# Intercepting Threats to Our National Security (2023) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A98f90e402a134fb9 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text 2023 ANNUAL REPORT TABLE OF CONTENTS 16 Intercepting Threats to Our National Security Disrupting & Dismantling Transnational Criminal Organizations 17 Global Collaboration & Enforcement Contributing to the Community 18 Protecting Our Seniors from Scams Safeguarding Covid Relief Funds Assisting in the Fight 19 14 Catching Criminals Utilizing False Claims & Credits Detecting Fraudulent Tax Refunds Rooting Out Corruption Recovering Losses for Victims 20 Securing the Integrity of the Financial System 15 Cybercrimes & Tracking Funds Through Cryptocurrencies Fighting Fentanyl & Exploitation on the Dark Web Marketplace 21 Field Office Map 65 Appendix 02 Message from the Chief 03 Organization Chart of CI 10 2023 Snapshot 11 Closing the Tax Gap 12 Combatting Fraud & Money Laundering 13 Navigation Menu Table of Contents 2023 Snapshot Data Field Office Map Appendix 2023 | CI ANNUAL REPORT 01 MESSAGE FROM THE CHIEF I am so proud of the tremendous work done by the men and women of IRS Criminal Investigation (CI). Financial crime continues to evolve at a rate that challenges law enforcement daily. We will never investigate our way out of any one particular type of crime, so where we spend our time and resources must be methodical in an effort to protect the integrity of the financial system. Our relevance within the enterprise is significant, and the deterrent effect provided by showing the consequences for being willfully noncompliant is real and impactful. This year, we focused on quality and impact in our case selection, and I could not be prouder of the investigations our agency brought to bear. Tax and tax-related crimes continue to dominate the division’s investigative inventory. Our priority must continue to be tax, as we are the only agency that can investigate and recommend violations involving federal income tax crimes. These investigations create deterrence, which is critical to encouraging tax compliance. The revenue collected by the IRS each year funds nearly 96% of our government. Our investigative mission is important, and there is no better investment in government than investing in CI! We continue to lead the way in our investigative efforts involving digital assets, and we are reaping the benefits of early investment in our cyber capabilities and training. Our partnerships with the private sector created opportunities for us to solve the most complex crypto-related crimes in the world. We remain focused on stopping those who attempt to exploit new technology for nefarious purposes, mitigating illicit finance, and identifying national security risks. We know that digital assets provide opportunities for responsible financial innovation, and most people using cryptocurrency do so for legitimate purposes. But, we also know that digital assets pose a risk of facilitating money laundering, cybercrime and ransomware, narcotics, human trafficking, terrorism, proliferation financing, and tax crimes. Chain-hopping and token swapping have become common digital assets techniques used to make following the digital money trail more difficult, but not impossible. Our responsibility to be a meaningful player in the international tax and law enforcement community remains high. We are proud members of the Joint Chiefs of Global Tax Enforcement (J5), which just celebrated five years together. We deliver trainings to representatives from multiple countries across the globe. In May 2023, CI delivered blockchain analysis tools and cyber training to Ukrainian law enforcement agencies. A couple of months later, we partnered with the UK and The Netherlands to provide a second round of training to Ukrainian law enforcement officers. The training focused on cryptocurrency and blockchain tracing. I’m proud to say that our role in national security continues to be a priority for CI as well. In collaboration with agency partners, we leverage our unique investigative authorities to identify, disrupt, and defeat those who engage in activities that degrade our financial integrity, distort markets, and victimize our citizens. We continue to be a key player in sanctions-related enforcement efforts through Task Force Kleptocapture, which targets Russian oligarchs and other would-be sanctions evaders. Building on past disruptions of terrorist organizations like Hamas using cryptocurrency to fundraise, CI continues to prioritize cases that have significant impacts on preventing terrorist organizations from being able to fund their activities. While I look back on a year like 2023 full of our many organizational successes, I also could not be more excited with the work we have already begun doing in 2024. I could not be prouder of the men and women in CI. Jim Lee Chief, Criminal Investigation 2023 | CI ANNUAL REPORT 02 ORGANIZATION CHART OF CI Click on a blue Section box to learn more. OFFICE OF THE CHIEF • Office of Communication • Commissioner's Protection Detail (CPD) • Equity, Diversity & Inclusion (EDI) GLOBAL OPERATIONS (GO) CYBER & FORENSIC SERVICES • Financial Crimes (FC) • Narcotics and National Security (N2S2) • Asset Recovery & Investigative Services (ARIS) • Special Investigative Techniques (SIT) • International Field Operations (IFO) • Cyber Crime Operations (CC) • Digital Forensics (DF) • Center for Science & Design (CSD) AAI STRATEGY • Applied Analytics (CIAA) • National Coordinated Investigative Unit (NCIU) • Refund Fraud and Investigative Support (RFIS) • Data Management & Governance (DMG) • System & Operational Support (SOS) • Innovation • National CI Training Academy (NCITA) • Workforce Development (WD) • Human Resources (HR) • Asset & Knowledge Management (AKM) • Assurance & Advisory (AA) • Finance TECHNOLOGY OPERATIONS FIELD OPERATIONS • Development • Field Operations • Western Area Field Operations • Northern Area Field Operations • Southern Area Field Operations 2023 | CI ANNUAL REPORT 03 X CLOSE OFFICE OF THE CHIEF OFFICE OF THE CHIEF ORGANIZATION CHART OF CI Click on a blue Section box to learn more. OFFICE OF THE CHIEF • Office of Communication • Commissioner's Protection Detail (CPD) • Equity, Diversity & Inclusion (EDI) Office of Communication Commissioner’s Protection Detail (CPD) The Office of Communication uses a variety of mediums and events to build awareness about CI and the work the agency does for both internal and external audiences. The Office of Communications releases products that focus on informing, educating, and protecting U.S. taxpayers on how to identify and avoid criminal activity, as well as deterring and preventing future tax and financial crimes. The Commissioner’s Protection Detail (CPD) is a specially trained cadre of CI special agents, who provide personal security and protection to the IRS Commissioner. Since 1999, this dedicated team is charged with protecting the Commissioner during official business operations. CPD provides protection of the Commissioner within the National Capital Region and while in travel status, including foreign and domestic travel. As the leader of the IRS, the Commissioner frequently attends meetings, conferences, publicized hearings, and speaking engagements in locations like the TECHNOLOGY White House, U.S. Capitol, U.S. Treasury, and other venues in Washington, D.C., as well as OPERATIONS around the globe. In FY 2023, the Office of Communication continued to grow its social media accounts, Chief Deputy Chief conducted more media interviews than ever before, launched two new GovDelivery James (Jim) Lee was selected as the Chief, CI Guy Ficco was selected as the Deputy Chief, GLOBAL CYBER & FORENSIC newsletters to highlight agency news, oversaw in August 2020. In this role, Jim is responsible CI in June 2022. Prior to his selection as (GO) staff of nearly 2,900SERVICES AAI STRATEGY the launch of a new employee intranet, and forOPERATIONS overseeing a worldwide Deputy Chief, Guy was the Executive Director provided briefings to Capitol Hill staff. CI employees, including approximately 2,000 of Global Operations, Policy and Support, In a typical year, the• CPD protects the • Financial (FC)offices and 11 foreign• Cyberwhere CrimeheOperations (CC) • Applied Analytics (CIAA) • National CI Training Academy Development special agentsCrimes in 20 field oversaw the agency’s international Follow us for more information and to stay Commissioner on approximately 500 countries, whoand investigate involving tax, • Digital footprint, as (DF) well as much of CI’s policies • Narcotics Nationalcrimes Security Forensics • National Coordinated (NCITA) • Field Operations updated on CI. protective movements, 20 domestic trips, money laundering, public corruption, cyber, ID as they relate to investigations. Guy’s other (N2S2) • Center for Science & Design (CSD) Investigative Unit (NCIU) • Workforce Development (WD) and two to three international visits. CPD @IRS_CI theft, narcotics, and terrorist-financing. executive positions include the Special Agent • Asset Recovery & Investigative • Refund Fraud and Investigative • Human Resources (HR) special agents are trained in protective service in Charge (SAC) of the Philadelphia Field PriorServices to his selection as Chief, Jim served as (ARIS) Support (RFIS) • Asset & Knowledge Management operations with an emphasis on operational IRS Criminal Investigation Office and Director of Special Investigative the within CI,Techniques as well as in other • Deputy SpecialChief Investigative • Data Management & Governance (AKM) planning, motorcade operations, protective Techniques. Guy received his bachelor’s executive positions, including Director of Field IRS:CI and preventing and responding to (SIT) (DMG) • Assurance & Advisory intelligence, (AA) degree from Dominican University in New Operations (DFO)-North, DFO-South, Director of attacks. Protective operations are a team effort York, is a Certified Fraud Examiner (CFE), and • International Field Operations • System & Operational Support • Finance www.irs.gov/compliance/ Strategy, and Executive Special Agent in Charge and require detailed advanced preparations started his career as a special agent in the New criminal-investigation (IFO) (SOS) (SAC) of the Chicago Field Office. Jim received aimed at identifying and mitigating potential York Field Office. his bachelor’s degree from Tiffin University in • Innovation risks, threats, and vulnerabilities. Joint Chiefs of Global Tax Enforcement (J5) Ohio and started his career as a special agent in the Detroit Field Office. CI’s top law enforcement priorities are designed to promote tax compliance, address emerging areas of fraud, and meet the needs of the law enforcement community by supporting national crime initiatives. CI’s Program Strategy is comprised of three interdependent programs: legal source tax crimes, illegal source financial crimes, and narcotics related financial crimes/counterterrorism. These three areas are mutually supportive, and they encourage utilization of all statutes within CI’s jurisdiction, the grand jury process, and enforcement techniques to combat tax, money laundering, and currency crime violations. Equity, Diversity, and Inclusion Office (EDI) The Equity, Diversity, and Inclusion Office (EDI) mission is to examine and address CI’s employment practices, policies, and procedures to ensure that every employee attains equal opportunity in every facet of CI’s programs, activities, and services. EDI’s role is to monitor and evaluate the organization’s compliance with Equal Employment Opportunity Commission (EEOC) and Treasury guidance to eliminate barriers that hinder equal opportunity. EDI’s guidance aims to achieve and sustain a diverse and inclusive work environment that respects and values FIELD all aspects of an employee’s OPERATIONS diversity, including ideas (how you think), identity (who you are), and information (what you know). •The goal ofArea the CI EDIOperations office is to Western Field support leadership with building an inclusive • Northern Area Field Operations environment where employees are motivated • Southern Area Field Operations to put forth their best effort and are vested in achieving the CI mission. J5 Website 2023 | CI ANNUAL REPORT 04 ORGANIZATION CHART OF CI Click on a blue Section box to learn more. X CLOSE GLOBAL OPERATIONS (GO) OFFICE OF THE CHIEF • Office of Communication Financial Crimes (FC) Narcotics and National Security Section (N2S2) • Commissioner's Protection Detail (CPD) Financial Crimes provides policy guidance and operational The Narcotics and National Security Section contributes • Equity, Diversity & Inclusion (EDI) support to field offices on tax crimes, illegal source to the success of U.S. national security programs by financial crimes, and money laundering violations. Financial investigating the finances of transnational criminal Crimes oversees a host of investigative priorities, including organizations involved in narcotics trafficking, human GLOBAL CYBER & FORENSIC abusive tax schemes, fraud referrals, and Bank Secrecy trafficking, terrorism financing, OPERATIONS (GO) SERVICES AAI economic espionage, and Act violations. The unit also provides a liaison to work money laundering. Liaison officers assigned to the section directly with the Department of Treasury’s Financial Crimes provide coordination, deconfliction, advice, strategy, and • Financial Crimes (FC) • Cyber Crime Operations (CC) • Applied Analytics (CIAA) Enforcement Network (FinCEN), oversees CI’s Task Force financial