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ANNUAL REPORT

TABLE OF CONTENTS

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Message from the Chief

Field Office Map

2022 Snapshot

Atlanta

Tax Crimes

Boston

Non-Tax Crimes

Charlotte

Cybercrimes

Chicago

Sanctions Related Investigations

Cincinnati

Narcotics and National Security

Dallas

Specialized Units

Denver

Commissioner’s Protection Detail

Detroit

International Operations

Houston

Undercover Operations

Los Angeles

Digital Forensics

Miami

Center for Science and Design

Newark

Advanced Analytics & Innovation

New York

National Criminal Investigation

Training Academy

Oakland

Asset Recovery and

Investigative Services

Philadelphia

Phoenix

Office of Communication

Seattle

Professional Staff and

Workforce Development

St. Louis

Tampa

Washington D.C.

Appendix

Equity, Diversity, and Inclusion

Outreach and Community Engagement

Navigation Menu

Table of Contents

2022 Snapshot Data

Field Office Map

Appendix: Investigation Data

IRS:CI Annual Report 2022

MESSAGE FROM THE CHIEF

IRS Criminal Investigation (CI) accomplished a list of successes in

fiscal year (FY) 2022, which rivals any year that I can remember in my

nearly 30 years with the agency. CI remains the sixth largest federal

law enforcement agency, and we are the only federal law enforcement

agency that spends 100% of its time on financial investigations. In

FY 2022, we investigated some of the largest and most sophisticated

tax crimes, and we identified more than $31 billion in tax fraud and

other financial crimes. Our bread and butter remains tax, as no other

agency has the authority to investigate criminal violations of the

Internal Revenue Code.

While navigating our way through the backend of a global pandemic,

we seized record amounts of data and cryptocurrency, led some of the

largest tax cases on record and spearheaded first-of-its-kind national

and international initiatives aimed at developing and strengthening

partnerships in the public and private sectors.

Our work has a global impact. CI is a key player in international cyber

investigations and sanctions-related enforcement efforts, including

through Task Force KleptoCapture, which targets Russian oligarchs

and other would-be sanctions evaders. Through our increasing use

of social media, we reached millions of taxpayers around the world,

educating them about the important role we play in the stability of

the financial system by investigating tax and other financial crimes.

Perhaps the statistic I continue to be most proud of is our conviction

rate, which again tops 90%. We are thorough and good at what we

do. As I tell crowds around the country, if a CI special agent has you

in their crosshairs, there is a good chance you are going to jail.

In FY 2022, CI operated with the agency’s guiding principles in mind.

Our agents honor the badge every day by working with urgency,

integrity, and professionalism, even when confronted with misguided

media reports fueled by those who just do not know who we are or what

we do. Our work protects the American public from cyber criminals,

Ponzi schemes, and bad actors posing as legitimate tax preparers.

There are real victims to the crimes we investigate, and we keep those

victims in mind as we bring criminals to justice.

We preserve CI’s legacy as the world’s finest financial investigators –

not by calling ourselves the best, but by writing our own chapter each

year in the storied history books of this great agency. This past year,

we took down the world’s largest darknet marketplace and separately

led the single largest financial seizure in the history of our government.

We remain masters of our craft, and we continually provide trainings

to foreign law enforcement agencies around the world. In FY 2022,

we conducted in-person trainings in locations ranging from Germany

to Palau, which covered financial investigative techniques and cyber

topics like cryptocurrency. By sharing our expertise with countries

across the globe and strengthening these partnerships, we made the

world a smaller place for criminals to operate.

We continue to inspire the future through recruiting and educational

and outreach programs. We conducted dozens of CI Citizen Academies

around the country to portray what it is like to be a special agent in

our organization.

It is easy to look back on a year like 2022 and be happy with our

success, but we are already laying the groundwork to do more in 2023.

I could not be prouder of our agency, and I look forward to continued

success in the future.

–Jim Lee, Chief

2022 SNAPSHOT

$5.7B

DIRECT INVESTIGATIVE TIME SPENT

Public Corruption

TAX FRAUD IDENTIFIED

Cybercrimes

STAFFING

$26.9B

Professional Staff

4,017

2.97

PETABYTES OF DIGITAL DATA

71.7%

2,935

3,015

11.6%

938

889

INVESTIGATION SOURCES

2,077

2,046

1,600

Financial Crimes

Enforcement Network

FY2021

FY2022

CI’s staffing levels are by fiscal year and reflect an actual count of employees

based on the Employee Master Database as of PP19.

State/Local Government

27%

U.S. Attorney’s Office

16%

FY2020

OCDETF

Organized Crime Drug

Enforcement Task Force

1.5% Uncategorized

IRS:Civil

FY2010

NARCOTICS

Money Laundering

Identity Theft

Public

800

15.2%

Refund Fraud

2,030

CONVICTIONS

2,400

2,761

1564

2,858

828

1,256

1837

CONVICTION RATE

TAX

Employment Tax

3,200

90.6%

NON-TAX

Abusive Tax Schemes

4,000

WARRANTS EXECUTED

REFERRED FOR PROSECUTION

General Fraud

General Tax Fraud

Special Agents

OTHER IDENTIFIED

FINANCIAL CRIMES

1210

Corporate Fraud

International

27%

Other Federal Agencies

IRS:CI Annual Report 2022

TAX CRIMES

IRS: Criminal Investigation (CI) is the criminal investigative arm of the IRS. As such, investigating

tax crimes continues to be a primary focus for the agency. CI works closely on tax-related

investigations with a host of federal, state, and local law enforcement partners, as well as

foreign tax and law enforcement agencies, and Prosecution of these cases supports overall

IRS compliance goals and enhances voluntary compliance with U.S. tax laws.

Click the links below to read Case Highlights:

Tampa

Field Office

Philadelphia

Field Office

GENERAL TAX FRAUD

REFUND FRAUD PROGRAM

ABUSIVE TAX SCHEMES

General tax fraud investigations are at the core of CI’s law

enforcement efforts and directly influence the American public’s

confidence and compliance with our country’s tax laws. The

integrity of our tax system depends heavily on the taxpayers’

willingness to self-assess taxes owed and voluntarily file tax

returns. CI investigations help show law-abiding taxpayers that

individuals who deliberately underreport or omit income from

their tax returns will be held accountable for their actions.

CI looks at high-income taxpayers who have a filing

requirement, but deliberately choose not to file returns and

pay taxes owed, and targets criminals who use two sets of

financial records, make false entries in books and records,

claim personal expenses as business expenses, claim false

deductions or credits against taxes owed, and hide or transfer

assets. CI special agents use their financial investigative

expertise to uncover and quantify the seriousness of these

schemes. They also work closely with Department of Justice

(DOJ) prosecutors to gather the necessary evidence to bring

cases to a successful conclusion.

The Refund Fraud Program consists of three parts:

Questionable Refund Program (QRP), Stolen Identity Refund

Fraud (SIRF) investigations, and the Return Preparer Program

(RPP) for both individuals and businesses. These programs

investigate individuals who file fraudulent tax returns to

steal government funds. This type of theft erodes voluntary

compliance and taxpayer confidence in the integrity of the

tax system. It also results in the loss of vital funds needed to

support government programs, many of which impact the most

vulnerable Americans.

CI investigates promoters and clients, who willfully violate tax laws by

participating in domestic and offshore tax schemes. The schemes

are usually complex and involve multiple layers of transactions to

conceal the true nature and ownership of the income and/or assets.

Participants create structures, such as trusts, foreign corporations,

and partnerships, to make it appear that a trustee, nominee,

non-resident alien, or other foreign entity is the owner of the

assets and income, when in fact, a U.S. taxpayer maintains true

ownership and control.

The QRP identifies fraudulent claims for tax refunds. Generally,

these schemes involve individuals filing multiple fraudulent tax

returns using the personally identifiable information (PII) of

taxpayers to facilitate the scheme. A significant number of these

investigations are also considered identity theft investigations.

Identity theft refund fraud occurs when someone uses the PII

of another individual, without the person’s permission. The PII

could include another person’s name, Social Security number

or address. These cases are commonly referred to as SIRF

investigations. The crime usually occurs when an identity thief

uses a legitimate taxpayer’s identity to file a fraudulent tax

return and claim a refund. Generally, the identity thief will use a

stolen Social Security number and other PII to file a fraudulent

tax return and attempt to get a refund early in the filing season

before the legitimate taxpayer files their tax return.

In contrast, RPP investigations involve corrupt return preparers

who orchestrate the preparation and filing of false income tax

returns for taxpayers. These preparers often claim inflated

personal or business expenses, false deductions, excessive

exemptions, and unallowable tax credits. The preparers’ clients

may or may not know their returns were falsified.

699

SENTENCED

EMPLOYMENT TAX FRAUD

Employment tax fraud includes cases involving

employee leasing, paying employees in cash, filing

false payroll tax returns, failing to file payroll tax

returns, and “pyramiding.” Pyramiding occurs

when a business withholds taxes from its

employees, but then intentionally fails to

forward the tax payments to the IRS. After

a liability accrues, the individual starts a

new business and begins to accrue a new

liability under the new entity. Employment

taxes include federal income tax

withholding, Social Security taxes, and

federal unemployment taxes. Some

employers withhold taxes from their

employees’ paychecks and use the

funds for their personal expenses.

Employment tax fraud can have

serious ramifications for both

employers and employees.

789

PROSECUTIONS RECOMMENDED

1388

INVESTIGATIONS INITIATED

NON-TAX CRIMES

CI also uses its financial expertise to investigate a multitude of non-tax-related crimes that range

from public corruption to fraud. Special agents focus on complex money-laundering schemes,

where individuals launder their ill-gotten gains by making the money appear as if it came from

legitimate sources. Sometimes an individual will employ a third party or a professional third-party

money launderer. Frequent money laundering techniques include manipulating currency

reporting requirements, layering transactions, the use of cryptocurrency or Black-Market

Pesos, or the international movement of funds.

Click the links below to read

Case Highlights:

Oakland

Field Office

Miami

Field Office

MONEY LAUNDERING

CORPORATE FRAUD

BANK SECRECY ACT PROGRAM

Money laundering occurs when criminals or criminal organizations try to disguise the illicit nature of their money by

introducing it into the stream of legitimate commerce and

finance. In today’s global economy, criminals can use a

computer, tablet, or smart phone to quickly move large

amounts of criminally derived funds into or through the

United States and foreign financial institutions. Criminals

launder money through a wide variety of enterprises like banks,

money transmitters, stock brokerage houses, casinos, and

virtual currency exchanges. The flow of illegal funds around the

world is estimated to be in the hundreds of billions of dollars.

The corporate fraud program concentrates on violations

committed by publicly traded or private corporations and

their senior executives. Some specific criminal acts involving

corporate fraud include falsifying, fabricating, or destroying

company records. Fraudsters then use false information to

complete tax returns, financial statements, and reports for

regulatory agencies or investors. Corporate fraud can also

include executives who receive unauthorized compensation,

unapproved payments and bonuses, corporate funds, or

fraudulent loans used to pay personal expenses.

The Bank Secrecy Act (BSA) mandates the disclosure of foreign bank

accounts, the reporting of certain currency transactions conducted with a

financial institution, and the reporting of the transportation of currency

across U.S. borders. The Financial Crimes Enforcement Network

(FinCEN) is tasked with administering the BSA, but FinCEN does not

have criminal enforcement authority. The U.S. Treasury Secretary

delegated all criminal enforcement of the BSA to CI. Other federal

agencies can investigate criminal violations of the BSA, but CI is the

only federal agency that actively reviews all BSA data for leads and

possible criminal violations. Through the analysis of BSA data,

CI has identified significant, complex money laundering

schemes and other financial crimes.

CI special agents are experts at uncovering money trails through

traditional and virtual financial banking systems. They take part

in a variety of investigations, as well as financial and narcotics

task forces like Organized Crime Drug Enforcement Task Force

(OCDETF) and the High Intensity Drug Trafficking Area (HIDTA).

PUBLIC CORRUPTION

CI investigates elected and appointed individuals who violate

the public’s trust. These individuals are from all levels of

government including local, county, state, and federal, as

well as foreign officials. Public corruption investigations

include such criminal offenses as bribery, extortion,

embezzlement, kickbacks, tax fraud, and money laundering.

Corruption by public officials results in the loss of taxpayer

dollars. In addition, the United States is often a desirable

destination for the monies of corrupt foreign officials. This type

of corruption undermines democratic institutions and threatens

national security. Public officials who violate the public trust are

often prosecuted to the fullest extent of the law, with large fines

and jail time for offenders.

GENERAL FRAUD

CI special agents also investigate healthcare, financial

institution, and COVID-19-related fraud. COVID-19-related

fraud includes schemes targeting the Paycheck Protection

Program (PPP), Economic Injury Disaster Loan (EIDL) program,

and Unemployment Insurance (UI) programs. Special agents

often work with federal, state, and local law enforcement

partners, as well as with foreign tax and law enforcement

agencies, to bring income tax and money laundering charges to

criminal cases, which enhance the prosecutors’ effectiveness

to combat these and other types of fraud.

CI’s BSA program has grown substantially since its start

in early 2000. CI now uses various data analytics tools

to actively analyze BSA data and identify leads for

possible investigation.

CI-led SAR Review Teams (SAR RTs) and Financial

Crimes Task Forces (FCTFs) exist in all 94 judicial

districts across the country, and CI currently has

upwards of 200 special agents and investigative analysts working on SAR RTs and FCTFs.

The SAR RTs and FCTFs focus on specific

geographic areas and involve collaboration

between CI and federal, state, and local

law enforcement agencies for identifying

and investigating financial crimes,

including BSA violations, money

laundering, narcotics, and more.

792

699

SENTENCED

1048

789

PROSECUTIONS RECOMMENDED

1388

1170

INVESTIGATIONS INITIATED

CYBERCRIMES

Recognizing that many aspects of our lives are increasingly

dependent on technology and the internet, CI continues to

focus investigative efforts on holding accountable those who

exploit technology for nefarious purposes. Digital assets

provide opportunities for responsible financial innovation,

expanding access to safe and affordable financial services, and

reducing the cost of domestic and cross-border funds transfers

and payments, including the continued modernization of public

payments systems. Despite the many promising opportunities

digital assets present, CI must mitigate the illicit finance and

national security risks posed by the misuse of digital assets.

Digital assets pose a significant risk of facilitating money

laundering, cybercrime and ransomware, narcotics and human

trafficking, terrorism, and proliferation financing. Digital assets

may also be used as a mechanism to circumvent U.S. tax law

and financial sanctions.

In FY 2022, the CI cybercrimes program began to reap

the benefits of a strategic realignment to mitigate many

of these risks. The Office of Cyber and Forensic Services (CFS)

was created in FY 2021 to bring together our digital asset

investigation, cybercrime investigation, digital forensics, and

physical forensics support efforts under the same roof. Among

its priorities, CFS supports criminal investigations agency-wide

regarding the illicit uses of digital assets and how they can be

used to exploit the U.S. tax and financial system.

Specifically, CFS supports the Eastern (Washington D.C.)

and Western (Los Angeles) based Cyber Crimes Units (CCUs)

CI’s flagship digital asset investigations units. The units are

charged with investigating the highest impact cases of theft,

fraud, facilitation, and tax crimes, where digital assets are

used to facilitate a crime or are proceeds of a crime. From a

traditional but massive scale pyramid scheme made possible

by leveraging the speed and reach of the internet to the

most cutting-edge and complex exploitation of decentralized

finance protocols, the CCUs are always ready to lead or assist

high-impact investigations with domestic and foreign partners.

In FY 2023, CI will establish the Advanced Collaboration and

Data Center (ACDC) to modernize its investigative practices.

The ACDC will provide centralized access to data and resources

to effectively support CI’s mission of deterring tax and financial

crime. The concept is a support-focused, task force model

approach, which combines skillsets of subject matter experts,

cybercrime special agents, computer scientists, and analysts

to tackle the most prolific and sophisticated crimes. The ACDC

will also facilitate collaboration with law enforcement and

partners in the government and private sector to ensure CI field

offices have the necessary resources to pursue highly technical

and digital payment-facilitated crimes.

The ACDC will enhance CI and our partners’ abilities to

access, investigate, and analyze information and evidence in

challenging areas such as:

► Dark web (research, monitoring, investigating illicit

actors/marketplaces)

► Cryptocurrency (tracing, monitoring, tax basis calculating)

► Social media and other open-source intelligence

As new and innovative digital technologies are developed,

the CFS continues to evolve to meet the challenges of those

attempting to exploit them for personal gain. In FY 2022,

CI special agents were instrumental in bringing charges related

to two individuals who developed a “rug pull” scheme to

defraud Non-fungible Token (NFT) investors. The two subjects

allegedly generated approximately $1.5 million in crypto

currency from the sale of an NFT, then abruptly abandoned the

project and retained the investors’ funds. It is also alleged that

the subjects were preparing to launch another NFT investment

opportunity and execute a similar scheme.

The CFS’s investigative efforts and law enforcement actions

helped mitigate risks presented by digital assets and held

bad actors accountable for many years. The CFS is constantly

taking additional steps to evolve, especially as threats evolve

in areas such as decentralized finance, peer-to-peer payments,

and anonymity-enhanced cryptocurrencies. Due to relatively

limited resources, the CFS focuses on cases where they can

have the most significant impact.

Cybercrime special agents surrounded

by server infrastructure.

