IRS Criminal Investigations in New Jersey

 – April 11, 2018
IRS Criminal Investigations in New Jersey

IRS-Criminal Investigation serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law. Below are cases that the IRS Criminal Investigations unit in New Jersey is currently working on:


April 11, 2018

Owner of Newark, New Jersey, Automobile Export Business Sentenced to 18 Months in Prison for Filing False Tax returns and Structuring Crimes

A Newark man was sentenced today to 18 months in prison for filing false tax returns and structuring cash payments to avoid reporting requirements, U.S. Attorney Craig Carpenito announced.

Okoro Ifeanyi, 56, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to a two-count information charging him with filing false tax returns with respect to his 2010 through 2013 personal tax returns and with structuring financial transactions in 2007 and 2008 to avoid reporting requirements. Judge Chesler imposed the sentence today in Newark federal court.

According to the documents filed in this case and statements made in court:

Ifeanyi was the owner and operator of Amiri Mbubu Auto Sales. His primary business was buying used cars in and around New Jersey, often at auto auctions, and exporting the cars to Nigeria.

Ifeanyi admitted to substantially underreporting his income on his 2010, 2011, 2012, and 2013 U.S. individual income tax returns, specifically, failing to report additional taxable income that he earned through his business. According to the information, by failing to report his true income, Ifeanyi avoided paying approximately $461,085 in taxes.

Ifeanyi also admitted to structuring a series of transactions in 2007 and 2008. He made 17 different deposits into his Bank of America account, each less than $10,000, in order to avoid currency reporting requirements.

In addition to the prison term, Judge Chesler sentenced Ifeanyi to three years of supervised release.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Justin S. Herring of the U.S. Attorney's Office Economic Crimes Unit in Newark.


March 30, 2018

Tax Return Preparer Indicted on Additional Charges Related to Tax Fraud and Refund Theft Schemes Committeed While on Pretrial Release

A federal grand jury in Newark has returned a 29-count second superseding indictment adding charges alleging that a former Bergen County, New Jersey, tax return preparer filed false federal income tax returns, stole client refunds and committed identity theft in connection with refunds stolen from a deceased taxpayer, U.S. Attorney Craig Carpenito announced today.

Wayne Dunich-Kolb, 53, of Montvale, NJ, was originally charged by indictment in March 2014 with five counts of aiding and assisting in the filing of false federal income tax returns and four counts of subscribing to false tax returns. In December 2016, Dunich-Kolb was charged by superseding indictment. Today’s second superseding indictment adds five counts of aiding and assisting in the filing of false tax returns, 12 counts of mail fraud and two counts of aggravated identity theft, all of which were allegedly committed while the defendant was on pretrial release.

Dunich-Kolb was arrested this morning. The initial appearance on the new charges is scheduled for Monday, April 2, 2018, before U.S. Magistrate Judge Steven C. Mannion.

According to the second superseding indictment:

Dunich-Kolb prepared and filed, through the U.S. mail, fraudulent returns through various tax preparation entities, including Dunich-Kolb LLC, Jadran Services Corp., Adriatica Payroll Corp., Adriatica Tax Planning LLC, and Adriatic Tax Planning LLC (collectively, the “tax preparation entities”), which he ran from his former residence in Saddle River and then from his current residence in Montvale. Dunich-Kolb also maintained a U.S. Post Office box in Las Vegas, NV, that he used in connection with his tax preparation business.

Dunich-Kolb caused many of his clients to form fictitious partnerships or corporations that existed in name only and had no business purpose other than to falsely reduce the clients’ tax liability. He prepared false and fraudulent business returns for clients’ fictitious businesses by fabricating and inflating business expenses, such as advertising, travel and other miscellaneous expenses, in order to generate fraudulent business and partnership losses, which he then used to substantially reduce taxpayers’ taxable income on their individual federal income tax returns.

Dunich-Kolb falsified clients’ 2007, 2008, 2009, 2010, 2011, 2013, 2014, 2015 and 2016 individual federal income tax returns (original and amended), partnership returns and corporation returns by fabricating and inflating: (1) business and partnership Schedule K-1 losses; (2) deductions for unreimbursed employee business expenses, including home office, vehicle mileage and fuel expenses; and (3) expenses and cost basis of rental properties, including vehicle mileage and travel expenses for rentals located within or a short distance from the primary residence.

Dunich-Kolb also falsified his own personal federal income tax returns by substantially underreporting income from his tax preparation and accounting business for tax years 2006, 2007 and 2008. For these tax years, Dunich-Kolb received gross income totaling approximately $500,000 to $657,000 per year. Dunich-Kolb falsely claimed income of only $400 for 2006, $526 for 2007, and $489 for 2008.