analysis to support a government-wide approach • Narcotics and National Security • Digital Forensics (DF) • National Officer (TFO) Program, and administers IRS’s Voluntary to address national security threats.Coordinated The unit also focuses (N2S2)Program (VDP). In addition, Financial • Center & Design Investigative Unit (NCIU) Disclosure Crimesfor Scienceheavily on (CSD) narcotics and financial investigations related • Assetstarted Recovery Investigative • Refundby Fraud and Investigative recently CI’s&Body Worn Camera (BWC) Program for to high-priority targets identified Organized Crime training and deployment to the field. Drug Enforcement Task Forces (OCDETF). Services (ARIS) Support (RFIS) These cases often involve the convergence of program areas, and the • Special Investigative Techniques • Data Management & Governance prosecutions have a significant impact on dismantling large (SIT) (DMG) transnational criminal organizations. • International Field Operations • System & Operational Support (IFO) (SOS) • Innovation Asset Recovery and Investigative Services (ARIS) International Field Operations (IO) Asset Recovery and Investigative Services uses forfeiture International Field Operations oversees CI’s international authority as an investigative tool to disrupt and dismantle presence. CI personnel overseas are dedicated to actively criminal enterprises. The program deprives criminals of identifying emerging financial crime threats and ensuring property used in, or acquired through, illegal activities. of our primary mission in tax TECHNOLOGY the successful enforcement FIELD Following forfeiture of seized assets, forfeited funds are criminal investigations CI. currently has attaché posts STRATEGY OPERATIONS OPERATIONS routed to the Treasury Forfeiture Fund (TFF) managed strategically stationed in 11 foreign countries: Mexico, by the Treasury Executive Office for Asset Forfeiture Canada, Colombia, Panama, Barbados, China, Germany, • National CI Training Academy • Development • Western Area Field Operations (TEOAF). Forfeited funds are often returned to victims the Netherlands, England, Australia, and the United Arab (NCITA) • Field Operations Northern Field Operations of criminal activity and are also used to reimburse law Emirates. Attachés work•with foreignArea governments to build • Workforceagencies Development (WD) like enhanced training, • Southern Area Field Operations enforcement for expenses partnerships to further financial crime investigations. In • Human Resources (HR) equipment, and costs associated with conducting significant FY 2023, International Operations deployed four cyber investigations. In addition, the TFF shares a portion of attachés on long-term details to Germany, Colombia, • Asset & Knowledge Management forfeited funds with other federal, state, and local law Singapore and Australia to work with foreign governments (AKM) enforcement agencies. on cyber investigations and to evaluate the potential for • Assurance & Advisory (AA) permanent cyber post locations. CI’s International Training • Finance Special Investigative Techniques (SIT) Team (ITT) delivers trainings to representatives from Special Investigative Techniques oversees CI’s undercover activities encompassing tasks such as reviewing and approving operations, as well as providing training to personnel conducting undercover actions. CI maintains a cadre of undercover agents that utilize sophisticated means to initiate contact with individuals perpetrating tax crimes and other financial crimes, in order to gain evidence needed for prosecution of those crimes. multiple countries across the globe. Training provides the foreign governments in developing nations with necessary tools to combat financial crimes and serves as a key part of CI’s presence abroad. 2023 | CI ANNUAL REPORT 05 ORGANIZATION CHART OF CI Click on a blue Section box to learn more. OFFICE OF THE CHIEF X CLOSE • Office of Communication • Commissioner's Protection Detail (CPD) • Equity, Diversity & Inclusion (EDI) CYBER & FORENSIC SERVICES GLOBAL OPERATIONS (GO) Cyber Crimes (CC) CYBER & FORENSIC SERVICES AAI • Financial (FC) have grown increasingly • Cyber Crime Operations (CC)Crimes headquarters • Applied Analyticsoversees (CIAA) the CI’s Cyber component Many aspectsCrimes of our lives agency’s involvement in cyber-related criminal investigations dependent on and technology, the same holds•true for Forensics (DF) • Narcotics Nationaland Security Digital • National Coordinated provides tools, resources, and training to(NCIU) assist special criminals’ (N2S2)activities. Nearly every case CI investigates • Center for Scienceand & Design (CSD) Investigative Unit agents around the globe with cyber investigations. This involves the use of the internet, digital payments, and • Asset Recovery & Investigative • Refund Fraud and Investigative includes tracking illicit finance and mitigating national computer devices. Services (ARIS) Support (RFIS) security risks posed by cybercrimes, as well as tracking The agency has two Cyber Crimes Units (CCU) – one • Special Investigative Techniques • Datanarcotics Management & Governance digital assets used to facilitate trafficking, money positioned in the Los Angeles Field Office and the other (SIT) (DMG) laundering, terrorism financing, and more. in the Washington, D.C. Field Office. The CCUs are • operational International Field • System & Operational Support the arm andOperations focus on multijurisdictional (IFO) (SOS) investigations posing the most significant threats to the U.S. tax and financial systems. • Innovation STRATEGY Digital Forensics (DF) TECHNOLOGY OPERATIONS FIELD OPERATIONS Center for Science and Design (CSD) • National CI Training • Development • Western Area Field Operations Digital Forensics consistsAcademy of Digital Forensic Field Services The Center for Science and Design (CSD), formerly known as (DFFS) and the Digital Forensic Lab (DFL). DFFS consists of three sections: (NCITA) • consists Field Operations the National Forensic Laboratory, • Northern Area Field Operations of •seven groups of field forensic examiners nationwide Scientific Services, Multimedia and Deception Detection, Workforce Development (WD) • Southern Area Field Operations that provide advanced forensic support to special agents and Trial and Design Services. These sections forensically • Human Resources (HR) working criminal investigations. The DFL supports the process and analyze a wide variety of evidence, deliver • Asset & Knowledge Management field examiners by providing expertise for more complex expert courtroom testimony, produce visual aids to simplify (AKM) digital forensic research and development, scenarios, the presentation of complex evidence, provide electronic • Assurance & Advisory (AA) forensic training, acquisition of forensic tools and solutions, enhancements to audio, video, and images introduced as and development of forensic processes to keep pace with evidence, and assist with polygraph examinations. • Finance technological advances. 2023 | CI ANNUAL REPORT 06 ORGANIZATION CHART OF CI Click on a blue Section box to learn more. OFFICE OF THE CHIEF X CLOSE • Office of Communication ANALYTICS & INNOVATION ADVANCED • Commissioner's Protection Detail (CPD) • Equity, Diversity & Inclusion (EDI) Applied Analytics (CIAA) National Coordinated Investigative Unit (NCIU) GLOBAL CYBER & FORENSIC Applied Analytics leverage big data and advanced analytical The Nationally Coordinated Investigative Unit’s mission is to OPERATIONS SERVICES AAI capabilities to make(GO) CI more efficient. They analyze data use skilled staff, big data, and strategic threat assessments about CI operations and enhance lead generation efforts in to identify individuals committing tax crimes. In FY 2023, • field Financial Crimes (FC) • Cyberfraud Crime Operations (CC) 269 investigative • Applied Analytics (CIAA) the by developing queries that identify potential NCIU made referrals to CI field offices. among tax return, administration, Act • Narcotics and tax National Security and Bank• Secrecy Digital Forensics (DF) • National Coordinated and Operational Support (SOS) data.(N2S2) In FY 2023, CIAA completed over 130 lead generation • Center for ScienceSystems & Design (CSD) Investigative Unit (NCIU) projects, supported 15 NCIU initiatives, and delivered over Systems and Operational• Support uses systems and • Asset Recovery & Investigative Refund Fraud and Investigative 5,500 business reports. The team also strives to raise partners with business units at IRS to identify emerging (ARIS) acumen by conducting trainings and Support (RFIS) CI’s Services overall analytical trends and quality investigative leads, assists with court • Special Investigative Techniques • Data Management & Governance sharing data analytic capabilities across CI. testimony, and helps detect, prevent and recover funds from (SIT) fraudulent tax refunds. (DMG) • International Field Operations • System & Operational Support (IFO) (SOS) • Innovation Refund Fraud and Investigative Support (RFIS) Innovation (I) TECHNOLOGY FIELDcomplex challenges by Refund Fraud and Investigative Support identifies emerging Innovation helps CI overcome STRATEGY OPERATIONS OPERATIONS trends and schemes related to refund fraud and identity sourcing, tracking, coordinating, analyzing, and enabling theft to support high-impact criminal tax and related innovative research, process, and technology improvements • National CI TraininginAcademy Development • Western Field Operations financial investigations CI field offices across• the country. to solve critical needs and improve Area efficiencies. In FY It also supports other national programs including theOperations Court 2023, Innovation supported 113 projects, including one (NCITA) • Field • Northern Area Field Operations Witness Program, the Controls and Unpostables Program, where technology was used to review more than 80,000 • Workforce Development (WD) • Southern Area Field Operations and the Electronic Filing Suitability Program. handwritten checks for evidence in an investigation, • Human Resources (HR) demonstrating an accuracy rate of over 99.5%. • Asset & Knowledge Management (AKM) Data Management & Governance (DMG)) • Assurance & Advisory (AA) Data Management and Governance continuously seeks • Finance new data sources and converts that data into an actionable format for CI special agents. The team digitizes records through the Data Processing Center and leverages technology and algorithms to filter large data sets. This enhances CI’s ability to identify fraud and dedicate resources to the most impactful criminal investigations. 2023 | CI ANNUAL REPORT 07 ORGANIZATION CHART OF CI Click on a blue Section box to learn more. X CLOSE OFFICE OF THE CHIEF STRATEGY • Office of Communication • Commissioner's Protection Detail (CPD) • Equity, Diversity & Inclusion (EDI) National CI Training Academy (NCITA) Asset and Knowledge Management (AKM) The National Criminal Investigation Training Academy Asset and Knowledge Management ensures the CI GLOBAL CYBER & FORENSIC (NCITA), which is located at the Federal Law Enforcement workforce has the necessary assets to accomplish CI’s OPERATIONS (GO) Training Center in Brunswick, GA, plays a vital SERVICES role in training enforcement objectives,AAI including equipment, vehicles, the CI workforce. NCITA develops and delivers the Special badges and credentials, radios, body armor, and real • Financial Crimes program (FC) Cyber Crime Operations • Applied Analytics (CIAA) Act Agent Basic Training to special agent •trainees. estate.