# Click on a section to go to that page. (2021) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A6a7ef78948d696a0 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text ANNUAL REPORT 2021 Click on a section to go to that page. 3 Message from the Chief 21 Field Office Map 4 2021 Snapshot 22 Case Closed: 5 Tax Crimes 6 Non-Tax Crimes 26 Atlanta 8 Cyber Crime Unit 27 Boston 9 Narcotics and National Security 28 Charlotte 10 PPP/EIDL/Covid Fraud 29 Chicago 10 Asset Recovery and 30 Cincinnati 31 Dallas Investigative Services Significant Case Summaries 11 Specialized Units 32 Denver 12 Nationally Coordinated 33 Detroit 34 Houston Investigations Unit 12 Commissioner’s Protection Detail 35 Las Vegas 13 Office of International Affairs 36 Los Angeles 14 Digital Forensics 37 Miami 15 National Forensic Laboratory 38 Newark 16 Undercover Operations 39 New York 17 National Criminal Investigation 40 Oakland 41 Philadelphia Training Academy 18 Office of Communication 42 Phoenix 18 Professional Staff 43 Seattle 19 Workforce Development 44 St. Louis 19 Equity, Diversity, and Inclusion 45 Tampa 20 Outreach and Community Engagement 46 Washington D.C. 47 Appendix TABLE OF CONTENTS Table of Contents Navigation Menu Table of Contents 2021 Snapshot Data Field Office Map Appendix: Investigation Data Criminal Investigation Guiding Principles Message from the Chief I am proud to share the FY 2021 IRS Criminal Investigation Annual Report. The IRS, and our country, relies on CI’s ability to investigate and recommend prosecution of criminal tax violations and other related financial crimes to the Department of Justice. The deterrent effect from our work reinforces the backbone of our voluntary compliance tax system -- a system that funds our government, our military, and our infrastructure. Criminal tax cases that are prosecuted and publicized provide a strong deterrent message to would-be tax evaders, helping to ensure the integrity and fairness in the U.S. tax system. It also provides deterrence to those who are considering other financial crimes. Our efforts put criminals on notice – they will be caught when they commit these crimes. This year our country continued to face the challenge of the effects of Covid-19. CI faced those challenges as well, both as we interacted with the public and as we managed our internal workforce. Although our core mission remained the same, we approached our investigations this year with compassion. We recognized that among other Covid-19 difficulties, members of families and friends were lost. We carefully approached our work this year with this recognition in mind. We also provided vital public safety messages about Covid-19-related scams to protect the public and their financial interests. But our underlying principles and our mission remained the same. They are what unite us and give us the structure to move forward seamlessly. Honor the Badge, Preserve the Legacy, Master Your Craft, and Inspire the Future are the guiding principles that IRS Criminal Investigation lives by and by which 2021 was defined. HONOR THE BADGE. Our workforce honors the badge by working with a sense of ingenuity, tenacity, and teamwork to uncover the truth. We honor the badge by using not only the lessons learned in the past, but by looking ahead and developing the tools that will make us successful in the future. But honoring the badge many times comes down to doing the hard tax-related work we have always done. This was exemplified by a CI case this year where a software tycoon was charged in a 20-year scheme to hide $2 billion in income – hailed as the largest U.S. tax case ever against an individual. PRESERVE THE LEGACY. Our cases continue to be some of the most complex and impactful cases in the world and regularly appear on the front page of the nation’s largest newspapers and websites. We increasingly rely on data analytics to augment good old-fashioned police work and find those cases that have the biggest impact on tax administration. We are leading the world in our ability to trace virtual currency in financial investigations while still working our foundational tax enforcement mission areas. This year, a civil forfeiture complaint was filed for thousands of Bitcoin valued at approximately $1 billion dollars, among the largest cryptocurrency seizures ever by the federal government. The complaint related to the Silk Road case, a sprawling black-market bazaar where unlawful goods and services were bought and sold regularly by the site’s users. MASTER YOUR CRAFT. The speed at which money moves today is almost instantaneous and the convenience that comes with that opens the door for criminals to exploit the latest technological advancements. The internet and the dark web have facilitated this change. CI has committed to staying ahead of these developments and we have made significant investments in training our employees in the latest tactics and techniques to be successful in a digital financial world. This year, we saw the first-ever sentencing of a Bitcoin case with a tax component. A former Microsoft employee defrauded the company of over $10 million using a bitcoin mixer to hide taxable income. He was sentenced to nine years in federal prison. INSPIRE THE FUTURE. The world is in many ways a smaller place these days, and financial crimes are increasingly international in scope. CI now works on a global scale to address this evolving future of law enforcement. We continued our partnership with the Joint Chiefs of Global Tax Enforcement (J5), an alliance between the criminal tax authorities of the U.S., Australia, Canada, the Netherlands, and the United Kingdom, and this year we netted our second plea under this J5 umbrella in a $722 million cryptocurrency mining scheme. Our work is changing and has been impacted by cybercrime, but we have positioned ourselves to solve these sophisticated schemes. We also increasingly rely on social media to alert the public of our cases and warn them about possible scams. Today’s criminals think we cannot catch them, but as evidenced by some of the great casework in this report, it is clear we can. I’m proud of our accomplishments from this year and look forward to continued successes in the future. HONOR THE BADGE I will honor the badge by working with a sense of urgency, integrity, and professionalism every day. PRESERVE THE LEGACY I will preserve the legacy by doing all that I can to ensure that we maintain our place as the world’s finest financial investigative agency. MASTER YOUR CRAFT I will master my craft through continuous learning, pursuit of excellence, and engagement with internal and external stakeholders. INSPIRE THE FUTURE I will inspire the future through a constant personal commitment to mentor others within the organization. –Jim Lee, Chief IRS:CI Annual Report 2021 3 2021 Snapshot $2.19B 13% 27% 1497 $8.18B TAX FRAUD IDENTIFIED IRS:CRIMINAL INVESTIGATION U.S. ATTORNEY'S OFFICE OTHER FINANCIAL CRIMES FINANCIAL CRIMES ENFORCEMENT NETWORK 89.4% WARRANTS EXECUTED 13% INVESTIGATION SOURCES CONVICTION RATE IRS:CIVIL 7% INTERNATIONAL STATE/LOCAL GOVERNMENT 3% CORPORATE FRAUD EMPLOYMENT TAX 6% OTHER FEDERAL AGENCIES PUBLIC CORRUPTION ABUSIVE TAX SCHEMES GENERAL FRAUD IDENTITY THEFT TAX REFUND FRAUD 31% CYBER CRIMES GENERAL TAX FRAUD PUBLIC 72% 15.4% NON-TAX NARCOTICS 11.2% MONEY LAUNDERING IRS:CI STAFFING SPECIAL AGENTS OCDETF Organized Crime Drug Enforcement Task Force 2021 2046 PROFESSIONAL STAFF 2021 0.8% DIRECT INVESTIGATIVE TIME SPENT* 2020 2030 889 7.4% 2020 828 PERCENTAGES *1.4% UNCATEGORIZED IRS:CI Annual Report 2021 4 TAX CRIMES 1372 INVESTIGATIONS INITIATED 850 PROSECUTIONS RECOMMENDED REFUND FRAUD PROGRAM The Refund Fraud Program consists of three parts: Questionable Refund Program (QRP), identity theft refund fraud investigations, and the Abusive 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. IRS: CRIMINAL INVESTIGATION’S (CI) primary resource commitment is to develop and investigate tax crimes, including both legal and illegal source cases. Prosecution of these cases supports the overall IRS compliance goals and enhances voluntary compliance with the tax laws. CI works some of these investigations with our federal, state, and local law enforcement partners, as well as with foreign tax and law enforcement agencies. The Illegal Source Financial Crimes Program encompasses tax and tax-related, money laundering, and currency violations. These investigations focus on individuals deriving income from illegal sources, such as money obtained through embezzlement, bribery, and fraud. The individuals can be legitimate business owners, who obtain their income through illegal means. These investigations focus on methods through which individuals seek to launder their ill-gotten income by making it appear the income is from a legitimate source. Frequent money laundering techniques include the manipulation of currency reporting requirements, the layering of transactions, and the international movement of funds. GENERAL TAX FRAUD 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 the 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 under report or omit income from their tax returns will be held accountable for their actions. One area within this program is CI’s investigations regarding high income taxpayers who have a filing requirement but deliberately choose not to file returns and pay taxes owed. Other common practices involved in general tax fraud investigations include keeping two sets of books, making false entries in books and records, claiming personal expenses as business expenses, claiming false deductions or credits against taxes owed, and hiding or transferring 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 these cases to a successful conclusion. 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 individuals, either knowingly or unknowingly, 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 stolen identify refund fraud (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 SSN 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, Abusive Return Preparer Program investigations involve the orchestrated preparation and filing of false income tax returns by corrupt return preparers. These preparers often claim inflated personal or business 633 SENTENCED expenses, false deductions, excessive exemptions, and unallowable tax credits. The preparers’ clients may or may not know their returns were falsified. ABUSIVE TAX SCHEMES CI focuses on the investigation of promoters and clients, who willfully violate tax laws by participating in domestic and offshore tax schemes. The schemes are usually complex involving multi-layer transactions for the purpose of concealing 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 a trustee, nominee, non-resident alien, or other foreign entity is the owner of the assets and income, when in fact the true ownership and control remains with a U.S. taxpayer. 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. u IRS:CI Annual Report 2021 5 NON-TAX CRIMES 1209 INVESTIGATIONS INITIATED 1132 PROSECUTIONS RECOMMENDED 635 SENTENCED NEWARK FIELD OFFICE: Special agents show their badges while visiting a person of interest during an investigation. IRS: CRIMINAL INVESTIGATION’S (CI) Illegal Source Financial Crimes Program investigates tax and tax related crimes, money laundering, and currency violations. The special agents’ investigations focus on individuals who receive income from illegal sources, such as embezzlement, bribery, and fraud. They also focus on 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, the use of Black Market Peso, and moving funds internationally. The domestic and international law enforcement community recognize CI’s special agents as the premier experts in money laundering investigations. MONEY LAUNDERING Money laundering, as defined in the National Money Laundering Strategy, is criminal finance. Money laundering creates an underground, untaxed economy that harms our country’s overall economic strength. When criminals or criminal organizations seek to disguise the illicit nature of their money by introducing it into the stream of legitimate commerce and finance, they launder money. The traditional image of money laundering portrays someone manually washing drug money from city streets and turning it into legitimate financial transactions, such as those for bank deposits and other assets. In contrast, criminals today can utilize a computer, tablet, or smart phone to move large amounts of criminally derived funds into or through the United States and foreign financial institutions. They launder money through a wide variety of enterprises, such as banks, money transmitters, stock brokerage houses, casinos, and virtual currency exchanges. The flow of illegal funds around the world is estimated to be hundreds of billions of dollars. Whenever money, whether it be legal or illicit, moves through a financial system, it leaves behind a trail of transactions. When uncovered, the trails often identify the main perpetrator and accomplices, who willingly enable and finance the criminal activity. The perpetrators often view crime with deliberate blindness, negligence, or disregard. BANK SECRECY ACT PROGRAM early 2000. The primary objective of the program is to analyze BSA information to identify significant financial criminal activity. Although Financial Crimes Enforcement Network (FinCEN) is the agency tasked with administering the BSA, they have no criminal enforcement authority. The U.S. Treasury Secretary delegated all criminal enforcement of BSA to IRS: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. CI uses various data analytics tools to actively analyze BSA data and to identify leads for possible investigation. CI leads SAR Review Teams (SAR RTs) and Financial Crimes Task Forces (FCTFs) in all 94 judicial districts across the country. 