CASE HIGHLIGHTS

Founders of Crypto ICO Sentenced to Combined

8 Years in Prison

In March 2022, Bitqyck founders Bruce Bise and Samuel

Mendez were sentenced to federal prison for defrauding

more than 13,000 investors through a cryptocurrency-related

scheme raising approximately $24 million. Instead of fulfilling

their promises to their investors, Bise and Mendez used the

funds on personal expenses, including casino trips, cars,

luxury home furnishings, art, and rent. In 2016, the pair

promoted the company’s cryptocurrency, Bitqy, as a way for

“those individuals who missed out on bitcoin” to get rich.

In an effort to legitimize its operation, the company charac

terized the cryptocurrency as an “earned gift” that rewarded

consumers for certain internet purchases. The Bitqyck website

also promised each Bitqy token was worth 1/10th of Bitqyck

common stock; however, the only shares of common stock

Bitqyck issued were to Bize and Mendez. Nine months after

launching Bitqyck, Bise and Mendez began marketing another

token claiming the token allowed investors to join “bitcoin

mining operations” that never existed.

Both defendants pleaded guilty to underreporting their

income to the IRS and failing to file corporate tax returns,

which resulted in a tax loss totaling more than $1.6 million.

The defendants also agreed to pay an $8.3 million penalty

related to a civil settlement with the U.S. Securities and

Exchange Commission.

Joint Federal Investigation Leads to Shutdown of

Largest Online Darknet Marketplace

In April 2022, a joint federal investigation led to the seizure

of the world’s largest and longest running darknet market.

Hydra accounted for an estimated 80 percent of all darknet

market-related cryptocurrency transactions. Since 2015,

Hydra received approximately $5.2 billion in cryptocurrency.

Hydra was an online criminal marketplace that enabled users

in mainly Russian-speaking countries to buy and sell illicit

goods and services, including illegal drugs, stolen financial

information, and fraudulent identification documents. Hydra

users could search for vendors selling identification documen

tation, such as U.S. passports or driver’s licenses, and filter

or sort by the item’s price. Vendors of false identification

documents also offered to customize the documents based on

photographs or other information provided by the buyers.

Transactions on Hydra were conducted using cryptocurrency,

and Hydra’s operators charged a commission for every

transaction on their platform. In addition to the shutdown of

Hydra, the Justice Department filed criminal charges against

Dmitry Olegovich Pavlov, a resident of Russia, for conspiracy

to distribute narcotics and conspiracy to commit money

laundering in connection with Hydra. As an administrator,

Pavlov allegedly conspired to further the site’s success

by providing the infrastructure to operate in the Dark

web environment.

Largest Single Financial Seizure

In Government History

In February 8, 2022, the Department of Justice announced the

arrest of Ilya Lichtenstein and his wife, Heather Morgan, for an

alleged conspiracy to launder cryptocurrency that was stolen

during the 2016 hack of Bitfinex, a virtual currency exchange.

Approximately 119,754 bitcoin (BTC) was stolen from the

exchange and was valued at approximately $4.5 billion at the

time of the arrest. The CI Cyber Crime Unit, with the assistance

of other U.S. authorities traced the stolen funds on the BTC

blockchain to various destinations, including accounts at the

darknet market AlphaBay, seven interconnected accounts

at U.S.-based virtual currency exchanges, various unhosted

BTC wallets, accounts owned by the defendants at six virtual

currency exchanges, and to an unhosted BTC wallet containing

a majority of the stolen bitcoin. Law enforcement was able to

access the wallet by decrypting a file saved to Lichtenstein’s

cloud storage account (obtained pursuant to a search warrant)

that contained a list of 2,000 virtual currency addresses, along

with corresponding private keys. CI special agents lawfully

seized and recovered more than 94,000 stolen bitcoin, valued

at over $3.6 billion at the time of seizure, which was the largest

of its kind.

A cybercrime special agent uses specialized

crypto tracing tools and software.

IRS:CI Annual Report 2022

SANCTIONS-RELATED INVESTIGATIONS

CI collaborated with the U.S. law enforcement community

to track down Russian financial criminals through a

multi-agency task force, Task Force KleptoCapture. On

March 2, 2022, the task force was established to locate

sanctioned Russians and their assets and to bring them to

justice. Between March and May, CI identified and tracked

19 sanctions-related individuals, targets, and entities.

This number grew to nearly 50 by September 2022.

CI works with the Treasury Office of Foreign Asset Control

and the Financial Crime Enforcement Network to identify,

develop, and add new individuals and entities to the

Special Designated Nationals list as part of the Treasury

Department’s Russian Elites, Proxies, and Oligarchs Task

Force efforts.

Much of the international success of CI special agents

stems from a robust and aggressive international program

that includes 11 foreign posts and memberships in

multiple international taskforces. CI special agents are

assigned within the Drug Enforcement Administration

Special Operations Division, International Organized Crime

Intelligence and Operations Center, the Organized Crime

Drug Enforcement Task Force’s (OCDETF) Fusion Center, and

the Joint Criminal Opioid Darknet Enforcement taskforce.

CI also spearheads the Joint Chiefs of Global Tax

Enforcement (J5), an alliance between the criminal tax

authorities of Australia, Canada, the Netherlands, the

United States, and the United Kingdom. J5 efforts focus on

combatting international tax and financial crimes through

proactive collaboration using each country’s collective

resources. The J5 is working to identify potential sanctionsevaders or sanctioned assets, and to develop a global

strategy to deter Russia’s aggression.

In addition to the Russian sanctions, CI remains committed

to stopping international organized crime syndicates, as well

as other foreign nationals violating U.S. sanctions.

CI prioritized training and the deployment of cryptocurrency,

blockchain, and open-source intelligence technologies to

unravel complex cyber-financial criminal schemes. When

a foreign corrupt government official receives bribes, they

often use a third-party to move or launder those illegal

proceeds to buy properties, cryptocurrencies, and many

other assets. If any of the funds move into or through U.S.

financial system, CI can trace the money.

Recent examples of CI’s global efforts involving sanctions

enforcement and other international crimes include:

Alleged Leader of Eastern European Organized

Crime Syndicate Extradited

On September 9, 2022, Viktor Zelinger, the alleged leader

of an Eastern European organized crime syndicate that

operated in the Brighton Beach, Sheepshead Bay, and

Coney Island neighborhoods of Brooklyn was extradited

from Switzerland on a nine-count superseding indictment.

Zelinger was linked to high-level Russian mafia members

known as “Thieves in Law” or “Thieves.” Zelinger is

charged with racketeering, racketeering conspiracy,

arson, arson conspiracy, illegal gambling, illegal gambling

conspiracy, extortionate collection of credit, and two counts

of extortionate collection of credit conspiracy. Zelinger is a

naturalized U.S. citizen with dual Ukrainian citizenship.

CI investigated this case as part of an OCDETF Strike

Force Initiative.

Alleged Russian $4 Billion Cryptocurrency

Money Launderer Extradited

On August 4, 2022, Alexander Vinnik, a Russian citizen and

an alleged operator of the illicit cryptocurrency exchange

BTC-e, was extradited from Greece to face charges in the

Northern District of California. Vinnik was charged in a

21-count superseding indictment in January 2017, based

on evidence obtained in a joint investigation between CI

and other federal law enforcement. Vinnik was taken into

custody in Greece at the request of the United States.

According to the indictment, Vinnik and his co-conspirators

allegedly owned, operated, and administrated BTC-e, a

significant cybercrime and online money laundering entity

that allowed its users to trade in bitcoin with high levels

of anonymity. They developed a customer base heavily

reliant on criminal activity. The exchange is alleged to have

laundered more than $4 billion of criminal proceeds.

Special agents train German and Swiss officials on human

trafficking investigative techniques.

Special Agents Train German, Swiss Officials

on Human Trafficking Investigative Techniques

On July 28, 2022, CI special agents teamed up with

other agencies in Frankfurt, Germany, to train German

law enforcement counterparts on the latest investigative

techniques to combat human trafficking. U.S. Mission

Germany hosted approximately 20 prosecutors and law

enforcement officials from the State Criminal Police Offices

of Berlin, Saxony, and Hesse; the German Federal Police;

the German Federal Criminal Police, and the Financial

Intelligence Unit. Traffickers continue to exploit domestic

and foreign victims in Germany, and global crises place

already vulnerable persons at increased risk. Of note,

Ukrainian refugees, predominantly women and children,

fleeing Russia’s war on Ukraine have become vulnerable

to trafficking.

Special agents in Frankfurt, Germany.

IRS:CI Annual Report 2022

NARCOTICS AND NATIONAL SECURITY

CI contributes to the success of U.S. national security

programs by investigating the finances of transnational

criminal organizations involved in narcotics trafficking,

human trafficking, terrorism financing, economic espionage,

and money laundering. CI special agents are known for their

expertise in following the money trail, and they use this

expertise to investigate criminal violations of the Internal

Revenue Code, Bank Secrecy Act, federal money laundering

statutes, and the International Emergency Economic Powers

Act. They trace financial transactions between individuals,

businesses, and criminal organizations to identify sophisticated

schemes designed to disguise illegal transactions.

Beginning in FY 2021, N2S2 established the Cyber-OCDETF

initiative. This pilot program was created to work with field

offices, contractors, and law enforcement partners on

cyber-related narcotics investigations. During FY 2022,

N2S2 finalized the initiative and expanded the investigative

resources available to all field offices. This resulted in better

use of available resources, and correspondingly, a greater

number of cyber-related narcotics investigations. N2S2

continues partnering with the FBI-led Joint Criminal Opioid

and Darknet Enforcement (JCODE) task force, where the

CI liaison officer aids in deconfliction, coordination, and

development of investigations.

The Narcotics and National Security Section (N2S2) has

senior liaison officers who provide interagency coordination,

deconfliction, advice, strategy, financial analysis, network

exploitation, and coordination of field office resources, in

support of a whole of government approach to our national

security threats.

CI continues its successful counterintelligence program

by serving as an integral member of the National

Counterintelligence Task Force (NCITF). The NCITF aims

to protect the U.S. government research through education

and awareness. The threat of foreign government infiltration

and diversion or theft of sensitive and critical infrastructure

materials remains extremely high. All threats against U.S.

interests and critical infrastructure have a real cost to our

nation, and, in almost all cases, involve financial crimes.

During FY 2022, CI increased investigative resources at the

NCITF, resulting in public indictments and prosecutions.

Criminal tax charges and Foreign Bank and Financial Accounts

(FBAR) violations for underreported or unreported income have

been critical tools in the effort to address egregious violators.

CI focuses heavily on narcotics and financial investigations

related to high-priority targets identified by OCDETF. These

cases often involve the convergence of program areas, and

these prosecutions have a greater effect on dismantling large

transnational criminal organizations.

Case Example

In December 2021, Charles Lieber, the former chair of Harvard

University’s Chemistry and Chemical Biology Department,

was convicted by a federal jury for lying to federal authorities

about his affiliation with People’s Republic of China’s Thousand

Talents Program and the Wuhan University of Technology (WUT)

in Wuhan, China. He also failed to report income he received

from WUT.

China’s Thousand Talents Plan is one of the most prominent

Chinese talent recruitment plans designed to attract, recruit,

and cultivate high-level scientific talent in furtherance of

China’s scientific development, economic prosperity, and

national security. Unbeknownst to his employer, Harvard

University, Lieber became a “Strategic Scientist” at WUT and,

later, a contractual participant in China’s Thousand Talents

Plan from 2012 through 2015.

Under the terms of Lieber’s Thousand Talents contract,

WUT paid Lieber a salary of up to $50,000 per month and

living expenses of up to $150,000 and awarded him more

than $1.5 million to establish a research lab at WUT. Lieber

lied to federal authorities about his involvement in the

Thousand Talents Plan and his affiliation with WUT.

Furthermore, Lieber failed to report the income earned

from the Thousand Talents contract and failed to file FBARs

for the foreign accounts used to receive his payments.

MULTI-AGENCY

TASK FORCES WITH CI PRESENCE

AND PARTICIPATION INCLUDE:

► Organized Crime Drug Enforcement

Task Force (OCDETF) - Executive

Office

► OCDETF Regional Coordinators

► Drug Enforcement Administration

Special Operations Division (SOD)

► OCDETF Fusion Center (OFC)

► International Organized Crime

Intelligence and Operations Center

(IOC2)

► Joint Criminal Opioid Darknet

Enforcement (J-CODE)

► National Joint Counterterrorism

Task Force (NJTTF)

► National Counterintelligence

Task Force (NCITF)

► High Intensity Drug

Trafficking Area (HIDTA)

Global Operations Director with N2S2 special agents.

IRS:CI Annual Report 2022

SPECIALIZED UNITS

INTERNATIONAL TAX AND

FINANCIAL CRIMES

The International Tax and Financial Crimes group (ITFC) was

created in late 2017 and is the nation’s foremost investigative

authority on offshore tax evasion. Since its inception, the

ITFC increased compliance and reduced the tax gap through

several well-publicized programs and investigations, including

the Swiss Bank Program and the UBS, Credit Suisse, and

HSBC investigations.

As a specialty group within the Washington, D.C. Field Office,

the ITFC is made up of special agents from across the United

States who are experts in international tax investigations and

use their skills to identify and pursue international evasion

schemes. Internally, ITFC works with CI’s investigative analysts,

foreign-based attachés, personnel from Special Investigative

Techniques and International Operations, while creating a

network of resources that assist in identifying leads, analyzing

data, and performing investigative tasks.

The ITFC leverages strategic partnerships with external

agencies, including the U.S. Attorney’s offices throughout the

country, the Department of Justice Tax Division, and other law

enforcement agencies.

The ITFC is also a major contributor to the Joint Chiefs of Global

Tax Enforcement (J5) and collaborates with the other J5

countries (United Kingdom, Canada, Australia, and Netherlands)

to further CI’s international mission to combat offshore tax

evasion. The ITFC identifies and investigates enablers, financial

institutions, third-party asset managers, promotors, referral

agents, and expatriated U.S. citizens who use international

jurisdictions for tax fraud. The group also ensures compliance

with the Bank Secrecy Act by identifying and investigating U.S.

taxpayers who fail to report their foreign accounts.

SIGNIFICANT CASE

Founder of Russian Bank Sentenced for Felony Tax

Conviction Arising from Scheme to Evade Exit Tax

while Renouncing his U.S. Citizenship

Oleg Tinkov, the founder of a Russian Bank, was sentenced

October 2021 for tax fraud after he renounced his U.S.

citizenship to avoid paying his share of taxes. Tinkov also paid

more than half a billion dollars in the largest personal tax

judgment known. Tinkov was a naturalized U.S. citizen when

he founded Tinkoff Credit Services (TCS) in late 2005 or 2006.

TCS is a Russian-based branchless bank that provides its

customers with online financial and banking services. Through a

foreign entity, Tinkov indirectly held the majority of TCS shares.

In October 2013, TCS held an initial public offering (IPO) on

the London Stock Exchange and became a multi-billion dollar,

publicly traded company. As part of going public, Tinkov sold a

small portion of his majority shareholder stake for more than

$192 million, and his assets following the IPO had a fair market

value of more than $1.1 billion. Three days after the successful

IPO, Tinkov went to the U.S. Embassy in Moscow, Russia to

relinquish his U.S. citizenship. As part of his expatriation,

Tinkov was required to file a U.S. Initial and Annual Expatriation

Statement. The form requires anyone with a net worth of

$2 million or more to report the constructive sale of their assets

worldwide to the IRS as if those assets were sold on the day

before expatriation. Tinkov filled out the expatriation form

himself falsely reporting that his net worth was only $300,000,

and he filed a 2013 tax return that falsely reported his income as

only $205,317. In addition, Tinkov did not report any of the gain

from the constructive sale of his property worth more than

$1.1 billion, nor did he pay the applicable taxes as required by

law. In total, Tinkov caused a tax loss of $248,525,339, which he

paid in full, along with substantial penalties and interest, as part

of his plea. Together with tax liabilities for other years, Tinkov

paid $508,936,184, which is the largest individual payment

tracked by the IRS.

GLOBAL ILLICIT FINANCIAL TEAM

Global Illicit Financial Team (GIFT) is a national task force

led by CI with the focus of investigating organizations illicitly

moving money, which is used to support international crime

organizations. As a major conduit of CI’s money laundering

strategy and a focal point for the CI Money Laundering Cadre,

GIFT’s talented special agents are hand-picked from field offices

for their extensive experiences in investigating complex cases

and for their abilities to lead multi-agency teams. Under the

leadership of a supervisory special agent in the Washington, D.C.

Field Office, GIFT brings a powerhouse of international money

laundering expertise to partnerships with other federal law

enforcement agencies.

contract fraud, the sale of contraband goods, terror financing, and sanctions violations.

With previous large-scale sanctions case experience involving financial institutions,

GIFT became a key partner in the Department of Justice KleptoCapture Task Force.

Since its inception in 2010, GIFT investigations resulted in seizures

and forfeitures of $5.2 billion, fines and penalties on settlements of over

$15 billion, and a conviction rate of over 90%.

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

Reminiscent of Eliot Ness and Elmer Irey’s “T-Men,” CI continues its

partnership with the Alcohol and Tobacco Tax and Trade Bureau (TTB) to

combat illicit alcohol, tobacco, and ammunition trade.

The TTB was created in January 2003, when the Bureau of Alcohol,

Tobacco, Firearms, and Explosives (ATF) was extensively reorganized

under the provisions of the Homeland Security Act of 2002. The

act realigned ATF to the Department of Justice but called for their

tax collection functions to remain with the Department of the

Treasury, thereby creating TTB. In 2009, TTB entered into an

inter-agency agreement with CI to provide special agents to

enforce TTB’s criminal provisions.