(CC) It also oversees CI’s Freedom of Information NCITA also plays major role in developing and delivering (FOIA) and records management as well as an • Narcotics andaNational Security • Digital Forensics (DF) • Nationalprograms, Coordinated advanced training for special agents in areas like use of internal knowledge management portal that permits the CI (N2S2) • Center for Science & Design (CSD) Investigative Unit (NCIU) force, firearms instruction, defensive tactics, and building workforce to crowdsource answers to questions to meet • Asset Recovery & Investigative • Refund Fraud and Investigative entry. NCITA also provides professional education courses enforcement goals. Services Support (RFIS) for the entire (ARIS) CI workforce focusing on emerging trends and • Special Investigative Techniques • Data(AA) Management & Governance Assurance and Advisory issues affecting law enforcement. (SIT) (DMG) Assurance and Advisory independently reviews, evaluates, • International Field Operations • System &program Operational Support and reports on CI field operations, areas, and (IFO) (SOS) headquarter sections in a fair and objective manner to identify risks, emerging issues, and best practices that • Innovation affect CI. The team assesses CI’s leadership effectiveness and ability to manage and mitigate risk and evaluates CI operations to ensure investigative alignment with agency strategy and established policies. Workforce Development (WD) Human Resources (HR) Workforce Development ensures that CI recruits and Human Resources (HR) spearheads the development TECHNOLOGY FIELD retains diverse and talented employees to meet CI’s and implementation of hiring plans for CI, leveraging all STRATEGY OPERATIONS OPERATIONS evolving enforcement challenges. WD also helps support relevant hiring authorities. HR executes the Service-wide and guide special agents and professional staff in HR Program Policy, specifically tailored to address the • National CICI’s Training Academy Development • Westernthey Area Field Operations accomplishing mission of deterrence and •compliance. distinct needs of CI. Additionally, manage employee Through Workforce Development, CI employees haveOperations recognition, work-life programs, andArea performance (NCITA) • Field • Northern Field Operations access to resources to keep them management, and they ensure special agents medical • Workforce Development (WD) balanced, engaged, • Southern Area Fieldmeet Operations and satisfied in their careers, as well as apprised of future requirements. HR is responsible for enforcing compliance • Human Resources (HR) opportunities within the agency. with federal employment laws, including the initiation of • Asset & Knowledge Management disciplinary actions when necessary. (AKM) Finance (F) • Assurance & Advisory (AA) • Finance Finance formulates, develops, and executes CI’s financial plan, utilizing sound financial management, laws, regulations, the Internal Revenue Manual, and local and IRS/Treasury policies. The Finance staff roles include implementing various Service-wide programs and processes, developing policy unique to the needs of CI, and providing financial oversight on behalf of CI. 2023 | CI ANNUAL REPORT 08 ORGANIZATION CHART OF CI Click on a blue Section box to learn more. OFFICE OF THE CHIEF X CLOSE • Office of Communication • Commissioner's Protection Detail (CPD) • Equity, Diversity & Inclusion (EDI) TECHNOLOGY OPERATIONS (TECHOPS) GLOBAL OPERATIONS (GO) Development CYBER & FORENSIC SERVICES AAI and Contracts (PMAC) section is responsible the oversight • Financial Crimes (FC) • Cyber Crime Operations (CC) • Applied Analytics for (CIAA) TechOps’ Development Branch sections work together and governance of IT projects and contracts. The Technical Narcotics and National Security • Digital Forensics (DF) • National Coordinated to •deliver and maintain CI’s infrastructure and technical Center (TOC) section oversees CI’s infrastructure applications. (BSD) for ScienceOperations (N2S2) The Business Systems Development • Center & Design (CSD) Investigative Unit (NCIU) and provides core IT services, such as remote and in office section identifies and manages the delivery of business • Asset Recovery & Investigative • Refund Fraud and Investigative network capabilities, application and server administration, improvement and information technology (IT) projects in Services (ARIS) Support (RFIS) and core enterprise computing center management, support of the CI Vision and strategic mission. BSD also • Special Investigative Techniques • Data Management smartphone and workstation management. & Governance oversees many CI applications, including LCA/Palantir, CIMIS, (SIT) and Diary. The Portfolio Management, Acquisitions, (DMG) AFTRAK, • International Field Operations • System & Operational Support (IFO) (SOS) • Innovation STRATEGY Field Operations TECHNOLOGY OPERATIONS FIELD OPERATIONS CI technology portfolio, software/hardware, change • National CIOperations Training Academy Development • Western Area Fieldand Operations TechOps’ Field sections support CI•through compliance with overall IRS, (NCITA) delivery, and technical support of•CI’s Field • Northern Area Field Operations the security, IT Operations requests, and they ensure Treasury, and federal standards and regulations. The User equipment. Cybersecurity (CYBER) is responsible for • Workforce Development (WD) • Southern Area Field Operations Support (US) section provides IT support for the field security risk management, security engineering, and • Human Resources (HR) offices, headquarters, and international sites through security operations, in the form of continuous monitoring • Asset & Knowledge Management the CI Help Desk and Field Service Computer Operations of CI’s IT systems and resources. CYBER also provides (AKM) Administrators (COAs), by providing CI users with access to security risk analysis and advisory services, disaster the network, a computer with a CI image, technical issue • Assurance & Advisory (AA) policy management and recovery support, and security resolution, and answers to their hardware, software, and • Finance guidance. Additionally, CYBER leads and facilitates incident telecommunication questions. response, insider threat, and data spill cleanup processes. Client Management Support Services (CMSS) manages the 2023 | CI ANNUAL REPORT 09 2023 SNAPSHOT DIRECT INVESTIGATIVE TIME SPENT INVESTIGATION SOURCES Corporate Fraud Public Public Corruption IRS:Civil Cybercrimes International General Tax Fraud Abusive Tax Schemes Employment Tax 5% General Fraud NON-TAX TAX 69.9% 2% State/Local Government 24% Financial Crimes Enforcement Network U.S. Attorney’s Office 14% NARCOTICS 11.3% OCDETF Organized Crime Drug Enforcement Task Force 19% Identity Theft 28% Other Federal Agencies 5.5B $ 31.6B $ 2,144 994 3,138 FY2022 2,077 938 3,015 FY2021 2,046 889 2,935 2,761 1,256 4,017 CI’s staffing levels are by fiscal year and reflect an actual count of employees based on the Employee Master Database as of PP19. 2% Uncategorized Other Identified Financial Crimes FY2023 FY2010 Refund Fraud Tax Fraud Identified Professional Staff Special Agents 7% Money Laundering 16.8% STAFFING Warrants Executed 1334 Referred For Prosecution 1838 Conviction Rate 88.4% Convictions 1508 Petabytes Of Digital Data 1.71 2023 | CI ANNUAL REPORT 10 Voluntary compliance is the backbone of the U.S. tax system. The IRS relies largely on taxpayers to report their income, calculate the amount of tax they owe, and remit that amount to the IRS through withholding or other payments. The gross tax gap is the difference between the amount of tax owed by taxpayers for a given year and the amount of taxes paid on time for that same year. IRS projected the gross tax gap at $688 billion for tax year 2021 alone, which could result in approximately $7 trillion in lost tax revenue over the next decade. As one of the oldest federal law enforcement agencies, Cl is the only federal law enforcement agency with jurisdiction to investigate federal tax crimes. CI is committed to reducing the tax gap by dedicating 70% of direct investigative time to tax investigations. CLOSING THE TAX GAP Targets of tax fraud investigations include individuals who deliberately underreport or omit income from their tax returns, such as high-income individuals who have a filing requirement but deliberately choose not to file returns and pay taxes owed. CI holds these tax evaders accountable, whether they are a TV personality who evades paying their tax obligations, or a taxpayer who embezzles funds or fails to report millions earned in illegal Dark Web transactions. With the increased use of digital assets in the mainstream economy, there has been a rise in digital asset tax investigations. These investigations consist of unreported income resulting from failure to report capital gains from the sale of cryptocurrency, income earned from mining cryptocurrency, or income received in the form of cryptocurrency, such as wages, rental income, and gambling winnings. CI is also seeing evasion of payment violations, where the taxpayer fails to disclose ownership of cryptocurrency in an attempt to shield holdings. “ The gross tax gap is the Promoters of overseas tax shelters or schemes develop sophisticated offshore structures, trusts, and bank accounts to unlawfully conceal millions of dollars of income from the U.S. Government. CI not only seeks to hold U.S. taxpayers taking part in these schemes responsible, but to pursue the promotors of the scheme, even if the promoter is an international tax advisor operating outside of the US border. Businesses also contribute to the tax gap by concealing profits from the IRS in an attempt to evade taxes owed. In January 2023, William Chen, a New England restaurant owner, was sentenced to prison for utilizing "zapper" software to deliberately delete transactions from his business’ point of sales system and underreporting millions in gross receipts on his taxes. Even individuals who win big in the lottery, try to wiggle out of paying their fair share. In May 2023, Ali and Yousef Jaafar, father and son, were sentenced in a “ten-percenting” scheme, where they unlawfully claimed more than 14,000 winning lottery tickets for others and laundered over $20 million in proceeds, resulting in a federal tax loss of more than $6 million. Some tax schemes have victims beyond the IRS. Employment tax fraud significantly contributes to the tax gap due to underreporting and underpayments. Employment tax fraud not only steals money from government coffers but also from hardworking employees. Employment tax fraud investigations include paying employees in cash under the table, filing false payroll tax returns, and failing to collect payroll tax from the employees. CI also investigates employers who withhold taxes from their employees’ paychecks but then use the funds for personal expenses or to enrich themselves. During the February 2023 sentencing of Kevin Shibilski, the judge stated imprisonment was necessary to send a deterrence message to two groups –business owners who willfully fail to pay their employment taxes and people who willfully fail to pay the IRS and use the tax funds for other purposes. Their actions have consequences, and they will go to federal prison. Investigations that close the tax gap foster confidence in the tax system and compliance with the U.S. tax laws. difference between the amount of tax owed by taxpayers for a given year and the amount of taxes paid on time for that same year. ” TAX CRIMES 1409 INVESTIGATIONS INITIATED 665 PROSECUTIONS RECOMMENDED 655 SENTENCED 2023 | CI ANNUAL REPORT 11 There are many faces to fraud, including tax, investment, healthcare, securities, and corporate fraud. However, the motive is always the same – money. CI’s premier financial investigators investigate fraud and the resulting money laundering that ensues. COMBATTING FRAUD & MONEY LAUNDERING Corporate fraud involves criminal 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 often use false information to complete tax returns, financial statements, and reports for regulatory agencies or investors. In June 2023, James Abrams, CEO of EthosGen LLC was convicted of 48 counts after a jury trial. Abrams provided forged documents and false information to induce several investors to invest in his company. The false documentation included forged teaming agreements, intellectual property licenses, tax returns, and financial statements that fabricated an existing customer base and inflated EthosGen LLC’s historical revenues, business activity, and profitability. Fraudsters will look for opportunities to perpetrate a scheme in all industries. In April 2023, Julian Omidi was sentenced to seven years for defrauding Tricare and private insurance companies by fraudulently submitting nearly $120 million in claims under his 1-800-GET-THIN business. Over the summer, Jose “Chanel” Teran and Webster “Yenddi” Batista were sentenced to 10 years collectively for running one of the largest music royalty fraud schemes in history. Teran and Batista stole $23 million from YouTube for song royalties that belonged to Latin artists in numerous countries. “ Money laundering occurs when criminals attempt to disguise the illicit nature of their funds by introducing it into the stream of legitimate commerce and finance. ” Money laundering occurs when criminals attempt to disguise the illicit nature of their funds by introducing it into the stream of legitimate commerce and finance. Criminals launder money through a wide variety of enterprises like banks, money transmitters, stock brokerage houses, casinos, and virtual currency exchanges. The flow of illegal funds around the world is estimated to be in the hundreds of billions of dollars. CI special agents are experts at uncovering money trails through traditional and virtual financial banking systems. “ CI special agents are experts at uncovering money trails through traditional and virtual financial banking systems. ” In September 2023, Karl Greenwood, cofounder of OneCoin, was sentenced to 20 years in federal prison for marketing and selling fake cryptocurrency to millions of victims who invested over $4 billion worldwide. In that same month, four men in Arkansas were convicted of cheating victims out of more than $18 million that they laundered through a web of international bank accounts. In June 2023, Rachael Winslow was sentenced to over 11 years in prison for her role in an international conspiracy to launder funds generated via boiler room fraud. Boiler room victims were led to believe there was legitimate investments in reputable companies, such as Facebook, Chesapeake Energy, or Toys R Us. In fact, the investments were worthless, and the boiler rooms defrauded the victims of more than $14 million. The use of professional money laundering or third-party money launderers has expanded with technology. Third-party facilitators place illicit proceeds into businesses, financial institutions, brokerage firms, and physical assets to conceal the nature of the illicit profits. In December, Ian Freeman was convicted of a bitcoin money laundering scheme. Freeman laundered over $10 million in proceeds from romance scams and other internet fraud by exchanging U.S. dollars for bitcoin. To facilitate the money laundering, Freeman and his co-conspirators opened and operated accounts at financial institutions in the names of various churches and described the deposits as donations to try to conceal the true source of the funds. In today’s technologically advanced world, criminal activity often crosses