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. Through the analysis of BSA data, CI has identified significant, complex money laundering schemes and other financial crimes. CI is one of the largest law enforcement consumers of BSA data. The CI BSA program has grown substantially since its start in 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 trafficking, and terrorist financing. Each of the SAR RTs and FCTFs operate in a slightly different fashion, based on the direction and oversight from their respective U.S. Attorney’s offices (USAO). Once CI special agents CI special agents are experts at uncovering money trails through traditional and virtual financial banking systems. They take part in a variety of investigations, financial task forces, and narcotics task forces, including Organized Crime Drug Enforcement Task Force (OCDETF) and the High Intensity Drug Trafficking Area (HIDTA). IRS:CI Annual Report 2021 6 Non-Tax Crimes identify leads in their respective areas, they meet with participating law enforcement agencies to discuss and disseminate the leads for action. While all of the major federal agencies use BSA data to supplement their investigations, only CI regularly triages BSA data for leads and possible criminal violations. CI’s financial investigative focus allows them to leverage BSA data better than any other U.S. law enforcement agency. As a result, 13% of all CI investigations initiated in fiscal year 2021 were the direct result of BSA data. CI currently has upwards of 200 special agents and investigative analysts working on SAR RTs and FCTFs around the country. CI strengthens the BSA program by maintaining excellent working relationships with anti-money laundering officials within the financial industry. During the past year, CI participated in numerous local, regional, national, and international anti-money laundering forums and conferences, both in-person and virtually, and presented on various topics including CI’s role in investigating financial crimes, case studies, and typologies. CI also continues to partner with FinCEN and other federal law enforcement agencies to provide feedback and outreach to the financial industry. 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 increased jail time for offenders. CORPORATE FRAUD 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 the 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. 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. CI 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. SIGNIFICANT CASE August 2021, the United States District Court for the Middle District of Florida sentenced two sisters for their $25 million tax fraud scheme. Petra Gomez was sentenced to eight years in federal prison for conspiracy to defraud the government and tax evasion. Gomez’s sister, Jakeline Lumucso, previously pleaded guilty to conspiracy to defraud the government and was sentenced to four years in prison. The court also ordered Gomez and Lumucso to pay $24,940,495 in restitution to the IRS. Gomez was ordered to pay an additional $510,999 to the IRS for tax evasion. From January 2012 to June 2016, Gomez and Lumucso conspired to defraud the IRS by submitting more than 16,000 false tax returns, which resulted in nearly $25 million in fraudulent tax refunds. To conceal the fraud, Gomez and Lumucso created five different tax preparation companies. In some instances, they opened the companies in the names of other people to conceal the fraud. In addition, when filing her 2014 tax return, Gomez failed to declare more than $800,000 in income. Gomez claimed $213,434 in earnings, when she actually earned $1,110,508. This resulted in an additional tax liability of $510,999 for tax year 2014. u NEWARK FIELD OFFICE: Special agents arrest a suspect during an investigation. DENVER FIELD OFFICE: Special agents conduct training on how to safely secure an office building. IRS:CI Annual Report 2021 7 CYBER CRIME UNIT SINCE 2015, CI continues to build a cybercrimes program to address the exponential growth of cybercrime impacting the tax, financial, and economic systems of the United States. A Cyber Crime Unit (CCU) with locations in our Los Angeles and Washington, D.C. Field Offices was part of the initial launch of the program and a headquarters Cyber Crimes office and cybercrimes coordinators in each of our 21 Field Offices followed. Over the last few years, CI has prioritized training and the deployment of cryptocurrency, blockchain and open-source intelligence (OSINT) technologies to unravel complex cyber-financial criminal schemes. To ensure CI’s capabilities continue to evolve with the online and digital payment landscape, CI plans to launch an Advanced Collaboration & Data Center (ACDC) in the Northern Virginia area in 2022. The focus of the center will be to bring together data, technology, and specialized personnel from across Treasury and government to work on high impact solutions to protect the integrity of our tax and financial systems. The integration of the Eastern CCU (Washington D.C Field Office) and Cyber Support Unit will ensure ACDC maintains an operational focus and strives to bring high-tech solutions posing the most significant threats to our tax, financial and economic systems. CCU investigations involve the internet and internet-based technologies that enable criminals to engage in illegal activity with anonymity and without a defined physical presence. The CCU focuses its efforts on multijurisdictional investigations posing the most significant threats to the U.S. tax and financial systems. These crimes almost always involve the use of crypto currencies to facilitate the criminal activity. Field office special agents and professional staff working cybercrime investigations are focused primarily on cyber enabled investigations that involve theft and fraud and are increased in scale by the use of computers, computer networks, or other forms of technology. Over the past several years, CI has seen an increasing growth in the number of criminals using the cyber environment to facilitate Stolen Identity Refund Fraud (SIRF), Covid fraud, and other refund fraud using the tax system as a facilitator to receive government payments. During this same period, data loss incidents reported to the IRS have drastically increased. These data loss incidents include data intrusions, business email compromises, phishing schemes, and bank account takeovers victimizing private sector entities involved in the tax eco-system and the IRS. These thefts target detailed financial data, prior year tax returns, and payroll records that criminals use to generate SIRF claims that mirror a victim’s actual tax return. During these types of cybercrime investigations, special agents use their close working partnerships with other law $3.5B enforcement agencies and their capabilities as law enforcement officers to gather valuable intelligence about SIRF, refund fraud crimes, and information that affects the integrity of IRS online systems and the tax system as a whole. They share criminal intelligence in real time with their IRS civil counterparts to aid taxpayer and revenue protection efforts. The IRS also uses this information to develop internal defenses that help identify and prevent further losses associated with fraudulent claims.CI’s cybercrime investigative efforts focus on subjects using the internet as an essential means to commit the crime, remain anonymous, and elude law enforcement while concealing financial transactions, ownership of assets, or other evidence. As with all types of crimes within CI’s area of responsibility, special agents working cybercrimes investigations use the same “follow the money” strategy that made CI’s involvement in complex investigations a mainstay since the creation of the agency in 1919. CRYPTOCURRENCY SEIZED 93 % OF ALL CI SEIZURES SIGNIFICANT CASES Feds Seize over $1 Billion in Crypto Currency November 5, 2020, the United States moved to forfeit thousands of bitcoins, valued at over $1 billion, seized by CI CCU. Silk Road creator Ross Ulbricht was convicted in 2015 by a New York federal jury of seven criminal counts, including conspiracy to distribute narcotics and money laundering. His prosecution left open a billiondollar question – where did the money go? This forfeiture answers that question, at least in part. This was the largest seizure of cryptocurrency in U.S. history. CCU special agents and personnel used a third-party bitcoin attribution company to analyze bitcoin transactions executed by Silk Road and were able to identify 54 previously undetected bitcoin transactions executed by Silk Road, which were the proceeds of unlawful activity, stolen from Silk Road in or about 2012 and 2013. These funds were traced to a bitcoin address. Further investigation of that bitcoin address by CCU special agents & personnel revealed that the funds were connected to Individual X. It was further determined that Individual X had hacked the funds from Silk Road. Pursuant to the investigation of the hack, CCU special agents seized several thousand Bitcoins on November 3, 2020. On November 4, 2020, the seized Bitcoin had a value of over $1 billion. CI Lifts the Fog on Notorious Darknet Cryptocurrency Mixing Service April 27, 2021, Roman Sterlingov, a dual RussianSwedish national, was arrested at Los Angeles International Airport on criminal charges related to his alleged operation of the longest-running bitcoin money laundering service on the darknet. Sterlingov, 32, operated Bitcoin Fog since 2011. Bitcoin Fog was the longest-running cryptocurrency “mixer,” gaining notoriety as a go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement. Over the course of its decade-long operation, Bitcoin Fog moved over 1.2 million bitcoin – valued at approximately $335 million at the time of the transactions. The bulk of this cryptocurrency came from darknet marketplaces and was tied to illegal narcotics, computer fraud and abuse activities, and identity theft. Sterlingov is charged with money laundering, operating an unlicensed money transmitting business, and money transmission without a license in the District of Columbia. This is only the second cryptocurrency mixing service case brought by the Department of Justice, and both were investigated by CI CCU. The investigation illustrates CI’s dual focus of fighting crypto-related crime and protecting the tax and financial systems from illicit activity. Microsoft Employee Sentenced to 9 Years for Stealing more then $10 Million and Using a Bitcoin Mixing Service to Hide the Proceeds November 9, 2020, Volodymyr Kvashuk, was sentenced to 9 years in prison for 18 felonies related to his scheme to defraud Microsoft of more than 10 million dollars. Volodymyr Kvashuk, 26, was convicted in February of wire fraud, money laundering, and filing false tax returns, among other charges, connected with his scheme to embezzle over $10 million worth of gift cards from Microsoft. Kvashuk was a software developer for Microsoft that exploited a vulnerability in Microsoft’s program for testing software related to their online store. This vulnerability allowed Kvashuk to obtain over $10 million in virtual gift cards at no cost. Kvashuk sold the gift cards on a third-party website at a large discount in exchange for bitcoin, which he attempted to launder through the use of bitcoin mixing services. He then used the laundered funds to purchase a $1.6 million waterfront property, a $160,000 Tesla vehicle, and fund a milliondollar investment account. Kvashuk then lied to his tax return preparer regarding the source of his wealth and filed a fraudulent tax return, failing to report his income from the scheme. CI CCU special agents and personnel investigating the case were able to connect Kvashuk to the theft of over 150,000 gift cards, track their sale for bitcoin, and follow the proceeds through bitcoin mixing services until Kvashuk ultimately converted the bitcoin to cash, and identified the assets he subsequently purchased. CCU special agents were able to document and explain methods used by Kvashuk at trial, leading to a conviction on 18 counts, including wire fraud, money laundering, and filing false tax returns. Ukrainian Cyber Criminal Extradited for Decrypting the Credentials of Thousands of Computers across the World and Selling Them on the Dark Web to Facilitate Tax Fraud, Ransomware and Other Crimes September 7, 2021, Glib Oleksandr Ivanov-Tolpintsev (28, Chernivtsi, Ukraine) was ordered detained by U.S. Magistrate Julie S. Sneed pending trial. Glib Oleksandr Ivanov-Tolpintsev was extradited in connection with charges of conspiracy, trafficking in unauthorized access devices, and trafficking in computer passwords. IvanovTolpintsev faces a maximum penalty of 17 years in federal prison. Ivanov-Tolpintsev was taken into custody by Polish authorities in Korczowa, Poland, on October 3, 2020, and extradited to the United States pursuant to the extradition treaty between the United States and the Republic of Poland. Ivanov-Tolpintsev controlled a “botnet,” which is a network of computers infected with malware and controlled as a group without the owners’ knowledge. He used the botnet to conduct brute-force attacks designed to decrypt numerous computer login credentials simultaneously. During the course of the conspiracy, Ivanov-Tolpintsev stated that his botnet was capable of decrypting the login credentials of at least 2,000 computers every week. Ivanov-Tolpintsev then sold these login credentials