014.
Today’s guilty plea resolves a case filed in October 2013 when a federal grand jury returned an indictment that named Scammell.
Scammell was previously charged with securities fraud by the Securities and Exchange Commission in a civil lawsuit filed in August 2011. He was later ordered to disgorge his trading profits and pay civil penalties and interest totaling $800,985 in that case.
This case was investigated by the Federal Bureau of Investigation, which received assistance from the Securities and Exchange Commission.
Toby G. Scammell, 29, pleaded guilty today to one count of securities fraud before United States District Judge S. James Otero.
According to a plea agreement filed in federal court, Scammell learned that Disney planned to acquire another company “that people would recognize right away” from his then-girlfriend, who was an extern at Disney in the summer of 2009 and who worked on the deal to acquire Marvel. Scammell later learned from a supervisor at his then-employer—which had periodically provided corporate consulting services to Disney and had confidentiality obligations to Disney—that Disney had previously been interested in acquiring Marvel. Scammell admitted that he learned the planned acquisition by Disney was estimated to close by Labor Day 2009, based on his observations of his girlfriend’s work schedule at Disney and their own travel plans at the time.
Scammell used the information that he learned from his girlfriend to acquire 659 call options to purchase Marvel stock for $5,465. He purchased more than half the options in his brother’s account. Scammell did not tell his girlfriend or his brother about the purchases of the Marvel call options.
Marvel’s stock rose approximately 25 percent after the deal with Disney was announced on August 31, 2009. After the acquisition was publicly disclosed by Disney, Scammell immediately sold his options, realizing more than $192,000 in profits. Scammell transferred $100,000 of the profits out of his brother’s account to conceal the trading and profits from his brother.
As a result of the guilty plea, Scammell faces a maximum statutory sentence of 25 years in federal prison when he is sentenced by Judge Otero on July 28, 2014.
Today’s guilty plea resolves a case filed in October 2013 when a federal grand jury returned an indictment that named Scammell.
Scammell was previously charged with securities fraud by the Securities and Exchange Commission in a civil lawsuit filed in August 2011. He was later ordered to disgorge his trading profits and pay civil penalties and interest totaling $800,985 in that case.
This case was investigated by the Federal Bureau of Investigation, which received assistance from the Securities and Exchange Commission.
Wednesday, April 16, 2014
Newport News Man Pleads Guilty to Participating in Murder
NEWPORT NEWS, VA—Mustafah Kalil Muhammad, 27, of Newport News, Virginia, pleaded guilty today use of a firearm resulting in the death of Lloyd Robinson on January 8, 2010.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Royce E. Curtin, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office; and Richard W. Meyers, Chief of Newport News Police, made the announcement after the plea was accepted by United States District Judge Raymond A. Jackson.
Muhammad was charged, along with others, in a superseding indictment returned in July 2013 with interference with commerce by robbery and use of a firearm resulting in death.
Muhammad faces a maximum penalty of life in prison when he is sentenced on July 23, 2014, in Norfolk.
Muhammad is alleged to be part of a criminal organization known locally as Thug Relations, alternatively known as the Duct, “Warwick Lawnz, TR,” and from the Duct to the Lawnz, a neighborhood gang operating in the Aqueduct Apartments, St. Michael’s Apartments, Mariner’s Landing Apartments, and Heritage Trace Apartments, as well as Warwick Lawns, Warwick Town Home, Sharon Drive, and the Savage Drive areas of Newport News, Virginia. The alleged gang members are accused in the indictment of protecting their criminal enterprise and activities through murder, attempted murder, witness intimidation, robbery, and narcotics distribution. In a statement of facts filed with his plea agreement, Muhammad admitted to his participation in the drug related home invasion and murder of Lloyd Robinson on January 8, 2010.
This investigation was led by FBI and the Safe Streets Task Force, with assistance from the Newport News Police and the Virginia State Police. Assistant United States Attorneys Howard J. Zlotnick and Lisa R. McKeel and Special Assistant United States Attorney Jonathan A. Ophardt are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Royce E. Curtin, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office; and Richard W. Meyers, Chief of Newport News Police, made the announcement after the plea was accepted by United States District Judge Raymond A. Jackson.
Muhammad was charged, along with others, in a superseding indictment returned in July 2013 with interference with commerce by robbery and use of a firearm resulting in death.
Muhammad faces a maximum penalty of life in prison when he is sentenced on July 23, 2014, in Norfolk.
Muhammad is alleged to be part of a criminal organization known locally as Thug Relations, alternatively known as the Duct, “Warwick Lawnz, TR,” and from the Duct to the Lawnz, a neighborhood gang operating in the Aqueduct Apartments, St. Michael’s Apartments, Mariner’s Landing Apartments, and Heritage Trace Apartments, as well as Warwick Lawns, Warwick Town Home, Sharon Drive, and the Savage Drive areas of Newport News, Virginia. The alleged gang members are accused in the indictment of protecting their criminal enterprise and activities through murder, attempted murder, witness intimidation, robbery, and narcotics distribution. In a statement of facts filed with his plea agreement, Muhammad admitted to his participation in the drug related home invasion and murder of Lloyd Robinson on January 8, 2010.