Moonshine, counterfeit cigarettes, and export only goods

diverted back into U.S. commerce are all in a day’s work

for this group whose sole focus is combating illicit trade

of tobacco, ammunition, and alcohol. TTB’s special

agents are strategically dispersed across the country.

The group is supervised by a supervisory special

agent, who reports to the Special Agent in Charge

of the Washington D.C. Field Office.

GIFT investigations are inherently complex and are cases

that will make the most impact on international third-party

money laundering. The cases include investigations of illegal

money transfer businesses, professional enablers of money

laundering, money laundering through real estate or investment

products, financial institutions concealing and disguising illegal

transactions, laundering of business email compromise or other

cyber intrusions, public corruption and extortion, government

COMMISSIONER’S PROTECTION DETAIL

The Commissioner’s Protection Detail (CPD) is a specially trained

cadre of CI special agents, who provide personal security and

protection to the IRS Commissioner. Since 1999, this dedicated

team is charged with protecting the Commissioner during

official business operations. CPD provides protection of the

Commissioner within the National Capital Region and while in

travel status, foreign and domestic. As the leader of the IRS,

the Commissioner frequently attends meetings, conferences,

publicized hearings, and speaking engagements in locations,

such as the White House, U.S. Capitol, U.S. Treasury, and other

venues in Washington, D.C., as well as around the globe.

In a typical year, the CPD protects the Commissioner on approxi

mately 500 protective movements, 20 domestic trips, and two to

three international visits.

CPD special agents are trained in protective service operations

with an emphasis on operational planning, motorcade

operations, protective intelligence, and preventing and

responding to attacks. Protective operations are a team effort

and require detailed advanced preparations aimed at identifying

and mitigating potential risks, threats, and vulnerabilities.

Commissioner Charles Rettig and CPD boarding a plane.

The Commissioner’s Protection Detail provides a secure

escort into the Pentagon.

Members of the Commissioner’s Protection Detail.

Commissioner Charles Rettig escorted by CPD.

IRS:CI Annual Report 2022

INTERNATIONAL OPERATIONS

CI has 12 attaché posts strategically stationed in 11 foreign

countries, including Mexico, Canada, Colombia, Panama,

Barbados, China, Germany, the Netherlands, England,

Australia, and the United Arab Emirates. Attachés work

with foreign governments to build partnerships, train law

enforcement counterparts, and investigate financial crimes.

Operations conducts training at the International Academy for

Tax Crime Investigation at the Guardia di Finanza Economic

and Financial Police School in Ostia, Italy. In some cases, host

nations fund the training, but the majority of the time, funding

is sponsored by the Organization for Economic Cooperation and

Development and the U.S. Department of State.

These partnerships give CI the ability to develop leads for

domestic and international investigations with an international

nexus. In addition, attachés provide support and direction for

investigations with international issues, foreign witnesses,

foreign evidence, or execution of sensitive investigative

activities in collaboration with our international partners.

Attachés also help uncover emerging schemes perpetrated by

promoters, professional enablers, and financial institutions.

These entities facilitate tax evasion of federal tax obligations by

U.S. taxpayers, as well as other financial crimes.

Attachés also partner with CI’s International Training Team

(ITT) to deliver trainings to representatives from multiple

countries across the globe. After delivering mostly virtual

trainings in FY 2021 due to the COVID-19 pandemic, the team

was back in action in FY 2022, delivering 20 in-person trainings

in Africa, Asia, the Caribbean, Europe, South America, Central

America, and the Indo-Pacific. In addition to the in-person

events, the team also delivered 10 trainings virtually. These

trainings generated more than 900 international contacts

to leverage support for investigations, and they serve as

a powerful means to amplify the reach of CI attachés and

promote the IRS mission.

Training is a key part of CI’s presence abroad and helps

provide the foreign governments in developing nations with

necessary tools to combat financial crimes. Training foreign

counterparts also serves as a way to build strong relationships

abroad, which results in successful international investigations.

Special agents train foreign governments through collaborative

efforts with the International Law Enforcement Academies

(ILEA) in Budapest, Hungary; Bangkok, Thailand; San Salvador,

El Salvador; and Gaborone, Botswana. In addition, Global

SIGNIFICANT ACCOMPLISHMENTS

Mexico City locates 70 fugitives

During FY 2022, CI’s Mexico City post located 79 fugitives

wanted for financial crimes in the United States. For example,

in January 2022, Thomas Johnson was located in Belize and

extradited to the United States to face court proceedings for

aiding in the preparation and filing of false tax returns. Johnson

prepared and filed false tax returns on behalf of his clients, and

they, in turn, split the large refunds they were not entitled to

with Johnson.

Frankfurt Helps Take Down Dark

Web Marketplace

CI’s Frankfurt post coordinated with the Bundeskriminalamt

(BKA) and CI’s Cyber Crimes Unit special agents to seize

Hydra Market (Hydra), the world’s largest and longest running

darknet marketplace. In April 2022, the attaché helped obtain

a Mutual Legal Assistance Treaty with German authorities to

obtain information on internet protocol (IP) addresses linked

to the marketplace. This resulted in a supplemental request

for assistance to gather information about two additional

IP addresses, and the attaché also ensured that U.S. law

enforcement received a copy of the imaged Hydra server

once the site was seized. The information CI obtained

helped build the criminal case against the main defendant

in this investigation.

Global Operations Establishes International

Liasion and Strategy Unit

Global Operations also established the International Liaison

and Strategy Unit in FY 2022 to ensure a strategic approach to

training and international initiatives.

CI developed public-private partnerships with

domestic and international organizations in

the financial compliance industry, financial

institutions, and the Fintech industry to facilitate

cooperation, deterrence, identification, and

enforcement of international tax evasion and

related financial crimes.

LONDON

For more information and stay updated on J5.

OTTAWA

THE HAGUE

FRANKFURT

Joint Chiefs of Global Tax Enforcement

J5 Website

MEXICO CITY

PANAMA CITY

DUBAI

HONG KONG

BRIDGETOWN

BOGOTA

CANBERRA

SYDNEY

ATTACHÉ

ATTACHÉ (J5)

IRS:CI Annual Report 2022

UNDERCOVER OPERATIONS

CI has a long history of using undercover techniques to

investigate crimes. These techniques are well-documented,

and they play a significant role to bring criminals to justice.

Special Investigative Techniques (SIT) oversees CI’s

undercover activities and reviews, approves, funds, and

trains personnel to carry out undercover operations. Special

agents and leadership teams initiate and manage day-to-day

operations in their respective field offices. CI has a cadre of

active undercover agents that use sophisticated means to

initiate contact with individuals perpetrating tax crimes and to

gain evidence needed to prosecute their crimes. In FY 2022,

agents conducted approximately 401 undercover operations.

SIGINIFICANT CASES

12 Individuals Sentenced for Tax Fraud,

Other Crimes

In May 2022, 12 individuals were sentenced in South

Carolina for employment tax fraud and other crimes related

to hiring unauthorized aliens at seven construction-related

companies. The construction companies used unlicensed

check cashers to facilitate under-the-table payments to

employees, many of whom were unauthorized aliens. The

check cashers also provided certificates of insurance falsely

stating that the employees were covered under workers’

compensation insurance. The defendants cashed at least

$15 million in checks resulting in millions of dollars in losses

to the U.S. government. During the investigation, multiple

CI undercover agents posed as individuals that provided

unlicensed check cashing services for a fee. The defendants

provided the undercover agents with contractor business

checks, and in return, the agents gave the defendants cash,

minus a transaction fee. Various undercover agents embedded

themselves in the Myrtle Beach area and recorded multiple

transactions with the defendants.

Pizza Restaurant Owners Plead Guilty to Evading

Payroll Taxes

In June and July 2022, Ernesto and Giuseppe Cannuscio,

brothers and owners of Mario’s Pizza in Ocean City, New

Jersey, pleaded guilty to conspiracy to evade more than

$200,000 in payroll, personal, and corporate income tax.

They face up to 5 years in prison and/or a fine up to

$250,000 for their crimes.

From 2013 to 2018, the Cannuscio brothers failed to deposit

cash receipts into the business bank accounts and paid

employees cash wages off the books to avoid payroll taxes.

They then failed to tell their accountant about the undeposited

cash receipts they did not deposit into their bank account,

which resulted in the underreporting of gross receipts on their

tax returns. In addition, they failed to tell the accountant about

the cash payroll, which resulted in the Cannuscio brothers

evading employment taxes.

During the investigation, CI undercover agents posed as

potential buyers interested in purchasing Mario’s Pizza. During

the undercover operation, the agents determined that the

Cannuscio brothers kept a second set of books and were

significantly underreporting sales. The books also showed that

the unreported cash was being split between the brothers. The

information obtained during the operation resulted in search

warrants at Mario’s Pizza and both of the brothers’ residences.

from these shelters was about $120 billion by 1985. With the

advent of money laundering laws, undercover agents became

proficient at conducting investigations into the laundered illegal

proceeds of narcotics traffickers. Today, CI uses undercover

operations in investigations of unscrupulous tax return

preparers, offshore tax schemes, money launderers, Dark web

marketplace operators, and those who seek to conceal the

movement of money for illegal purposes, including tax evasion.

HISTORY:

In 1929, Michael Malone successfully infiltrated Al Capone’s

Chicago gang for nearly two years. Because of his work, the

government successfully prosecuted Capone and his top

enforcer, Frank Nitti, for tax crimes. In 1963, the Undercover

Operation (UCO) was centralized into the National Office.

UCO focused on illegal gambling and organized crime, and

most operations lasted longer than one year. In the late 1960s,

CI initiated the Courier Project to corroborate persistent

allegations concerning the movement of casino receipts by

couriers to offshore tax havens. UCO infiltrated organized crime

organizations that used fall guys to operate casinos. In the

late 1970s, the UCO was decentralized. The National Office

retained review, approval, funding, and training authority,

and districts were responsible for the initiation and daily

management of the operations. This organization continues

today. In the 1980s, UCO focused on offshore banking

schemes and illegal tax shelters. The estimated revenue loss

401

Undercover Operations

Special agents conduct surveillance on suspected illegal activities.

IRS:CI Annual Report 2022

DIGITAL FORENSICS

Woman Sentenced for PPP Fraud

Digital Forensics is a function of CI’s Cyber and Forensic

Services section and is the premier digital forensics unit in

federal law enforcement. The Digital Forensics mission is to

support special agents in the collection and analysis of digital

evidence. Since computer, mobile, and digital devices are

found on nearly every enforcement action, the reliance on

Digital Forensics personnel to secure and analyze digital

data has grown. During the last year, CI Special AgentComputer Investigative Specialists (CISs) assisted with over

619 operations, seized 2.97 petabytes of data, and imaged

3,901 computers and other devices. CISs and Forensic

Specialists are certified in forensic examinations and the use of

top-level forensic software, thus establishing proficiency. They

provide valuable testimony in criminal proceedings and are the

voice of the digital evidence.

With the increased use of digital currency in illegal transactions,

the need for seizing digital currencies in investigations has also

increased, and Digital Forensics has risen to the challenge.

During FY 2022 Digital Forensic lab and field staff took

possession of approximately $4 billion of digital currency

pursuant to seizure orders.

Today’s sophisticated schemes to defraud the American

taxpayers demand the analytical ability of financial investigators

to decipher complex financial records. Records of transactions

have moved from paper ledgers to computers to off-site, online

storage. As a result, CI is developing tools and techniques to

follow and find those transactions, wherever they may lead.

Digital Forensics possesses the expertise in computer and

network forensics to forensically seize digital evidence, using

specialized equipment and techniques to preserve digital

evidence and to recover relevant evidence, including data that

may have been encrypted, password protected, or hidden by

other electronic means.

Digital Forensics is beginning the transition to a regional lab

model with 18 sites selected as major hubs for forensic work.

The lab layout will provide a large workspace, storage rooms,

a manager’s office, and a conference room, all with the latest

technology to provide a superior work experience. The first

regional lab opened in the Boston area this year, and the

opening of several more of these regional labs is anticipated

in the coming year.

Digital Forensics current staffing includes seven groups of CISs

who sit in labs located throughout the country. Digital Forensics

also maintains an 11,000-square foot lab and training center in

Northern Virginia. The lab specialists are skilled in various digital

forensic disciplines, such as data recovery, mobile support,

hardware and software testing and deployment,

Key Figures from FY2022

and the planning and delivery of the advanced training

needed to keep the CISs highly skilled and current on technology

and processes.

Digital Forensics is positioned to continue providing world

class digital forensic services to special agents and other law

enforcement stakeholders, while combining CI’s respective

electronic, cyber and technical expertise and talents.

SIGNIFICANT CASES

Florida Man Convicted for Wire, Mail Fraud

In May 2022, Michael DaCorta of Sarasota, Florida was

convicted at trial for conspiracy to commit wire fraud and

mail fraud, money laundering, and filing a false income tax

return. DaCorta faces a penalty of 33 years in prison. DaCorta

worked as the CEO of multiple domestic and international

businesses, where he enticed investors into a foreign exchange

trading opportunity and then used the proceeds to fund his

lavish personal lifestyle. CI and the FBI worked jointly on the

investigation. In April 2019, the FBI executed federal search

warrants at five locations and seized 42 TB of data from

39 images of phones and computers. When preparing for trial,

CI did not receive any digital evidence from the seized data.

Two months before trial, a CIS was assigned to search for

email and files documenting the subject’s extravagant lifestyle.

In approximately one month, the CIS processed 11 images,

consisting of approximately 8 TB of data and triaged the

files into a manageable dataset for the case agent. The most

incriminating files were then used by the prosecution team

during the multi-week trial.

Digital Forensics Key to Lawyer’s Guilty Plea

In June 2022, Mykhaylo Chugay was convicted of conspiracy

to harbor non-resident aliens and induce them to remain in

the country, conspiracy to commit money laundering, and

conspiracy to defraud the IRS. Chugay operated labor-staffing

companies in southern Florida between 2007 and 2021.

Chugay hired illegal employees to provide workforce to the

hospitality industry in the Florida Keys. Chugay did not withhold

employment taxes, did not issue Forms W-2 to the employees,

and did not file quarterly employment tax returns. CI and

HSI worked jointly in the investigation. Digital Forensics

participated in a search warrant and a consent search, and a

CIS was assigned to review the QuickBooks files obtained from

the searches. The CIS used software to crack the passcode for

the files, and the files were ultimately presented at trial to prove

the existence of the employment tax violations. A retired CIS

testified about the records at trial.

In December 2021, Jericca Rosado was sentenced for her

scheme to fraudulently obtain Paycheck Protection Program

(PPP) Small Business Association loans in exchange for a

kickback payment from the PPP loan proceeds. A search

warrant for a cell phone was conducted during the investi

gation. The CIS coordinated the cell phone/computer

extraction with the prosecution team, which consisted of

Assistant United States Attorneys in the Southern District of

Florida, trial attorneys at the Department of Justice, and the

special agents. The CIS also worked directly with Rosado to

obtain Telegram, Whatsapp, and Gmail extracts to assist the

prosecution team in identifying an additional target related

to the scheme. The CIS was praised by the prosecution team

for his involvement in the case.

CIS special agents adapt and use what is available

as a work space.

Attorney Plead Guilty to Obstruction and Wire

Fraud

In June 2022, Michael Avenatti pleaded guilty to wire fraud

and endeavoring to obstruct the administration of the

Internal Revenue Code. During the investigation, multiple

CISs worked with the investigative team to image digital

devices and extract data from cell phones provided by

witnesses. The CISs also assisted with the execution of

search warrants at two residences, a law firm, and a data

center that housed the servers for Avenatti’s law firm.

Multiple digital devices were imaged, including computers,

servers, and mobile phones. A CIS assisted DOJ’s Cyber Lab

to process the forensic images and to load them to Relativity

E-Discovery software for special agents and attorneys to

conduct a privilege review of the digital evidence. The CIS

then rebuilt Avenatti’s law firm’s server network in a virtual

environment to access the specialized database software

containing the client data. The CIS used the program TABS,

which is a software specialized to attorneys’ offices.

Avenatti’s case originally went to trial in July 2021. The

CIS testified for the prosecution and was later called to

testify for the defense. During and after the trial, the CIS

assisted with locating additional digital evidence to address

discovery concerns raised by Avenatti. The trial was

declared a mistrial, and the case was scheduled for a new

trial in July 2022. Avenatti claimed that files on his computer

would prove his innocence. The CIS obtained a copy of a

special billing software to be able to review Avenatti’s billing

records. After teaching himself how to use the program,

the CIS accessed Avenatti’s records in a meeting with the

prosecution and defense attorneys. The CIS showed the

defense team that Avenatti’s defense would not hold up at

trial. Avenatti subsequently entered a guilty plea before the

new trial date.

A CIS special agent

prepares to image

a server.

A CIS special agent

prepares to pull a hard

drive for imaging.

A CIS special agent prepares to document steps

included in imaging.

Map of Digital Forensics

Regional Lab Locations

IRS:CI Annual Report 2022

CENTER FOR SCIENCE AND DESIGN

Since the early 1970s, scientists and technical experts at the

Center for Science and Design (CSD), formerly known as the

National Forensic Laboratory, have reported the results of

forensic testing and technical services to investigators exploring

potential criminal violations and for adjudication of the Internal

Revenue Code and related financial crimes. Results of the

CSD’s work are used by CI special agents or other customers

of the laboratory to analyze elements to provide pivotal

direction in their investigations. The CSD’s work remains

essential to ensuring the efficient processing of crucial evidence

in CI investigations. Often support provided by the CSD does

not end with the delivery of a scientific report or product. This

important work continues with support in judicial proceedings

when required.