on a dark web website that specialized in the purchase and sale of access to compromised computers. Once sold on this website, credentials were used to facilitate a wide range of illegal activity, including tax fraud and ransomware attacks. CI CCU special agents and personnel helped unwind the digital and financial trails to bring Ivanov-Tolpintsev and others to justice. Through this work, CI helped identify thousands of victims and protect thousands more from tax fraud and other financial crimes. u IRS:CI Annual Report 2021 8 NARCOTICS AND NATIONAL SECURITY IRS:CI SIGNIFICANTLY CONTRIBUTES to the success of U.S. national security programs by identifying, disrupting, reducing, or eliminating the profits and financial incentives of individuals, entities, and transnational criminal organizations (TCOs) engaged in crimes associated with narcotics trafficking, human trafficking, terrorism financing, economic espionage, and money laundering crimes in support of these crimes. CI special agents investigate criminal violations of the Internal Revenue Code, Bank Secrecy Act, federal money laundering statutes, and the International Emergency Economic Powers Act. CI special agents utilize their unique financial investigation skills to trace financial transactions between individuals, businesses, and criminal organizations and to identify sophisticated schemes designed to disguise illegal transactions. Criminal prosecutions in these cases dismantle and disrupt criminal networks through criminal prosecution. CI’s office of Narcotics and National Security section 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. Some of the 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) Assessment. The purpose of the risk assessment is to identify, assess, and understand the changing landscape of money laundering and terrorist financing within the United States, so that agencies, prosecutors, and legislative changes can be considered and implemented to mitigate these risks. In September 2020, CI’s Director of Narcotics and National Security participated in the Federal Bureau of Investigation’s inaugural kick off of their National Counterintelligence Task Force (NCITF), where CI was an inaugural member. As of May 2021, CI formalized its partnership in NCITF. Special agents meet about an investigation as they enter the Narcotics and National Security main office. The Narcotics and National Security sections also support the following programs: the U.S. National Drug Control Strategy, the White House’s Strategy to Combat Transnational Organized Crime, the 2020 National Illicit Finance Strategy, the U.S. Government’s National Counterterrorism Strategy, the National Strategy for Countering Domestic Terrorism, and the National Counterintelligence Strategy. Beginning with FY 2021, Narcotics and National Security established the Cyber-OCDETF initiative. This is a pilot program working with field offices, contractors, and law enforcement partners to coordinate on cyber-related narcotics investigations. This initiative led to CI ‘s Narcotics and National Security section formalizing our participation and engagement with Joint Cyber Opioid Darknet Enforcement (JCODE) task force. In June 2021, CI assigned a liaison officer to the JCODE mission to develop, research, coordinate, and refer cyber narcotics investigations to CI special agents. SIGNIFICANT CASE August 2019, CI special agents worked with 30 other law enforcement agencies in Virginia, North Carolina, and Texas in a joint OCDETF operation known as Operation Cookout. The investigation pertained to a transnational criminal organization linked to the Sinaloa Cartel. The organization had a narcotics distribution network operating on both the east coast of the United States and California. The investigators executed simultaneous search, arrest, and seizure warrants, which resulted in the arrest of 35 defendants for their respective roles in the ongoing criminal conspiracy enterprise. Investigators also seized 24 firearms, 30 kilograms of fentanyl, 30 kilograms of heroin, 5 kilograms of cocaine, and over $700,000 in cash. In July 2021, the ringleader and last defendant to be convicted was sentenced to 33 years in prison. In all, 45 defendants were charged in Operation Cookout and all have pleaded guilty. Most of the defendants’ sentences ranged from 2 to 10 years in prison. However, five defendants were sentenced to between 15 and 25 years in prison. u IRS: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 TCOs. In 2019, Narcotics and National Security partnered with the Organization for Economic Cooperation and Development Task Force on Tax Crimes and Other Crimes to update their Money Laundering and Terrorist Financing Awareness Handbook for tax examiners and tax auditors. This work continued in 2020 and 2021 and resulted in updates to the Financial Action Task Force’s recommendations for member countries to improve money laundering compliance. The products and engagement raise awareness on money laundering and terrorist financing techniques with our international partners and encourage bi-lateral investigations. In 2021, Narcotics and National Security partnered with Treasury’s Office of Terrorism Finance and Financial Crimes to update the FY 2021/FY 2022 National Money Laundering and Terrorist Financing Risk NEWARK FIELD OFFICE: Special agents collect documents, records, and computer assets during a search and seizure. IRS:CI Annual Report 2021 9 PPP/EIDL/COVID FRAUD THROUGHOUT FISCAL YEAR 2021, we continued to deal with the effects of the Covid-19 pandemic. Unfortunately, criminals haven’t stopped committing crimes just because there is a national health emergency. In fact, some criminals pounce on the opportunity to take advantage of others as well as government programs designed to help the American people in times of crisis. We lead investigations into fraudulent claims for economic impact payments, Paycheck Protection Program (PPP) loans, and refundable payroll tax credits from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PPP offers billions of dollars in potentially forgivable loans to keep workers on the payroll, guaranteed by the Small Business Administration (SBA). Working with our law enforcement partners, CI has opened investigations involving various allegations of individuals attempting to take advantage of these government programs designed to help struggling individuals and businesses. Some examples of these investigations include: February 10, 2021, David T. Hines of Miami, Florida, pled guilty to fraudulently obtaining nearly $4 million in PPP loans. Hines fraudulently sought millions of dollars in PPP loans through applications to an insured financial institution on behalf of various companies. These loan applications made numerous false and misleading statements about the companies’ respective payroll expenses. Instead of using the received PPP funds to make payroll payments, Hines instead used approximately $318,000 of those funds to purchase a 2020 Lamborghini Huracan sports car. Hines was sentenced to 78 months confinement and 36 months of supervised release. March 15, 2021, Mukund Mohan of Clyde Hill, Washington, pled guilty in connection with his role in obtaining over $5.5 million in PPP loans. Mohan submitted at least eight fraudulent PPP loan applications to federally insured financial institutions in which he made false and misleading statements, as well as submitted fake and altered tax filings and incorporation documents. Mohan was sentenced to 24 months confinement, 36 months of supervised release and a fine of $100,000. June 2, 2021 Thomas Smith of Pewaukee, Wisconsin, was sentenced to 57 months confinement, 24 months of supervised release and ordered to pay $960,000 in restitution for fraudulently obtaining over $1 million in PPP loans. Smith fraudulently sought over $1.2 million in PPP loans through applications to a federally insured financial institution on behalf of eight different companies. According to his plea agreement, Smith caused to be submitted fraudulent loan applications containing numerous false and misleading statements about the companies’ respective payroll expenses. Based on these representations, the financial institution approved and funded over $1 million in loans. Smith then directed his co-conspirators to send him portions of the PPP funds. July 28, 2021, Dinesh Sah of Coppell, Texas, was sentenced to 135 months of confinement, 36 months of supervised release and ordered to pay $17,284,649 in restitution in connection with his fraudulent scheme to obtain approximately $24.8 million in PPP loans. Sah submitted 15 fraudulent applications, filed under the names of various purported businesses that he owned or controlled, to eight different lenders seeking approximately $24.8 million in PPP loans. Sah claimed that these businesses had numerous employees and hundreds of thousands of dollars in payroll expenses when, in fact, no business had employees or paid wages consistent with the amounts claimed in the PPP applications. Sah received over $17 million in PPP loan funds and diverted the proceeds for his personal benefit, using them to purchase multiple homes in Texas, pay off the mortgages on other homes in California and buy a fleet of luxury cars, including a Bentley convertible, Corvette Stingray and Porsche Macan. September 16, 2021, Fahad Shah of Murphy, Texas, was sentenced to 31 months confinement and 36 months of supervised release for perpetrating a scheme to fraudulently obtain more than $3.3 million in PPP loans. According to court documents, Shah sought approximately $3.3 million in PPP funds by claiming that his family’s business, WBF Weddings by Farah Inc. (WBF), employed more than 100 individuals and paid millions of dollars in compensation to those employees. In actuality, WBF had no employees aside from Shah and his wife. Based on Shah’s false representations and forged documents, an SBA-approved lender provided over $1.5 million in PPP loan funds to Shah. Shah then used the funds for personal gain contrary to program’s terms, paying off his home mortgage and purchasing two Teslas and a Mercedes, among other items. u ASSET RECOVERY & INVESTIGATIVE SERVICES IRS:CI ASSET FORFIETURE PROGRAM uses seizure and forfeiture authority as an investigative tool to disrupt and dismantle criminal enterprises. The program seeks to deprive criminals of property used in, or acquired through, illegal activities. IRS:CI conducts criminal investigations that use our financial expertise and resources. In part, IRS:CI is one of the larger contributors 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 as well as to reimburse for law enforcement related expenses, such as additional training, equipment, and the cost of 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, 2021, IRS:CI seized assets having an estimated value of approximately $1.3 billion and forfeited approximately $91 million in ill-gotten proceeds. SIGNIFICANT FORFEITURES New York Field Office Switzerland’s largest insurance company, Swiss Life Holding AG, and three subsidiaries entered a deferred prosecution agreement (DPA) with the Department of Justice in the Southern District of New York. Swiss Life admitted to conspiring with U.S. taxpayers to hide assets and income in offshore accounts and as part of the agreement, Swiss Life will pay a total of $77,374,337 to the United States, to include a forfeiture of $35.7 million. From 2005 to 2014, Swiss Life through affiliated insurance carriers in Liechtenstein, Luxembourg, and Singapore maintained approximately 1,608 Private Placement Life Insurance (PPLI) policies. The PPLI Carriers’ issuance and administration of those policies and the related investment accounts were often done in a manner to assist U.S. taxpayers in evading U.S. taxes and reporting requirements as well as concealing the ownership of offshore assets. Atlanta Field Office Wade Ashley Walters, a co-owner of numerous compounding pharmacies and pharmaceutical distributors, was sentenced to 18 years imprisonment in the Southern District of Mississippi for his role in a multimillion-dollar scheme to defraud TRICARE, the health care benefit program serving the U.S military, veterans, and their families, as well as private health care benefit programs. WASHINGTON D.C. FIELD OFFICE: Special agents seize a airplane as part of an investigation. Walters was also ordered to pay $287,659,569 in restitution and forfeit $56,565,963, representing the proceeds he personally derived from the fraud scheme. Between 2012 and 2016, Walters orchestrated the scheme to defraud the health care benefit programs by distributing compounded medications that were not medically necessary in an amount exceeding $287 million. Walters further conspired with others to launder the proceeds of his fraud scheme by engaging in monetary transactions in amounts of over $10,000 in proceeds from the fraud scheme, including transactions relating to his participation in a sham intellectual property scheme. u IRS:CI Annual Report 2021 10 SPECIALIZED UNITS INTERNATIONAL TAX AND FINANCIAL CRIMES IRS:CI increased voluntary compliance and reduced the tax gap related to offshore tax evasion through several well-publicized programs and investigations, including the Swiss Bank Program and the UBS, Credit Suisse and the HSBC investigations. CI started the International Tax and Financial Crimes (ITFC) group in late 2017. The group is a specialty group within the Washington, D.C. Field Office and is made up of special agents from across the United States. The special agents are experts in international tax investigations and use their skills to identify and investigate international tax evasion schemes. The ITFC utilizes strategic partnerships with external agencies, including the United States Attorney’s offices and the Department of Justice Tax Division. IRS:CI also created a network of internal resources that assist in identifying leads, analyzing data, and performing investigative tasks. The ITFC works with investigative analysts, foreign-based attachés, personnel from special investigative techniques, and International Operations. 