borders and can involve global financial crime. The crimes involve complex webs of offshore holdings and anonymous transactions, but CI traces the money each step of the way. NON-TAX CRIMES 1267 INVESTIGATIONS INITIATED 1173 PROSECUTIONS RECOMMENDED 824 SENTENCED 2023 | CI ANNUAL REPORT 12 Today’s sophisticated schemes demand a highly skilled team made up of instructors, analysts, scientists, data experts, and professional staff to decipher complex financial crimes and support and train special agents for the fight. ASSISTING IN THE FIGHT CI special agents are sworn federal law enforcement officers who begin their training at the National Criminal Investigation Training Academy (NCITA), located at the Federal Law Enforcement Training Center (FLETC) in Brunswick, Georgia. After passing rigorous practical exercises and academic standards, special agents graduate from the nine-week FLETC Criminal Investigation Training Program (CITP) and continue onto Cl's specialized 16-week Special Agent Basic Training (SABT). NCITA instructors train special agents to investigate cases and complete investigative steps, such as interviewing, gathering evidence, applying methods of proof, and making recommendations for prosecutions. NCITA provides special agents the knowledge and skills needed as criminal investigators. NCITA also plays a vital role in advanced training and comprehensive continuing professional education courses to special agents and professional staff, which focus on emerging trends and issues within the law enforcement environment. Nearly one-third of CI’s staff consist of professionals who work alongside special agents and provide support, guidance, and aid in accomplishing CI’s mission. Professional staff are on the front lines of case work and behind the scenes of every CI activity, whether it is an investigative analyst ensuring intelligence is accurate, administrative staff keeping the trains moving, computer specialists making sure CI has the necessary equipment, or our scientist and digital forensic team certifying evidence and linking that evidence to the criminals. “ CI is honored to have a highly talented and diverse workforce that is dedicated to bringing criminals to justice. ” Digital Forensics supports special agents in the collection and analysis of digital evidence. During the last year, CI’s team seized over 1.7 petabytes of digital data from over 3,300 computer devices in support of investigations. Digital Forensics possesses the expertise to recover relevant evidence, including data that may have been encrypted, password protected, or hidden by other electronic means. “ CI special agents are sworn federal law enforcement officers who begin their training at the National Criminal Investigation Training Academy... ” Since 1972, CI’s Center for Science and Design (CSD) has aided investigations through forensic testing and technical services. CSD’s scientific services include the ability to forensically process and analyze a wide variety of evidence, such as latent prints (finger and palm print development and comparison), questioned documents, ink chemistry, and DNA. In addition, CSD provides electronic enhancements, polygraph examination, and facial recognition. CSD’s design team simplifies the presentation of complex evidence for juries through compelling illustrations. Workforce Development provides continuing education and career path opportunities to assist employees in meeting their career goals and finding career satisfaction. This section provides easy access to resources to help all employees stay balanced and engaged in their work and home life. Equity, Diversity, and Inclusion Office (EDI) ensures that CI’s processes and programs are impartial and fair and that they provide equal possible outcomes for every individual. EDI creates and sustains a diverse, equitable, and inclusive environment that respects and accommodates every employee’s background, including race/ethnicity, sexual orientation, gender identity, and other protected statuses that make us all unique. CI is honored to have a highly talented and diverse workforce that is dedicated to bringing criminals to justice. CI continually strives to maintain its status as a top-notch employer by supporting all its employees, providing developmental opportunities, generating paths to career advancement, and investing in each individual’s success. STAFFING 994 PROFESSIONAL STAFF 2144 SPECIAL AGENT STAFFING 3138 TOTAL CI STAFFING 2023 | CI ANNUAL REPORT 13 CATCHING CRIMINALS UTILIZING FALSE CLAIMS & CREDITS Tax cheats pull out all the stops to compromise the integrity of the U.S. tax system. Whether it is someone who claims false tax credits or a team of individuals promoting and facilitating abusive tax schemes, it is CI’s job to catch the criminals who try to steer clear of paying their fair share. CI investigates promoters and the clients who willfully violate tax laws by participating in abusive tax schemes. Tax credits that sound too good to be true are usually tax schemes pushed by promoters using improper methods to avoid paying taxes. Promoters peddle large tax deductions by abusing legitimate credits, such as fuel tax credits. Fuel tax credits (FTCs) are meant for off-highway business and farming use and are not available to most taxpayers. The FTC has been around for over 50 years, yet unscrupulous tax return preparers continue to abuse the credit. Individual tax returns requesting FTCs have significantly increased this filing season. In fiscal year 2023, CI initiated investigations involving more than $164 million of potentially fraudulent FTCs and seized funds totaling $1.49 million from these schemes. In April 2023, five individuals were sentenced from six to 40 years in prison for their roles in a $1 billion biofuel tax conspiracy, one of the largest fraud schemes in U.S. history. The individuals conspired to appear as though they were producing and selling biodiesel to fraudulently claim more than $1 billion in refundable renewable fuel DETECTING FRAUDULENT TAX REFUNDS tax credits. As a result of the scheme, IRS paid out more than $511 million in credits to Washakie Renewable Energy, a Utah biodiesel company owned by Jacob and Isaiah Kingston. Similarly, promoters tout abusive tax schemes under syndicated conservation easements. In September 2023, Jack Fisher and James Sinnott were found guilty of a fraudulent tax shelter scheme involving syndicated conservation easements, where they and others received more than $41 million in payments. Fisher and Sinnott designed, marketed, and sold over $1.3 billion in abusive syndicated conservation easement tax shelters. They grossly inflated the value of the easements so their high-income clients could claim fraudulently inflated tax deductions. Other fraudsters make false claims on government grant programs. In December 2022, Christopher Condron was sentenced to seven years in prison for defrauding the U.S. Treasury of more than $50 million in tax-free energy grants as part of the American Recovery and Reinvestment Act of 2009. For nearly four years, Condron and his co-conspirators submitted fraudulent grant applications, falsely claiming entities had acquired, put into service, or started construction of energy property and sought reimbursement under the Act for costs they never actually incurred. Tax-related crimes make up the lion’s share of CI special agents’ investigations. Few crimes impact all American taxpayers like tax crimes, because tax revenue is the lifeblood of the government. It is estimated that fraudulent tax refunds cost Americans tens of millions of dollars each year. By investigating bad actors who submit questionable refunds, file returns using stolen identities, use dishonest tax preparers, or claim false tax losses or dependent information, CI helps ensure the integrity of the tax system. CI special agents use their financial investigative expertise to uncover and quantify the seriousness of these schemes. Questionable refund schemes often involve individuals who file numerous fraudulent tax returns for others, but sometimes they are based solely on false information submitted by a single taxpayer. CI special agents uncovered a years-long scam by Francis Burns, who filed five false tax returns asking for refunds totaling more than $80 million. He claimed to be filing returns on behalf of an estate or a trust that did not exist. The returns contained fake Forms 1099s that falsely claimed significant sums of income were withheld for federal taxes by third parties, such as banks. In reality, Burns was unemployed, and there was no estate, no trust, and no income. While he did not receive the entire attempted refund amount, he spent the refunds he did receive on expenses including a lavish luxury home and a vehicle. He was sentenced to five years in federal prison and ordered to pay restitution. CI seized and forfeited a significant percentage of the assets Burns purchased with the fraudulent refunds. Stolen identity refund fraud occurs when an identity thief uses a legitimate taxpayer’s identity to file a fraudulent tax return and to claim a refund. Generally, the identity thief will attempt to get a refund early in the filing season before the legitimate taxpayer files their tax return. CI aggressively investigates these cases and brings perpetrators to justice. In September 2023, Ariel Jimenez was sentenced to 12 years in prison for leading a tax fraud and identity theft conspiracy, where he obtained stolen identities of hundreds of minors and sold those identities to his tax clients so they could fraudulently claim them as dependents on their tax returns. Return preparer investigations involve corrupt return preparers, who orchestrate the preparation and filing of false income tax returns for others. These preparers often claim inflated personal or business expenses, false deductions, excessive exemptions, and unallowable tax credits. The preparers’ clients may or may not know their tax returns were falsified. In North Carolina, two return preparers filed 1,000 false tax returns with the IRS that claimed approximately $5 million in fraudulent refunds. Both women behind this scheme were subsequently sentenced to federal prison and ordered to pay $5.2 million in restitution to the IRS. CI special agents investigate hundreds of these cases each year, helping ensure fairness in the tax system. 2023 | CI ANNUAL REPORT 14 CYBERCRIMES & TRACKING FUNDS THROUGH CRYPTOCURRENCIES CI remains focused on stopping those who use digital assets to exploit technology for nefarious purposes, mitigate illicit finance and identify national security risks. While digital assets provide opportunities for responsible financial innovation, safe and affordable financial services, they also pose risk of facilitating money laundering, cybercrime and ransomware, narcotics and human trafficking, terrorism, and proliferation financing. Cryptocurrency continues to fuel cybercrime. CI Cybercrime Units have some of the top financial investigators in tracing cryptocurrency. Cybercriminals continue to create more sophisticated hacks and schemes in an attempt to outsmart the law to steal and launder massive amounts of cryptocurrency. CI has demonstrated its ability to pursue these criminals, no matter how complex the schemes, as shown in the Mt. Gox hack and the takedown of the illicit cryptocurrency exchange BTC-e. CI investigation of BTC-e exchange revealed illicit proceeds from numerous computer intrusions and hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings. Ransomware, malware, banking trojans, mineware and crimeware, skyrocketed after cryptocurrency was created. From anywhere in the world, a cybercriminal seeks to steal data through any means possible. This includes computer system hacking or fraudulently gaining trust in targets of opportunity, such as the elderly. Chain hopping and token swapping have become common techniques utilizing uncommon or new cryptocurrency or privacy coins. These techniques used by hackers like Ilya Lichtenstein make following the money more difficult, but not impossible. The virtual currency scheme “pig butchering” continued to rise in 2023, primarily targeting U.S. taxpayers. Thus far, the highest identified loss in one of these schemes is $2 million, but average losses are hundreds of thousands of dollars. This scheme uses fake identities, relationships, and storylines to enable the victim to trust the scammer. After convincing the victim to invest in virtual currency or an over-the counter foreign exchange scheme, the victim becomes unable to access their funds because it’s under the scammer’s control. Key partnerships with federal law enforcement continues to play an integral role in investigations while following the money trail no matter where it leads. The sentencing of Ionut-Razvan Sandu, a Romanian national, for laundering more than $3.5 million in fraudulent online auction proceeds brought justice for more than 900 American victims and highlighted the importance of working alongside law enforcement partners to pursue cybercriminals and bring them to justice. FIGHTING FENTANYL & EXPLOITATION ON THE DARK WEB MARKETPLACE CI special agents work tirelessly to combat money laundering, drug trafficking, and exploration on darknet marketplaces. CI’s Cyber and Forensic Services and Narcotics and National Security Section collaborated to initiate a Cyber-Organized Crime Drug Enforcement Task Forces (OCDETF) program to directly target criminals using the internet, darknet, and virtual currencies to conduct and profit from the sale of illicit narcotics. Our special agents are experienced in solving sophisticated cyber-related schemes and are up to the challenge of locating and apprehending criminals hiding in the digital world. “ Under the Joint Criminal Opioid and Darknet Enforcement (JCODE) task force, CI and other law enforcement agencies around the world have joined forces to identify and take down criminals who use the darknet to buy and sell narcotics. CI plays an integral role in these investigations by following the money trail, whether it is in fiat currency or digital assets on the blockchain. Sadly, it is not only narcotics being trafficked on the darknet. Darknet sites also profit from human trafficking and the sexual exploitation of children. In July 2023, Vincent Galarza was sentenced to over 17 years in prison related to the Welcome to Video investigation. Galarza was one of 337 individuals arrested around the world. As a result of the investigation, law enforcement rescued 23 minor victims who were abused by users of the site. In May 2023, CI and JCODE partners announced the results of Operation SpecTor. The operation resulted in 288 arrests and the seizure of 117 firearms, 850 kilograms of drugs that included 64 kilograms of fentanyl or fentanyl-laced narcotics, and $53.4 million in cash and virtual currencies. Defendants in more than CI’s Cyber-OCDETF program directly targets criminals using the internet, darknet, and virtual currencies to conduct and profit from the sale of illicit narcotics. ” 100 cases were prosecuted for selling tens-of-thousands of counterfeit oxycodone pills containing fentanyl, in exchange for cryptocurrency via darknet marketplaces. CI continues to dedicate investigative time and expertise to tackle darknet and cryptocurrency crimes. In June 2023, CI also joined forces with other federal agencies to create the Darknet Marketplace and Digital Currency Crimes Task Force. 