The CSD consists of three sections, each offering specific

scientific or technical services. The Trial and Design Services

(TDS) section simplifies complicated cases into succinct,

effective visuals that help show, rather than tell, all the

elements of extremely complex investigations. Although the

services are primarily for special agents preparing for trial, TDS

also creates high-level presentations, investigation summaries,

and other special projects, such as CI branding and marketing

outreach. In 2022, TDS assisted in the creation and launch of

the new CI logo.

The Scientific Services section offers forensic disciplines that

include latent prints (finger and palm print development and

comparison), questioned documents, ink chemistry, and DNA

collection. Due to advances in technology, the CSD has also

offered services for DNA. This section can collect samples

from evidence to be used in identifying subjects related to

the investigation. The CSD has a working relationship with

the FBI’s DNA Unit to assist the lab in extracting a profile

from the samples.

Meanwhile, the newly formed Multimedia and Deception

Detection section provides services such as electronic (audio,

video, and image enhancement), polygraph examination,

and soon-to-be established facial recognition. The Facial

Recognition Unit is in development and when established will

be able to assist special agents with facial images collected

from ATMs, pole-cams, and undercover operations.

A scientist listens for sound cues and adjusts levels to clarify audio for a training case.

When the experts at the CSD are not working on evidence, they

are providing tours and virtual presentations to special agents

and various CI stakeholders at their building in downtown

Chicago. One of the most effective ways to educate others

about the CSD’s capabilities is by demonstrating their state-of

the-art equipment and sharing stories. Thanks to the talented

men and women of the CSD and their dedication to science

and their technical services, as well as the mission of CI, the

customers of the laboratory have come to know and expect

their high-quality work. The successes of their cases speak

for themselves, and nothing is more gratifying to the CSD than

seeing the cases get fully adjudicated. However, it is equally

important to help investigators know when to consider closing

a case. Regardless of the outcome, the CSD scientists and

technical experts continue to strive in their role as servants of

the criminal justice system.

Scientific Services

191

Trial & Design Services

Multimedia &

Deception Detection

A scientist identifies similarities and identification markers on various fingerprints.

IRS:CI Annual Report 2022

ADVANCED ANALYTICS & INNOVATION

Our newest HQ Division, Advanced Analytics & Innovation

(AAI), is moving CI into the future of case selection through

the utilization of data analytics, creation of investigative

data management and governance, and solving employee

challenges through innovative solutions. AAI, through strategic

partnerships with internal IRS business units, such as Large

Business & International, Small Business/Self Employed,

Research Applied Analytics & Statistics, and the Office of Fraud

Enforcement, is streamlining processes and implementing

automation to protect revenue. AAI collaborates with a diverse

group of internal and external professionals, including experts

in academia, government, and industry to improve functions

and processes.

AAI’s dedicated team is united in the goal of “One IRS” and

is comprised of special agents and professional staff with

dynamic skills, including data scientists, mathematicians,

program analysts, investigative analysts, systems experts,

and leaders in process change management. AAI is comprised

of six sections: Applied Analytics (AA), Data Management

and Governance (DMG), Innovation, National Coordinated

Investigations Unit (NCIU), Refund Fraud and Investigative

Support (RFIS), and Systems and Operational Support (SOS).

AAI identifies egregious promoters of criminal activity,

including refund fraud, identity theft, and other abusive

schemes, and isolates significant cases of federal tax evasion,

including employment tax, COVID fraud, and international and

domestic tax evasion. During FY 2022, RFIS provided field

office support in the Questionable Refund Program (QRP), the

Return Preparer Program (RPP), and the Identity Theft (IDT)

Program. RFIS also supported other national programs, such

as the Court Witness Program, Controls and Unpostables

Program, and Electronic Filing (ELF) Suitability Program.

AAI also digitizes records through the Data Processing Center

and supports CI investigations utilizing data analytics. To

improve efficiencies and ensure impartiality, AAI’s talented

staff leverages technology and develops algorithms to filter

large data sets. Using analytics increases CI’s ability to identify

fraud and dedicate resources to the most impactful investi

gations that result in criminal prosecution.

AAI has experts who analyze business statistics to support

data-driven decisions made by CI leaders. The experts

validate data to ensure integrity and proper system

functionality. AAI partners with Return Integrity and

Compliance Services to improve IRS filters that detect and stop

refund and identity theft early in the filing process. AAI further

supports the tax enforcement effort by sharing knowledge of

increased data analytic capabilities through training sessions

and collaboration across CI.

AAI is guiding CI into the future of investigative data

management and governance which will ensure tax information

is both usable and safeguarded. This is essential to reduce the

tax gap as criminals continue to evolve in sophistication, and

the criminals’ use of social media allows for rapid advertising of

fraud schemes and criminal collaboration.

CI assures the American public that criminals are held

accountable, citizens are paying their fair share of taxes, and

resources are dedicated to the most impactful criminal investi

gations. This serves the public interest and deters would-be

criminals. AAI strives to make CI the most innovative law

enforcement agency in the world while fulfilling our mission to

foster compliance and confidence in the tax system.

2022 AAI HIGHLIGHTS

► In FY 2022, the Data Processing

Center processed approximately

2,101,762 documents despite

challenges related to COVID.

► In FY 2022, RFIS supported

525 QRP and 862 RPP schemes,

with 254 of the schemes having

an IDT element.

► AAI’s Innovation section supported

at least 105 support requests for

efficiency challenges in FY 2022.

For example, in one case, the use

of automation reduced an expected

6-month process to 2 weeks.

► RFIS also provided support to

138 trials, placed 96,744 controls,

addressed 33,471 unpostables

on individual and business tax

modules, and received and

researched 3,913 Electronic Filing

Identification Number applications

to assist IRS in determining the

suitability of an individual into

the program.

► In FY 2022, NCIU made

172 investigative referrals to

CI field offices.

A special agent presents the organizational structure and function of Advanced Analytics and Innovation.

IRS:CI Annual Report 2022

NATIONAL CRIMINAL INVESTIGATION TRAINING ACADEMY

CI special agents are sworn federal law enforcement

officers throughout all 50 states and U.S. territories,

including special agent attachés located in 11 countries.

Special agents begin their training at the National Criminal

Investigation Training Academy (NCITA), which is located

at the Federal Law Enforcement Training Center (FLETC) in

Brunswick, Georgia.

New special agents first attend and complete FLETC’s

Criminal Investigator Training Program (CITP), which

provides, on an interagency basis, a program of instruction

that fulfills all the basic criminal investigative training

requirements necessary for responsible and competent

job performance. Rather than being agency-specific, the

program addresses common knowledge, skills, and

abilities that are expected of all investigators. In today’s

changing world, criminal investigators are faced with a

variety of situations that, in addition to traditional law

enforcement skills, require an awareness of and expertise

in human behavior, modern technology, cultural sensitivity,

law, and other interdisciplinary approaches to effective

law enforcement.

Special Agent Investigative Techniques (SAIT) is CI specific

training, which begins immediately after students graduate

from CITP. During SAIT, the students work together to

investigate three cases and to complete investigative

steps just as they would in the field. These steps include

interviewing, gathering evidence, writing of interviews and

reports, applying various methods of proof, and making

recommendations for prosecution.

NCITA also plays a vital role in assisting and providing

advanced training to special agents in areas such as use of

force, firearms instruction, defensive tactics, and building

entry. NCITA assists in developing continuing professional

education courses for special agents and professional

staff, which focus on emerging trends and issues within

the law enforcement environment. A comprehensive and

progressive formal training program is essential to effective

performance as a criminal investigator and provides

assurance that new practitioners are fully equipped to

meet the rigorous demands of the environment in which

they will operate.

NCITA is committed to continual improvement of new agent

training through modernization and building a student

curriculum that is updated on a real time basis. CI continues

to revamp its case study videos, to automate its case activity

documents, and to create tax lessons that assure new

special agents will meet and exceed all the complex and

challenging tasks of contemporary law enforcement.

A day in class

Commissioner Charles Rettig was the keynote speaker at

the graduation for SABT 2204 on April 25, 2022. Commis

sioner Rettig had the opportunity to tour FLETC Glynco’s

facilities, including the driving range, Danis City, the Physical

Techniques Division, and the firearms training facilities.

During his visit, Commissioner Rettig addressed the CI

special agents currently in training and attended a social

with the students after the training day concluded.

Matroom

NCITA Training Cycle

Firearms training

ASSET RECOVERY AND INVESTIGATIVE SERVICES

Asset Recovery and Investigative Services uses forfeiture

authority as an investigative tool to disrupt and dismantle

criminal enterprises. The program deprives criminals of

property used in, or acquired through, illegal activities. Seized

assets are routed to the Treasury Forfeiture Fund (TFF), which

the Treasury Executive Office for Asset Forfeiture manages.

Forfeited funds are returned to identified victims of criminal

activity and are also used to reimburse law enforcement

agencies for expenses like enhanced training, equipment,

and costs associated with conducting significant investigations.

In addition, the TFF shares a portion of forfeited funds with

federal, state, and local law enforcement agencies. As of

September 30, 2022, CI seized assets valued at approximately

$7.1 billion and forfeited approximately $1.1 billion in

ill-gotten proceeds. In addition, approximately $32.5 million

were refunded as part of CI’s asset recovery efforts.

$7.1B

Seized Assets

$1.1B

SIGNIFICANT FORFEITURES

► Three San Diego money managers – Richard M. Owen,

Jeffrey Morrow and James Warren – laundered money from

a number of illicit sources, including a Mexican cartel, and

fraudulently documented the activity as gold transactions

through their business, Global Gold Exchange LLC. Owen,

Morrow, and Warren admitted that the company operated

as an informal money transmitter that facilitated money

transfers both domestically and internationally and outside

conventional financial institutions. They directed their

clients to lie to law enforcement and tax officials and asked

their clients to mail packages filled with heavy substances

to mirror the weight of gold. The trio agreed to forfeit

approximately $2 million in assets, including currency

and financial accounts, as well as various gold bars,

nuggets, and coins they acquired by laundering money

and conducting unlicensed money transmitting services

through Global Gold Exchange LLC.

► The March 2020 Coronavirus Aid, Relief, and Economic

Security (CARES) Act was designed to provide emergency

financial assistance to businesses suffering as a result of

the COVID-19 pandemic. Unfortunately, fraudsters like

Don Cisternino tried to capitalize on CARES Act funds for

personal gain. In May 2020, Cisternino obtained a

$7.2 million loan for a non-existent movie production

company he claimed had 441 employees and a payroll of

more than $2.8 million. Instead, he used approximately

$3.5 million to purchase a luxury home with seven

bedrooms, 11 bathrooms, a four-car garage, a theater

room, a resort-style pool and spa, tennis courts, and a

horse barn. The home was located on more than

12 acres of land. In FY 2022, the lavish residence

was civilly forfeited and sold for $4 million.

► The Black Market Bolivar Exchange (BMBE), with its genesis

in Venezuela, is a money laundering system that parallels

the Black Market Peso Exchange (BMPE). Operation

Seaducks exposed a BMBE in southern Florida and

throughout the United States, whereby many Venezuelan

nationals with ties to the Venezuelan government and

drug trafficking organizations (DTOs) were able to access

an unlimited supply of U.S. dollars (USD) at favorable,

albeit grossly inflated, currency exchange rates. One of the

primary “clients” of these currency speculators benefiting

from the BMBE were DTOs based in Colombia, Venezuela,

and elsewhere.

Mohannad Ilbih Ilbih, who had numerous companies

registered with CADIVI, the Venezuelan government entity

delegated with the administration of the country’s legal

currency exchange, was a leader in a south Florida

DTO. Ilbih Ilbih directed co-conspirators’ to use nominee

accounts and entities to arrange multiple cash

pick-ups throughout the U.S. and to send approximately

$6 million in wire transfers of illegal, narcotics-derived cash

proceeds throughout the world. Significant proceeds from

Ilbih Ilbih money laundering fraud scheme were utilized

to purchase two homes, one in Davie, Florida and one in

Sunrise, Florida. Both homes were forfeited and sold for

$2,365,000 and $500,500, respectively.

Ill-Gotten Proceeds

Forfeited

$32.5M

Refunded

 Seizure and forfeitures figures are based on values

at date of asset seizure.

OFFICE OF COMMUNICATION

The Office of Communication is charged with building

awareness about CI and the work the agency does. The

office uses a variety of tools to communicate to both internal

and external audiences and oversees the agency’s participation

in outreach events. The office strives to weave deterrence

messaging into its products and events, signaling to criminals

that they will be held accountable for their actions. Doing so

builds confidence in our nation’s tax system and helps foster

compliance with the Internal Revenue Code and related

financial laws.

In FY 2022, the Office of Communication continued growing its

social media accounts on Twitter and LinkedIn, nearly tripling

its number of followers from the previous fiscal year. More than

16,000 accounts follow CI on social media, resulting in more

than one million views per quarter. Hot topics from FY 2022

included special agent hiring, cryptocurrency, and national

security. Additionally, CI also manages the LinkedIn account

for the Joint Chiefs of Global Tax Enforcement (J5) who work

together to combat global financial crimes.

The Office of Communication houses two legislative liaisons

who serve as conduits for communicating information to

and from Capitol Hill. These special agents assist with

hearing preparation for senior-level officials and provide

Congressional briefings. Congressional liaisons provide

data and trend information on criminal investigations

and formulate official responses to requests from

House and Senate members and their staff, as well

as oversight committees.

The office has implemented a powerful communi

cations strategy that includes outreach to the

public, federal and legislative communities,

the financial sector, IRS employees, and CI’s

global partners. Education and awareness

serve as foundations to many organizations,

and the Office of Communication’s efforts

serve as a central part of CI.

In FY 2023, the agency plans to add additional social media

accounts for field offices. This will enable field offices to

highlight significant cases and communicate key information

directly to the communities they serve.

@IRS_CI

IRS Criminal Investigation

Joint Chiefs of Global Tax Enforcement

IRS:CI

PROFESSIONAL STAFF AND WORKFORCE DEVELOPMENT

During FY 2022, CI continued its commitment to the growing

numbers of its professional staff with the creation and instal

lation of Professional Staff Advocates (PSAs). Located within

Strategy and part of its Workforce Development arm, the PSAs

were hired to bring advocacy and voice to all professional staff

across CI. This effort was integral to promote unity, opportunity,

and cohesiveness to the professional staff during the ongoing

COVID-19 pandemic.

CI currently employs a robust workforce that works alongside

the special agents. With more than 900 professional staff

employees, nearly one-third of CI’s workforce exists to provide

support, guidance, and aid in accomplishing CI’s mission of

deterrence and compliance. Generally, these roles fall into three

separate categories: investigative, administrative, and technical

staff. Professional Staff are on the front lines of case work and

behind the scenes of every CI activity.

These dedicated employees continued to provide excellent

case, administrative, and technical support in uncertain times

and less than ideal situations. CI employed innovative remote

hiring techniques, which involved bringing people onboard

in a completely virtual environment. The newly hired profes

sional staff did not have the opportunity for immediate face

to face training. CI addressed the remote training obstacle by

successfully developing virtual and peer-led training initiatives.

The PSAs and the professional staff community have provided

interactive on-line instruction related to specific investi

gative, technical, and administrative job functions. Workforce

Development (WD) seeks to develop employees over the

long term to providing them with the skills necessary to meet

the challenges of the future. WD continues to support skills

development at all stages of an employee’s career lifecycle to

enhance engagement and opportunity for special agents and

professional staff. WD partners with HR and EDI to recruit and

retain a talented and diverse workforce. During FY 2022, WD

created and published a Retention Plan so that employees can

easily access resources meant to keep them balanced, engaged,

and satisfied in their careers. Career pathing helps employees

consider future opportunities within the agency. CI furthered

its commitments to its workforce by having professional staff

participate in Frontline Leadership Training Programs and

Frontline Leadership Readiness Programs.

CI created, developed, and deployed innovative techniques

to provide resources for professional staff to identify career

opportunities and tools necessary to help them thrive as they

advance in their careers. WD facilitates an ongoing series on

leadership, management, and self-development. Hundreds

of employees utilized Zoom sessions facilitated by experts

in career and personal development. Leadership aims to

keep these programs running well into the future as they are

key to ensuring mental health, professional growth, and

job satisfaction. Furthermore, these sessions foster an

environment of inclusion and the sharing of best practices

amongst all personnel.

Investigative Support

Major investments in professional staff have positively

impacted CI’s ability to accomplish its law enforcement

mission and will continue to do so for many years to come.

Administrative Support

938

Professional Staff

support Investigative,

Administrative, and

Technical roles

Technical Support

EQUITY, DIVERSITY,AND INCLUSION OFFICE

The mission of the Equity, Diversity, and Inclusion Office (EDI) is to identify, examine, and

address the organization’s employment practices, policies, and procedures to ensure that all

employees achieve equal opportunity. Equity is the main element that is needed to ensure that

processes and programs are impartial, fair and provide equal possible outcomes for every

individual. EDI’s goal is to create and sustain a diverse, equitable, and inclusive environment

that respects and accommodates every employees’ background including race/ethnicity,

sexual orientation, gender identity, and other protected statuses that make us all unique.

Achieving an inclusive environment creates an equitable workplace and promotes a positive

employee experience. Therefore, in FY 2022, EDI reinstated EEO’s Special Emphasis

Program that raised more awareness of national observances and other significant programs

that encouraged broad awareness and engagement of underrepresented populations.

