On Oct. 22, 2014, in Sioux Falls, South Dakota, Veronica Fairchild was sentenced to 33 months in prison and ordered to pay over $214,000 in restitution to the IRS for unpaid taxes. Fairchild was convicted in June 2014 of four counts of tax fraud. According to court documents, Fairchild failed to claim over $850,000 in income on her 2005 through 2008 income tax returns which she filed in 2010. Fairchild claimed the unreported income she received from performing private shows as an exotic dancer was a gift.
On Oct. 22, 2014, in Boise, Idaho, Herminio Harro Sandoval, of Caldwell, Idaho, was sentenced to 46 months in prison and three years of supervised release. In addition, Sandoval agreed to civilly forfeit real property, bank accounts, a vehicle, and U.S.currency and coins, totaling approximately $315,335. Sandoval also agreed to a tax assessment of at least $210,000. Sandoval pleaded guilty on Aug. 12, 2014 to conspiracy to attempt to evade and defeat tax. According to court documents, over the past two decades Sandoval owned and operated various nightclubs in Canyon County.Beginning in 1998 and continuing to 2012, Sandoval conspired to fail to report $750,000 in income. Sandoval derived much of his unreported income from illegal outdoor
On Oct. 22, 2014, in Great Falls, Montana, Gary Joseph Conti, of Three Forks, was sentenced to 60 months in prison, three years of supervised release and ordered to pay $1.7 million in restitution. Conti, a former Oklahoma State University professor, was convicted in March 2014 by a federal jury of bankruptcy fraud and convicted in May 2014 of 26 other felony crimes. According to court documents, Conti was part of a multi-million dollar tribal corruption and fraud case on the Blackfeet Indian Reservation. He assisted Blackfeet Tribal officials Frances Onstad and Delyle “Shanny” Augare, and others, obtain millions of dollars in federal monies for a program for troubled and at risk Blackfeet youth called the Po’Ka Project. The federal money was provided based on fraudulent claims as to matching or “in-kind” contributions of third parties which made it appear that the project was becoming self-sufficient. Once the federal money was provided to the Po’Ka program, Onstad and Augare paid Conti $475,000 from August 2008 to August 2011. Conti then kicked-back $225,000 through a children’s charity bank account over which Augare and Onstad had control. An audit by the Department of Health and Human Services’ Office of Inspector General found the projected loss due to fraud and mismanagement at $4.6 million out of the $9 million provided to the Po’Ka Project from 2005 to 2011.
On Oct. 22, 2014, in Milwaukee, Wisconsin, Dr. Michael N. Mangold was sentenced to 18 months in prison. Mangold pleaded guilty on May 22, 2014, to one count of tax evasion and one count of making false statements. According to court documents, Mangold was a medical doctor specializing in emergency medicine and urgent care who, since about 1993, had worked as a physician for various hospitals, emergency rooms and urgent care facilities. At times, he also worked as a physician in state and county correctional facilities. Mangold primarily earned income through a combination of employee wages and independent contractor payments. From 1997 through 2007,Mangold willfully concealed his income from the IRS and made false statements to the IRS. In total, Mangold owed approximately $191,577 in taxes based on his income and wages during the relevant calendar years plus interest. In addition, Mangold made materially false statements during the course of a civil lawsuit concerning his failure to repay federal student loan obligations. He submitted a false financial affidavit to government officials which contained false statements about the amount of income he earned as a doctor.
On Oct. 21, 2014, in Baltimore, Maryland, Patrick J. Belzner, aka Patrick McCloskey, of Selbyville, Delaware, was sentenced to 180 months in prison and three years of supervised release on charges of wire fraud conspiracy, wire fraud and tax evasion. Belzner was also ordered to pay $19.805 million in restitution. According to court documents, from the fall of 2009 through August 2011, Belzner, a home builder, worked for a real estate development business known as the McCloskey Group, which was owned by another home builder. During that time, Belzner conspired with others to defraud investors through a fraudulent real estate investment scheme. Belzner also pleaded guilty to evasion of assessed tax payments for funds he stole from his employer in the years 1995, 1996 and 1998. Belzner admitted that between January 2006 and June 2011, he concealed income and assets from the IRS and made no payments on his tax debt through such schemes as placing his residences, other real estate and automobiles in the names of corporations that he formed. In February 2006 and again in January 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest. The total amount of assessed tax, interest and penalties owed by Belzner as of August 2013 was $2,619,870.