2023 | CI ANNUAL REPORT 15 INTERCEPTING THREATS TO OUR NATIONAL SECURITY Criminals, corrupt entities, and foreign adversaries constitute significant financial threats to U.S. National Security. CI leverages our unique investigative authorities, in collaboration with agency partners, to identify, disrupt, and defeat those who engage in activities which degrade our financial integrity, distort markets, and victimize our citizens. CI participates in investigations involving terrorism, espionage, and other significant criminal activities undertaken on behalf of our nation's adversaries or international criminal organizations. Illicit actors engage in a wide variety of financial crimes and utilize their ill-gotten gains to cyber attacks, direct kinetic, and intelligence against Americans and our interests, both at home and abroad. In June 2023, three Russian nationals were charged with deploying LockBit ransomware and other cyberattacks against victim computer systems in the United States, Asia, Europe, and Africa. LockBit actors allegedly executed over 1,400 attacks against victims around the world, issuing over $100 million in ransom demands and receiving tens of millions of dollars in actual ransom payments made in the form of bitcoin. CI’s unique ability to follow the money trail continues to play an integral role in interdicting illicit financing activities and threats to our national security. These organizations cannot exist without the behind-the-scenes financial support funding their illicit activity. In November 2022, Mustafa Alowemer was sentenced to over 17 years in prison for his plan to bomb a church in Pittsburgh in the name of ISIS. Alowemer targeted the church, he described as a "Nigerian Christian" church, to "take revenge for our [ISIS] brothers in Nigeria." In April 2023, Dr. Charles Lieber, was sentenced for lying to federal authorities about his affiliation with the People's Republic of China's Thousand Talents Program and failing to report the associated income he received from the Wuhan University of Technology (WUT) in China. CI also continued to share our best practices by hosting training sessions for other investigative agencies around the world. Most recently, in September 2023, CI trained investigators from Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates on techniques for identifying and combating the flow of money to and within terrorist organizations. Through our participation in The National Joint Terrorism Task Force (NJTTF) and The National Counterintelligence Task Force (NCITF), CI and our agency partners stand ready in our shared missions to ensure the integrity of the U.S. financial system by combatting illicit finance. DISRUPTING & DISMANTLING TRANSNATIONAL CRIMINAL ORGANIZATIONS CI targets money trails tied to transnational criminal organizations, which are often linked to a variety of crimes, including narcotics trafficking, terrorist financing, fraud, and illegal firearms distribution. CI also partners with other law enforcement agencies to pool resources to disrupt the transnational criminal organizations. CI holds key positions with the Executive Office and Fusion Center for the Organized Crime Drug Enforcement Task Force (OCDETF), the Financial Crimes Enforcement Network, the High Intensity Drug Trafficking Areas Task Force, and more. In fiscal year 2023, over 11% of CI’s direct investigative time was dedicated to narcotics investigations. In the last 10 years, CI was involved in approximately 36% of all OCDETF investigations and historically participated in 90% of all money laundering prosecutions across the United States. These investigations resulted in the removal of illegal weapons and drugs, including fentanyl, out of public circulation. In January 2023, Chance Alan Wilson, leader of the Universal Aryan Brotherhood (UAB), was sentenced to additional prison time after being found guilty of distribution of hundreds of kilograms of methamphetamine and other drugs. In total, 69 individuals associated with the UAB’s operations have been charged and convicted in both state and federal court. Collectively, the individuals charged federally have been sentenced to 418 years in prison. CI is not only focused on illegal drugs but also the misuse of prescription drugs. In June 2023, Dr. Dzung Ahn Pham was sentenced to over 12 years in federal prison for illegally distributing opioids and other powerful narcotics by writing prescriptions for patients without a legitimate medical purpose. Pham admitted he wrote prescriptions for approximately 53,693 pills of oxycodone, 68,795 pills of hydrocodone, and 29,286 pills of amphetamine salts. CI’s specialized financial expertise provides prosecutors with options for charging criminal co-conspirators, especially those who develop elaborate schemes to launder illicit funds via Black-Market Currency Exchanges (BMCE), Trade Based Money Laundering (TBML) schemes, unlicensed Money Service Businesses (MSB), Hawala transactions, shell/shelf corporations, casinos, smurfing, micro-structuring, bulk cash smuggling, or virtual currency exchanges. Miguel Salinas Salcedo served as a Mexico-based “peso broker,” who arranged with drug traffickers to trade pesos that he controlled in Mexico for the cash proceeds in the United States. Salinas Salcedo and associates picked up the cash in the United States, deposited it into various bank accounts, and then made corresponding quantities of pesos available to the traffickers in Mexico. In August 2023, Salinas Salcedo was sentenced to eight years in prison for laundering drug proceeds. 2023 | CI ANNUAL REPORT 16 GLOBAL COLLABORATION & ENFORCEMENT As our world becomes increasingly interconnected through global commerce and technology, CI serves as a leader in protecting the interests of the United States and its allies beyond the physical borders of our country. CI has encountered more complicated transnational crime conspiracies affecting all of CI’s investigative priorities, including core mission tax crimes, narcotics-related crimes, and other financial crimes. These schemes include tax evasion, international money laundering, illicit use of virtual currency, cyber hacking, terrorist financing, public corruption, human trafficking, and sanctions evasion. To combat these offenses, CI has attachés posted in 11 overseas locations, who work with foreign governments and build partnerships to further financial crime investigations. In June 2023, CI deployed four cyber attachés on long-term details to Germany, Colombia, Singapore, and Australia to work with foreign governments on cyber investigations. CI is a proud member of the Joint Chiefs of Global Tax Enforcement (J5), which attacks transnational tax crime by collaborating on enforcement operations, gathering information, sharing intelligence, and conducting coordinated operations against international criminals. The J5 includes the Australian Taxation Office, the Canada Revenue Agency, the Dutch Fiscal Information and Investigation Service, His Majesty’s Revenue and Customs, and CI. In July 2023, J5 efforts resulted in the indictment of an international tax advisor accused of concealing millions of dollars of income for high income Americans. CI’s International Training Team (ITT) delivers trainings to representatives from multiple countries across the globe. Training provides foreign governments in developing nations with necessary tools to combat financial crimes. During fiscal year 2023s, ITT taught 33 courses to over 1,100 law enforcement officials from 96 countries. In May 2023, CI delivered blockchain analysis tools and cyber training to Ukrainian law enforcement agencies. In September 2023, CI teamed up with the UK and the Netherlands to provide a second round of training, which was focused on cryptocurrency and blockchain tracing, to Ukrainian law enforcement officers. CI participates on multiple national taskforces that are uniquely positioned to combat global threats. CI partners with the Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) to identify, develop, and add new individuals and entities to the Special Designated Nationals list. CI also plays an important role in sanctions enforcement. The agency plays an integral role in Taskforce KleptoCapture, which focuses on Russian sanction evaders. Working globally to ensure criminals cannot seek cover overseas, CI tirelessly battles complex international financial crimes. CONTRIBUTING TO THE COMMUNITY While CI is laser-focused on combatting financial crimes, CI also engages in community outreach to proactively protect fellow citizens from fraud, provide a helping hand, and assist when disaster strikes. CI participates in hundreds of outreach events year-round to warn the public of fraud and scams, in addition to providing tips during tax filing season. CI offices participate in community events, such as National Night Out and the Law Enforcement Torch Run for Special Olympics. In our local communities, CI employees visited schools to encourage students to strive and thrive as future community leaders and to pursue education. CI offices throughout the country volunteered with a wide variety of organizations to help build homes, feed the hungry, and pack hygiene products and toiletries for those most in need. CI is proud to partner with the Federal Emergency Management Agency (FEMA) to assist in natural disasters. FEMA designated 14 Emergency Management Functions (EMFs) to assist in disaster recovery efforts, which range from transportation to external affairs. CI has approximately 140 special agents assigned to the ESF #13 Cadre, who provide public safety and security assistance during natural disasters. During deployment, CI special agents provide security for aid centers, search and recuse teams, or field hospitals in the most impacted areas. In 2023, CI’s ESF#13 members were deployed to Maui, Hawaii following the devastating wildfires and to areas of Florida devastated by Hurricane Idalia. CI special agents play an important role in the Continuity of Operations (COOP) for IRS and Treasury, as they must evacuate executive leadership and provide security for the command center during emergency events. They are also the first responders in case of active shooter situations in many IRS buildings throughout the country. CI employees also live and volunteer in the communities they work in, and they always step up to help those in need. This is exemplified by the actions taken in March 2023 by a special agent in New York. While getting ready for work, the special agent heard screaming and subsequent gunfire. Armed with his firearm and badge, the special agent ran outside to respond, finding a suspect had shot someone and then entered a taxi. The special agent held the man and taxi at gunpoint until responding NYPD officers could take the man into custody. CI special agents can always be counted on to answer when duty calls. 