Information sessions designed to address and promote diversity and work-life balance included

Understanding Depression; LGBTQ Awareness for Managers; Coping with Unexpected Grief;

Managing Stress. Multiple mental and physical health awareness sessions were conducted

through EAP.

This year, EDI facilitated the development of a new course, entitled Inclusive

Leadership. The training was designed for the Senior Leadership Training

Program participants and senior managers within field offices. The

curriculum focuses on the areas of cultural competency, emotional

intelligence, diversity, inclusion, and engagement throughout all

management levels. EDI is collaborating with the newly formed

Mental Health Awareness Program team. The goal is to increase

awareness around mental health wellness and to provide options

for support throughout the CI community. EDI also delivered

multiple training and work-life sessions, covering topics such

as managing workplace conflict, disability awareness and

reasonable accommodation, emotional intelligence, prevention

of harassment; mental health awareness,managing stress

during the pandemic, and provided agency guidance

pertaining to religious accommodation procedures for

vaccination exemptions.

OUTREACH AND COMMUNITY ENGAGEMENT

CI offices throughout the country participate in community

events such as National Night Out and the Law Enforcement

Torch Run for Special Olympics. National Night Out is

an annual community-building event that promotes law

enforcement-community partnerships and neighborhood

camaraderie to make our neighborhoods safer and more

caring places to live. National Night Out also enhances

the relationship between neighbors and law enforcement,

while bringing back a true sense of community. The Law

Enforcement Torch Run for Special Olympics is a campaign

to benefit the Special Olympics. It began in 1981, in

Wichita, Kansas, and is the largest grass-roots fundraising

movement for the Special Olympics. Since inception, the

Law Enforcement Torch Run has raised more than half a

billion dollars and changed millions of attitudes by engaging

law enforcement officers worldwide to be champions of

acceptance and inclusion.

Special agents from

the Newark Field Office

participated in an

elementary school 2022

career day. The agents

shared their personal

journeys, which led them

on the path to choosing a career as a special agent with

CI. The agents’ enthusiasm and passion for their careers

encouraged the students to strive and thrive as future leaders

of their community and inspired them to keep working on their

education through the pandemic.

Through the help

of Native American

Community Services

of Erie and Niagara

Counties, Inc. (NACS),

special agents and

support staff of the

Buffalo, New York POD adopted and provided gifts for

five deserving families in the Western New York

community, in an effort to spread holiday cheer. The group

participated in gift-wrapping festivities prior to attending

their holiday luncheon.

Special agents of the

Miami Field Office

engaged more than

250 middle school

students at a middle

school in Davie, Florida.

The focus of their

presentation was on what it is like to be a special agent

in CI. The students were very engaged with the presentation

and asked lots of questions. Perhaps around 2030, we will

see some new special agents joining our ranks. The daughter

of one of CI’s special agents attended the presentation and is

pictured with her classmates.

CI SPECIAL AGENTS DEPLOY TO ASSIST

WITH DISASTER RECOVERY EFFORTS

CI Special Agents not only investigate a multitude of financial crimes, but they also

provide assistance to state and local agencies during or after catastrophic events.

The Federal Emergency Management Agency (FEMA) designated 14 Emergency

Management Functions (EMFs) to assist in disaster recovery efforts which range

from transportation to external affairs. CI helps maintain ESF #13 by providing

public safety and security assistance.

In July 2022, 15 CI special agents supporting ESF #13 deployed to Hazard,

Kentucky, for 12 days to provide security for first responders, the operations

base and the FEMA staffing center after catastrophic flooding there.

The team worked 15+ hour days on protection details, ensuring the safe

completion of recovery efforts.

About 140 CI special agents, supervisory special agents and analysts

have volunteered to support ESF #13. Whenever, there’s a federally

declared disaster, EMF participants can volunteer to deploy for the

mission. Previous deployments include: hurricane recovery efforts

after hurricanes Dorian, Ira, and Florence; perimeter security and

relocation of sick guests after a COVID-19 outbreak on a cruise

ship; and security for search and rescue efforts following the

Oregon wildfires.

Special agents from the

Oakland Field Office

spent their evening at San

Francisco State Univer

sity’s Meet the Firms

hosted by Beta Alpha Psi

(Beta Chi Chapter). It was

an astonishing turnout and a refreshing experience to attend

an in-person career fair again. Agents were able to engage in

more personable conversations with students about CI and

their own our career paths.

FIELD OFFICE MAP

Click on a location to go to that Field Office section.

NORTHERN AREA

WESTERN AREA

SEATTLE

CHICAGO

BOSTON

DETROIT

NEWARK

Guam

CINCINNATI

DENVER

NEW YORK

PHILADELPHIA

ST. LOUIS

OAKLAND

WASHINGTON DC

LOS ANGELES

PHOENIX

CHARLOTTE

DALLAS

ATLANTA

Puerto Rico

HOUSTON

TAMPA

U.S. Virgin Islands

MIAMI

SOUTHERN AREA

IRS:CI Annual Report 2022

ATLANTA

401 W. Peachtree St. NW

Atlanta, GA 30308

(470) 639-2228

AtlantaFieldOffice@ci.irs.gov

ALABAMA

Huntsville | Mobile | Montgomery | Birmingham

GEORGIA

Atlanta | Augusta | Columbus | Decatur

Macon | Savannah

LOUISIANA

Baton Rouge | Lafayette

New Orleans | Shreveport

MISSISSIPPI

Gulfport | Hattiesburg | Jackson | Oxford

The ATLANTA FIELD OFFICE encompasses

four states: Georgia, Louisiana, Mississippi, and

Alabama. The territory includes Atlanta and New

Orleans, two of the most popular destinations in

the southeast, which are known for their vibrant

culture, outstanding cuisine, and world-renowned

chefs. The field office is also home to some of the

best beaches along the Gulf Coast in Mississippi

and Alabama. The Atlanta Field Office offers

meaningful investigative work in many areas, such

as corporate fraud, political corruption, OCEDTF,

counterintelligence and terrorism funding, and

QRP/RPP. The field office is continually building

and strengthening its relationships with our law

enforcement partners, the U.S. Attorney’s Office,

and the public in an effort to identify, investigate,

and refer quality cases for prosecution.

Former City of Atlanta

Director of Human Services

Sentenced to 14 Years in

Prison for Bribery Scheme

September 8, 2022—former City of Atlanta

Director of Human Services, Mitzi Bickers,

was sentenced to 14 years in prison and

3 years of supervised release. Bickers was

also ordered to pay restitution of nearly

$3 million to the City of Atlanta. Bickers was

previously found guilty of conspiracy to commit

bribery, wire fraud, money laundering, and filing a

false tax return. Bickers utilized the illegally obtain

bribery funds to purchase a lake home, a GMC Acadia

Denali, and jet skis, which Bickers ultimately forfeited

to the government.

Special agents participated in the Atlanta

“Tough Mudder”, which raises money for the

Wounded Warrior Project.

A special agent and supervisory special agent participated in the inaugural FBI Atlanta

Counterintelligence Task Force.

Former Georgia Insurance Commissioner

Sentenced to 7 Years in Prison for Tax Fraud

October 13, 2021—Jim Beck, the former General Manager

of the Georgia Underwriting Association, was sentenced to

over 7 years in prison and 3 years of supervised release and

was ordered to pay restitution of $2,619,000 and forfeiture of

over $426,000, two pieces of real property, and a $2,064,781.85

personal forfeiture money judgment. Beck was previously found

guilty of four counts of tax fraud for filing false federal income tax

returns for 2014 through 2018. Beck devised a scheme to steal

more than $2.5 million from the state-created insurance company,

Georgia Underwriting Association. Beck managed the company

prior to taking office as the insurance commissioner.

Former Muscogee County Deputy Clerk

of Court Sentenced to 12 Years in Prison

for Historic Multi-Million Dollar Fraud Case

June 2, 2022— Willie Demps, was sentenced to over 12 years

in prison and 5 years of supervised release and was ordered

to pay $1,323,045 in restitution to Muscogee County Clerk

of Court’s and $359,604 in restitution to the IRS. Demps

the former deputy clerk for Muscogee County Clerk’s Office,

was the ringleader of a massive lengthy scheme to drain the

Muscogee County Clerk of Courts’ coffers of millions of dollars.

Willie Demps, worked for the Muscogee County clerk’s office

for about 30 years, where he supervised monetary deposits

received by the clerk’s office. While in this role, Demps wrote

checks from the clerk’s office payable to various codefendants

in the case. The codefendants would then cash the checks and

return the money to Demps, who allegedly gave the participants

in the scheme a portion of the money.

A special agent meets with students at an Alabama A&M career fair.

Georgia Man Sentenced to More Than

19 Years in Prison for Filing False Returns

July 14, 2022—Marquet Mattox, was sentenced to over 19 years

in prison and 3 years of supervised release. Mattox was also

ordered to pay restitution of $3.2 million to the IRS. Mattox was

previously convicted by a federal grand jury on August 18, 2022,

of wire fraud, false claims, and theft of government funds. From

2016 to 2018, Mattox filed more than 30 fraudulent federal

income tax returns with the IRS in the names of 12 different

trusts. On those returns, Mattox falsely reported that the trusts

had withheld large amounts of taxes on purported interest

income, thereby entitling the trust to refunds. In total, Mattox

claimed approximately $165 million in refunds on behalf of

the purported trusts. The IRS paid $5 million of the requested

refunds. Mattox used those funds to purchase a new house, a

luxury automobile, and other personal expenses.

Computer Consultant Sentenced to More

Than 6 Years in Prison for Access Device Fraud

March 14, 2022— Kevin Kirton, was sentenced to over 6 ½

years in prison and 3 years of supervised release. Kirton was

also ordered to pay restitution of $629,551 to the IRS. Kirton

previously pleaded guilty to access device fraud and aggravated

identity theft. Kevin Kirton created a computer program to

file fraudulent federal income tax returns with the IRS. The

computer program stored stolen identities and could be used to

submit fraudulent tax returns in the names of stolen identities

to the IRS, effectively automating stolen identity tax refund

fraud. The computer program could be accessed remotely via

Special agents volunteered a day of service

to the Community Food Bank of

Central Alabama.

the internet to prepare fraudulent tax returns. The resulting

fraudulent tax refunds were deposited onto prepaid debit cards

in the names of identity theft victims. To help conceal the fraud

activity, Kirton developed techniques to hide Internet Protocol

addresses so the IRS could not trace a fraudulent tax return

back to one particular origination point. Kirton also set up a

bootleg phone system that he believed would not be susceptible

to wiretaps to communicate with other criminals.

ER Doctor Sentenced to More Than

Two Years in Prison for Tax Evasion

June 7, 2022—Dr. Kevin L. Crandell was sentenced to almost 3

years in prison and ordered to pay restitution to the IRS totaling

$972,493, resulting from a conviction involving a scheme to

evade the payment of his personal income taxes. Crandell

was an emergency room doctor from Golden, Mississippi,

who earned approximately $30,000 to $40,000 per month.

He ceased paying personal income taxes in 2007. Crandell

committed multiple affirmative acts of evasion, which included

making false statements to an IRS revenue officer, creating

a nominee entity that he utilized to collect and conceal his

income from the IRS, and filing a false Collection Information

Statement, Form 433-A, which omitted his receipt of income

and ownership of significant assets. During the trial, the IRS

special agent and revenue officer testified and introduced

evidence to ensure that Crandell was held accountable for the

full extent of his criminal conduct.

IRS:CI Annual Report 2022

BOSTON

15 New Sudbury Street

Boston, MA 02203

(617) 316-2080

BostonFieldOffice@ci.irs.gov

CONNECTICUT

Bridgeport | Hartford | New Haven | Norwalk

MAINE

South Portland

MASSACHUSETTS

Boston | Springfield | Woburn | Worcester

NEW HAMPSHIRE

Manchester | Portsmouth

RHODE ISLAND

Warwick

VERMONT

Burlington

The BOSTON FIELD OFFICE covers the six New

England states: Massachusetts, Connecticut, Rhode

Island, New Hampshire, Vermont, and Maine; each

with their own judicial districts. New England is

home to some of the greatest sports franchises,

a long coastline of beautiful beaches, and several

of the oldest and most renowned colleges and

universities in the country. Boston Field Office’s

relationship with the U.S. Attorney’s Office and our

law enforcement partners is one of the best in the

country. Boston Field Office special agents are vital

members of several task forces, including Organized

Crime Drug Enforcement Task Force (OCDETF),

Joint Terrorism Task Force (JTTF), cybercrimes,

securities fraud, and health care fraud.

Former CFO of Boston

Grand Prix Sentenced to

4 Years in Prison for Fraud

and Tax Schemes That

Netted Almost $2 Million

February 15, 2022—John F. Casey was

sentenced to 4 years in prison and 3 years

of supervised release. Casey was also ordered

to pay $1,998,097 in restitution and ordered

to forfeit $1,570,399. Casey became the CFO

of the Boston Grand Prix in January 2015. The

Boston Grand Prix organization made payments

to, or on behalf of, Casey totaling approximately

$308,292 in 2015 and $601,073 in 2016, which

Casey failed to include in the gross income he claimed

on his personal tax returns for those years. In addition,

between March 2020 and May 2021, Casey orchestrated

a scheme to fraudulently obtain Economic Injury Disaster

Loans and Paycheck Protection Program loans. Casey

subsequently used the fraudulently obtained funds to pay

personal expenses, including the purchase of a three-carat

diamond ring, an online dating membership, private school

tuition, and luxury hotel stays.

Third Strike for Rhode Island

Businessman Sentenced to Prison

for Employment Tax Fraud Scheme

April 28, 2022—Steven M. Allard, owner and operator of

BR Steel Corporation in Burrillville, RI and Greystone Iron

Corporation in Smithfield, RI, was sentenced to almost 3

years in prison and 3 years of supervised release. He was

also ordered to pay $625,186 in restitution to the IRS. Allard

previously admitted in court that from at least 2017 through

2018, he failed to turn over to the IRS more than $570,000 in

federal employment taxes and FICA payments withheld from his

employees. Instead, Allard used the money to pay for personal

expenditures, including the purchase of more than $216,000 in

“credits” to an online dating website, RussianBrides.com, and

$93,000 in rent payments for a luxury home in Scituate. This

case marks the third federal conviction and sentencing of Allard

in U.S. District Court in Rhode Island.

Australian Tech Entrepreneur Sentenced to

More Than 8 Years in Prison for Defrauding

Mobile Phone Users of More Than $40 Million

June 28, 2022—Eugeni Tsvetnenko, of Australia, was sentenced

to over 8 years in prison and was ordered to pay $15.4 million

dollars in forfeiture, which he repaid. Tsvetnenko pleaded guilty

for his role in a consumer fraud scheme to charge mobile phone

customers millions of dollars in monthly fees for unsolicited,

recurring text messages about such topics as horoscopes,

celebrity gossip, and trivia facts, without the customers’

knowledge or consent, a practice referred to as “auto-sub

scribing.” The consumers who received the unsolicited text

messages typically ignored or deleted the messages, often

A brand - new special agent is sworn in by a senior

special agent and his on -the -job instructor.

Special agents provide security at the Annual

Boston Marathon Road Race.

Special Agent in Charge participates in a press conference announcing the indictments of

several individuals involved in a large drug trafficking and money laundering operation.

believing them to be spam. Tsvetnenko and his co-conspirators

distributed the proceeds of the fraud scheme among them

selves, and others involved in the scheme by causing funds to

be transferred through the bank accounts of a series of shell

companies and companies held in the names of third parties.

Vermont Business Owner Sentenced

to Prison for Executing a Multi-Step Plan

to Evade Employment Taxes

August 1, 2022—Blakely H. Jenkins, Sr., was sentenced to one

year and one day in prison for evading taxes and committing

identity theft while running his St. Johnsbury-based painting

business, Blake Jenkins Painting, Inc. In total, Jenkins’ company

failed to report over $1.3 million in employee wages, resulting

in over $340,000 in unpaid federal taxes. Jenkins evaded

employment taxes from the middle of 2015 to the middle of

2020 by paying his employees “off the books” wages, either

in cash or in checks falsely denoted as being for non-wage

purposes. Jenkins took a number of steps to execute this plan,

including falsifying records, creating bogus documents, and

signing another person’s name without permission.

Massachusetts Tax Return Preparer

Sentenced to 5 Years in Prison for

COVID-19 and Tax Fraud Schemes

Gearing up for an enforcement operation.

May 12, 2022—Roosevelt Fernandez, was sentenced to 5 years

in prison and 3 years of supervised release. Fernandez was also

ordered to pay $198,402 in restitution and forfeiture. In as early

as 2018, Fernandez, a tax preparer, operated a Salem-based tax

preparation business called, Soluciones Multi Service. Through

his business, Fernandez used personal identifying information of

certain taxpayers to prepare and file fraudulent federal and state

tax returns on their behalf without their knowledge. A number of

these returns included fraudulent Forms W-2 purportedly issued

by employers for whom the named taxpayer did not work. In

addition, Fernandez applied for and received multiple fraudulent

payments authorized under the Coronavirus Aid, Relief, and

Economic Security Act (CARES Act)

Connecticut Attorney Sentenced

to 2 Years in Prison for Tax Offenses

July 28, 2022—Deron Freeman, of Glastonbury, was sentenced

to 2 years in prison, followed by one year of supervised release,

for tax fraud offenses. Freeman was also ordered to pay

$357,062 in restitution to the IRS and fined $15,000. Freeman,

an attorney specializing in the areas of personal injury and

criminal law, owned and operated The Law Offices of Deron

Freeman in Hartford. Between 2006 and 2010, Freeman failed

to pay his overdue tax balance, despite multiple notices of

delinquent taxes and the imposition of payment and interest by

the IRS. In 2011, soon after Freeman entered into a payment

plan with the IRS, he began using a bank account in the name

of a third party to hold hundreds of thousands of dollars in an

attempt to protect the funds from IRS scrutiny. The evidence

at trial revealed that between 2012 and 2016, Freeman spent

lavishly on cars, watercraft, and approximately $1.5 million in

expenses related to the construction of a new home.

