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$5.6M IRS money laundering scheme in Georgia

October 24, 2017

Residents of Atlanta, Lithonia and Smyrna were among the eight Georgians sentenced for a scheme that defrauded the federal government of millions of dollars.

 

Prison sentences ranged from four months to 10 times that, and restitution amounts went from half a million to two and a half million, federal prosecutors said Tuesday in a news release.

 

“These defendants conspired to file false claim after false claim against the United States, treating the U.S. Treasury like an ATM and stealing from every honest taxpayer in the process,” said Byung J. Pak, new head attorney of the justice department’s northern Georgia district.

 

Pak said the group filed 100 fraudulent corporate tax claims between 2009 and 2012, claiming $35 million in refunds for fuel taxes falsely alleging to have been paid on company off-road vehicles.

 

The fraudsters did not get that full amount, but they did get $5.6 million from the Internal Revenue Service before the arrest of the conspiracy’s leader, Charlie Shivers III, during a warrant search of his home on May 12, 2012.

 

In Charlie Shivers’ home, investigators found many fraudulent corporate tax income documents and notes that outline the scheme.

 

Shivers was sentenced about a year later at age 40 and ordered to pay $5,630,681.66 in restitution.

“Tax fraud schemes are becoming more complex and perpetrators are continually creating new ways to generate fraudulent claims to the IRS,” said James Dorsey with the IRS.

 

The false claims were made in the names of shell companies and corporations whose names had been hijacked, none of which used off-road vehicles or paid the fuel tax claimed for refund.

 

The IRS investigated the case once they noticed certain similarities in the returns.

But there was a large break in the investigation, prosecutors said, when a defendant in an unrelated federal fraud case learned of the conspiracy and decided to cooperate law enforcement officials to organize a series of undercover meetings with members of the conspiracy, which the cooperator recorded.

 

In the recorded meetings, Shivers and his brother Anthony described the roles of members of the conspiracy and how the fraudulent returns were prepared and filed.

 

In general, the roles are as follows: Kenneth Cottrell prepared the fraudulent tax returns. Calvin L. Barnes, Sharon Ceacal, Zechariah Daniel, Derrick Lawson, Reynolds Scott III and Calvin C. Williams negotiated the fraudulently obtained refund checks and distributed the proceeds to co*conspirators. Anthony Shivers assisted his brother.

 

Here are their sentences:

 

• Calvin L. Barnes, 36, of Forest Park, was sentenced to a year and a day in prison followed by three years of supervised release. The court said he will probably pay a million dollars in restitution, but it will determine the final amount in seven days to see if he is entitled to credit for some pre-sentencing payments to the IRS. Barnes pleaded guilty to a charge of theft of government funds.

 

• Sharon Ceacal, 51, of Warner Robins, was sentenced on Aug. 2, to a year and a day in prison followed by three years of supervised release. He must pay $1,549,250 in restitution. Ceacal pleaded guilty to a conspiracy charge.

 

• Kenneth Cottrell, 33, of Atlanta, was sentenced to six months in prison followed by three years of supervised release. He was ordered to pay $754,586 in restitution. Cottrell pleaded guilty to a conspiracy charge.

 

• Zechariah Daniel, 36, of Atlanta, was sentenced to two years and four months in prison followed by three years of supervised release. He was ordered to pay $2,566,491 in restitution. Daniel pleaded guilty to a conspiracy charge.

 

• Derrick Lawson, 43, of Lithonia, was sentenced to a year and six months in prison followed by three years of supervised release. He was ordered to pay $1,021,705 in restitution. Lawson pleaded guilty to a charge of theft of government funds.

 

• Reynolds Scott III, 49, of Atlanta, was sentenced to four months in prison followed by three years of supervised release. Scott was ordered to pay $1,549,250 in restitution. Scott pleaded guilty to a conspiracy count.

 

• Anthony Shivers, 47, of Lovejoy, was sentenced to three years and five months in prison followed by three years of supervised release. He was ordered to pay $505,399 in restitution. Shivers pleaded guilty to a conspiracy count.

 

• Calvin C. Williams, 48, of Smyrna, was sentenced to 10 months in prison followed by three years of supervised release. He was ordered to pay $1,876,014 in restitution. Williams pleaded guilty to a conspiracy charge.

 

Three other defendents were previously sentenced for their roles in the scheme:

 

• Charlie Shivers III, of Atlanta, pleaded guilty to two counts of filing false claims against the United States. He was sentenced to seven years in prison followed by three years of supervised release. 

 

• Kenneth Michael Pettis, Sr., was sentenced to four years and three months in prison followed by three years supervised release. Pettis pleaded guilty to a count of conspiracy to steal government funds.

 

• Demetrius Weddle was sentenced to two years and seven months in confinement followed by three years supervised release. Weddle pleaded guilty to a charge of bank fraud.

 

 

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