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.