Dunich-Kolb also stole certain clients’ federal tax refunds, including the refunds of a deceased client, by causing the IRS to mail the refund checks to Dunich-Kolb’s Las Vegas Post Office box, from where they were mail-forwarded to Dunich-Kolb’s residence in Montvale. Dunich-Kolb, without authorization, used the Social Security numbers of the deceased client and another client on IRS forms claiming that the latter client was entitled to the deceased client’s refunds for tax years 2013 and 2014 and causing the IRS to mail the deceased client’s refunds to his Las Vegas Post Office box. Once in receipt of the clients’ tax refund checks that had been mail-forwarded to his residence, Dunich-Kolb deposited the checks into accounts that he controlled and converted the funds to his own personal use.

Each of the aiding and assisting in the filing of false federal income tax returns and subscribing to false tax returns counts carries a maximum potential penalty of three years in prison and a $250,000 fine. Each of the mail fraud counts carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The aggravated identity theft counts each carry a maximum potential penalty of two years in prison that each must run consecutive to the sentence imposed on the underlying mail fraud counts. For committing a felony offense while on pretrial release, the maximum potential penalty is 10 years in prison that must run consecutive to the sentence for the underlying felony offense.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca, and the Montvale Police Department, under the direction of Chief Jeremy Abrams, with the investigation leading to today’s charges.

The charges and allegations in the second superseding indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.

The government is represented by Assistant U.S. Attorney Shirley U. Emehelu, Chief of the Asset Recover Money Laundering Unit.

 


March 28, 2018

Bergen County Man Admits Defrauding Two International Companies of $3 Million and Failing to Pay Over $880,000 in Taxes

A Park Ridge, NJ, man today admitted using shell companies and phony invoices to scam both his and his wife’s employers out of millions of dollars, U.S. Attorney Craig Carpenito announced.

Philip Charles de Gruchy, 64, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to Count One and Counts 10 through 15 of a superseding indictment charging him with conspiracy to commit mail fraud and subscribing to false individual and corporate tax returns.

According to documents filed in this case and statements made in court:

From August 2007 through April 2, 2010, de Gruchy’s then-wife Barbara Brown was employed by “Company A,” a toy and juvenile products retailer headquartered in Wayne, NJ, first as director of customer relationship management and then as director of global customer relations management. She had authority to hire and pay contractors. Brown caused Company A to enter into a business relationship with CEM Inc., an entity that she and de Gruchy secretly controlled. From Nov. 5, 2007, through March 4, 2010, CEM submitted approximately 170 invoices to Company A totalling more than $3 million for alleged marketing consulting work that was ultimately unnecessary, worthless or never completed.

Although the checks that Company A issued to CEM were mailed to various Canadian addresses, the checks were ultimately deposited by de Gruchy into a CEM account at bank branches located in Park Ridge. De Gruchy wrote checks out of the CEM account payable directly to either de Gruchy, Brown or two companies affiliated with de Gruchy: Silk Farm Inc. and Ontario LLC. De Gruchy and Brown then used the money for personal purposes, including home renovations, mortgage payments on the Park Ridge residence that Brown and de Gruchy shared and credit card expenses. 

From July 2010 through Nov. 11, 2011, de Gruchy was employed as the director of global relations management by “Company B,” an international manufacturer and retailer of luxury suitcases and accessories, headquartered in South Plainfield, NJ. He was responsible for a data migration project designed to assist Company B with identifying customer purchasing patterns. De Gruchy obtained verbal approval from Company B to hire Brown to assist him on the migration project. At no time did de Gruchy reveal his personal and financial relationship with Brown. 

From November 2010 until November 2011, Brown submitted invoices in her own name or the name of her company, BI Insights, totaling more than $300,000 for purported work related to the data migration project. De Gruchy approved all of the invoices submitted by Brown and BI Insights. The work was ultimately unnecessary, worthless or never completed. Checks from Company B totaling $216,825 were sent to one of the Canadian addresses used to receive checks from Company A and deposited into a Canadian bank account. Certain funds from the Canadian bank account were thereafter transferred to de Gruchy and Brown’s joint personal bank accounts in the United States.

