It’s an arm of law enforcement that tends to fly under the radar. And one you probably don’t want to run into outside of a bar.
If you watched the press conference announcing the college admissions scandal or those informing the public that Michael Avenatti was charged with embezzlement type crimes, you may have noticed participation by IRS Criminal Investigations.
They were part of the coordinated effort to investigate, arrest, and now prosecute the crimes which include allegations of tax fraud.
You may have also heard that both recording artist DMX and NBA player Kermit Alan Washington were sentenced to jail for tax evasion and fraud, respectively. Yes, the IRS has its own criminal investigations unit (known as CI), and it is law enforcement for financial crimes.
Make no mistake, CI isn’t a bunch of nerds with calculators. They are 2019 special agents who investigate and take on tax fraud, identity theft and the dark web, public corruption, money laundering, organized crime and drug enforcement.
They have a 91.7% conviction rate. They employ a “follow the money” strategy which led to 2111 sentenced for tax and non-tax crimes last year. Some recent examples include:
Investigation of public corruption which resulted in the guilty plea and sentence of the Dallas Mayor ProTem, Dwaine Caraway, who pleaded guilty to accepting more than $450,000 in kickbacks and bribes for awarding contracts for Dallas County Schools.
He used a bogus consulting agency to do so. On April 5, 2019, Caraway was sentenced to 56 months in jail and 3 years of supervised release. CI investigated this case with federal, state and local law enforcement.
Screwing Over Disabled Vets
Investigation of a former police Sergeant, Glenn Pearson, who was ultimately convicted and sentenced in Boston for embezzling funds from disabled veterans and operating a fraudulent tax preparation business.
“Pearson was appointed as a VA fiduciary for eight disabled veterans. [He] embezzled VA-issued benefit money from the accounts of several of these veterans. He used the embezzled funds for, among other things, paying down the mortgage on his house.”
He also operated a tax preparation business and prepared numerous returns that included false credits and deductions which led to IRS audits. He was sentenced to 4 years in prison, 3 years supervised release, and ordered to pay restitution to the Department of Veterans Affairs and the IRS.
Hiding Major Cash
Investigation of a Chicago scrap iron refining company and its president who “concealed from the IRS more than $11.6 million in cash wages paid to at least 50 employees.”
Over a 4 year period, the company and its president “obtained approximately $152 million in cash from two currency exchanges. They used that money to pay 85 separate scrap metal suppliers to assist them in underreporting their income and taxes.
Further, [the company], at the direction of [its president], spent at least $1.6 million to fund construction of a personal residence” and wrote it off the Company’s tax return as cost of goods sold.
The company president, Laurence Baron, was sentenced to 1 year in prison, 1 year of supervised release, and he and the company were ordered to pay total restitution of over $5.8 million and a $500,000 fine.
The Nigerian (Identify Theft) Prince
Investigation of the Nigerian leader of a nationwide identity theft and IRS tax fraud scheme which used stolen identifying information of more than 259,000 victims to file 10,139 fraudulent tax returns attempting to get over $91 million in refunds and successfully receiving over $11.6 million over a 3 year period.
2,000 wire transfers from false refunds totaling over $2.1 million were sent to Nigeria. The defendant, Emmanuel Oluwatosin Kazeem, who acted with co-conspirators, was sentenced to 15 years in prison and ordered to pay more than $12 million in restitution. He will be subject to deportation when released from prison.
Investigation of heroin-trafficking conspiracy and money laundering-related crimes of two men whose “ring brought in so much heroin between 2014 and 2015 that it was a go-to supplier for the prison-based Texas Mexican Mafia.”
The investigation, joint with the US Drug Enforcement Agency, resulted in seizure and forfeiture of San Antonio area properties that included 4 former barber shops and a barber college used for heroin smuggling.
The $1.4 million proceeds of the July 11, 2018 auction of these assets were shared with local law enforcement. The two men pled guilty.
They Will Find You
When it comes to combatting narcotics trafficking and financing terrorism, CI applies its “financial investigative expertise to trace profits from an illegal activity back to an individual or criminal organization with the intent to dismantle, disrupt, and prosecute the criminal.”
Yes, CI has undercover agents. And the IRS is quick to remind people that it was the only agency able to convict Al Capone by following the money.