IRS:CI Annual Report 2022

CHARLOTTE

10715 David Taylor Drive

Charlotte, NC 28262

(705) 548-4241

CharlotteFieldOffice@ci.irs.gov

NORTH CAROLINA

Charlotte | Greensboro | Raleigh | Wilmington

SOUTH CAROLINA

Charleston | Columbia

Greenville | Myrtle Beach

TENNESSEE

Chattanooga | Johnson City

Knoxville | Nashville

The CHARLOTTE FIELD OFFICE covers three

states, spanning from the Great Smoky Mountains

of North Carolina and the music filled state of

Tennessee to the beaches of South Carolina. The

field office covers seven judicial districts and

has excellent partnerships both internally and

externally. The field office works a diverse mix

of cases throughout the three states, including

general tax fraud, employment tax fraud,

healthcare fraud, refund fraud, terrorist financing,

public corruption, and Organized Crime Drug

Enforcement Task Force (OCDETF).

North Carolina Surgeon

and Wife Sentenced to

Prison for Tax Crimes

January 28, 2022–Dr. James and Susan

Rice were both sentenced to 5 years in

prison and 3 years of probation and were

ordered to pay $2.4 million in restitution.

Rice was an orthopedic surgeon and sole

owner of Sandhills Orthopedic & Spine Clinic,

and his wife had authority over the business’s

Special agents volunteer to help build a house.

administrative operations. Between 2007 and

2016, the Rices withheld employment taxes from

their employees but failed to pay over $580,000 in

withheld taxes to the IRS. Instead, over $1 million

of business funds were used to pay for their personal

luxuries, transferred into their personal accounts

and business bank accounts of other entities under

their control, and used to support Susan Rice’s truffle

cultivation business. The Rices also directed employees to

deposit patient co-payments directly into their personal bank

accounts. Finally, the Rices failed to file individual income tax

returns and corporate income tax returns from 2014 to 2016.

Bookkeeper sentenced to prison for $1.5M theft

from Charleston real estate company

April 4, 2022–Karen Rhett, of Charleston, South Carolina was

sentenced to 3 years in prison and 2 years of supervised

release and was ordered to pay $1.5 Million in restitution.

Rhett was a longtime bookkeeper for a Charleston based real

estate company. While working as the bookkeeper Rhett stole

at least $1.5 Million dollars from the family-run business.

The 59-year-old woman committed the thefts using secret,

password-protected ledgers and fabricated invoices, federal

authorities said. She stole company checks, padded her

own salary and moved ill-gotten money through the bank

accounts of affiliated businesses to hide its origins. David

Simmons, president of the company, said Rhett was stealing

from the company even as his father was dying of cancer. The

family’s accounting showed Rhett stole more than $2.5 million

beginning in 1996, family attorney Bart Daniel said. The govern

ment’s figure of $1.5 million only accounted for money stolen

after 2012, the attorney said. Rhett pleaded guilty following an

investigation by the IRS and the FBI.

New Bern Woman Sentenced to More Than 13

Years After Drug and Tax Conviction Investigation

February 17, 2022–Antoinette Charmane Becton of Wilmington,

North Carolina, was sentenced to more than 13 ½ years in

prison for conspiracy to distribute and to possess with intent

to distribute 50 grams or more of a mixture and substance

containing a detectable amount of methamphetamine, and

conspiracy to defraud the United States. Becton was also

ordered to pay $222,461 in restitution to the IRS. In addition

Special agents support a suicide awareness walk.

Special agents conduct training.

to the drug activity, Becton owned and operated Carolina Tax

Solutions, a tax return preparation business in New Bern and

Kinston, North Carolina. Becton and her employees filed false

tax returns with intended losses of more than $1 million. From

2014 to 2018, Becton and others knowingly prepared false tax

returns for clients by falsifying W-2 income, W-2 withholdings,

and credits. Becton was paid through fees deducted from the

refund checks, and she received cash kickbacks of approximately

$1,000 to $1,500 after the client cashed the refund check.

Cocaine Trafficker and Money Launderer

Operating Across the Carolinas is Sentenced

to 30 Years in Federal Prison

April 7, 2022–Jared Shemaiah Jones, the leader of a drug

and money laundering organization operating across the

Carolinas, was sentenced to 30 years in prison and 5 years of

supervised release for conspiracy to distribute and to possess

with intent to distribute cocaine, money laundering conspiracy,

and possession with intent to distribute cocaine. Seven other

co-conspirators have been sentenced to between 2 and 7 years

in prison, while another is awaiting sentencing and another

is a fugitive. Between 2014 and September 2020, the drug

conspiracy trafficked approximately 1,000 kilograms of cocaine

from California into North Carolina and South Carolina and

laundered the criminal proceeds. During the investigation, law

enforcement seized 30 kilograms of cocaine, one kilogram of

heroin, and approximately $500,000 in cash.

COVID fraud investigations make the news.

Chapel Hill Man Sentenced to More Than

10 Years Imprisonment for an Elder Fraud

Home Repair Scheme

January 24, 2022–Jorge Alberto Garcia, of Raleigh, North

Carolina, was sentenced to over 10 years in prison and 3 years

of supervised release for conspiracy to commit wire fraud and

willfully failing to file a tax return. Garcia was also ordered to

pay $4,043,398 in restitution. From around September 2015

to April 2020, Garcia approached elderly, retired individuals

at their private residences in Durham, Orange, and Chatham

Counties, offering home improvement services using the

business names “J&J Home Improvement” and “JH Home

Improvements, Inc.” Many of these victims had physical or

mental infirmities. Garcia, who never had a state general

contractor’s license, offered to perform home improvement

projects, and these elderly individuals paid him prior to the

completion of any construction work. The victims made

payments by personal checks, credit cards, or withdrawals from

investment accounts. Garcia often directed these individuals

to leave the “to” line of the check blank, and he later added the

name of his wife to the check. Other times, Garcia directed the

individuals to issue the check directly to his wife. Garcia’s wife

then deposited the checks into personal accounts in her name

or that of her business, La Cacerola. Garcia’s wife then withdrew

the money in cash and/or issued a cashier’s check made out to

Garcia. Garcia and his wife also took the checks to the elderly

individual’s bank or their bank and cashed the checks without

depositing the funds into their bank accounts.

IRS:CI Annual Report 2022

CHICAGO

230 S Dearborn St.

Chicago, IL 60604

(312) 292-4500

ChicagoFieldOffice@ci.irs.gov

INDIANA

Carmel | Evansville | Fort Wayne

Indianapolis | Merrillville | South Bend

ILLINOIS

Chicago | Downers Grove | Matteson

Orland Park | Rockford | Schiller Park

Springfield

MINNESOTA

Duluth | St. Paul | Rochester

WISCONSIN

Eau Claire | Green Bay | Madison | Milwaukee

Anchoring the Mid-West, the CHICAGO FIELD

OFFICE covers several major cities and areas,

dotting the coastline of Lakes Michigan, Superior,

and the Mississippi River. The Chicago Field

Office has 20 posts of duty with over 165 special

agents and professional staff across an area

of responsibility across Minnesota, Wisconsin,

Indiana, and most of Illinois. Second to none, the

Chicago Field Office tackles tax fraud as its top

priority and investigates a wide array of financial

crimes, including money laundering from narcotics

trafficking and COVID-19 fraud. Chicago’s special

agents also work with their law enforcement

partners to lend their financial investigative

expertise to task forces, including HIDTA, OCDETF,

JTTF, cybercrimes, and political corruption. Serving

over 235,000 square miles, the office is consistently

building on and bolstering its relationships with

other law enforcement partners, the U.S. Attorney’s

Office, and the public to identify, investigate, and

refer quality cases for prosecution.

Former Brookfield Business

Owner Sentenced to Federal

Prison for Tax Offense

May 27, 2022–Kimberly Zulkowski

was sentenced to 15 months in prison

followed by 3 years of supervised release

for her willful failure to account for and pay

over taxes owed to the IRS. Zulkowski was

also ordered to pay $731,970 in restitution.

Zulkowski founded and managed Faith Family

Services, Inc., a personal care business based

in Brookfield, Wisconsin. Her business was

successful, with gross annual receipts exceeding

$5 million and over 150 employees. Despite that

success, Zulkowski refused to pay over taxes she

withheld from her employees’ wages as part of her

company’s payroll tax obligations. Court records reveal

that although the IRS had warned Zulkowski in 2015 that

she was violating the federal tax laws, she nevertheless

persisted in her criminal conduct for nearly two more years.

Mexican Posse Gang Members Sentenced

to Federal Prison for Narcotics Trafficking

August 21, 2022–Louis Perez III was sentenced to 21 years

in prison and 5 years of supervised release after pleading

guilty to conspiracy to distribute, possession with intent to

distribute controlled substances, and possession of firearms,

in furtherance of a drug trafficking crime. Perez III’s conviction

and sentence stem from his leadership of a violent, nationwide

drug trafficking organization that obtained multi-kilogram

quantities of cocaine, heroin, and marijuana for distribution

in the Milwaukee area. Perez III, also known as “Eight Ball,”

often obtained controlled substances from California and

shipped drug proceeds through the U.S. Postal Service to

co-conspirators in California. As a result of the investigation,

law enforcement officers seized approximately 45 firearms,

8.6 kilograms of cocaine, 700 grams of heroin, 4.4 kilograms of

marijuana, 4,500 kilograms of marijuana oils, 21.9 kilograms of

filled marijuana vape cartridges, and $170,000 in U.S. currency.

Minnesota Man Sentenced to More

Than 2 Years in Prison for Tax Evasion

October 8, 2021–Daniel Berglund was sentenced to over 2

years in prison followed by 3 years of supervised release,

and he was ordered to pay $336,040.45 in restitution for tax

evasion after failing to file income tax returns since 1997.

Berglund was previously convicted by a federal jury on four

counts of tax evasion. Berglund was the owner and sole

employee of Faith Software (FAITH), where he worked as a

computer language instructor. Despite earning a substantial

annual income through FAITH, Berglund did not file any

individual income tax returns since 1997, and he did not file

any corporate tax returns on behalf of FAITH. Berglund took

numerous steps to hide his income from the IRS, including

giving his clients a fabricated tax identification number to

A special agent learns the proper use of a weapon during range training.

Special Agent in Charge gives a statement

during the joint agency news conference to

announce the indictment of Former Illinois

Speaker of the House Michael Madigan.

Participating in the US Marshalls Fallen Heroes Honor Run in Chicago

on March 11, 2022, CI was well represented by special agents.

prevent their payments from being reported to the

IRS as income attributable to him, depositing clients’

payments into accounts where the funds would not be

traceable to him, and converting his income into silver that

he stashed in concealed locations in his home.

Grandparent Scammer Gets Federal Sentence

August 23, 2022–Jasaun Pope was sentenced to 8 years in

prison for mail fraud and money laundering related to his role in

a nationwide elder fraud scheme. Pope and four co-conspirators

have all signed plea agreements for their roles in the offense, and

Pope is the first to be sentenced. Unidentified members of the

conspiracy made scam telephone calls to elderly victims in Indiana

and nationwide claiming that their grandchild or other relative had

an urgent legal or medical problem and needed money immediately.

The caller, who often claimed to be an attorney, police officer,

or other authority figure, told the victims to send an overnight

delivery of cash to help the purported relative in need—typically

between $5,000 and $15,000—to a delivery address used by the

conspirators. Pope’s crew traveled to cities around the country to

identify unoccupied residences to use as cash delivery addresses.

They relayed the delivery addresses to Pope, who provided them

to other members of the conspiracy. Pope’s crew then traveled

to the delivery addresses to retrieve the cash sent by the elderly

victims, and the conspirators divided the criminal proceeds amongst

themselves. To date, investigators have identified over 68 suspected

victims of the defendants’ scheme and identified losses amounting

to over $683,464.

Supervisory special agents attend Chicago’s Hellenic Community

Fair to support recruiting efforts.

Leader of Massive Sports Gambling

Ring Sentenced to 18 Months

March 9, 2022–Vincent Delgiudice was sentenced to 1 ½ years

in prison for conducting an illegal sports gambling business

and laundering the proceeds, and he was ordered to forfeit

proceeds of $3.6 million. Delgiudice pleaded guilty last year to

conspiracy and gambling charges. Delgiudice, also known as

“Uncle Mick,” conducted, managed, supervised, and directed

a multi-million dollar illegal gambling business based in the

greater Chicago area. Delgiudice accepted wagers from approx

imately 1,000 gamblers on the outcome of sporting events,

including major league baseball, college and professional

basketball, college and professional football, and other profes

sional and amateur sporting events. To maintain the illegal

betting website, Delgiudice cashed at least 12 cashier’s checks

totaling at least $113,625 and express mailed them via Federal

Express from Orland Park, Illinois to Costa Rica.

IRS:CI Annual Report 2022

CINCINNATI

550 Main St.

Cincinnati, OH 45202

(513) 975-6343

CincinnatiFieldOffice@ci.irs.gov

KENTUCKY

Bowling Green | Florence

Lexington | Louisville

OHIO

Akron | Canton | Cincinnati | Cleveland

Columbus | Dayton | Independence | Toledo

CINCINNATI FIELD OFFICE comprises of the

states of Ohio and Kentucky, which contains

two federal judicial districts in each state.

The Cincinnati field office works closely with

our federal, state, and local law enforcement

partners to investigate and prosecute tax,

money laundering, and related financial crimes

that affect the southern and northern judicial

districts of the “Buckeye State” and the eastern

and western judicial districts of the “Bluegrass

State.” Our special agents and professional

staff provide unparalleled financial expertise to

lead investigations against the most egregious

white-collar criminals. In concert with the U.S.

Attorney’s office as well as our civil and law

enforcement partners, our investigations have

a significant impact on regional and national

enforcement priorities that include income tax

evasion, questionable tax refund/return preparer

fraud, COVID -19 relief fraud, public corruption,

cybercrimes, and narcotics related crimes.

Kentucky Man Sentenced

to 35 Years in Prison on

Drug and Money Laundering

Conspiracy Charges

July 18, 2022–William R. Hargis was

sentenced to 35 years in prison for

conspiracy to distribute and possession

with intent to distribute 52.5 pounds of crystal

meth, possession of firearms in furtherance

of drug trafficking, and conspiracy to commit

money laundering. Hargis was a drug supplier

and was storing, packaging, and cutting narcotics

in a Lexington office building. In that office, law

enforcement found more than 50 pounds of metham

phetamine, four firearms, cocaine, and additional

drug trafficking items. Hargis traveled from Kentucky

to casinos in Southern Indiana to place monetary bets

to conceal the source of the bets, which was in whole or

part drug proceeds.

Two Men Sentenced in Massive

COVID-19 Relief Fraud Scheme

May 6, 2022–James Stote was sentenced to 10 years in

prison, and Phillip Augustin was sentenced to 6 ½ years in

prison related to Paycheck Protection Program (PPP) fraud.

Augustin and Stote obtained fraudulent PPP loans for Augustin’s

company and others using falsified documents. Augustin used

his network of business contacts as a manager for professional

football players to recruit loan applicants. The applications

they submitted for these loans relied on fake payroll numbers,

falsified IRS forms, and phony bank statements. Stote

submitted or facilitated at least 79 fraudulent loan applications

worth at least $35 million. Among those loans, Augustin was

also held responsible for at least 34 fraudulent loan applications

worth at least $15 million.

Middletown Man Sentenced

to Prison for Tax Evasion

April 4, 2022–David Fraley was sentenced to 2 ½ years in prison

and ordered to pay $725,107 in restitution to the IRS, after

pleading guilty to tax evasion. In an effort to evade the payment

of his taxes, Fraley initially told his contractor not to issue any

income in his name but to issue the income in his business

name. When the IRS levied his business bank account, Fraley

stopped making deposits into his business bank account and

started making deposits into his brother’s bank account.

Non-Profit CEO Sentenced

to 4 years in Prison for Tax Fraud

November 16, 2021–Barry Isaacs was sentenced to 4 years

in prison and ordered to pay $360,025 in restitution to the IRS

for willful failure to account for and pay over employment taxes

and aggravated identity theft. Isaacs was the founder, owner,

Special agents in Louisville assist with recovery

efforts in the wake of Kentucky tornados.

Special Agent in Charge sits down with

WLWT in Cincinnati to discuss COVID

relief fraud schemes.

A special agent executes a search warrant

in southwestern Ohio.

CEO, and president of Hope 4 Change, a Cincinnati

non-profit that provided housing and care for adults

with developmental disabilities, drug addiction problems,

and mental disorders. Isaacs withheld payroll taxes but

failed to pay the taxes over to the IRS. Isaacs caused

Hope 4 Change to spend thousands of dollars for clothing,

massages, beauty care, travel, and personal vehicles for

himself and his family.