2023 | CI ANNUAL REPORT 17 PROTECTING OUR SENIORS FROM SCAMS Few segments of the population deserve our respect, admiration, and protection as much as our seniors do. In recent years, seniors have increasingly become the target of a wide variety of online fraud schemes. These schemes run the gamut from romance and lottery scams to so-called grandparent and tech-support scams, and they cost elderly Americans more than $1 billion each year. CI tackles these threats through a multitiered approach, consisting of education, criminal investigations, and public-private partnerships. CI also plays a vital role in helping ensure that recovered funds are returned to the victims. In fiscal year 2023, CI led or assisted in dozens of criminal investigations that brought the operators of fraud schemes to justice. Whether the charges include money laundering, wire fraud, mail fraud, or other charges, CI’s vast financial toolkit continues to be a critical force multiplier for successful criminal prosecutions against those who exploit the elderly. In early 2023, following a years-long investigation, five defendants received sentences from three to eight years in federal prison for their role in a scam that bilked nearly 70 victims, using a sophisticated “grandparent scam.” The defendants claimed that a close relative of the victim SAFEGUARDING COVID RELIEF FUNDS was in extreme danger, thereby inducing the victim to send thousands of dollars to help. In February 2023, Ejiro Efevwerha was sentenced to over 7 years in federal prison for laundering the proceeds tied to grandchildrenin-jail, inheritance, lottery and romance schemes. CI also participates on 20 Transnational Elder Fraud Strike Forces, worked through the U.S. Department of Justice (DOJ). These strike forces provide dedicated resources to identify the most harmful elder fraud schemes and to bring perpetrators to justice. Last fall, CI joined the DOJ in announcing the return of approximately $40 million in funds forfeited to the United States from the Western Union Company to nearly 25,000 victims, some of whom had fallen prey to elderly scams. Raising awareness through education is a key component to CI’s effort to combat elder fraud. CI partnered with the private industry in outreach efforts to arm seniors with tips and resources to provide a critical first line of defense. In support of 2023 National Consumer Protection Week, CI published tips specifically geared to seniors, which were distributed to senior care facilities. The agency has also communicated information about elder fraud at various outreach events and has partnered with congressional representatives to educate seniors in their respective districts. During the COVID-19 pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act that provided economic assistance to the American industry, including workers, families, and small businesses. The CARES Act authorized the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) to help businesses survive the economic downturn caused by the pandemic. Unfortunately, criminals saw the CARES Act as an opportunity to defraud the government by submitting false claims. CI has worked tirelessly finding and holding accountable individuals who defrauded these programs, dedicating over 10% of Direct Investigative Time (DIT) to combat CARES Act violations. Investigations range from fraudulently obtained employee refund tax credits to falsified PPP loans. PPP loans put in place with the intention of protecting employees have been exploited by fraudsters. As of September 30, 2023, CI investigated 1,444 tax and money laundering cases related to COVID-19 fraud, with an estimated fraud loss of $8.8 billion. Numerous investigations have resulted in lengthy prison sentences. Don Cisternino was sentence to over eight years in federal prison for wire fraud, aggravated identity theft, and illegal monetary transactions for his scheme to obtain false PPP loans. Cisternino received more than $7.2 million in emergency funds through fraudulent PPP loans. Rather than use the funds to pay employees and business expenses, he purchased vehicles, including a Maserati and a Mercedes-Benz, and a 12,579 sq. ft. residence on a 12-acre estate. Once Cisternino caught wind of the investigation, he fled to Switzerland, but he was later extradited from Croatia to face charges. The Employee Retention Credit (ERC) is a refundable tax credit for businesses who paid employees while shutdown due to the COVID-19 pandemic or for those who had significant declines in gross receipts from March 13, 2020 to December 31, 2021. The ERC was designed to encourage businesses to keep employees on their payroll. However, unscrupulous promoters have been encouraging businesses who do not qualify for the credit to file fraudulent ERC claims. As of September 30, 2023, CI has initiated 301 investigations involving over $3.4 billion of potentially fraudulent ERC claims for tax years 2020 through 2023. CI’s commitment to finding COVID-19 fraud remains unwavering. Working closely with our law enforcement partners on the COVID-19 Fraud Enforcement Task Force, CI continues to bring criminals who defrauded these vital programs to justice. 2023 | CI ANNUAL REPORT 18 ROOTING OUT CORRUPTION CI is uniquely qualified to investigate corruption of all types, because, at its core, corruption is a crime of greed. Corruption is the abuse of power for personal gain. CI investigates elected individuals who violate the public’s trust. These individuals may be from all levels of government, including local, county, state, and federal government, as well as foreign entities. Corruption investigations may involve crimes, such as bribery, extortion, embezzlement, kickbacks, tax fraud, and money laundering. A bribery scheme turned into nearly five years of jail time for Luis Arroyo, a former Illinois state representative who accepted thousands of dollars in bribes from a gaming company. In exchange for those bribes, Arroyo promoted legislation in the Illinois House of Representatives related to the sweepstakes industry and advised other state lawmakers to support the legislation. Kickbacks, while unethical and unlawful, are also taxable. Kickback schemes run the gamut and can include payments in return for loan approvals, awarding lucrative contracts to personal associates, and pushing RECOVERING LOSSES FOR VICTIMS unnecessary medical procedures. In July 2023, Jimmy and Ashley Collins, a husband and wife, pleaded guilty to receiving kickback payments of over $45 million related to a $65 million TRICARE scheme. Their clinics authorized over 4,000 prescriptions and billed TRICARE for them. The prescriptions were diverted to a pharmacy, who then kicked back a percentage of the TRICARE reimbursement to the pair. At times, corruption involves violations of the Foreign Corrupt Practices Act of 1977 (FCPA). FCPA prohibits certain individuals and entities from making payments to foreign government officials to obtain or retain business. In September 2023, Albemarle Corporation, a publicly traded specialty chemicals manufacturing company, paid a hefty price for FCPA violations. The company’s third-party sales agents and subsidiary employees conspired to pay bribes to government officials to obtain and retain chemical catalyst business with state-owned oil refineries in Vietnam, Indonesia, and India. A CI investigation into the arrangement resulted in the company agreeing to pay $218 million as part of a non-prosecution agreement. While CI works diligently to put criminals out of business, we also recognize the hardships endured by crime victims. CI’s asset recovery program utilizes forfeiture authority to disrupt and dismantle criminal enterprises. Investigative seizures and forfeitures enable CI to not only seize assets and proceeds of criminal activity but also to help reimburse victims for their losses. In the investigation of the Silk Road hacker, James Zhong, the government seized bitcoin valued at over $3.4 billion at the time of seizure. Using a decentralized bitcoin mixer, an overseas cryptocurrency exchange, and a variety of technology tools, Zhong stole 50,000 bitcoin from Silk Road, an online darknet marketplace. Due to CI’s ability to follow the money, even through the Dark web, special agents discovered and recovered the bitcoin stolen by Zhong. Once adjudicated in federal court, the seized funds are forfeited to the Treasury Forfeiture Fund (TFF), which is managed by the Treasury Executive Office for Asset Forfeiture. Whenever possible, forfeited funds are returned to identified victims of the criminal activity. During fiscal year 2023, CI seized assets valued at approximately $272 million and forfeited approximately “ While CI works diligently to put criminals out of business, we also recognize the hardships endured by crime victims. CI’s asset recovery program utilizes forfeiture authority to disrupt and dismantle criminal enterprises. ” $3.5 billion in ill-gotten proceeds. In addition, approximately $30.3 million was refunded as part of CI’s asset recovery efforts. If forfeited funds exceed the amount necessary to compensate victims of a crime or those with rightful claim to the asset, the proceeds are used to reimburse law enforcement agencies for expenses like enhanced training, equipment, and costs associated with conducting criminal investigations. In addition, the TFF shares a portion of forfeited funds with other federal, state, and local law enforcement agencies. 2023 | CI ANNUAL REPORT 19 In addition to our tax and money laundering authorities, CI also investigates violations of The Bank Secrecy Act (BSA). The BSA mandates the disclosure of foreign bank accounts, the reporting of certain currency transactions conducted with businesses or financial institutions, and transportation of currency across U.S. borders. While the Financial Crimes Enforcement Network (FinCEN) is tasked with administering the BSA, the U.S. Treasury Secretary delegated responsibility for all criminal enforcement of the BSA to CI. SECURING THE INTEGRITY OF THE FINANCIAL SYSTEM CI’s BSA program has grown substantially since its inception in early 2000. BSA data helps investigators detect suspicious financial activity and identify unusual transactional patterns indicative of criminal behavior. CI leverages our data analytics to identify the highest quality leads for possible investigation. In fiscal year 2023, BSA data was queried in over 89.6% of CI investigations, and 14% of CI’s investigations were initiated based on BSA information. CI-led SAR Review Teams (SAR RTs) and Financial Crimes Task Forces (FCTFs) are in 92 federal judicial districts, where more than 200 special agents and investigative analysts collaborate with federal, state, and local law enforcement partners to identify and investigate financial crimes specific to their geographic areas. These crimes include tax, BSA violations, money laundering, narcotics, and more. Chief Jim Lee described CI’s valued role in the BSA program: “The Bank Secrecy Act exists to prevent financial institutions from being used as a vehicle by criminals to conceal or launder their ill-gotten gains. It also serves as a safety net for crime victims. Hundreds of millions of dollars in restitution have been awarded “ to crime victims because our agents were able to use BSA data to prove a crime was committed.” CI is the only federal law enforcement agency to win a FinCEN award in every award period since the program’s inception in 2015. CI employs every lawful technique at our disposal, including undercover operations, to detect and investigate potential criminal violations within our jurisdiction, including businesses that willfully fail to file required disclosures under BSA. CI’s undercover agents utilize sophisticated techniques to initiate contact with individuals perpetrating crimes and to gather the evidence necessary for prosecution. In FY 2023, special agents conducted approximately 475 undercover operations. In August 2023, Junaid “Jay” Sahibzada plead guilty to evading federal reporting requirements for businesses that conduct cash transactions above $10,000, by failing to file Form 8300. An undercover agent posing as a heroin dealer met with Sahibzada to discuss laundering drug proceeds through jewelry purchases. Sahibzada agreed to help conceal the purchases from the government by not filing the required Form 8300. Sahibzada later admitted to special agents that he had never filed Forms 8300, despite having completed multiple jewelry cash transactions exceeding $10,000. BSA data is a force multiplier for CI’s investigations and is crucial in combatting a wide variety of financial crimes, including tax evasion. In September 2023, Mark Gyetvay was sentenced to more than seven years in federal prison in a scheme to hide millions of dollars of income in undisclosed Swiss bank accounts. Gyetvay was convicted of failing to file a Report of Foreign Bank and Financial Accounts (FBAR), making a false statement to the IRS, and willfully failing to file tax returns. BSA data is a force multiplier for CI’s investigations and is crucial in combatting a wide variety of financial crimes, including tax evasion. ” BSA DATA USAGE 1.8M AVERAGE QUERIES PER YEAR BY CI SPECIAL AGENTS 14% INVESTIGATIONS INITIATED BASED ON BSA INFORMATION 89% INVESTIGATIONS QUERIED BSA DATA 2023 | CI ANNUAL REPORT 20 FIELD OFFICE MAP Click on an area name to go to that Field Office area. NORTHERN AREA Guam Puerto Rico WESTERN AREA U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 21 WESTERN AREA Click on a city to go to that Field Office or on an area name to go to that Field Office area. NORTHERN AREA SEATTLE Guam DENVER ST. LOUIS OAKLAND LOS ANGELES PHOENIX Puerto Rico U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 22 WESTERN AREA X CLOSE Click on a city to go to that Field Office or on an area name to go to that Field Office area. DENVER WESTERN AREA 1999 Broadway Denver, CO 80202 DenverFieldOffice@ci.irs.gov COLORADO SEATTLE Colorado Springs • Denver • Durango • Fort Collins Grand Junction • Westminster IDAHO Boise • Coeur D’alene MONTANA Billings • Helena • Missoula WYOMING Cheyenne THE DENVER FIELD OFFICE covers a vast and diverse area encompassing approximately 432,500 square miles Guam of Colorado, Idaho, Montana, and that includes the states Wyoming. Our special agents are based in twelve cities