This investigation was led by FBI and the Safe Streets Task Force, with assistance from the Newport News Police and the Virginia State Police. Assistant United States Attorneys Howard J. Zlotnick and Lisa R. McKeel and Special Assistant United States Attorney Jonathan A. Ophardt are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.
Utah Man Charged with Federal Hate Crime for Threatening Interracial Family
WASHINGTON—The Department of Justice announced today that an information was filed charging Robert Keller, 70, with interfering with the housing rights of three members of an interracial family because of the family members’ races and because the family members were living in Hurricane, Utah.
Keller has been charged with two counts of criminal interference with a right to fair housing. More specifically, the information alleges that Keller wrote a note to two Caucasian family members of an interracial family threatening to kill them if they did not make their African-American family member leave their home and the community. The first count alleges that Keller’s threats interfered with the housing rights of the Caucasian residents to associate in their home with their African-American family member, and the second count alleges that Keller’s threats interfered with the African-American resident’s right to occupy the home.
If convicted, Keller faces a statutory maximum penalty of one year in prison on each count.
This case is being investigated by the Salt Lake City Division of the FBI in cooperation with the Hurricane City Police Department. It is being prosecuted by Trial Attorney Saeed Mody of the Civil Rights Division and Assistant U.S. Attorney Carlos Esqueda for the District of Utah.
An information is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Keller has been charged with two counts of criminal interference with a right to fair housing. More specifically, the information alleges that Keller wrote a note to two Caucasian family members of an interracial family threatening to kill them if they did not make their African-American family member leave their home and the community. The first count alleges that Keller’s threats interfered with the housing rights of the Caucasian residents to associate in their home with their African-American family member, and the second count alleges that Keller’s threats interfered with the African-American resident’s right to occupy the home.
If convicted, Keller faces a statutory maximum penalty of one year in prison on each count.
This case is being investigated by the Salt Lake City Division of the FBI in cooperation with the Hurricane City Police Department. It is being prosecuted by Trial Attorney Saeed Mody of the Civil Rights Division and Assistant U.S. Attorney Carlos Esqueda for the District of Utah.
An information is merely an accusation, and the defendant is presumed innocent unless proven guilty.
San Antonio Businessmen Sentenced to Federal Prison for Fraud and Tax Scheme Involving More Than $130 Million in Real-Dollar Losses
n San Antonio this morning, United States Chief District Judge Fred Biery handed down prison sentences to two individuals for their roles in what is believed to be the largest real-dollar loss fraud and tax related case ever prosecuted in the Western District of Texas, announced United States Attorney Robert Pitman, Acting FBI Special Agent in Charge Aaron C. Rouse, and IRS-Criminal Investigation Special Agent in Charge Steve McCollough.
Larry Kimes, the manager of AccounTex Financial Services LLC, was sentenced to 12 years in federal prison, followed by three years of supervised release, and ordered to pay $132 million restitution after pleading guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge last month.
Charles Pircher, manager of a series of Professional Employer Organizations (PEOs) based in San Antonio, including service professionals, was sentenced to 11 years in federal prison, followed by three years of supervised release, and ordered to pay $132 million restitution after pleading guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge in November 2013.
“The sentencing of so-called ‘white-collar’ defendants to significant terms of imprisonment such as the judge imposed in this case today should send a strong message to those who concoct fraudulent schemes—schemes that result in real losses to real people,” stated United States Attorney Robert Pitman.
In February, three other individuals who also entered guilty pleas in connection with this fraudulent scheme were sentenced to federal prison by Judge Biery. John Bean, owner of Synergy Personnel, a PEO based in San Antonio, as well as an agent, representative, officer, license holder, and accountant of several San Antonio- and Austin-based PEOs, including Service Professionals; Pat Mire, owner and manager of several San Antonio-based PEOs, including Service Professionals; and Mike Solis, an executive assistant at several San Antonio based PEOs, including Service Professionals, were sentenced to six years, three years, and three years in federal prison, respectively.
By pleading guilty, the defendants admitted that between 2002 and 2008, they participated in a scheme in which they stole more than $130 million from the clients of a series of PEOs operated by the defendants. The PEOs entered into staff leasing agreements with various client companies to manage the companies’ payroll and insurance programs. Kimes, Pircher, and the other co-conspirators diverted to their own use and benefit clients’ monies that should have been paid for payroll taxes and insurance premiums.
“The defendants involved in this, the largest-ever single criminal tax case in San Antonio’s history, knowingly violated our country’s tax laws. They chose to ignore their responsibilities and live a lavish lifestyle on money belonging to their employees and to the U.S. government. IRS special agents will continue to aggressively pursue these types of very serious tax crimes,” stated IRS-Criminal Investigation Special Agent in Charge Steve McCollough.
“Motivated by greed, the defendants perpetrated an extensive fraud scheme designed to steal money from their clients and taxpayers over a number of years. The FBI will continue to work with our partners to identify, investigate, and prosecute others, like the defendants, who seek unjust enrichment by victimizing others,” stated FBI Acting Special Agent in Charge Aaron C. Rouse.