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 the Netherlands) to further CI’s international mission to combat offshore tax evasion. The IFTC works to identify and investigate enablers, financial institutions, third-party asset managers, promotors, referral agents, and expatriated U.S. citizens, who utilized international jurisdictions to effect tax fraud. The ITFC also ensures compliance with the Bank Secrecy Act by identifying and investigating those U.S. persons who fail to report their foreign accounts. SIGNIFICANT CASE May 2021, the United States District Court for the Southern District of Florida sentenced Dusko Bruer to 24 months in prison for willfully evading the assessment of millions of dollars in taxes between 2007 and 2014 and for not reporting his foreign financial accounts from 2006 through 2015. Bruer, a Croatian national and naturalized United States citizen, filed income tax returns for the tax years 2007 through 2014, which he knew did not include income received from his company or through his foreign bank accounts. Bruer used bank accounts in Croatia, Germany, Serbia, and Switzerland to conceal his income from the IRS from 2006 to at least 2015, and he did not report the bank accounts, as required by law. Between 2007 and 2011, Bruer transferred $5.8 million from domestic accounts to these foreign financial accounts. In total, between 2007 and 2014, Bruer did not report $7,726,213 in income, which would have resulted in an additional tax due of $2,789,538. Bruer used his unreported offshore accounts to fund a lavish lifestyle, which included the purchase of foreign property, a $1,350,000 yacht, and $1,650,000 home in Lake Worth, Florida. November 5, 2020, the IFTC executed a global day of action on a case involving a tax evasion case with multiple targets. Special agents from the IFTC coordinated enforcement activity in nine states and three countries, on three separate continents. The IFTC coordinated with J5 personnel, seven IRS:CI field offices, and IRS:CI attaches in London, The Hague, and Dubai. In connection with this day of action, the following activities occurred: GLOBAL ILLICIT FINANCIAL TEAM The Global Illicit Financial Team (GIFT) is a task force led by IRS:CI that investigates organizations that illicitly move money used to support international crime organizations. GIFT is a major conduit of CI’s money laundering strategy and a focal point for the CI Money Laundering Cadre. GIFT works with various partner agencies, including Homeland Security Investigations (HSI) and the Department of Defense Office of Inspector General (DOD OIG). GIFT and CI Money Laundering Cadre consist of special agents from all CI field offices, as well as partner agencies. The group is supervised by an IRS:CI Supervisory Special Agent (SSA), who reports to the Special Agent in Charge of the Washington, D.C. Field Office. GIFT investigations are centered on international third-party money laundering and 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 contract fraud, the sale of contraband goods, and terror financing and sanctions violations. ALCOHOL AND TOBACCO TAX AND TRADE BUREAU Reminiscent of Eliot Ness and Elmer Irey’s “T-Men,” IRS:CI continues its partnership with the Alcohol and Tobacco Tax and Trade Bureau (TTB) to combat illicit tobacco and alcohol 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 and realigned to the Department of Justice. The act called for the tax collection functions to remain with the Department of the Treasury, thereby creating TTB. TTB regulates and collects taxes on the trade and imports of alcohol, tobacco, firearms, and ammunition within the United States. In 2009, TTB entered into an inter-agency agreement with CI to provide special agents to enforce TTB’s criminal provisions. These special agents are strategically dispersed across the country. This group is supervised by an SSA, who reports to the Special Agent in Charge of the Washington D.C. Field Office. This group’s sole focus is combating the illicit trade of tobacco and alcohol. Since the agreement began in 2009, the group has initiated over 180 investigations. u Since its inception in 2010, GIFT investigations have resulted in seizures and forfeitures of over $4.2 billion, fines and penalties on settlements of over $15 billion, and a conviction rate of over 90%. • Search warrants were executed at three locations in the United Kingdom and at two locations in the Netherlands. • Agents interviewed 25 witnesses in nine U.S. states, including Oregon, Florida, California, Texas, Hawaii, Alabama, New York, Colorado, Memphis, and in three countries (the United Kingdom, the Netherlands, and the United Arab Emirates). Offers of cooperation were secured from several witnesses/subjects. • Agents served 43 grand jury subpoenas. WASHINGTON D.C. FIELD OFFICE: Special agents investigate an illegal distillery where untaxed moonshine is prepped for interstate transport. IRS:CI Annual Report 2021 11 NATIONALLY COORDINATED INVESTIGATIONS UNIT THE NATIONALLY COORDINATED INVESTIGATIONS UNIT (NCIU) contributes to CI’s strategy by using technology and data to drive decisions in case selection and to identify patterns of non-compliance. The NCIU works alongside data scientists and data analysts to develop models that identify individuals whose financial activities match patterns linked to non-compliance with tax laws. The NCIU focuses on identifying domestic and international tax evasion and money laundering schemes. The NCIU evaluates the leads for the presence of criminal acts and refers investigative leads to CI’s field offices for further investigation. In FY 2021, NCIU made 164 referrals to field offices. The NCIU continues to modernize the way CI develops cases. The NCIU identifies trends in non-compliance and emerging threats by building strategic partnerships with internal and external stakeholders. Through partnerships with CI’s field offices, the NCIU has expanded regional projects to national projects. The NCIU works closely with multiple IRS business operating divisions to facilitate a collaborative, service-wide approach to enforcement, and to promote data analytics throughout the IRS. In addition to case development, the NCIU offers continuous support to CI’s field offices by offering initiative-specific training and investigative research. 164 INVESTIGATION REFERRALS COMMISSIONER’S PROTECTION DETAIL During FY 2021, the NCIU applied resources to case development in the following areas of focus: international, virtual currency, employment taxes, abusive schemes, Forms 1099-K, gambling, exempt organizations, Schedule Cs, and social media. The NCIU also works in partnership with other organizations to develop cases in certain areas. For example, the NCIU works in partnership with the IRS’s Office of Fraud Enforcement (OFE) for matters of Covid-19 related fraud, with other law enforcement agencies in National Targeting Center cases to combat money laundering through transnational organized crime, with the Miami Field Office and the Departamento de Hacienda for fraud related to Acts 20/22, a Puerto Rican tax incentive. Special agents assigned to the Commissioner’s Protection Detail meet with Charles P. Rettig, IRS Commissioner. Members of the NCIU and Miami Field Office meet with representatives from Departamento de Hacienda, Puerto Rico’s taxation authority. THE COMMISSIONER’S PROTECTION DETAIL (CPD) is a specially trained cadre of IRS:CI special agents, who provide personal security and protection of the IRS Commissioner. Since 1999, this dedicated team has been charged with protecting the Commissioner during official business operations. CPD agents provide protection of the Commissioner within the National Capital Region and while in travel status, foreign and domestically. 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 approximately 500 protective movements, 20 domestic trips, and 2-3 international visits. CPD 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. u IRS:CI Annual Report 2021 12 OFFICE OF INTERNATIONAL AFFAIRS IRS:CI HAS SPECIAL AGENT attachés strategically stationed in 11 foreign countries, including Mexico, Canada, Colombia, Panama, Barbados, China, Germany, the Netherlands-Europol, England, Australia, and the United Arab Emirates. Attachés continuously build and maintain strong alliances with foreign governments, law enforcement, embassy personnel, and industry partners. These alliances give IRS: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, a foreign witness, foreign evidence, or overseas special investigative technique operations. The vigilance of CI’s special agent attachés helps 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. In FY 2021, International Affairs had several significant accomplishments: IRS:CI applied for membership with Europol’s Joint Cybercrime Action Taskforce (J-CAT) and was officially approved as a full member in July 2021. The J-CAT is a taskforce operated through Europol’s European Cybercrime Centre. Their objectives are to drive coordinated action against key cybercrime threats and targets by facilitating the joint identification, prioritization, preparation, initiation, and execution of cross-border investigations and operations to target cyber dependent crimes, transnational payment fraud, online child exploitation, and cross-crime cyber facilitators. In addition to IRS:CI, current member International Affairs also educates foreign governments and agencies on crime detection, investigative techniques, case studies, emerging trends, and best practices. 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, IO conducts training at the International Academy for Tax Crime Investigation at the Guardia di Finanza Economic and Financial Police School in Ostia, Italy. The training is sponsored by the Organization for Economic Cooperation and Development and the U.S. Department of State. Attachés also partner with the CI’s International Training Team (ITT) to deliver virtual training to representatives from multiple countries, including Taiwan, Palau, Philippines, Trinidad and Tobago, Grenada, Namibia, Moldova, and Azerbaijan. One notable training coincided with the announced partnership between CI and the South African Revenue Service to coordinate efforts to investigate crimes affecting both countries. As part of the alliance, the ITT provided training to approximately 40 South African law enforcement officers and government officials and committed to providing additional training in the future. These strategic partnerships are essential for fighting global financial crimes. As Global Operations Executive Director Guy Ficco stated when this alliance was announced, “The global fight against financial crimes is not one that can be fought alone by any one country. Our partnership with the South African Revenue Service will soon reveal operational results made possible by our strong alliance and collaborative efforts.” countries of the J-CAT include nine European Union (EU) Member States (Austria, France, Germany, Italy, the Netherlands, Romania, Poland, Sweden, and Spain) and seven Non-EU members (Australia, Canada, Columbia, Norway, Switzerland, the United Kingdom, and the U.S. [FBI and Secret Service]). To further support CI’s cyber program this year, International Affairs deployed its first cyber attaché internationally to Europol in The Hague, Netherlands. The attaché proactively supported cyber investigative needs of CI’s Cybercrime Units and field offices through onsite coordination and contact with cyber partners at Europol. The cyber attaché also focused on case development from cyber related investigative data, shared emerging trends and technologies, and facilitated the exchange of cyber-related information. In addition, the cyber attaché was assigned as CI’s Cyber Liaison Officer to the J-CAT. CI continued its partnership with the Joint Chiefs of Global Tax Enforcement (J5), an alliance between the criminal tax authorities of the U.S., Australia, Canada, the Netherlands, and the United Kingdom. J5’s focus is combatting international tax and financial crimes through proactive collaboration and information sharing using each country’s collective resources. In FY 2021, the J5 continued its focus on professional enablers, virtual currency crimes, international tax evasion, technology sharing, and innovation. CI has developed Public-Private Partnerships with financial institutions and the Fin-Tech industry to further facilitate cooperation, deterrence, identification, and enforcement of international tax evasion and related financial crimes. u THE HAGUE LONDON FRANKFURT OTTAWA WASHINGTON, D.C. MEXICO CITY PANAMA CITY BOGOTA HEADQUARTERS BARBADOS DUBAI HONG KONG ATTACHÉ ATTACHÉ (J5) BRANCH A: OTTAWA LONDON THE HAGUE DUBAI CANBERRY & SYDNEY BRANCH B: MEXICO CITY PANAMA CITY BOGOTA BARBADOS FRANKFURT HONG KONG SYDNEY CANBERRA IRS:CI Annual Report 2021 13 DIGITAL FORENSICS THIS YEAR, DIGITAL FORENSICS joined with IRS:CI’s CyberCrimes Unit and the National Forensics Lab as part of the new Headquarters Cyber and Forensic Services section. Under this new structure, 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. The primary mission of