CHICAGO–(ENEWSPF)–April 14, 2014. Seven Chicago and suburban residents, among others, are facing federal prosecution for alleged federal income tax crimes in various separate cases filed recently. Two defendants were arrested by IRS agents today after they were indicted in an alleged scheme to use stolen identities to fraudulently claim and obtain tax refunds based on fictitious returns. Other defendants include Dolton and Lockport businessmen and a retired Chicago police officer and his wife.
“The IRS Criminal Investigation Division is focused on ensuring that taxpayers pay their fair share,” said James C. Lee, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. “Tax fraud does not know a season ― IRS special agents pursue criminals year round, not only at filing deadlines. Taxpayers who might be thinking about cheating should think twice or they will risk the consequences,” he said.
“Federal tax prosecutions occur throughout the year but at this time of year it is especially prudent to remind taxpayers of the importance of voluntary compliance with their tax obligations,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.
In addition to criminal penalties, including incarceration, fines, and the costs of prosecution, convicted defendants remain responsible for any taxes and interest due, as well as civil penalties of up to 75 percent of the tax owed, Mr. Fardon noted. And those making false claims against the government may be required to pay restitution or may be sued civilly for an amount greater than the fraudulent claims, he added.
In the case involving today’s arrests, three defendants were indicted in an alleged scheme to fraudulently claim tax refunds in excess of $350,000, and fraudulently obtaining approximately $180,000, after filing 173 fictitious returns. WILLIS PATTON, 43, of Woodridge, and STEVIE SHELTON, 54, of Chicago, were arrested today, while KENYA BOND, 35, of Chicago, will be arraigned on a date to be determined in U.S. District Court. Each of them was charged with six counts of wire fraud, while Patton and Bond were also charged with two counts each of making false claims, and Shelton was charged with two counts of theft of government funds in a 10-count indictment that was returned by a federal grand jury on April 2 and unsealed today.
According to the indictment, Bond misappropriated the names, social security numbers, and dates of birth of 29 patients of the suburban Woodridge dentist’s office where she worked, and provided the identity information to Patton for a fee. Patton used that information, as well as identifying information obtained from other unspecified sources, to file 173 fictitious tax returns for 2011 that contained false information about income, tax withholdings, and supporting documents. Patton directed the IRS to send electronic tax refunds to bank accounts controlled by Shelton and other individuals, the indictment alleges. In fact, Patton allegedly controlled these bank accounts and recruited Shelton and others to open and maintain them in their names for Patton to obtain tax refunds.
For the 2011 tax year, Patton allegedly received approximately $180,000 in false tax refunds, including $67,000 that was electronically transferred into accounts maintained by Shelton. Patton and Shelton were both ordered to remain in federal custody pending a detention hearing at 2 p.m. Thursday before Magistrate Judge Geraldine Soat Brown in U.S. District Court.
Each count of wire fraud carries a maximum sentence of 20 years in prison, each count of making a false claim carries a maximum of five years, and each count of theft of government funds carries a maximum of 10 years, and all counts carry a maximum fine of $250,000. The government is being represented by Assistant U.S. Attorney Jessica Romero.
In other recent cases:
VICTOR SHAW, 53, of Dolton, was charged in a criminal information filed Friday with six misdemeanor counts of failing to file federal income tax returns for each year between 2007 and 2012. He will be arraigned on a date to be determined in U.S. District Court. Each count of failing to file an income tax return, a misdemeanor, carries a maximum sentence of a year in prison and $100,000 fine. (AUSA Maureen Merin.)
RONALD MUHAMMAD, 63, who retired as a Chicago police officer in 2007, and his, wife, WILHELMENIA MUHAMMAD, 64, a retired Social Security Administration employee, both of Chicago, were each indicted on four counts of tax evasion and four counts of failing to file a federal income tax return in a 12-count indictment that was returned by a federal grand jury last Thursday. Between 2007 and 2010, the couple allegedly failed to file tax returns and evaded paying taxes on hundreds of thousands of dollars in income from pension payments and wages, including Ronald’s earnings at the Chicago Park District after he retired from the police department. Among the couple’s other wages and retirement earnings, Ronald allegedly withdrew the following amounts in police pension and annuity payments: $537,514 in 2008, $514,043 in 2009, and $149,490 in 2010.
According to the indictment, either or both of the Muhammads responded to various letters from the IRS by saying they viewed a letter as a “fraudulent document that had no legal basis,” or the IRS “has no jurisdiction over our personal affairs,” as well as claiming at times that they were exempt from federal withholding.
The Muhammads are scheduled to be arraigned at 9 a.m. Wednesday in U.S. District Court. Each count of tax evasion carries a maximum sentence of five years in prison and a $250,000 fine, and each count of failing to file an income tax return, a misdemeanor, carries a maximum sentence of a year in prison and $100,000 fine. (AUSA Bethany Biesenthal.)
PAUL WEST, 61, of Lockport and formerly of Frankfort, also known as “Thomas Wilson,” and “Tom Wilson,” was indicted last Thursday on two counts of filing a false federal income tax return and three counts of failing to file a federal income tax return. West, who was in the business of selling materials for recycling, including scrap cardboard, had gross income in excess of $450,000 in 2007, and more than $200,000 in 2011, and allegedly under-reported his income for both years, reporting that he owed little or no taxes, according to the indictment. It further alleges that he had gross income in excess of $250,000 in 2008, $150,000 in 2009, and 200,000 in 2010, and failed to file federal income tax returns for those years.
West will be arraigned on a date to be determined in U.S. District Court. Each count of filing a false income tax return carries a maximum sentence of three years in prison and a $250,000 fine, and each count of failing to file an income tax return, a misdemeanor, carries a maximum sentence of a year in prison and $100,000 fine. (AUSA Kaarina Salovaara.)
In each case, if convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that criminal charges are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.