This case was investigated by agents with the Federal Bureau of Investigation and the Internal Revenue Service- Criminal Investigation. Assistant United States Attorney Thomas J. McHugh prosecuted this case on behalf of the government.
Larry Kimes, the manager of AccounTex Financial Services LLC, was sentenced to 12 years in federal prison, followed by three years of supervised release, and ordered to pay $132 million restitution after pleading guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge last month.
Charles Pircher, manager of a series of Professional Employer Organizations (PEOs) based in San Antonio, including service professionals, was sentenced to 11 years in federal prison, followed by three years of supervised release, and ordered to pay $132 million restitution after pleading guilty to a Klein tax fraud conspiracy charge and a mail fraud conspiracy charge in November 2013.
“The sentencing of so-called ‘white-collar’ defendants to significant terms of imprisonment such as the judge imposed in this case today should send a strong message to those who concoct fraudulent schemes—schemes that result in real losses to real people,” stated United States Attorney Robert Pitman.
In February, three other individuals who also entered guilty pleas in connection with this fraudulent scheme were sentenced to federal prison by Judge Biery. John Bean, owner of Synergy Personnel, a PEO based in San Antonio, as well as an agent, representative, officer, license holder, and accountant of several San Antonio- and Austin-based PEOs, including Service Professionals; Pat Mire, owner and manager of several San Antonio-based PEOs, including Service Professionals; and Mike Solis, an executive assistant at several San Antonio based PEOs, including Service Professionals, were sentenced to six years, three years, and three years in federal prison, respectively.
By pleading guilty, the defendants admitted that between 2002 and 2008, they participated in a scheme in which they stole more than $130 million from the clients of a series of PEOs operated by the defendants. The PEOs entered into staff leasing agreements with various client companies to manage the companies’ payroll and insurance programs. Kimes, Pircher, and the other co-conspirators diverted to their own use and benefit clients’ monies that should have been paid for payroll taxes and insurance premiums.
“The defendants involved in this, the largest-ever single criminal tax case in San Antonio’s history, knowingly violated our country’s tax laws. They chose to ignore their responsibilities and live a lavish lifestyle on money belonging to their employees and to the U.S. government. IRS special agents will continue to aggressively pursue these types of very serious tax crimes,” stated IRS-Criminal Investigation Special Agent in Charge Steve McCollough.
“Motivated by greed, the defendants perpetrated an extensive fraud scheme designed to steal money from their clients and taxpayers over a number of years. The FBI will continue to work with our partners to identify, investigate, and prosecute others, like the defendants, who seek unjust enrichment by victimizing others,” stated FBI Acting Special Agent in Charge Aaron C. Rouse.
This case was investigated by agents with the Federal Bureau of Investigation and the Internal Revenue Service- Criminal Investigation. Assistant United States Attorney Thomas J. McHugh prosecuted this case on behalf of the government.
Austin-Area Man Sentenced to Federal Prison for a String of Robberies
In Austin today, 52-year-old Randall David Reed of Dripping Springs, Texas, was sentenced to 15 years in federal prison for six robberies, including five banks and one grocery store, and brandishing a firearm during and in relation to a crime of violence, announced United States Attorney Robert Pitman and Acting FBI Special Agent in Charge Aaron C. Rouse.
In addition to the prison term, United States District Judge Lee Yeakel ordered that Reed pay restitution totaling $32,430 and be placed under supervised release for a period of three years after completing his prison term.
On February 5, 2014, Reed pleaded guilty to five counts of bank robbery, one count of violating the Hobbs Act (robbery that affects interstate commerce) and the firearm charge. According to court records, Reed admitted that he committed the following robberies:
This case was investigated by agents with the Federal Bureau of Investigation and the police departments from Austin, San Marcos, and San Antonio. Assistant United States Attorney Matthew B. Devlin prosecuted this case on behalf of the government.
In addition to the prison term, United States District Judge Lee Yeakel ordered that Reed pay restitution totaling $32,430 and be placed under supervised release for a period of three years after completing his prison term.
On February 5, 2014, Reed pleaded guilty to five counts of bank robbery, one count of violating the Hobbs Act (robbery that affects interstate commerce) and the firearm charge. According to court records, Reed admitted that he committed the following robberies:
- February 28, 2013—Randalls grocery store (2000 block of West Ben White Blvd. in Austin)—$3,000
- March 25, 2013—Pioneer Bank (100 block of Wonder World Dr. in San Marcos)—$8,312
- May 3, 2013—Prosperity Bank (12000 block of Research Blvd. in Austin)—$2,200
- May 21, 2013—Northstar Bank (1500 block of West 35th St. in Austin)—$3,552
- July 3, 2013—Broadway Bank (13400 block of U.S. Hwy 281 in San Antonio)—$1,500
- July 26, 2013—Benchmark Bank (1500 block of West 35th St. in Austin)—$13,866
This case was investigated by agents with the Federal Bureau of Investigation and the police departments from Austin, San Marcos, and San Antonio. Assistant United States Attorney Matthew B. Devlin prosecuted this case on behalf of the government.
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