Digital Forensics is the forensic acquisition, preservation, and analysis of the digital and multimedia evidence related to ongoing criminal investigations. To carry out this mission, our Computer Investigative Specialists (CISs) are routinely called upon to assist agents with the acquisition of digital evidence, to assist in the preparation and execution of search warrants, to analyze the resulting evidence, and to testify. This year, a CIS testified in federal court in Reno, Nevada, regarding a case against an attorney accused of evading federal income tax. The CIS agent was qualified as an expert witness in the recovery, interpretation and reporting of file metadata by the magistrate judge. The attorney created and used multiple spreadsheets, together with his administrative assistant, to keep track of cash inflows and outflows. The metadata was an important evidentiary item with respect to file attribution, time, date, and author. The testimony was useful in showing that the defendant had accessed, edited, printed, and sent files on his work and personal computers, proving that his defense that he never saw or edited the files was false. He was convicted and sentenced to 2½ years in prison, and he forfeited his law license. Electronic evidence and digital forensics are used in every criminal investigation. Such digital evidence can be as simple as a query of subpoenaed email production to the most complex of digital tasks, like imaging a server farm and subsequently analyzing the terabytes of data in a virtual environment. Experts in digital forensics specialize in extracting evidence from a variety of sources, including personal computers, mobile phones, tablets, business computer networks and systems, servers, cloud storage, and even the Dark web. Criminals continue to use advanced technologies to hide evidence in the digital world. In response, CI’s digital examiners continue to advance, as well. IRS:CI’s Digital 830 1350 SEARCH WARRANTS TERABYTES OF DATA 3000 COMPUTER DEVICES Computer Investigative Forensic Specialist Greg Masi works to recover data from a hard drive. Forensics examiners are recognized leaders in the extraction of data from unique devices, such as vehicles, drones, smart devices, and various other electronic media known as the Internet of Things. Digital Forensics current staffing includes seven groups of CISs spread throughout 47 local laboratories. Digital Forensics also maintains an 11,000-square foot lab and training center, which houses forensic specialists. The specialists are skilled in various digital forensic disciplines, such as data recovery, mobile support, hardware and software testing and deployment, and the planning and delivery of the vital training needed to keep the CISs highly skilled and current on technology and processes. The lab assists with solving more complex data extractions and challenges encountered by the digital forensic examiners. SEATTLE CLEVELAND BOSTON CHICAGO DENVER NEW YORK PHILADELPHIA KANSAS CITY WOODBRIDGE OAKLAND CHARLOTTE LOS ANGELES PHOENIX DALLAS HOUSTON ATLANTA TAMPA MIAMI LAB LOCATION GROUP 1 GROUP 2 GROUP 3 GROUP 4 GROUP 5 GROUP 6 GROUP 7 This year, Digital Forensics continued to see advancement in the goal of consolidating the current local CIS labs into 18 regional digital forensics laboratories (RDFLs). IRS:CI invested heavily in acquiring the latest technology to provide CISs the equipment needed and to deploy the RDFLs as they begin to open in FY 2022. In addition, Digital Forensics took a leading role in the lawful seizures of digital currency that were proceeds or facilitated financial crimes, by working with headquarter’s Warrants and Forfeiture section to provide a more effective and secure seizure process. Digital Forensics CISs and specialists also played a large part in the development of a new tactical law enforcement network, which will greatly enhance CI’s ability to deploy tools and resources to special agents in a secure and flexible environment. In FY 2021, Digital Forensics personnel participated in over 830 search warrants or other digital forensic operations and lawfully seized more than 1,350 terabytes of data from over 3,000 computers, laptops, external devices and mobile devices. IRS:CI’s Digital Forensics unit continues to be the premier digital forensics unit in federal law enforcement. u IRS:CI Annual Report 2021 14 NATIONAL FORENSIC LABORATORY National Forensic Lab Cases 113 SCIENTIFIC SERVICES SINCE THE EARLY 1970’S, scientists and technical experts at the National Forensic Laboratory (NFL) have reported the results of forensic testing and technical services to investigators for use in both exploring potential criminal violations and for adjudication of the Internal Revenue Code and related financial crimes. Results of the NFL’s work are used by CI special agents or other customers of the laboratory to analyze elements to provide pivotal direction in their investigations. Often, support provided by the NFL doesn’t end with delivery of a scientific report or product. Visual information specialists design and develop interactive professional presentations for trial and forensic scientists testify to their findings. An integral important function of the laboratory role is to support judicial proceedings where and when required. 138 TRIAL GRAPHICS & DESIGN The laboratory’s work is critical in ensuring the efficient processing of crucial evidence in CI investigations. The NFL consists of three sections, each offering specific scientific or technical services. The Scientific Services section offers forensic disciplines that include electronics (audio, video, and image intelligibility), latent prints (finger and palm print development and comparison), polygraph, questioned documents, chemistry, and DNA collection. The Trial Graphics and Design section simplifies complicated cases into succinct effective visuals that help show, rather than tell, all the elements of extremely complex investigations. Although these services are primarily for CI special agents preparing for trial, Trial Graphics and Design also assists in the creation of high-level presentations and other special projects such as CI branding and marketing outreach. The Data Processing Center (DPC) located in Florence, Kentucky, is responsible for taking information, either hard copy or electronic, and compiling it into a database that is delivered to the customer and can be used to efficiently manage and analyze case-related data. By doing so, the 84 DATA PROCESSING CENTER DPC saves investigators countless hours of tedious labor, while enabling them to focus their energy on other key areas of the investigation. When the experts at the NFL are not working on evidence, they are providing tours to agents and various IRS:CI stakeholders at their building located in downtown Chicago. One of the most effective ways to educate others about the NFL’s capabilities is by demonstrating their state-of-the-art equipment and sharing stories. Thanks to the talented men and women of the NFL and their dedication to science and their technical services, as well as the mission of IRS: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 NFL than seeing them get fully adjudicated. But equally important is helping investigators know when to consider closing a case. Regardless of the outcome, the NFL scientists and technical experts continue to strive in their role as servants of the criminal justice system. u NBC Nightly News met with National Forensic Laboratory scientists and technical experts to broadcast a segment on the forensic science behind financial crime. Segments included questioned documents (top), latent prints (left), polygraph (middle), and chemistry (right). IRS:CI Annual Report 2021 15 UNDERCOVER OPERATIONS SIGNIFICANT CASES IN APRIL 2021, the United States District Court for the District of New Hampshire indicted six individuals, including Ian Freeman, for participating in a conspiracy to operate an unlicensed money transmitting business, wire fraud, money laundering, and operating a continuing financial crimes enterprise. According to the indictment, the individuals operated a business that enabled customers to exchange over $10 million in fiat currency for virtual currency, charging a fee between 10 to 14% for their service. They operated their virtual currency exchange business using websites and virtual currency ATM machines in New Hampshire. NEWARK FIELD OFFICE: Special agents conduct surveillance on suspected illegal activities. IRS: CRIMINAL INVESTIGATION (CI) has a long history of using undercover techniques to investigate crime. 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 2021, agents conducted approximately 292 undercover operations. 292 UNDERCOVER OPERATIONS They knowingly operated the virtual currency exchange business in violation of federal anti-money laundering laws and regulations. In furtherance of their scheme, some individuals opened bank accounts in the names of purported religious entities. They engaged in substantial efforts to evade detection of their unlawful virtual currency exchange scheme by avoiding answering questions from financial institutions regarding the nature of the business and by misleading financial institutions into believing their unlawful virtual currency exchange business was instead a religious organization that received charitable contributions. Ian Freeman also told the banks that he was dealing in rare coins. Freeman claimed that there are only 21 million bitcoins ever mined, so bitcoin are rare coins. He argued that he did not defraud banks by saying he was dealing in rare coins. During the investigation, an IRS:CI undercover agent posed as a drug dealer looking to conceal and disguise proceeds from narcotic sales. The undercover agent communicated with Freeman and others on multiple occasions and met with the individuals named in the indictment in New Hampshire. The undercover agent also engaged in multiple transactions with Freeman to exchange proceeds from narcotic sales for bitcoin through Freeman’s business and ATMs. Specifically, one transaction was conducted through Freeman’s ATM in the amount of $19,900 dollars for approximately 1.54 bitcoins. Freeman was aware that the proceeds were from narcotic sales. IN JUNE 2021, the United States District Court for the District of Columbia, indicted Roman Sterlingov, a resident of Sweden and a citizen of Russia, for money laundering, operating an unlicensed money transmitting business, and money transmission without a license in the District of Columbia. Sterlingov operated the business Bitcoin Fog since 2011. Bitcoin Fog was the longest-running cryptocurrency “mixer,” gaining notoriety as a go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement. Bitcoin Fog moved over 1.2 million bitcoins valued at approximately $335 million. The bulk of this cryptocurrency came from Dark web marketplaces and was tied to illegal narcotics, computer fraud, illicit activities, and identity theft. During the investigation, an IRS undercover agent communicated with Sterlingov, while posing as a drug dealer looking to clean proceeds from narcotic sales. Sterlingov did not prevent the deposit or withdrawal of funds through Bitcoin Fog when the funds were represented to him as narcotics proceeds. u CI’S UNDERCOVER PROGRAM 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 operation. This organization continues today. In the 1980s, UCO focused on offshore banking schemes and illegal tax shelters. The estimated revenue loss 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 on 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. IRS:CI Annual Report 2021 16 NATIONAL CRIMINAL INVESTIGATION TRAINING ACADEMY 6 months TRAINING FOR NEW SPECIAL AGENTS IRS:CI SPECIAL AGENTS are among the most highly trained financial investigators in the world. They begin their training at the National Criminal Investigation Training Academy (NCITA). NCITA is located at the Federal Law Enforcement Training Center (FLETC) in Brunswick, Georgia. NCITA is dedicated to fostering the highest levels of professionalism and ethical behavior throughout the CI workforce. NCITA’s primary focus is training new special agents in the fundamentals of financial investigations, and agents learn to recognize the elements of tax offenses and methods of proof unique to federal tax investigations. They acquire the knowledge, skills, and abilities required to be federal law enforcement’s finest financial investigators. New special agents complete six months of training, which begins with an 11-week Criminal Investigator Training Program (CITP) run by FLETC. CITP covers topics common to all federal law enforcement agents, including basic criminal investigation skills, federal criminal law, courtroom procedures, enforcement operations, interviewing skills, and firearms training. Following CITP, new special agent trainees take a 14-week NCITA Special Agent Investigative Techniques (SAIT) course. The SAIT program trains new agents in tax law, evidence gathering, interviewing, report writing, methods of proving unreported income, and money laundering violations. It also provides physical fitness conditioning and use of force training, which includes firearms, weaponless tactics, and building entry. In addition to SAIT, NCITA assists in providing advanced training to special agents in use of force, firearms instruction, defensive tactics, and building entry. Each year, NCITA assists in developing continuing professional education courses for special agents and professional staff, with an emphasis on emerging trends and issues within the law enforcement environment. IRS:CI special agents receive regular refresher training. They attend quarterly training in firearms, defensive tactics, and building entry. Through frequent use of force training, they maintain their skills and abilities to ensure good judgement and to apply the appropriate degree of force necessary to safely carry out enforcement activities, including issuing search warrants, arrests, surveillance, dignitary protection, undercover activities, and seizures. NCITA also provides training to foreign governments and agencies regarding crime detection, investigative techniques, case studies, developing trends, and best practices. The International Training Team (ITT) delivered 24 training events in FY 2021, 22 of which were virtual. In total, the ITT made 910 new contacts with foreign officials through the delivery of international training. The foreign officials held various positions in their government agencies, including positions with Financial Intelligence Units, Tax/Revenue Authorities, National Police Units, Attorney General’s Offices, and Ministries of Justice. In addition to working with these foreign officials, the ITT also partnered with numerous U.S. entities for the delivery of international training, including partnerships with the FBI, the U.S. Department of State, the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL), the Department of Justice Office of Overseas Prosecutorial Development Assistance and Training Program (OPDAT), and the National Center for State Courts. 