throughout the region and specialize in investigating sophisticated financial crimes involving evading federal income or payroll taxes, money laundering, andOAKLAND COVID-19 relief scams. Denver Field Office special agents focus on financial crimes in our region and lead investigations all over the world. When other law enforcement agencies identify any financial aspect of an investigation, they rely on our agents’ unmatched financial investigative expertise to present the most thorough investigation possible to LOSoften ANGELES federal prosecutors. These investigations involve the Organized Crime Drug Enforcement Task Forces (OCDETF) and lead to dismantling drug operations by disrupting the flow of money throughout the organization. Denver’s team also includes our professional staff who provide critical support support to our investigations. Montana Money Mule Sentenced to 57 Months, NORTHERN AREA Ordered to Pay $2 Million Bookkeeper Sentenced for Embezzling Money from Non-Profit Community Theatre Colorado Man Receives More than 4 Years in Prison for COVID-19 Relief Fraud For 18 months, Carissa Dunn-Pollard worked as a bookkeeper for the Cheyenne Little Theatre Players Inc., a non-profit organization based in Wyoming that relies primarily on volunteers and part-time employees. During this time, she devised a scheme to embezzle $220,481.57 from the theatre by creating payroll deposits to her bank account. In addition to committing wire fraud, Pollard failed to file federal income tax returns reporting the income for tax years 2018 through 2021, resulting in $113,251.58 of taxes owed. Pollard spent part of her ill-gotten gains on a Mercedes, a country club membership, and a suite at a Colorado Rockies baseball game for her son’s baseball team. In June 2023, PollardDENVER was sentenced to 21 months in prison for wire fraud and failure to file a tax return. She was also ordered to pay taxes owed to the IRS and $220,481.57 in restitution to the Cheyenne Little Theatre. From April 2020 through September 2021, Edward Harrington submitted multiple fraudulent Paycheck Protection Program (PPP) applications to seven banks and one lender on behalf of business entities that he supposedly controlled. He falsely represented that all PPP funds were intended for eligible business expenses when, in fact, the proceeds were used for his benefit to purchase goods and property, including real estate and vehicles. Harrington went on to submit PPP loan forgiveness applications, in which he made more false representations and certifications regarding his businesses and his compliance with the PPP program rules. In July 2023, Harrington was sentenced to 51 months in prison for wire fraud and money laundering and was ordered to pay restitution for the funds he illegally ST. LOUIS obtained in the amount of nearly $1.1 million. Learn more about this case. Learn more about this case. From about May 2017 until February 2021, Theresa Chabot, through her business, Avalanche Creek LLC, collected and deposited money from various wire fraud schemes around the United States into her bank accounts. Chabot then funneled millions of dollars overseas, including to the United Arab Emirates, and she received a 10 percent commission on the transactions. These schemes varied, including preying on the elderly, promoting fantasies of love and friendships, and purporting oil investments, advance-pay schemes, and gold and silver investments. In 2018, the Secret Service informed Chabot she was acting as a “money mule,” but Chabot ignored the warning and continued sending money overseas. When interviewed again by agents in 2020, Chabot admitted one instance in which she received $10,000 hidden in a stuffed animal and deposited the money into her account. In February 2023, Chabot was sentenced to 57 months in prison for operating an unlicensed money transmitting business and was ordered to pay $2 million in restitution. Learn more about this case. PHOENIX Puerto Rico View FO Photo Gallery U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 23 X CLOSE WESTERN AREA DENVER WESTERN AREA 1999 Broadway Denver, CO 80202 DenverFieldOffice@ci.irs.gov Click on a city to go to that Field Office or on an area name to go to that Field Office area. NORTHERN AREA SEATTLE Denver Field OfficeGuam Special Agent in Charge conducts an interview with a television reporter. DENVER Special agents attend an Army base career fair. ST. LOUIS OAKLAND LOS ANGELES A special agent discusses a scenario with students during a Citizen Academy. PHOENIX Puerto Rico U.S. Virgin Islands Special agents suit up before executing a search warrant. A special agent conducts quarterly firearms proficiency training. SOUTHERN AREA 2023 | CI ANNUAL REPORT 24 WESTERN AREA Click on a city to go to that Field Office or on an area name to go to that Field Office area. X CLOSE LOS ANGELES WESTERN AREA NORTHERN AREA 300 N. Los Angeles Street, Los Angeles CA, 90012 LosAngelesFieldOffice@ci.irs.gov SEATTLE CALIFORNIA Camarillo • El Monte • Laguna Niguel • Long Beach Los Angeles • San Bernardino • San Diego • San Marcos Santa Ana • Santa Maria • Van Nuys THE LOS ANGELES FIELD OFFICE is the nation’s largest field office by population and serves a population of nearly 24 million people, stretching over nine counties from San Luis Obispo to the border between United States and Guam Field Office covers two judicial Mexico. The Los Angeles districts in California, the Central and the Southern Judicial Districts. The Los Angeles Field Office works a diverse mix of financial investigations across this large geographic area, including cybercrime, international tax fraud, identity theft, OAKLAND public corruption, and Bank Secrecy Act violations. We play crucial roles in the U.S. Attorney’s priority task forces, including JTTF and OCDETF. LOS ANGELES L.A. Man Sentenced to Over 24 Years in Prison for COVID-19 Jobless Benefits Scam, Tax Fraud, Drug Trafficking San Diego Man Sentenced to Prison for Tax Evasion, Fraud and Failing to Appear for His 2001 Sentencing Hearing Edward Kim, of Los Angeles, California, fraudulently obtained nearly $5.5 million in COVID-related jobless benefits by using the identities of California state prison inmates and other third parties. He also tried to fraudulently obtain more than $356,400 in tax refunds and trafficked fentanyl and methamphetamine. Kim pleaded guilty in November 2022 to one count of conspiracy to distribute DENVER methamphetamine and fentanyl, one count of distribution of methamphetamine, one count of conspiracy to defraud the government with respect to claims, two counts of mail fraud, and two counts of possession of 15 or more unauthorized access devices. He was sentenced in March 2023 to more than 24 years in federal prison. Additionally, he was ordered to pay nearly $5.5 million in restitution to the California Employment Development Department (EDD) and $16,800 in restitution to the IRS. Robin J. McPherson, formerly of San Diego but apprehended in Costa Rica, returned to the United States in 2022 to face sentencing for his criminal conduct spanning three decades. McPherson failed to appear for sentencing, conspired to defraud the IRS, evaded the proper assessment of income tax, and committed wire fraud. McPherson was convicted in a December 2000 bench trial of conspiring to defraud the IRS and collectively evading over $1 million in income taxes for 1993 and 1994, but he skipped his 2001 ST. LOUIS sentencing hearing date and fled to Costa Rica. Between 2016 and 2020, he continued to defraud individuals out of approximately $1.5 million by soliciting investment in Costa Rican villas that were never built. In April 2023, McPherson was sentenced to over five years in prison and ordered to pay approximately $4.7 million in restitution to his victims and the United States. Learn more about this case. Learn more about this case. PHOENIX French Man Sentenced for International Tax Scheme From January 2016 to November 2017, Ayodele Arasokun devised a scheme to unlawfully obtain tax refunds by filing fraudulent federal income tax returns. Arasokun collected the names, dates of birth, and Social Security numbers of multiple individuals across the United States, with West Virginia residents among his victims. He then compromised the IRS Electronic Filing Pin application, an online electronic portal used for e-filing, by using the collected personal information to file fraudulent tax returns, which contained fictitious income and withholding amounts and other false information. Arasokun then directed the tax refunds to be deposited onto prepaid debit cards and into bank accounts that he monitored. In total, Arasokun filed 1,701 false tax returns, which claimed false federal income tax refunds of $9.1 million, and the IRS paid out $2.2 million of these refunds. In October 2022, a jury convicted Arasokun of 21 counts of wire fraud and aggravated identify theft. In September 2023, Arasokun was sentenced to 34 years in federal prison for orchestrating an international tax scheme. Learn more about this case. Puerto Rico View FO Photo Gallery U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 25 X CLOSE WESTERN AREA LOS ANGELES WESTERN AREA 300 N. Los Angeles Street, Los Angeles CA, 90012 LosAngelesFieldOffice@ci.irs.gov Click on a city to go to that Field Office or on an area name to go to that Field Office area. NORTHERN AREA SEATTLE Special agents participate Guam in a career fair to increase exposure of low-income students to diverse careers and professions. A special agent speaks about CI to university students during a recruiting event. DENVER ST. LOUIS OAKLAND LOS ANGELES Special agents maintain firearms proficiency on the range. PHOENIX A special agent discusses the role of CI special agents during National Night Out hosted by federal law enforcement agencies from across San Diego County. Puerto Rico U.S. Virgin Islands Los Angeles Field Office Special Agent in Charge participates in a morning news interview with NBC 7 San Diego. SOUTHERN AREA 2023 | CI ANNUAL REPORT 26 WESTERN AREA Click on a city to go to that Field Office or on an area name to go to that Field Office area. X CLOSE OAKLAND 1301 Clay Street, Oakland, CA 94612 OaklandFieldOffice@ci.irs.gov WESTERN AREA NORTHERN AREA SEATTLE CALIFORNIA Fresno • Modesto • Oakland • Sacramento • San Francisco San Jose • San Rafael • Santa Rosa • Stockton THE OAKLAND FIELD OFFICE is responsible for covering the Northern and Eastern Judicial Districts of California, which is more than half of the state of sunny California. Nine posts of duty cover territory from the west coastline to the Guam Sierra mountains and from the Oregon border all the way down to Bakersfield, CA. The Oakland Field Office is proud to represent CI as the leading agency in financial crimes in Northern California. Tax fraud is a top priority, but the field office also partners with other federal law enforcement OAKLAND agencies in tackling financial crimes, including money laundering and high profile public corruption cases. Oakland Field Office special agents maintain a strong working relationship with the U.S. Attorneys’ Offices and are involved in local task forces, including OCDETF, JTTF, cybercrimes, and public corruption. Some of the top CI cases are LOS ANGELES investigated by special agents from the Oakland Field Office. California Man Sentenced to Over 6 Years in Prison for Cow Manure Ponzi Scheme Multiyear Prison Sentences for California Men for COVID-19 Business Loan Fraud Software Company CEO Sentenced to 2 Years in Prison for Tax, Conspiracy Charges Ray Brewer devised and operated a multimillion-dollar fraud scheme focused on turning cow manure into green energy. Brewer stole $8.75 million from investors by claiming to build anaerobic digesters on California dairy farms. Anaerobic digesters breakdown biodegradable material and turn it into methane. Methane can be sold on the open market as green energy and is eligible for renewable DENVER energy credits. Brewer shared construction schedules, project-related invoices, and pictures with investors, but in actuality, all of these items were fabricated. When some investors realized they had been defrauded and obtained civil judgments against Brewer, he moved to Montana and assumed a new identity. In June 2023, Brewer was sentenced to 81 months in prison. Jeffrey Hedges and Manuel Asadurian lied to the Small Business Administration and federally insured financial institutions on a total of 12 loan applications through the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program intended to help businesses during the pandemic. In total, they fraudulently obtained more than $3 million in loans intended to help businesses. In January 2023, Hedges was sentenced to seven years in prison and ordered to pay nearly $2.1 million in restitution ST. LOUIS payments, while Asadurian was sentenced in February 2023 to over four years in prison and ordered to pay nearly $1.1 million in restitution. Kishore Kethineni, the CEO of multiple software development and IT services companies in the Bay Area, fraudulently obtained over $3.1 million in loans under the Paycheck Protection Program (PPP). From April 2020 through May 2021, Kethineni and his brothers submitted PPP loan applications on behalf of their companies and provided falsified payroll data and records to obtain loans and loan forgiveness. Kethineni also admitted to willfully failing to account for and pay employment taxes that his company had withheld from its employees, incurring an employment tax liability of over $2 million over the course