On Oct. 16, 2014, in Salt Lake City, Utah, James Ronald Donahoo, II, of Pleasant Grove, was sentenced to 48 months in prison, three years of supervised release and ordered to pay $2,739,501 in restitution to victims of the fraud. A forfeiture money judgment has been entered in the same amount. Donahoo pleaded guilty in June 2014 to wire fraud, money laundering and failure to file a tax return. According to his plea agreement, Donahoo misrepresented to investors that if they would invest in Paradigm Investing, Inc., they would make a 1 to 3 percent return on their investment, which would be paid out monthly. Paradigm never earned any revenues on any of its purported investments from which interest payments could have been made. Donahoo created false bank statements for Paradigm that he showed to investors to convince them that the investment was safe, low risk, and a good investment. He also told investors that the risk was mitigated by the fact that for every dollar invested, he had a dollar in the bank. Donahoo made payments to investors totaling more than $267,000 out of investor funds in furtherance of what was a Ponzi scheme. In addition, Donahoo
did not file a tax return for 2008, even though he transferred funds from the Paradigm bank account to his personal bank account totaling $335,000. He used those funds for personal purposes.
On Oct. 14, 2014, in Philadelphia, Pennsylvania, Rochelle Biesenthal, of Brigantine, New Jersey, was sentenced to 12 months and a day in prison, three years of supervised release and ordered to pay restitution of $171,187 to the victim organization and $61,637 to the IRS. On May 28, 2014, Biesenthal pleaded guilty to one count of wire fraud and three counts of tax evasion. According to court documents, Biesenthal engaged in a scheme to defraud a non-profit organization in Philadelphia that provides opportunities for Jewish individuals to engage with their Jewish heritage and reaffirm their Jewish identity. Biesenthal carried out the scheme between 2002 and April 2009, while she was employed as a bookkeeper at the organization. She fraudulently prepared and issued checks and authorized electronic debits from the organization’s bank accounts to herself and to pay her personal and family’s personal credit cards. As
part of the scheme, she defrauded the organization of a total of well over $400,000. In addition, she never reported her unauthorized income in her tax returns in tax years 2007 through 2009 and concealed the true sources of her income.
On Oct. 9, 2014, in Springfield, Missouri, Daniel D. Whitworth, of Joplin, was sentenced to 24 months in prison and ordered to pay $404,957 in restitution to his former clients and $72,810 to the government. In addition, Whitworth surrendered his license to practice law. On March 31, 2014, Whitworth pleaded guilty to wire fraud, money laundering and false statements on tax returns. According to court documents, Whitworth embezzled approximately $576,739 from 22 of his legal clients between 2004 and Oct. 18, 2013. Whitworth spent these embezzled funds on personal loans and items unrelated to the legal matters of his clients. Whitworth failed to report the embezzled funds on his personal income tax returns for the years 2009 through 2011, which totaled $448,835. For 2012, Whitworth did not file an income tax return and therefore did not report the embezzled funds during this year as well.
On Oct. 8, 2014, in Sherman, Texas, Shirley Jean Emert, of Spring Branch, was sentenced to 24 months in prison and ordered to pay $697,187 in restitution. Emert pleaded guilty in February 2014 to making and subscribing to a false tax return for the calendar year 2010. According to court documents, Emert embezzled funds from her employer in the amounts of $53,859 in 2008; $126,202 in 2009; $172,965 in 2010; and $166,254 in 2011. Emert failed to report the income on the corresponding tax year returns. Emert’s willful act of falsely reporting income on her tax returns for the years 2008 through 2011 resulted in income tax due and owing in the amount of $159,907.
On Oct. 2, 2014, in New Orleans, Louisiana, Jabari Ragas, of New Orleans, was sentenced to 42 months in prison and three years of supervised release for money laundering and tax fraud. Ragas was also ordered to pay nearly $1,700,000 in restitution for the money laundering count, and $259,210 for the tax fraud count. According to court documents, Ragas was employed by as a registered broker and investment adviser from 2005 through 2009. Ragas previously pleaded guilty to embezzling nearly $1,400,000 from clients, and failing to pay nearly $260,000 in tax due and owing to the IRS. In early 2006, a client of Ragas indicated that he wished to open a Simplified Employee Pension (SEP) account to allow him to contribute towards retirement. Without authorization, Ragas began moving money from the SEP account into an account controlled by Ragas. Ragas supplied the client with a fraudulent account statement along with a fraudulent balance. After using the interstate wire to embezzle funds from the client’s account, Ragas then committed money laundering by further transferring $20,000 into a different account that he controlled. Additionally, on Oct. 12, 2008, Ragas signed and filed an income tax return for 2007 that did not report approximately $288,000 in income.