11 weeks CRIMINAL INVESTIGATOR TRAINING PROGRAM NCITA and CI are committed to continual improvement of new agent training through modernization. In doing so, CI has revamped case study videos, automated case activity documents, and created tax lessons that will eventually be completed virtually, prior to arrival at FLETC. These changes have allowed NCITA to increase the flexibility for scheduling instructors, reduce travel and associated costs, and reduce in person training by five training days. Overall, these changes will ensure NCITA continues to produce effective and modern training for IRS:CI special agents. u 14 weeks SPECIAL AGENT INVESTIGATIVE TECHNIQUES FY 2021 HIGHLIGHTS Although NCITA continued to overcome Covid-related issues during FY 2021, the following training classes were held for IRS:CI special agents: • Six Special Agent Basic Training (SABT) classes, which graduated 124 new special agents • Three Integrated Use of Force Instructor Trainings (IUOFIT) classes • One Integrated Use of Force Instructor Refresher Training (IUOFIRT) class. IRS:CI Annual Report 2021 17 OFFICE OF COMMUNICATION PROFESSIONAL STAFF PHOENIX FIELD OFFICE: A special agent participates in a television interview with Channel 3 KTVK. Professional staff members have a meeting. CRIMINAL INVESTIGATION (CI) serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes. This includes promoting CI’s activities to foster compliance and educating taxpayers about the agency’s enforcement efforts. Doing so builds confidence in our nation’s tax system and puts criminals on notice – they will be prosecuted when they commit crimes. DURING 2021, IRS:CI hired a record number of professional staff, raising the ranks to 889 employees, which is nearly one-third of CI’s workforce. In addition to traditional hiring, CI continued to capitalize on excepted hiring, including The Veteran’s Recruitment Act, Schedule-A, and 30% disability hiring authorities. Over 100 individuals were hired through these programs during this fiscal year. Our investigative analysts, budget analysts, management and program analysts, administrative officers, secretaries, and technical professionals are embedded in every facet of CI. Each professional staff role supports the goals and missions of the IRS and CI respectively. The Office of Communication directly supports CI’s mission by building awareness with internal and external stakeholders about the agency’s work, and it provides vital public safety messages about Covid-19-related scams and IRS impersonation schemes to protect the public and their financial interests. The Office continues to expand its efforts in two important areas – the international arena and social media. CI’s work has an increasingly global reach through its partnership with the Joint Chiefs of Global Tax Enforcement (J5), an international group comprised of tax organizations from five countries. The J5 combats tax crime through collaboration, information-sharing, and enforcement operations. Communication between participating countries on topics like cryptocurrency, tax crimes, and financial crimes continues to expand each year. CI also maintains the Twitter account, @IRS_CI, to supplement IRS compliance and enforcement messaging. This account creates awareness about CI while providing real-time information on criminal cases to the media and public. Since its launch in May 2020, CI’s Twitter account averages over one million impressions per quarter, generates hundreds of tweets and continues to grow exponentially. In September 2021, CI launched its agency account on LinkedIn. This account, in addition to the J5 LinkedIn account, serves as a channel for CI to disseminate information to taxpayers, particularly about recruiting and job opportunities within the agency. It also provides an outlet to reach a new population of social media users, who may not be avid Twitter users, but have a special interest in CI’s work. The Office of Communication houses two CI legislative liaisons. Legislative liaisons serve as conduits for communicating information to and from Capitol Hill. They assist with hearing preparation for senior-level officials and provide Congressional briefings. They analyze, research and formulate official responses to requests from House and Senate members and their staff, as well as oversight committees. IRS:CI communicators have implemented a comprehensive communications strategy that balances outreach to the public, federal and legislative communities, and CI’s global partners, while protecting the sensitive nature of CI investigations. The Office of Communication’s efforts serve as an integral part of building understanding about CI’s work and deterring violations of the U.S. tax system. u Our investigative professional staff are critical to advancing the law enforcement efforts of CI. Professional staff can be found on the front lines of case work and behind the scenes of every CI activity. Tax fraud investigative assistants (TFIA) and investigative analysts (IA) work with special agents in field offices throughout the country and in our international posts of duty. They actively participate in all aspects of criminal investigations from inception to prosecution. Additionally, our non-investigatory professional staff are critical at keeping CI’s wheels turning by ensuring available finances and functioning equipment. In FY 2021, CI provided innovative virtual training to TFIAs and IAs. This created an opportunity to be inclusive, as all CI employees were invited to attend the foundational sessions. Topics included: CI organizational structure, elements of a crime, badges of fraud, lifecycle of a criminal investigation, the role of a special agent, and the role of the investigative analyst. All employees learned about the mission of Criminal Investigation and how their position impacts the work we do. IAs and TFIAs received additional specialized training and participated in practical exercises encompassing research, case development, report writing, and case presentations. Beyond just supporting CI field offices, professional staff support CI’s essential and innovative work in the areas of cybercrime, data analytics, finance, technical operations, cybersecurity, national investigative priorities, refund fraud, and the crime lab. Data scientists, forensic scientists, technical specialists, and investigative analysts are experts in their fields and work across all areas of CI operations. The Workforce Development section furthered CI’s commitment to its workforce by leading a series on self-development. Hundreds of employees took advantage of Zoom sessions facilitated by experts in career and personal development. Key topics included mental health and suicide awareness, knowledge retention and information sharing, job interviewing techniques, and identifying great leadership qualities. These sessions fostered an environment of inclusion and the sharing of best practices amongst CI’s administrative, technical, and investigative personnel. FY 2021’s continued investment in CI’s Professional Staff community positively impacted CI’s ability to accomplish its law enforcement mission and has set a standard for years to come. u IRS:CI Annual Report 2021 18 WORKFORCE DEVELOPMENT Two special agents review a report as they discuss the recruiting and development needs necessary to support organizational changes across CI this year. WORKFORCE DEVELOPMENT (WD) was created to address the development and leadership needs of IRS:CI’s most important resource – its employees. WD is building on the early successes of the former Leadership, Education, and Development group by expanding its reach to all employees. WD now provides leadership development training to agents beginning at the training academy and continuing through their entire leadership progression. WD also addresses the development of investigative and administrative professional staff through leadership development and career pathing for those not aspiring to a formal leadership position. Finally, WD is responsible for the recruiting and retention of a diverse and highly qualified workforce, which will ensure CI continues to be the leader in financial investigations for the foreseeable future. EQUITY, DIVERSITY, AND INCLUSION THE MISSION OF THE CRIMINAL INVESTIGATION (CI) Equity, Diversity, and Inclusion Office (EDI) is to identify, examine, and address the organization’s employment practices, policies, guidelines, and procedures to ensure that all employees and applicants for employment achieve equal opportunity in every facet of CI’s programs, activities, and services. EDI works to ensure that employment practices and decisions are made with the highest level of integrity and fairness for every employee. CI EDI endeavors to provide excellent customer service, advice, and education to management, employees, and stakeholders to ensure compliance with appropriate federal Equal Employment Opportunity (EEO) laws and regulations that prohibit discrimination on the basis of age, color, disability, equal pay, national origin, pregnancy, race, religion, retaliation, sex (gender), and sexual harassment. The EDI Director reports directly to the Chief and Deputy Chief and provides strategic advice and assistance on Management Directive 715 (MD-715), diversity strategies, policies, directives, and guidance to the Senior Staff and Senior Leadership Team. EDI staff members also advise managers on how to effectively capitalize on the strengths of all employees while embracing their differences and unique perspectives to create an environment that engages and supports all employees. EDI is dedicated to providing diversity and inclusion training and education, recognizing that education is essential for bringing diversity awareness to the workforce. Our efforts for educating the CI workforce is an ongoing process of creating the awareness needed to manage an inclusive and diverse workforce. Presentations, products/reports, guidance, and seminars are customized and provided to the workforce to ensure that employees have the awareness, skills, and knowledge to carry the message of diversity into their personal work environments. The goal of our diversity training program is to convey the importance of a respectful work environment, thereby maximizing every individual’s potential. When field offices need to obtain EEO information, EDI can provide an in-depth demographic report of the field office as well as an overview of the data so the requestor understands the information they have received. EDI can also give advice, guidance, and recommendations on EDI diversity questions, as well as educating employees of where sources can be obtained and the impact it has on their job or role in CI. u IRS:CI Annual Report 2021 19 OUTREACH & COMMUNITY ENGAGEMENT ATLANTA FIELD OFFICE: Special agents meet at a community event in Lake Charles, Louisiana. CHICAGO FIELD OFFICE: Special agents (left to right) Chris Klein, Robert Zehme, Mike D’Andrea, and Collin Thompson participate in the US Marshalls Honor Run. MIAMI FIELD OFFICE: Special agents work closely with the Puerto Rico Department of Treasury to improve investigation coordination. NEW YORK FIELD OFFICE: IRS:CI launched a digital billboard campaign in Buffalo, New York, asking for the public’s help in identifying individuals and organizations who commit financial crimes. CHARLOTTE FIELD OFFICE: A special agent wins Top Shot. MIAMI FIELD OFFICE: ST. LOUIS FIELD OFFICE: A special agent talks to a student during a career fair at the University of Kansas. Emergency Support Function #13 The Homeland Security Investigations (HSI) manager overseeing the Champlain Towers investigation recognized Miami FO Group 40 for its support in helping track missing people from the building collapse in Surfside, Florida. Group 40’s efforts resulted in them being able to quickly locate all 40 people and/ or their family members. IRS:CI’s Emergency Support Function (ESF) #13 provides federal public safety and security assistance to local, state, tribal, territorial, and federal organizations overwhelmed by the results of an actual or anticipated natural/manmade disaster or act of terrorism. IRS:CI has