De Gruchy also admitted that he filed false federal tax returns, Forms 1040, for the calendar years 2009 and 2010, in which he knowingly overstated expenses and understated gross receipts, including receipts from the fraudulent conduct involving Company A and Company B. De Gruchy further admitted that he filed false federal corporate income tax returns, Forms 1120, for the calendar years 2009 and 2010 for CEM Inc. and Silk Farm Inc., in which he falsely claimed certain payments as business expenses. De Gruchy acknowledged at the plea hearing that he owes the IRS approximately $882,844 in additional taxes for 2009 and 2010.

Brown, who was charged with de Gruchy in the superseding indictment, passed away in May 2017. As such, the charges against her were dismissed in June 2017.

The mail fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The false tax return counts each carry a maximum potential penalty of three years in prison and a $250,000 fine, or twice gross gain or loss from the offense. Sentencing is scheduled for July 9, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, with the investigation.

The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Special Prosecutions Division in Newark.


March 5, 2018

Jersey City Resident Sentenced to Prison for Filing False Tax Returns

An individual with controlling interest of a pharmacy in Jersey City, New Jersey, was sentenced to 12 months in prison for filing a false income tax return.

 

U.S. District Judge Kevin McNulty also ordered Mark Smith, a resident of Jersey City, N.J., to serve one year on supervised release, which includes six month of home confinement, $372,000 in restitution and forfeiture of $820,654.79 in a related civil case.

“As we continue with this year’s tax filing season, it is important for people to have confidence that when they pay their taxes, their neighbors and co-workers are doing the same,” stated Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office. “The sentencing of Mr. Smith should serve as a deterrent to others who might contemplate similar fraudulent actions.”

According to court documents and statements made in court:

Smith had controlling interest of a pharmacy in Jersey City that was owned by one of Smith’s family members. Smith had control of and access to the pharmacy bank account.

Smith admitted that during the 2011 tax year, he withdrew approximately $170,831 from the pharmacy’s bank account for his own personal use. Smith admitted he should have reported this money as income on his personal tax return but failed to do so. As a result, Smith owed approximately $45,423 of additional tax to the Internal Revenue Service.

In addition, Smith willfully failed to file personal tax returns for the years 2012 and 2013. 

The investigation was conducted by IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen and the U.S. Attorney’s Office, under the direction of U.S. Attorney Craig Carpenito.

The Government is represented by Assistant U.S. Attorney David E. Malagold. 


Feb. 15, 2018

New Jersey Stock Promoter Pleads Guilty to Tax Evasion for Failing to Report Over $1.7 Million

The owner of a consulting business located in Edgewater, New Jersey, pleaded guilty today to income tax evasion.

Danny Colon, 52, entered his plea in Newark federal court before U. S. District Judge Esther Salas. Colon pleaded guilty to one count of personal income tax evasion pertaining to his 2010 tax return. Sentencing is scheduled for June 5, 2018.

“To build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share,” stated Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office. “Today’s guilty plea by Mr. Colon should reassure those Americans who file accurate, honest and timely returns that the government will hold accountable those who do not.”

According to court documents and statements made in court:

Colon was the owner of DC International Consulting, LLC (hereinafter “DCI”). DCI is a single member LLC and as such Colon was responsible for reporting any income earned by DCI on his personal income tax returns. Colon has not filed a personal income tax return since 1999.

Colon controlled 17 brokerage accounts, some of which were in the name of DCI, some in the name of another individual and some jointly in the name of Colon and the other individual. Between January 2009 and December 2011, Colon, through DCI, was primarily engaged in promoting microcap stocks. Colon was compensated for his services in shares of stock. Once Colon received the stock, he deposited them into one of the brokerage accounts and sold them within a few weeks. Colon admitted that during the 2010 calendar year, he received compensation in the form of stock shares in the amount of approximately $716,565. Colon admitted that he failed to file a personal tax return for 2010 which caused an approximate tax due and owing to the government of $277,946.

In addition, Colon admitted that he failed to file personal tax returns for 2009 and 2011. In doing so, he failed to report income of approximately $494,880 for 2009 and $537,426 for 2011, resulting in an approximate tax due and owing to the government of $179,957 and $189,709 respectively.

In total, for the years 2009 through 2011, Colon failed to report approximately $1,748,871 in additional income, upon which there was an additional tax due and owing to the government of approximately $647,612.

The count of tax evasion carries a statutory maximum prison sentence of five years and a statutory maximum fine equal to the greatest of: (1) $250,000; (2) twice the gross amount of any pecuniary gain derived from the offense; or (3) twice the gross amount of any pecuniary loss sustained by any victims of the offense.

The investigation was conducted by IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen and the U.S. Attorney’s Office, under the direction of U.S. Attorney Craig Carpenito.

The Government is represented by Assistant U.S. Attorney Deborah J. Gannett.