Former Cleveland City Councilman

Sentenced to 6 Years in Prison for Federal

Program Theft, Tax Violations, Witness

Tampering, and Falsifying Records

October 8, 2021–former City of Cleveland Councilman Kenneth

Johnson was sentenced to 6 years in prison and ordered to pay

$746,839 in restitution to the IRS and the U.S. Department of

Housing and Urban Development. Johnson was found guilty by

a jury of conspiracy to commit federal program theft, federal

program theft, aiding and assisting in the preparation of false

tax returns, tampering with a witness, and falsification of

records in a federal investigation. Garnell Jamison was also

sentenced to 5 years in prison following his conviction of

conspiracy to commit federal program theft, federal program

theft, aiding and assisting in the preparation of false tax

returns, tampering with a witness, and falsification of records

in a federal investigation. From January 2010 through October

2018, Johnson and Jamison devised a scheme to induce the

City of Cleveland to issue reimbursement checks to Johnson for

Ward 4 services that were never actually performed.

Special agents in Northern Ohio participate in a National Night

Out event in Cleveland, Ohio.

Elkhorn City Attorney Sentenced to 41 Months

for Bank Fraud and Filing False Tax Returns

November 9, 2021–Timothy Belcher was sentenced to almost

3 ½ years in prison and ordered to pay $817,000 in restitution

after pleading guilty to bank fraud and filing a false tax return.

Belcher, a licensed attorney practicing in Pike County, agreed

to represent a client and her minor daughter in a wrongful

death lawsuit. In 2004, a settlement was reached in the

lawsuit, where half of the settlement would be distributed to

the victim and the other half would be distributed among the

three children. The funds were placed into an escrow account

for the children. From July 2012 to December 2018, Belcher

transferred money from that escrow account to his law practice

and used those funds for his personal and business expenses.

Belcher knowingly failed to report the money he embezzled

from the settlement account on his tax return.

IRS:CI Annual Report 2022

DALLAS

1100 Commerce

Dallas, TX 75242

(214) 413-5929

DallasFieldOffice@ci.irs.gov

ARKANSAS

Fayetteville | Fort Smith | Little Rock

OKLAHOMA

Muskogee | Oklahoma City | Tulsa

TEXAS

Amarillo | Beaumont | Dallas | Farmers Branch

Fort Worth | Irving | Lubbock | Tyler

THE DALLAS FIELD OFFICE covers a broad

geographic area that includes the Northern and

Eastern Texas, and the entire states of Oklahoma

and Arkansas. Serving seven judicial districts in

the “Lone Star State”, the “Sooner State”, and the

“Natural State”, the Dallas Field Office is comprised

of a group of hard-working special agents and

professional staff who investigate an array of

complex and impactful cases, including tax fraud,

general fraud, cybercrimes, identity theft, public

and political corruption, narcotics, and terrorism

investigations. The Dallas Field Office has excellent

working relationships with the U.S. Attorney’s

Office and our other law enforcement partners. Our

special agents are essential members of several

priority task forces, including the Organized Crime

and Drug Enforcement Task Force (OCDETF), the

High Intensity Drug Trafficking Area Task Force

(HIDTA), the Financial Crimes Task Force (FCTF)

and the Joint Terrorism Task Force (JTTF).

Two Arkansas Men

Sentenced to Over 23

Years Combined in Prison

for Wind Farm Fraud &

Money Laundering Scheme

March 8, 2022–Jody Douglas Davis was

sentenced to 15 years in prison and Phillip

Vincent Ridings was sentenced to over 8 years

in prison relating to charges of wire fraud, aiding

and abetting wire fraud, money laundering,

Special agents plan their next move.

A professional staff member answers a call.

and aiding and abetting money laundering in

connection with a scheme to defraud investors in

the development of a wind turbine a proposed wind

farm project. Both defendants were also sentenced

to 3 years supervised release and ordered to pay

restitution of $1,138,845. Davis and Ridings developed

a scheme where they stole large sums of money from

innocent investors. They formed limited liability companies

in Texas, called Dragonfly Industries International, LLC and

Arkansas Wind Power, LLC, to develop what they told investors

was a revolutionary wind turbine design that was to be installed

on a 311-acre wind farm proposed for construction in Elm

Springs, Arkansas. Investors were told that their money would be

A special agent coordinates

A special agent gives an IVLP presentation.

search warrant staging.

used to build a prototype of the wind turbine and to develop wind

farms. However, the wind turbine was never operational, and the

wind farm was never constructed. Instead, Davis and Ridings used

companies. Maczka and Jordan failed to disclose to the public

69 years, combined, in prison for conspiring to participate

most the money obtained from investors for their personal use.

that they had coordinated to affect the zoning changes Jordan

in a racketeering enterprise that committed acts of murder,

wanted and that Jordan had provided a stream of benefits to

kidnapping, the trafficking of methamphetamine and

Maczka. Maczka and Jordan were married after the federal

firearms,

money

laundering,

assault,

and

robbery

throughout

Oklahoma Man Sentenced to 7 Years

investigation began.

Oklahoma.

The

UAB

white

supremacist

prison-based

gang

in Prison for Defrauding Investor and Banks

with

members

operating

inside

and

outside

state

prisons

June 1, 2022–Brian Mulder, of Tulsa, was sentenced to

throughout Oklahoma.

7 years in prison and ordered to pay $8.4 million in restitution.

Mulder misrepresented himself as worth millions to friends

Oklahoma Office Manager Sent to

and convinced them to pool their investments with his fortune

Prison for Tax Evasion and Swindling

to grow their money faster. However, Mulder did not make

Former North Texas Mayor and Land

Broken Arrow Business of $2.7 Million

any investments on their behalf. Instead, Mulder deposited

Developer Husband Sentenced to Combined

Melissa Raye Dihel, of Okmulgee, Oklahoma, was sentenced to

checks into his personal bank accounts and used the funds

almost 4 years in prison and 3 years of supervised release for

12 Years in Prison for Public Corruption

to pay off credit card debts and to run a coffee shop chain. To

tax evasion and mail fraud. She was ordered to pay $2,722,332

August 4, 2022–Laura Jordan (aka Laura Maczka), the former

cover his tracks, Mulder created a web of convoluted rules and

in restitution to her former employer and $775,971 in restitution

Mayor of Richardson, Texas, and her husband, Mark Jordan, a

restrictions to keep the victims from seeing the progress of

to the IRS. Dihel was an office manager, who embezzled

land developer, were each sentenced to 6 years in prison for

their investments. He also moved money between more than

more the $2.7 million from her employer. She began stealing

their public corruption scheme. Maczka and Mark Jordan, both

60 bank accounts to make it difficult for the investors and law

from her employer less than two years after pleading guilty to

of Plano, Texas, conspired and executed a scheme to commit

enforcement to follow the trail of money.

embezzling from another business. Dihel took advantage of her

bribery. Contrary to her campaign promises, Maczka supported

trusted position as an office manager and forged the president’s

and repeatedly voted for controversial zoning changes sought

signature on approximately 334 checks for her own benefit and

by Jordan, ultimately allowing for the construction of over

to the detriment of the company. Dihel further manipulated

1,000

new

apartments

Richardson.

exchange,

Jordan

paid

Four Gang Members Sentenced to

accounting entries in her employer’s books and records to

Maczka

over

$18,000

cash

and

$40,000

check,

and

Over 69 Years in Prison Combined

cover her tracks. Dihel spent most of the money on gambling.

paid

for

over

$24,000

renovations

Maczka’s

home.

Jordan

In April 2022–four Universal Aryan Brotherhood (UAB) gang

Additionally, Dihel did not report the illegal income to the IRS.

also paid for luxury hotel stays and airfare upgrades for Maczka

members, Christopher K. Baldwin, Robert W. Zeidler, Charles

and provided Maczka lucrative employment at one of Jordan’s

M. McCully, and Eddie Funkhouser, were sentenced to over

IRS:CI Annual Report 2022

DENVER

1999 Broadway

Denver, CO 80202

DenverFieldOffice@ci.irs.gov

COLORADO

Colorado Springs | Denver | Durango

Fort Collins | Grand Junction | Westminster

IDAHO

Boise | Coeur D’alene

MONTANA

Billings | Helena | Missoula

WYOMING

Cheyenne

THE DENVER FIELD OFFICE covers a vast and

diverse area encompassing approximately 432,500

square miles that includes the states of Colorado,

Idaho, Montana, and Wyoming. Our special agents

are based in twelve cities throughout the region

and specialize in investigating sophisticated

financial crimes involving evading federal income

or payroll taxes, money laundering, and COVID -19

relief scams. Denver Field Office special agents

focus on financial crimes in our region and lead

investigations all over the world. When other

law enforcement agencies identify any financial

aspect of an investigation, they rely on our agents’

unmatched financial investigative expertise to

present the most thorough investigation possible

to federal prosecutors. These investigations often

involve the Organized Crime Drug Enforcement

Task Forces (OCDETF) and lead to dismantling

drug operations by disrupting the flow of money

throughout the organization. Denver’s team also

includes our professional staff who provide critical

support to our investigations.

Colorado Man Found Guilty

of Submitting Multiple

Fraudulent COVID-19

Relief Applications

August 12, 2022–Russell Foreman

of Aurora, Colorado was sentenced to

5 ½ years in prison and ordered to pay

$367,000 in restitution for money laundering

and wire fraud. Over six months in 2020,

Foreman submitted several fraudulent Economic

Injury Disaster Loan (EIDL) and Paycheck

Protection Program (PPP) loan applications. As

a result of these fraudulent applications, Foreman

received $216,552 in illicit funds. Foreman was also

convicted of aiding and abetting a co-defendant who

received $150,000 based off the information contained

in a false EIDL application.

Bozeman Woman Convicted of Failing to Pay

Over $2.8 Million in Federal Employment Taxes

August 10, 2022–Melissa Horner was sentenced to 2 ½ years

in prison and to pay $2,878,522 in restitution for failing to pay

employment taxes for her business. For approximately five years,

Horner, a small business owner, withheld payroll and FICA taxes

from her employees’ paychecks and used the funds for her benefit

instead of paying them over to the IRS. Horner also willfully failed

to file quarterly federal tax returns, knowing she was required to

do so. Horner used the money she obtained for personal expenses,

including more than $100,000 on motorsports vehicles, $90,000

to a real estate title company, $50,000 on home renovations, and

$20,000 for a motor home.

‘Ring-leader’ Sentenced to 14 Years in Prison on

Drug Trafficking and Money Laundering Charges

July 15, 2022–Omar Briceno-Quijano was sentenced to

14 years in prison after his conviction of conspiracy to distribute

methamphetamine and heroin and conspiracy to commit money

laundering. Between January 1, 2019 and December 18, 2019,

Briceno-Quijano was involved in sending illegal narcotics from

Mexico to the western slope region of Colorado. Once the drugs

were in the United States, Briceno-Quijano received drug orders

and dispatched couriers to deliver the drugs to the customers.

This conviction was a result of an Organized Crime Drug

Enforcement Task Force (OCDETF) investigation.

A special agent educates high school students on the different job opportunities CI provides

during a career fair at Helena High School in Montana.

A special agent conducts a sit- down

interview with an accounting professor from

the Colorado State University Accounting

Department.

Special agents pose for a group photo following a training event in Helena, Montana.

Prostitution and Money

Laundering Operation Leads

to Federal Prison Sentence

May 17, 2022–Dannie Carr of Boise, Idaho was sentenced

to over 6 years in prison for transporting women for prosti

tution and for money laundering. Over a two-year period,

Carr engaged in the interstate prostitution of two women

primarily throughout six states in the western United States. Carr

laundered between $250,000 and $550,000 of illicit proceeds

from his operation and concealed the nature and source of the

income from the IRS. Additionally, he failed to file tax returns for

the 2018 through 2020 tax years.

Fake Spy Sentenced for Defrauding Investor

in Scheme to Fund Fake CIA Missions

March 3, 2022–Matthew Marshall of Whitefish, Montana was

sentenced to 6 years in prison and 3 years of supervised release

for wire fraud, money laundering, and tax evasion. Marshall was

also ordered to pay $2,355,000 in restitution to the victim and

$899,327 to the IRS. Marshall defrauded a Montana investor

of $2.3 million by falsely claiming to be a former Force Recon

Marine and CIA operative who needed funds to run fake rescue

missions in foreign countries. As part of the scheme, Marshall

forwarded the victim fake text messages, allegedly from a

former CIA officer and others, lauding the success of the fake

rescue missions.

Special agents conduct firearms training.

Wyoming Revenue Suppression

Software Scheme Uncovered

August 16, 2022–Jin Chen Liang was sentenced to 5 years

of probation and ordered to pay $700,000 in restitution to the

State of Wyoming and the IRS for his role in a conspiracy to

defraud the government. Liang developed, sold, and installed

software that enabled multiple restaurants in Wyoming to

conceal cash sales and underreport the amount of state and

federal income tax owed. Liang sold the software to restaurants

in five cities throughout Wyoming, resulting in a total amount

of $2 million in underreported income. Four restaurant owners

involved in the scheme were also convicted of wire fraud and

conspiracy and paid over $1.8 million in restitution to the State

of Wyoming and the IRS.

IRS:CI Annual Report 2022

DETROIT

985 Michigan Avenue

Detroit, MI 48226

DetroitFieldOffice@ci.irs.gov

MICHIGAN

Ann Arbor | Detroit | East Lansing | Flint

Grand Rapids | Pontiac | Traverse City

THE DETROIT FIELD OFFICE area of

responsibility encompasses the state of

Michigan and it’s two judicial districts. The state

of Michigan is surrounded by the Great Lakes,

which are the largest surface freshwater system

on the Earth. With Michigan’s diverse cultures

and proximity to the Canadian international border,

Detroit CI special agents are involved in a variety

of criminal investigations including traditional

tax, corporate fraud, COVID -19 fraud, and money

laundering. To address the various priorities

affecting Michigan, agents are embedded on

a variety of task forces with our law enforcement

partners, such as the Joint Terrorism Task

Force (JTTF), Public Corruption, and Organized

Crime Drug Enforcement Task Force (OCDETF),

among others.

Grand Blanc Man

and Flint Woman

Sentenced in Fraudulent

Investment Scheme

October 8, 2021–Larry Holley, a former

pastor, was sentenced to over 8 years in

prison and restitution of $8,858,591 for

his role in a multi-year Ponzi scheme that

defrauded more than 140 individuals from

multiple states out of nearly $9.3 million dollars.

Holley promised high guaranteed returns and

the safe return of an investor’s entire principal

at the end of the investment period. However, the

money was not invested and did not earn the profits

to pay the guaranteed interest payments. Instead,

Holley deposited the victim investor funds into bank

accounts he controlled and then used the money for his

personal benefit.

Special agents and an investigative analyst volunteered at Gleaner’s Food Bank.

State Contractor Sentenced in

$3 Million Unemployment Fraud Scheme

October 28, 2021–Brandi Hawkins was sentenced to almost

5 years in prison and restitution of $3,793,186 after having pleaded

guilty for her role in a multi-million dollar unemployment insurance

fraud scheme. Hawkins’s scheme defrauded the State of Michigan

and the U.S. government of funds earmarked for unemployment

assistance during the COVID-19 pandemic. Hawkins entered

numerous false claims, totaling over $12 million, into the State

of Michigan’s Unemployment Insurance Agency system, many of

which were filed using stolen identities.

Former Macomb County Prosecutor Eric Smith

Sentenced to Prison for Obstruction of Justice

February 16, 2022–former Macomb County Michigan

Prosecutor Eric Smith, was sentenced to almost 2 years in

prison and ordered to pay a $20,000 fine after having pleaded

guilty to obstruction of justice. Between 2012 and 2020, Smith

conducted two fraud schemes to steal approximately $75,000

in cash from his political campaign fund to use for his personal

expenses. When he became aware of a federal grand jury

investigation in 2019, Smith pressured three witnesses to lie

and commit perjury on his behalf to federal authorities and a

federal grand jury.

Three Defendants Sentenced

for Illegal Bitcoin Business

February 28, 2022–Christopher Allan Boden, Daniel Reynold

DeJager, and Leesa Beth Vogt, of Grand Rapids, Michigan, were

Investigative analysts conducting inventory

on site during a search warrant.

Special agents provided recruitment outreach to over 230 Northern

Michigan University students.

sentenced for the commission of various financial

crimes, including operating an unlicensed money

transmitting business, money laundering, structuring

deposits to evade financial institution reporting

requirements, and conspiracy. Boden was sentenced to

2 ½ years in prison and was ordered to pay $75,000 and

forfeit bitcoin, among other penalties. DeJager received

10 months in prison for his role in the scheme and was ordered

to pay $25,000. Vogt was sentenced to 4 years of probation and

ordered to pay $62,711 to the government. In total, the defendants

forfeited and were ordered to pay more than $200,000 in bitcoin

and U.S. currency.

Cadillac Businessman Sent

to Prison for Tax Evasion

April 11, 2022–Douglas Horning was sentenced to almost

2 years in prison and 3 years of supervised release and was

ordered to pay $977,983 in restitution for tax evasion. Horning

concealed business income by routing it through a second

company, even after that company was dissolved by the State of

Michigan, and failed to disclose the company’s bank account to

the IRS when required to do so. Horning also did not include that

income on the Forms W-2 he issued to himself. Horning further

received unreported income by paying personal expenses using

business bank accounts.

Sheriff task force officer was officially sworn in as a member of

one of CI’s financial crimes task force.

Real Estate Consultant Sentenced

for Tax Crimes in Kickback Scheme

July 21, 2022–Steven Mills was sentenced to 1 ½ years in

prison and ordered to pay $297,858 in restitution for filing false

tax returns with the IRS that omitted more than $800,000 in

income. Mills was retained by a corporation to supervise several

outside real estate agents hired by the corporation. The outside

real estate agents were paid substantial commissions by the

corporation. From 2012 to 2015, Mills demanded and received

approximately $577,000 in kickbacks from one of these agents,

and he not report the funds as income on his tax returns.