been supporting the ESF #13 mission since 2018 and currently has a cadre exceeding 100 agents. In September, IRS:CI deployed 22 ESF special agents to Louisiana to assist with the aftermath of Hurricane Ida. IRS-CI’s ESF team was assigned to protected and assist New York Task Force 1 and Massachusetts Task Force 1 Urban Search and Rescue teams (USAR). The ESF agents accompanied USAR teams on foot, in the water, and in boats, providing security and assistance during the search and rescue efforts. IRS:CI Annual Report 2021 20 FIELD OFFICE MAP Click on a location to go to that Field Office section. WESTERN AREA NORTHERN AREA SEATTLE DETROIT BOSTON CHICAGO Guam CINCINNATI DENVER NEW YORK NEWARK PHILADELPHIA ST. LOUIS OAKLAND LAS VEGAS LOS ANGELES WASHINGTON, D.C. (HEADQUARTERS) PHOENIX CHARLOTTE ATLANTA Puerto Rico DALLAS HOUSTON TAMPA U.S. Virgin Islands MIAMI * The Las Vegas field office merged into the Phoenix field office in July 2020. SOUTHERN AREA IRS:CI Annual Report 2021 21 CASE CLOSED: A SUMMARY OF SIGNIFICANT CASES FOR IRS:CI IN 2021 ST. LOUIS FIELD OFFICE: Special Agent Liliana Nin assembles her gear for a National Night Out with her local community. NORTHERN AREA Multiple Individuals Sentenced in Massive Contracting Fraud and Money Laundering Scheme December 7, 2020, John Williams was sentenced to 9 years in prison and was ordered to pay $10 million in restitution. Williams was convicted of tax evasion, money laundering conspiracy, money laundering, and embezzlement by a bank employee. Williams embezzled over $8.4 million from his employer. Williams was employed as a construction project manager in the Indianapolis regional office of a bank. His responsibilities included overseeing the bank’s internal real estate projects. Williams used information available to him as a bank employee to identify construction and renovation projects that were projected to come in under budget. Williams then contacted co-conspirators, Ernie Perkins, Robert Finch, Walter Watson and Donald Landis, and instructed them to submit fraudulent invoices on those under-budget projects. The invoices listed work that was never performed and materials that were never supplied. Williams then approved the payments of the fraudulent invoices. Perkins, Finch, Watson, and Landis kicked back a large percentage of the payments to CB Consulting, a fictitious business entity controlled by Williams. Williams did not report his illegal income on his federal tax returns, which resulted in a tax loss of $1.9 million. • Ernie Perkins, the owner of Remarkable Creative Enterprises (“RCE”), was sentenced to nearly 6 years in prison. • Robert Finch, the owner of Finch Constructors and Finch Management, was sentenced to 4 years in prison. • Donald Landis, the owner of P&L Supply, was sentenced to 3 years in prison. • Walter Watson, the owner of W-3 construction company, was sentenced to 1½ years in prison. Eight Individuals Sentenced for Laundering $44 Million in Drug Proceeds to Mexico Through Local Cell Phone Store Fronts April 9, 2021, Rodrigo Esqueda-Vazquez was sentenced to 15 years in prison. Esqueda-Vazquez was the final of eight defendants sentenced in a $44 million money laundering case. Sentences imposed ranged from 5 to 18 years in prison. From 2013 through September 2019, the defendants conspired to distribute heroin, fentanyl, and marijuana and to commit money laundering. The scheme relied on the use of small businesses that purported to be cell phone stores. The stores conducted little, if any, legitimate business; rather, the stores were merely front businesses for drug traffickers to send large amounts of drug trafficking proceeds to Mexico. Jose Luis Rosales-Ocampo, of Columbus, Ohio, and his family members ran the so-called cell phone stores. The investigation and prosecution of these defendants removed approxi- Another co-conspirator, Shalonda Coleman, was sentenced to 2 years in prison and was ordered to pay $309,088 in restitution. Coleman embezzled $282,432 from her employer, an insurance company, by approving fictitious invoices submitted by Ernie Perkins, for payment. Once Perkins received the fraud proceeds, he then wrote checks back to Coleman for her cut. Coleman did CHICAGO FIELD OFFICE : Assistant Special Agent in not report her illegal income on Charge Donald Eakins (right) administers the oath of office her tax returns. for Special Agent Matthew Kron on his first day of duty. CINCINNATI FIELD OFFICE : Special agents conduct firearms training. mately 34 kilograms of heroin, 516 grams of cocaine, 76 grams of fentanyl, and 250 pounds of marijuana from Central Ohio streets. Additionally, investigators seized $458,500 in U.S. currency and a home valued at nearly $248,000. IRS:CI Annual Report 2021 22 FCA US LLC Pleads Guilty and Former UAW and FCA Officials Sentenced March 1, 2021, FCA US LLC (FCA, a/k/a Fiat Chrysler Automobiles), one of the big three American automobile manufacturers, pleaded guilty to conspiring to violate the Labor Management Relations Act, also known as the Taft-Hartley Act, by making illegal payments to officers of the United Auto Workers union. FCA is the American operating subsidiary of Stellantis, and it is headquartered in Auburn Hills, Michigan. As part of the plea agreement, FCA agreed to pay a fine of $30 million and be subject to federal oversight. The company conspired with other entities and individuals to violate the Taft-Hartley Act by making more than $3.5 million in illegal payments to officers of the International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW) during the years 2009 through 2016. During the conspiracy, executives of FCA, including Alphons Iacobelli and Jerome Durden, engineered the illegal payments to senior officials of the UAW. The payments violated federal labor laws and undermined the collective bargaining process. As part of the investigation, senior UAW officials were also found to have participated in a multi-year conspiracy to embezzle money from the UAW for their personal benefit. Several of the recent sentencings include: July 6, 2021, Vance Pearson, former Director of the United Auto Worker’s Region 5 and a former member of the UAW’s International Executive Board, was sentenced to one year in prison and was ordered to pay $250,000 in restitution to the UAW and to forfeit $122,258 for conspiring with other UAW officials to embezzle UAW dues money and for further racketeering crimes. WESTERN AREA Private Equity CEO Enters into Non-Prosecution Agreement on International Tax Fraud Scheme June 10, 2021, Gary Jones, former President of the international United Auto Workers union, was sentenced to more than 2 years in prison and was ordered to pay $550,000 in restitution to the UAW, $42,000 in restitution to the IRS, forfeiture of $151,377, and a $10,000 fine, for conspiring with other UAW officials to embezzle UAW funds and to defraud the United States. DALLAS FIELD OFFICE: Special agents conduct building entry training drills at the Denton Public Safety Training Center in Denton, Texas. May 11, 2021, Dennis Williams, former President of the international United Auto Workers union, was sentenced to nearly 2 years in prison and was ordered to pay restitution of $132,000 and a $10,000 fine for conspiring with other UAW officials to embezzle UAW funds. January 27, 2021, Edward “Nick” Robinson, former President of the United Auto Workers Midwest CAP and former Director of the UAW Labor and Employment Training Corporation, was sentenced to one year in prison and was directed to pay $342,000 in restitution. The following other individuals have already been sentenced for their participation in the corruption within the UAW or illegal payments by FCA to UAW officials: former FCA Vice President for Employee Relations Alphons Iacobelli (5 ½ years in prison), former FCA Financial Analyst Jerome Durden (more than one year in prison), former Director of FCA’s Employee Relations Department Michael Brown (one year in prison), former senior UAW official Virdell King (60 days in prison), Keith Mickens (one year in prison), Nancy A. Johnson (one year in prison), Monica Morgan, the widow of UAW Vice President General Holiefield (1½ years in prison), former UAW Vice President Norwood Jewell (more than one year in prison), former senior UAW official Michael Grimes (more than 2 years in prison) and former UAW Vice President Joseph Ashton (2½ years in prison). Former senior UAW official Jeffrey “Paycheck” Pietrzyk passed away before being sentenced. DENVER FIELD OFFICE : A special agent conducts firearms training drills with a shotgun at an outdoor shooting range. TAMPA FIELD OFFICE : Special agents conduct firearms training drills in an indoor training facility. October 15, 2020, Robert F. Smith, the Chairman and Chief Executive Officer of a San Francisco based private equity company, entered into a Non-Prosecution Agreement for his involvement from 2000 through 2015 in an illegal scheme to conceal income and evade millions in taxes by using an offshore trust structure and offshore bank accounts. In that agreement, Smith admitted his involvement in the illegal scheme, agreed to cooperate with the ongoing investigation, and agreed to pay back taxes and penalties in full. Smith, a resident of Austin, Texas, formed the Excelsior Trust in Belize, and a shell company, Flash Holdings, in Nevis in 2000, in order to avoid the payment of U.S. taxes. Smith used third parties to conceal his beneficial ownership and control of the Excelsior Trust and Flash Holdings. In reality, Smith controlled both offshore structures. Additionally, over the years, Smith used millions of unreported income to acquire and make improvements to real estate used for his personal benefit. Under the terms of the agreement, Smith agreed to cooperate with the Department of Justice in other related investigations. Further, Smith agreed to pay approximately $56 million in taxes and penalties stemming from the unreported income and another $82 million in penalties stemming from his concealment of his offshore bank accounts. Altogether, Smith will pay more than $139 million in taxes and penalties. Additionally, Smith agreed to abandon his protective claims for a refund totaling approximately $182 million that were filed with the IRS. The protective refund claims consisted, in part, of claims for charitable contribution deductions filed with the IRS on September 21, 2018 and October 11, 2019. As a result of the agreement, Smith shall take no further direct or indirect tax benefit from such claims. Political Donor Sentenced to 12 Years in Prison for Lobbying and Campaign Contribution Crimes, Tax Evasion, and Obstruction of Justice February 18, 2021, Imaad Shah Zuberi, of Arcadia, California, was sentenced to 12 years in prison and was ordered to pay $15 million in restitution and a criminal fine of $1.75 million. In November 2019, Zuberi pleaded guilty to violating the Foreign Agents Registration Act (FARA) by making false statements on a FARA filing, tax evasion, and making illegal campaign contributions. In June 2020, Zuberi pleaded guilty in a separate case to obstruction of justice. His sentence pertains to both cases. Zuberi, a venture capitalist and political fundraiser, falsified records to conceal his work as a foreign agent, while lobbying high-level U.S. government officials. Zuberi became wealthy, largely through his theft of client funds and unlawful lobbying on behalf of foreign interests. Zuberi also siphoned more than 90 percent of investments in U.S. Cares, a company set up to export humanitarian aid to Iran. In 2013 and 2014, investors deposited approximately $7 million into U.S. Cares. In addition, the government of Sri Lanka contracted with Zuberi to rehabilitate the country’s image in the United States. Sri Lanka wired $6.5 million to Zuberi, and Zuberi used more than $5.65 million of that money to the benefit of himself and his wife. Zuberi failed to report these funds on his tax return. Zuberi’s tax evasion over the course of four years – 2012 through 2015 – caused tax losses ranging from $3.5 million to as much as $9.5 million. IRS:CI Annual Report 2021 23 DETROIT FIELD OFFICE: A special agent climbs over barn rafters to locate records while conducting a search warrant. PHOENIX FIELD OFFICE: Special agents conduct NEW YORK FIELD OFFICE: Special Agent Michele entry training to safely clear rooms and buildings. McCormick receives recognition for 20 years of service with the federal government. SOUTHERN AREA Two Members of Racketeering Enterprise Sentenced October 13, 2020, Marcus Etienne, aka “Hitler,” and Mario Robinson were sentenced to 34 and 32 years in prison, respectively, for their roles in a wide-ranging criminal conspiracy. Etienne, of St. Martin Parish, Louisiana, and Robinson, of Opelousas, Louisiana, and Oakland, California, were involved in an enterprise based in St. Martin Parish consisting of more than seven members who conducted a continuing and extensive narcotics distribution conspiracy. Etienne was the leader of the enterprise, which began as early as 2009. The enterprise engaged in narcotics distribution, assault, robbery, extortion, extortionate collection of extensions of credit, murder for hire, murder, money laundering, illegal firearms possession, gambling on dogfighting, and obstruction of justice. Etienne and Robinson both had a OAKLAND FIELD OFFICE: Special agents and professional staff participate in building entry, active shooter, and weaponless tactics at the Tactical Village in Sacramento, Calif. role in the 2016 murder of another enterprise member, Trince Thibodeaux. Etienne and Robinson participated in additional activities to promote the enterprise. The enterprise purchased marijuana in California and shipped the drugs to Louisiana and Texas. Robinson received packages containing between one and 10 pounds of marijuana every one or two months. Robinson and Etienne used cash proceeds from the narcotics trafficking to purchase marijuana and other controlled substances in California. Robinson also purchased money orders in Louisiana to pay the enterprise’s marijuana suppliers in California. Both Etienne and Robinson conducted financial transactions with proceeds of narcotics trafficking to conceal the nature, source, and ownership of the enterprise’s profits. LOS ANGELES FIELD OFFICE: Assistant Special Agent in Charge Darren Lian discusses recent tax scams with KAZN AM1300 radio, which serves Mandarin speakers in California. Conspirators Sentenced in Connection with Consumer Fraud Schemes July 15, 2021, Lori Owen, aka Lori Corrigan, was sentenced to more than 5 years in prison and was ordered to pay $620,103 in restitution to the identified victims and a $265,964 money judgment, which represented the proceeds of the fraud. Owen participated in a telemarketing scam—primarily tax impersonation fraud—that operated from approximately December 2014 through the end of 2016, and which defrauded more than $1.38 million from victims around the United States. The conspirators, some of whom were located overseas, extorted money from victims by falsely representing to the victims that they had financial obligations to the IRS, Canadian tax authorities, or other entities. The conspirators then threatened the victims with arrest, prosecution, or other legal consequences for their purported debts and demanded that they pay the conspirators the “owed” money. Owen worked with others—including her ex-husband, David Owen, and her son, Andrew Corrigan—to collect the fraud proceeds on behalf of the overseas call centers. The conspirators monitored the victims’ payments to ensure that the payments were recovered quickly, before any victim or law enforcement officer could become aware of the fraud and attempt to stop the transaction. David Owen was sentenced to more than 10 years in prison, and Andrew Corrigan was sentenced to 10 years in prison. Key Drug Suppliers for the Irish Mob Sentenced March 31, 2021, Jorge Antonio Medina Escarsiga was sentenced to 32 years in prison. Escarsiga was a leader of a drug trafficking and money laundering organization that operated out of the Oklahoma State Prison (OSP) system. The organization distributed significant quantities of methamphetamine throughout the country, much of which was destined for Oklahoma. The methamphetamine originated with Escarsiga and was shipped from California to Kansas for transport to, and distribution in, Oklahoma City and elsewhere. Co-conspirators, who were incarcerated at the OSP in McAlester, Oklahoma, directed the wire transfer of drug proceeds to Andrew Pranger, an OSP prison guard. The wire transfers were conducted by Edmundo Perez and Makenzie Harris. Pranger was paid for smuggling contraband into the prison and for providing unlawful services to inmates within the prison, including the transfer of contraband between cells. This type of illegal service allowed Irish Mob members to continue to run their illicit drug activities while incarcerated. The remaining Operation Irish Spring defendants were sentenced as follows: • Johnny Ross, almost 27 years in prison • Michael Sanders, 16 years in prison • Edmundo Perez, 13 years in prison • Richard Lee Potts, 13 years in prison • Andrew Pranger, 1½ years in prison • Alyxsis Claussen, one year in prison • Makenzie Harris, one year in prison • Kenesha Moaning, one year in prison • Chelsea Rouse, 10 years in prison • Joy Robison, 5 years of probation IRS:CI Annual Report 2021 24 Pennsylvania Biofuel Company and Owners Sentenced on Environmental and Tax Crime Convictions Arising out of Renewable Fuels Fraud October 20, 2020, Ben Wootton, of Savannah, Georgia, was sentenced to nearly 6 years in prison, and Race Miner, of Marco Island, Florida, was sentenced to 5½ years in prison. Both men were ordered to pay restitution of more than $4 million to the IRS and more than $5 million to the Pennsylvania Department of Environmental Protection. Their company, Keystone Biofuels Inc., (originally located in Shiremanstown, Pennsylvania, and later in Camp Hill, Pennsylvania) was sentenced to five years of probation and ordered to pay restitution of more than $4 million to the IRS and more than $5 million to the Pennsylvania Department of Environment Protection. Miner was the founder and chief executive officer of Keystone. Wootton was president of Keystone and a former member of the National Biodiesel Board. Wootton, Miner, and Keystone falsely represented that they were able to produce a fuel meeting the requirements set by the American Society for Testing and Materials (ASTM) for biodiesel (a renewable fuel) and adopted by the EPA, and as such, were entitled to create renewable fuel credits, known as RINs, based on each gallon of renewable fuel produced. The fuel and the RINs have financial value and could be sold and purchased by participants within the federal renewable fuels commercial system. Wootton and Miner were also convicted of fraudulently claiming federal tax refunds based on IRS’s Biofuel Mixture Credit. The Biodiesel Mixture Credit is a type of “blender’s credit” for persons or businesses who mix biodiesel with diesel fuel and use or sell the mixture as a fuel. Wootton and Miner caused Keystone to fraudulently claim tax refunds based on non-qualifying fuel, and, in at least some instances, non-existent or non-mixed fuel. In an attempt to hide their fraud scheme, the men created false corporate books and records and sham financial transactions to account for the nonexistent and non-qualifying fuel and to create the appearance of legitimacy. The prosecution of Wootton, Miner and Keystone is the first prosecution of a case under the federal renewable fuels program based on fuel that did not meet the program renewable fuel quality standards. NEWARK FIELD OFFICE: Special agents conduct fire arms training. WASHINGTON D.C. FIELD OFFICE: Special agents seize a Tesla vehicle during a Paycheck Protection Program loan fraud investigation. HOUSTON FIELD OFFICE: Special Agent Sonia Hurtado (left) attends an outreach and recruiting event at The University of Texas Rio Grande Valley. MIAMI FIELD OFFICE: Supervisory Special Agent John Siddons announces indictments against the Los 27 gang during a multiagency news conference in San Juan, Puerto Rico. BOSTON FIELD OFFICE: Special Agent in Charge Joleen Simpson announces indictments for embezzlement and wire fraud during a press conference. ATLANTA FIELD OFFICE: Special agents clear fallen trees during cleanup operations following Hurricane Ida. SEATTLE FIELD OFFICE: Special agents maintain and improve their skills at a firearms range. IRS:CI Annual Report 2021 25 ATLANTA FIELD OFFICE 401 W. PEACHTREE STREET NW, ATLANTA, GA 30308 | (470) 639-2228 | AtlantaFieldOffice@ci.irs.gov AUGUSTA, GA BATON ROUGE, LA BIRMINGHAM, GA COLUMBUS, GA DECATUR, GA GULFPORT, MS HATTIESBURG, MS HUNTSVILLE, AL JACKSON, MS LAFAYETTE, LA MACON, GA MOBILE, AL MONTGOMERY, AL THE ATLANTA FIELD OFFICE covers the states of Georgia, Alabama, Mississippi, and Louisiana and consists of eleven judicial districts. We work a wide variety of criminal investigations across the four state region which includes legal and illegal source income tax fraud, payroll tax fraud, stolen identity theft / tax refund fraud, public corruption, terrorism, general fraud, money laundering and narcotics cases. With the recent merger of two field offices (the Atlanta Field Office with the former New Orleans Field Office), the newly constituted and expanded Atlanta Field Office has a diverse mix of employees with different backgrounds who are finding creative ways to investigate our cases. The Atlanta Field Office is continually building and strengthening its relationships with our law enforcement partners, the United States Attorney’s Office and the public in an effort to identify, investigate and refer quality cases for prosecution that will encourage compliance with and confidence in the Internal Revenue laws. NEW ORLEANS, LA OXFORD, MS SAVANNAH, GA SHREVEPORT, LA Compounding Pharmacy Mogul Sentenced for Multimillion-Dollar Health Care Fraud Scheme January 15, 2021, Wade Ashely Walters, of Hattiesburg, Mississippi, was sentenced to 18 years in prison and was ordered to pay more than $287 million in restitution and forfeit more than $56 million. Walters was a co-owner of numerous compounding pharmacies and pharmaceutical distributors. Between 2012 and 2016, Walters orchestrated a scheme to defraud TRICARE, the health care benefit program serving U.S. military, veterans, and their respective family members, as well as private health care benefit programs. As part of the scheme, Walters distributed compounded medications that were not medically necessary. Additionally, Walters conspired with others to launder the proceeds of his fraud scheme by engaging in monetary transactions in amounts over $10,000 in proceeds from the fraud scheme, including transactions relating to his participation in a sham intellectual property scheme. Clinton Pharmacist Sentenced for Conspiracy to Commit Health Care Fraud February 2, 2021, Marco Bisa Hawkins Moran, of Clinton, Mississippi, was sentenced to 10 years in prison for conspiring to commit health care fraud. Moran was also ordered to pay a monetary judgment exceeding $12 million, restitution exceeding $22 million, and a $20,000 fine. Between 2014 and 2016, Moran, as co-owner of Medworx Compounding and Custom Care Pharmacy, participated in a scheme to defraud TRICARE and other health care benefit programs, including those that provided coverage to employees of the city of Jackson, Mississippi. In total, the pharmacies submitted more than $22 million in fraudulent claims to TRICARE and other health care benefit programs. Alabama Salesman Sentenced for Tax Evasion - Used Offshore Insurance Wrappers and Precious Metals to Hide Assets from the IRS October 27, 2020, Ivan Scott “Scott” Butler, of Hoover, Alabama, was sentenced to 2 years in prison for tax evasion. Butler was also ordered to pay more than $1 million in restitution to the United States. Butler was an automobile industry consultant and sold automobile warranties as an independent salesman. In 1993, Butler stopped filing tax returns, attended tax defier meetings, and purchased tax defier materials. Starting in 1998, Butler used several Nevada nominee corporations to receive his income and to conceal the income from the IRS. In or around 1999, Butler moved hundreds of thousands of dollars to bank accounts in Switzerland and hid his assets in offshore insurance policies, which were held in the name of non-U.S. insurance providers, thus disguising his ownership of the funds. Such accounts, which generally are used as investment vehicles, are commonly known as “insurance wrappers.” In 2014, Butler converted some of his insurance wrappers into precious metals, which were shipped to Butler and another individual in the United States. In total, Butler caused a tax loss to the IRS exceeding $1 million. Drug-trafficking Pimp Sentenced in Commercial Sex Conspiracy May 28, 2021, Anthony Wilson Jackson, of Savannah, Georgia, was sentenced to more than 30 years in prison. Jackson previously pleaded guilty to conspiracy to possess with intent to distribute marijuana, conspiracy to engage in interstate travel or transportation in aid of a racketeering business (prostitution), possession of a machine gun, possession of a machine gun in furtherance of a drug trafficking crime, possession of a firearm by a convicted felon, and money laundering conspiracy. Jackson was the leader of a conspiracy that operated a commercial sex trafficking business across the country, and he shipped and distributed large amounts of marijuana in the Savannah area. Authorities seized drugs and drug trafficking paraphernalia, multiple firearms and ammunition, and more than $7,000 in cash. Jackson threatened to murder women whom he trafficked for sex, he forced women to bow and pray to him, and he beat his child so severely with a belt that the child urinated and defecated on himself. Jackson previously served prison time for drug trafficking, and while incarcerated he was punished for engaging in multiple assaults, including one in which another inmate was seriously injured. Louisiana Man Sentenced for Embezzling Over $7 Million and Filing False Tax Returns February 9, 2021, Deepak “Jack” Jagtiani, was sentenced to more than 5 years in prison. Jagtiani was ordered to pay more than $7 million in restitution to Dan-Gulf and its business partner, Caytrans BBC, LLC. Jagtiani was also ordered to pay more than $1.2 million in restitution to the IRS for unpaid taxes. From 2007 through 2019, Jagtiani worked as the comptroller for Dan-Gulf Shipping, Inc. During that time, Jagtiani paid himself excessive salaries and benefits. To disguise his scheme, Jagtiani set up a fake catering business to write off bogus losses. In total, he claimed enough business losses to offset most of his income. In truth, neither Jagtiani nor his spouse operated any catering business. In total, Jagtiani avoided paying more than $1.2 million in federal income taxes. IRS:CI Annual Report 2021 26 BOSTON FIELD OFFICE 15 NEW SUDBURY STREET, BOSTON MA, 02203 | (617) 316-2080 | BostonFieldOffice@ci.irs.gov BRIDGEPORT, CT BURLINGTON, VT HARTFOR [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A6a7ef78948d696a0. Public record. Not legal advice.