Mills also did not report all the income he received from the

corporation, nor did he report $100,000 of compensation he

received from a real estate developer for the years 2013 to 2015.

IRS:CI Annual Report 2022

HOUSTON

8701 S. Gessner

Houston, TX 77074

(281) 721-8390

HoustonFieldOffice@ci.irs.gov

TEXAS

Austin | Brownsville | Corpus Christi

El Paso | Houston | Laredo | McAllen

San Antonio | Waco

Midland Businessman

Evades $12.7 Million in

Taxes, Gets 24 Months

in Prison

August 9, 2022–Thomas Valdez Rodriguez,

of Midland, Texas, was sentenced to

2 years in prison and was ordered to pay

over $12.7 million in restitution to the IRS

for failing to pay personal income taxes and

employment taxes for his two companies,

Tom-E-Lee Trucking and Tom-E-Lee Industries.

Instead of remitting the withheld taxes to the IRS,

Rodriguez paid for personal expenses, such as

Dallas Cowboy season tickets on the 50-yard line,

chartered flights to the games, and the purchase of a

$2 million residence.

Special agents meet with students during a career fair

at the University of Texas Rio Grande Valley.

A Special Agent in Charge holds an onsite press conference

during a court- ordered operation.

Conspirators in Prison, Massive Restitution

for Health Care Fraud

The boundaries of THE HOUSTON FIELD OFFICE

includes some of Texas’ most bountiful treasures:

NASA’s Johnson Space Center, the iconic Alamo,

the state capitol in Austin, the southwestern

living of El Paso, and the gulf coast beaches. The

Houston Field Office also encompasses unique

and culturally diverse locations, including the Rio

Grande Valley along the Mexican border, the coast

of Corpus Christi, the Central Texas hub of Waco,

and the oil producing communities in the Permian

Basin. The sprawling urban area and ports add to

the complexity of work in the field office, which is

rich with Fortune 500 headquarters and has the

largest concentration of healthcare and research

institutions. The Houston Field Office is among

the leaders in complex federal investigations with

national and international impact and is one of

the most successful when it comes to stopping

criminal financial activities. The field office

participates in federal task forces, including South

Texas money laundering, Joint Terrorism Task

Force, Organized Crime Drug Enforcement Task

Force, high intensity drug trafficking areas, public

corruption, human trafficking, paycheck protection

program, and healthcare fraud. Partnerships with

the U.S. Attorneys’ Offices in the Western and

Southern districts of Texas are critical, as well

as the interagency work done with other federal,

state, and local law enforcement agencies.

June 21, 2022–Fausat Adekunle of Houston was sentenced to

12 years in prison for his role in a health care fraud conspiracy

with two other individuals, including Oluyemisi Amos. The

conspirators defrauded both Medicare and Medicaid through

several home health care companies they started or purchased in

the Houston area. They then used the businesses to bill the federal

government for services not provided or claims not properly filed.

Proceeds from the fraud were used to purchase a Land Rover

luxury SUV and several properties, including one property worth

over $3.3 million. On August 4, 2022, Amos was sentenced to

6 years in prison for his role in the conspiracy. Adekunle and Amos

were also ordered to pay $21,197,440 in restitution to Medicare.

Former School Superintendent

Learning His Fraud Lesson in Prison

December 1, 2021–Richard Rose of Missouri City, Texas,

was sentenced to 3 years in prison and was ordered to pay

$335,439 in restitution for conspiracy to commit mail fraud.

Rose was the founding superintendent of the Zoe Learning

Academy Charter School. Rose used his position as the CEO

and chief financial officer to falsify governance reports to obtain

funding for the school, but he then used the money for personal

expenses, including legal fees, a lawsuit settlement, and the

purchase of a timeshare.

Iranian Fugitive Rests Legs in Prison After

Running a Scheme to Launder Drug Money

February 9, 2022–fugitive Mohsen Mohammadi-Mohammadi, of

Iran, was sentenced to 3 ½ years in prison for his conviction of

conspiracy to commit money laundering in a scheme known as

a black-market peso exchange (BMPE). Mohammadi was also

ordered to the forfeiture of $177,345. He obtained proceeds from

the sale of illegal drugs in the U.S. and transferred the funds to

Special agents hold a pre - operational meeting.

Special agent participates in an interview with Radio 1560AM to discuss CI’s mission,

investigative priorities, and avoiding identity theft and unscrupulous tax preparers.

Mexico using a BMPE, a form of trade-based money laundering.

The monies were laundered through commodities businesses,

such as perfume sellers. Mohammadi owned such a business

known as Mav Trading Inc. Mohammadi is expected to face

removal proceedings following completion of his prison sentence.

Nigerian Attempts Scam to Net $250 Million,

Gets Nearly 14 Years Instead

February 17, 2022–Harry Cole was sentenced to almost

14 years in prison and 3 years of supervised release for his

role in a fraudulent “sweepstakes” scheme, leading to an

attempted loss of more than $260 million. Cole was also

ordered to pay $111,870 in restitution and to forfeit $850,000.

Cole, a Nigerian citizen and Canadian resident, worked with

seven others to target elderly residents in the United States and

led them to believe they won a sweepstakes. Cole has been in

federal custody since his extradition and arrest in August 2020.

Unscrupulous Tax Preparer Makes Sure

He Gets His Cash, CI Gets Him a Bonus:

25 Months in Prison

March 30, 2022–Mario Clark, of Houston, was sentenced to over

2 years in prison and ordered to pay $203,336 in restitution

for preparing false income tax returns. Clark prepared the tax

returns for himself and others by falsely claiming business

losses, unreimbursed employee expenses, itemized deductions,

and gifts by cash or check.

Hotel Management Fraudster Books

70 months in Prison After Stealing $5 Million

May 18, 2022–Jason Michael Schubert of Austin, Texas was

sentenced to almost 6 years in prison and ordered to pay over

$5 million in restitution for his scheme to bilk hotel investors out

of millions of dollars. From 2012 through June 2018, Schubert

conducted seminars on how to make money from investing

in hotel properties, known as “Rich in Five” seminars, and

charged participants substantial fees to attend. Schubert then

solicited money from the participants for investing in preexisting

hotel properties that he would manage and operate. Instead,

Schubert misappropriated the funds and paid himself significant

“management fees.” Schubert’s fraud depleted investor funds

and caused hotel properties to go into foreclosure.

Central Texas Resident Forges a Path to 51

Months in Prison After Scheme to Steal $775,000

June 13, 2022–Cynthia Linette Jones of Round Rock, Texas

was sentenced to over 4 years in prison and ordered to pay

$960,000 in restitution for her scheme to embezzle $775,000

from her former employer and evade $185,000 in taxes. From

2012 through 2018, Jones abused her position as the office

manager for her employer and forged 70 company checks

totaling over $775,000. Jones did not report any of the ill-gotten

gains to the IRS.

IRS:CI Annual Report 2022

LOS ANGELES

300 N. Los Angeles St.

Los Angeles CA, 90012

(213) 372-4129

LosAngelesFieldOffice@ci.irs.gov

CALIFORNIA

Camarillo | El Monte | Laguna Niguel

Long Beach | Los Angeles | San Bernardino

San Diego | San Marcos | Santa Ana

Santa Maria | Van Nuys

As the nation’s largest field office by population,

the Los Angeles Field Office serves a population of

approximately 22 million people, stretching over

nine counties from San Luis Obispo to the United

States-Mexico border. The LA Field Office covers

two judicial districts in California, the Central and

the Southern. The LA field office works a diverse

mix of financial investigations across this large

geographic area, including cybercrime, international

tax fraud, identity theft, public corruption, and

Bank Secrecy Act violations. We play crucial roles

in the U.S. Attorney’s priority task forces, including

the Joint Terrorism Task Force (JTTF) and the

Organized Crime Drug Enforcement Task Force

(OCDETF).

$20-million COVID Relief

Fraud Ring Sentenced

November 15, 2021–members of a San

Fernando Valley family were sentenced

for scheming to fraudulently obtain more

than $20 million in Paycheck Protection

Program (PPP) and Economic Injury Disaster

Loan (EIDL) COVID-19 relief funds. Richard

Ayvazya was sentenced to 17 years in prison,

his wife, Marietta Terabelian, was sentenced to

Special agents meet at a search warrant

A special agent is interviewed for an episode of “American Greed.”

staging area.

6 years in prison, and his brother, Artur Ayvazyan,

was sentenced to 5 years in prison. The defendants

used dozens of fake, stolen, or synthetic identities,

including names belonging to elderly or deceased

people and foreign exchange students who briefly

visited the United States years ago and never returned,

to submit fraudulent applications for approximately

150 PPP and EIDL loans. The defendants then used the

funds as down payments on luxury homes in Tarzana,

Glendale, and Palm Desert. They also used the funds to buy

gold coins, diamonds, jewelry, luxury watches, fine imported

furnishings, designer handbags, clothing, and a Harley-Davidson

motorcycle. Others previously sentenced in this case, include

Members of the Orange County Cyber Taskforce gather for a photo.

New special agents participate in training.

Tamara Dadyan (over 10 years in prison), Manuk Grigoryan (6 years

in prison), Edvard Paronyan (2 ½ years in prison), Vahe Dadyan (one

year and one day in prison), and Arman Hayrapetyan (10 months

most significant of which was a 90-10 tax fraud scheme. Rabbi

Layfield misappropriated approximately $2 million owed to a car

of probation).

Goldstein received false donations from more than a dozen

accident victim for his personal and unrelated business uses,

donors and provided them with fake receipts, which they

including to pay clients whose settlement proceeds Layfield had

used

illegally

claim

huge

tax

deductions

for

the

nonexistent

earlier misappropriated. Long after Layfield misappropriated

Unlicensed Bitcoin Exchanger Sentenced

donations.

Rabbi

Goldstein

kept

percent

and

secretly

the victim’s settlement proceeds, Layfield attempted to placate

November 18, 2021–Hugo Sergio Mejia was sentenced to

funneled back 90 percent of the false “donations” to the donors.

the victim by paying her a mere $25,000 from other clients’

3 years in prison for operating an unlicensed business that

settlement proceeds.

exchanged at least $13 million in bitcoin and cash, often for drug

traffickers. Mejia established shell companies to mask his true

identity, used encrypted messaging services with his customers,

Nun Who Embezzled Tuition Money from

and held meetings at coffee shops to evade law enforcement

Catholic Elementary School Sentenced to Prison

Former Sheriff Deputy Sentenced for Multi-million

surveillance. From May 2018 to September 2020, Mejia

February 7, 2022–Mary Margaret Kreuper, a nun who was the

dollar Investment Fraud and Cheating on His Taxes

operated a virtual currency business that was not registered

principal of a Catholic elementary school in California, was

August 30, 2022–Christopher Burnell, a former sheriff’s deputy,

with FinCEN and laundered over $250,000 in bitcoin-cash

sentenced to one year and one day in prison and was ordered to

was sentenced to 14 years in prison for wire fraud and filing

transactions purported to be proceeds of international metham

pay $825,338 in restitution to St. James School for her scheme

false tax returns. After deceiving victims into believing he was

to embezzle funds from the school. For a period of 10 years,

phetamine sales. As part of the sentence, Mejia forfeited

a wealthy businessman, Burnell encouraged victims to invest

Kreuper, who had taken a vow of poverty, diverted school funds

$233,987 in cash, silver coins and bars, and approximately

hundreds of thousands of dollars with him by offering exclusive

into

the

St.

James

convent

account

and

the

St.

James

savings

investment opportunities that promised rates of returns as

$95,587 in cryptocurrency seized during the investigation.

account and then used the diverted funds to pay for expenses

high as 100%. Burnell spent victims’ money on gambling and

that the order would not have approved or paid for. In total,

luxury items, such as $500,000 in private jet trips, $70,000 on

Kreuper

stole

than

$835,000

school

funds

pay

for

Louis Vuitton merchandise, and $175,000 on luxury cars and

Former Synagogue Rabbi Sentenced

personal

expenses,

including

gambling

trips.

an apartment lease for his then-girlfriends. During this time,

for Multi-million dollar Fraud Schemes

Burnell lost more than $2 million from gambling. Burnell did not

January 4, 2022–in California Rabbi Yisroel Goldstein, former

report any of the money he received from victims on his income

director at Chabad of Poway, was sentenced to 14 months

tax returns for the tax years 2011 or 2012.

in prison and ordered to pay restitution in the amount of

Personal Injury Attorney

$2,834,608 relating to his multi-million dollar schemes to

Sentenced to 12 Years in Prison

defraud the IRS. From at least 2010 through 2018, Rabbi

February 17, 2022–Philip Layfield, a disbarred personal-injury

Goldstein engaged in a series of schemes that defrauded the

lawyer, was sentenced to 12 years in prison for stealing

IRS, three Fortune 500 companies, the California Office of

settlement money from multiple clients and for cheating on his

Emergency Services, and the Clarence Brooks Foundation,

federal income taxes. During the investigation, it was found that

IRS:CI Annual Report 2022

MIAMI

51 SW 1st Avenue

Miami, FL 33130

(954) 991-4322

Miamifieldoffice@ci.irs.gov

FLORIDA

Miami | Plantation | Port St. Lucie

West Palm Beach

PUERTO RICO

Guaynabo

U.S. VIRGIN ISLANDS

St. Thomas

THE MIAMI FIELD OFFICE covers the Southern

Judicial District of Florida, and the judicial districts

of Puerto Rico and the United States Virgin Islands.

The Southern Judicial District of Florida includes

the counties of Miami-Dade, Broward, Monroe,

Palm Beach, Martin, St. Lucie, Indian River,

Okeechobee, and Highlands. Greater Miami, the

state’s largest urban concentration, includes the

“Magic City” of Miami, Miami Beach, and many

smaller municipalities and unincorporated areas;

together, these make up the southern section of

Florida’s “Gold Coast.” Last year’s investigations

were highlighted by a myriad of criminal cases

in tax law, identity theft, return preparer fraud,

money laundering, healthcare fraud, and political

and public corruption. We participate on the

Organized Crime Drug Enforcement Task Force

(OCDETF) and on other priority task forces at the

U.S. Attorney’s Offices in our areas of responsibility

targeting identity theft, financial crimes, health

care fraud, and disaster fraud.

Managers of Key West

Labor Staffing Companies

Sentenced for Tax Crimes

and Immigration Fraud

August 26, 2022–Mykhaylo Chugay was

sentenced to over 24 years in prison for

conspiracy to defraud the U.S. government,

money laundering, and immigration related

crimes. Chugay owned and operated a series

of labor-staffing companies in Southern Florida.

Special agents participate in a Fraud Prevention Community Forum.

Between 2007 and 2021, Chugay facilitated

the employment of individuals in hotels, bars,

and restaurants in Key West and other locations,

even though the employees were not authorized

to work in the United States. As part of his scheme,

Chugay and his co-conspirators defrauded the IRS out

of more than $10 million in Social Security and Medicare

taxes that should have been collected and paid over

in connection with these workers. His co-conspirator,

Volodymyr Ogorodnychuk, was previously sentenced to 4

years in prison and 3 years of supervised release for tax and

immigration crimes.

Owner and Operator of Telemedicine

and Telemarketing Companies Sentenced

to 14 Years for $20 Million Fraud Scheme,

$4 Million Tax Evasion

June 16, 2022–Marc Sporn, of Delray Beach, Florida, was

sentenced to 14 years in prison for health care and wire fraud

that cost Medicare more than $20 million dollars and for

evading taxes. Sporn owned and operated several telemar

keting and telemedicine companies and used them to market

medically unnecessary genetic tests to Medicare beneficiaries

and to sell prescriptions for medically unnecessary genetic tests

to laboratories in exchange for kickbacks and bribes. In

addition to the prison term, Sporn was ordered to pay more

than $4 million in restitution to the IRS.

Florida Man Sentenced to 97 Months

for Filing False Tax Returns

March 23, 2022–Fred Pickett Jr. was sentenced to over 8

years in prison, one year of supervised release, and ordered to

pay $169,639 in restitution to the IRS for preparing false tax

returns for his clients. Pickett owned and operated a tax return

business, which he used to prepare false individual income tax

returns for his clients. From 2013 to 2016, Pickett prepared tax

returns for some of his clients claiming they owned fictitious

businesses that lost tens of thousands of dollars each year.

Pickett included these nonexistent companies, as well as other

false deductions and tax credits, on his clients’ returns to

generate refunds to which they were not entitled.

Kids participate in getting fingerprinted.

Special agents attend a recruiting event.

Special agents visit the Department of Treasury in Puerto Rico.

Florida Man Sentenced to 52 Months

for Filing False Tax Returns

March 11, 2022–Michael Wihlborg was sentenced to over

4 years in prison for filing false tax returns and conspiracy

to commit wire fraud. From 1997 to 2017, Wihlborg worked

for a personal injury law firm in various roles. Wihlborg and

other co-conspirators derived a scheme to set up “dummy”

companies, whose names were similar to actual vendors with

whom the law firm conducted legitimate business. They then

diverted medical expense payments to the sham companies.

In addition, they voided legitimate checks and rewrote them to

the sham companies. The money received was not reported by

Wihlborg and resulted in a tax loss of over $500,000.

Former NFL Player Sentenced to

Federal Prison for COVID-19 Relief Fraud

December 10, 2021–Joshua J. Bellamy, a former National

Football League (NFL) player, was sentenced to over 3 years in

prison and 3 years of supervised released, and

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