of five years. In August 2023, Kethineni was sentenced to two years in prison for conspiracy to commit bank fraud and failure to pay more than $2 million in employment taxes. He was also ordered to pay nearly $3.3 million in restitution, to forfeit nearly $3.2 million, and to pay a $15,000 fine. Learn more about this case. Learn more about this case. Learn more about this case. PHOENIX Puerto Rico View FO Photo Gallery U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 27 X CLOSE WESTERN AREA OAKLAND WESTERN AREA 1301 Clay Street, Oakland, CA 94612 OaklandFieldOffice@ci.irs.gov Click on a city to go to that Field Office or on an area name to go to that Field Office area. NORTHERN AREA SEATTLE Guam Special agents recruit future financial investigators at a career fair. A special agent participates in the Baker to Vegas Law Enforcement Relay Challenge. DENVER ST. LOUIS OAKLAND LOS ANGELES Special agents participate in a use of force training exercise. PHOENIX Puerto Rico U.S. Virgin Islands Oakland Field Office’s Special Agent in Charge answers a news reporter’s questions. Special agent participates in firearms training. SOUTHERN AREA 2023 | CI ANNUAL REPORT 28 WESTERN AREA Click on a city to go to that Field Office or on an area name to go to that Field Office area. X CLOSE PHOENIX 4041 N. Central Avenue, Phoenix, AZ 85012 PhoenixFieldOffice@ci.irs.gov WESTERN AREA NORTHERN AREA SEATTLE ARIZONA Glendale • Mesa • Phoenix • Tucson NEVADA Las Vegas • Reno NEW MEXICO Albuquerque • Las Cruces • Santa Fe UTAH Ogden • Salt Lake City GuamOFFICE covers the southwestern THE PHOENIX FIELD states of Arizona, Nevada, New Mexico, and Utah. After recently merging with the former Las Vegas Field Office, the office now covers a vast geographic area that stretches from the Sierra Nevada Mountains in the west to the Rockies OAKLAND in the east. The office’s special agents investigate both legal and illegal source tax crimes, including cases with an international nexus. The office also operates multiple financial crimes task forces. Located on the border of the United States and Mexico, the office provides significant participation in high level OCDETF cases. From the Grand Canyon of Arizona to the bright lightsLOS of LasANGELES Vegas, the Phoenix Field Office identifies and investigates a wide variety of complex financial crimes. Leader of Human Smuggling Organization Sentenced to 96 Months in Prison Albuquerque Man Sentenced to 94 Months for $1.2 Million Wire Fraud, Identity Theft Scheme Former Airline Executive Sentenced for $2.6 Million Tax Evasion Scheme Manuel Ochoa-Vasquez served as a leader in a smuggling organization that harbored and transported more than 7,000 undocumented non-citizens and laundered funds from the scheme. When payments were late, Ochoa-Vasquez and his co-conspirators detained undocumented non-citizens and sometimes threatened their sponsors until payments were received. Search warrants revealed guns, ammunition, evidence of money laundering, and over $1.4 million in cash. In June 2023, Ochoa-Vasquez was sentenced to 96 DENVER months in prison and three years of supervised release. From 2009 to 2018, George Martinez of Albuquerque, New Mexico, used his position as the unit supervisor and bureau chief of the Questionable Refund Unit at the New Mexico Taxation and Revenue Department to fraudulently alter tax refunds and direct more than $1.2 million to bank accounts he controlled. Martinez perpetrated the fraud by copying tax returns that had already been processed and by creating new returns in taxpayers’ accounts and altering taxpayer information. In January 2023, Martinez was sentenced to 94 months in prison, ordered to pay restitution, and issued a forfeiture of money judgment totaling $689,797, for 42 ST. LOUIS counts of wire fraud and aggravated identity theft and six counts of money laundering. From 2014 to 2016, William Acor was the president and CEO of Vision Airlines Inc., headquartered in North Las Vegas. He was responsible for collecting, accounting for, and paying IRS taxes withheld from employee wages, which he failed to do. Acor also failed to pay over Vision Airline’s employer share of Social Security and Medicare taxes. In total, Acor failed to pay over $2.6 million in employment taxes. In January 2023, Acor was sentenced to two years in prison and ordered to pay $1.66 million in restitution to the IRS. Learn more about this case. Learn more about this case. Learn more about this case. PHOENIX Puerto Rico View FO Photo Gallery U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 29 X CLOSE WESTERN AREA PHOENIX WESTERN AREA 4041 N. Central Avenue, Phoenix, AZ 85012 PhoenixFieldOffice@ci.irs.gov Click on a city to go to that Field Office or on an area name to go to that Field Office area. NORTHERN AREA SEATTLE Special agents conduct firearms training at an outdoor range in Las Vegas. Guam DENVER An Arizona Air National Guard honor guard and an Arizona law enforcement honor guard perform funeral honors for Special Agent Pat Bauer on August 31, 2023. ST. LOUIS OAKLAND LOS ANGELES Phoenix Field Office members participate at an Arizona State University career fair. PHOENIX Puerto Rico U.S. Virgin Islands A special agent collects evidence during a search warrant. Phoenix Field Office members at annual field office training. SOUTHERN AREA 2023 | CI ANNUAL REPORT 30 WESTERN AREA Click on a city to go to that Field Office or on an area name to go to that Field Office area. X CLOSE SEATTLE WESTERN AREA 915 Second Avenue, Seattle, WA 98174 SeattleFieldOffice@ci.irs.gov SEATTLE ALASKA Anchorage GUAM Hagatna HAWAII Honolulu • Kona OREGON Bend • Eugene • Medford • Portland WASHINGTON Seattle • Spokane • Tacoma • Vancouver Guam THE SEATTLE FIELD OFFICE investigates a wide variety of complex crimes related to domestic and international tax, public corruption, identity theft, cybercrime, and drug-related financial crimes. Our area of operation spans OAKLAND four states and two territories: Alaska, Hawaii, Oregon, Washington, Guam, and the Commonwealth of the Northern Mariana Islands. The Seattle Field Office works with U.S. Attorneys’ Offices in seven judicial districts in four different time zones (on both sides of the international date line). The field office is privileged to serve a diverse and unique LOS ANGELES population of taxpayers. Financial investigative expertise, meticulous planning, and determined collaboration allow us to effectively combat all types of financial crime for the benefit of the communities within our geographic area. NORTHERN AREA Arizona Man Sentenced to 9 Years in Prison for Massive Tax Fraud Scheme Kauai Woman Sentenced to 17 Years in Prison for Wire Fraud, Aggravated Identity Theft Charles St. George Kirkland ran an eight-year tax fraud scheme that resulted in more than $50 million in illegal tax refunds being released by the IRS. Kirkland falsely claimed in tax filings he had lost more than $135 million by investing in solar equipment, then he “sold” those made-up losses to taxpayers through a network of tax preparers, telling the preparers that their clients could use Kirkland’s losses to claim refunds on their own tax returns. Taxpayers filed amended returns claiming that, because of the losses transferred from Kirkland, they were entitled to a refund of all the tax payments theyDENVER had made in a prior tax year. After receiving the fraudulent refunds, taxpayers paid 90 percent of the proceeds to Kirkland. The scheme resulted in 3,200 fraudulent tax returns being filed and a loss to the U.S. Treasury of $51.6 million. In June 2023, Kirkland was sentenced to nine years in prison, imposed a $1 million fine, and ordered to pay restitution. This case was jointly worked with the Phoenix Field Office. Leihinahina Sullivan participated in multiple fraud schemes that landed her in prison. Sullivan purposely filed hundreds of false federal and state tax returns for herself and others, which included fictitious expenses, claims for credits, and other items. This fraud scheme involved over $2.8 million in tax losses, mostly in the form of fraudulent tax refunds from the IRS and the State of Hawaii. In addition to the false returns, Sullivan prepared and submitted false student loan, grant, scholarship, and financial aid applications requesting money from public and private educational-based financial assistance and aid providers. Sullivan also used individuals’ personal identification information to ST.approximately LOUIS 40 credit cards in other apply for and use people’s names and under their guaranteed lines of credit without their authorization. She spent over $1 million using the fraudulently obtained credit cards. In March 2023, Sullivan was sentenced to 17 years in prison for wire fraud and aggravated identity theft related to the multiple long-running fraud schemes. She was ordered to pay nearly $3.4 million in restitution to various victims, including public and private entities, and to forfeit just over $2 million. Learn more about this case. PHOENIX Learn more about this case. Former Aequitas CEO and Company Executives Sentenced for Roles in $300 Million Fraud Conspiracy Three former executives of Aequitas Management, LLC, an asset management firm, were sentenced to federal prison for their roles in a vast fraud conspiracy. Aequitas held investments in a variety of notes and funds, which were purportedly backed by trade receivables in education, health care, transportation, and other consumer credit areas. The former executives solicited nearly $300 million from investors by misrepresenting Aequitas’ use of investor money, the financial health of the company, and the risks associated with its investments. In September 2023, former CEO Robert Jesenik and two other Aequitas executives, Andrew MacRitchie and Brian Rice, were sentenced for conspiracy to commit mail and wire fraud, conspiracy to commit money laundering, and wire fraud. Jesenik was sentenced to 14 years in prison and ordered to forfeit more than $1.5 million, MacRitchie was sentenced to 70 months in prison and ordered to forfeit $689,662, and Rice was sentenced to 37 months in prison and ordered to forfeit $116,627. Learn more about this case. Puerto Rico View FO Photo Gallery U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 31 X CLOSE WESTERN AREA SEATTLE WESTERN AREA 915 Second Avenue, Seattle, WA 98174 SeattleFieldOffice@ci.irs.gov Click on a city to go to that Field Office or on an area name to go to that Field Office area. NORTHERN AREA SEATTLE Guam Special agents from Alaska participate in a local team building event. DENVER ST. LOUIS OAKLAND LOS ANGELES Special agents from Oregon discuss the plan before an enforcement action. PHOENIX Puerto Rico U.S. Virgin Islands Deputy Chief Guy Ficco with special agents from the Seattle Field Office at the Global ACFE conference. Special agents from Hawaii after a team building activity. Members of Seattle Field Office’s professional staff. SOUTHERN AREA 2023 | CI ANNUAL REPORT 32 WESTERN AREA ST. LOUIS X CLOSE WESTERN AREA Click on a city to go to that Field Office or on an area name 1222 Spruce Street, St. Louis, MO 63103 to go to that Field Office area. StLouisFieldOffice@ci.irs.gov MISSOURI Chesterfield • Lee’s Summit • Jefferson City Springfield • St. Louis ILLINOIS Fairview Heights SEATTLE IOWA Cedar Rapids • Davenport • Des Moines KANSAS Overland Park • Wichita NEBRASKA Omaha NORTH DAKOTA Fargo SOUTH DAKOTA Rapid City • Sioux Falls Guam As part of the Gateway to the West, THE ST. LOUIS FIELD OFFICE serves a territory that spans the states of Iowa, Kansas, Missouri, Nebraska, North Dakota, South Dakota, and 38 counties in southern Illinois. With moreOAKLAND than 90 special agents and professional staff members assigned to 15 posts of duty, the St. Louis Field Office serves a population of more than 17 million people in nine judicial districts. While tackling tax fraud is a top priority, the office also partners with other law enforcement agencies in the investigation of a wide variety of financial crimes, LOS ANGELES including money laundering, narcotics trafficking, and identity theft. To build strong community ties, the special agents participate in outreach activities at local colleges and community organizations, which helps to build a level of trust within the community and to recruit a diverse pool of talent. Recognizing CI’s distinction as the finest financial investigation team in the world, the St. Louis Field Office plays a critical role in several task forces with the U.S. Attorneys’ Offices, including OCDETF. Local Rapper Sentenced to 30 Years for Drug Trafficking, Money Laundering Father-Daughter Duo Sentenced to Prison for Tax Fraud and Preying on Vulnerable Populations Omaha Man Sentenced for Tax Evasion and Role in Million-Dollar Embezzlement Kansas City based gang member David Duncan participated in a drug-trafficking conspiracy and other violent criminal behaviors that included illegal firearms and a drive-by shooting outside a daycare center, where children were present. Duncan was a rap artist and member of the 246 street gang, who often posted videos containing displays of firearms and large amounts of cash to social media platforms. Members of the 246 gang used a residence, located close to a public elementary school, for gang and drug-trafficking business. Law enforcement officers executed a search warrant at the house and seized 295 grams of heroin, two assault rifles, and a stolen vehicle. The stolen vehicle had been used in a drive-by shooting, which was done at Duncan’s direction. When Duncan was arrested, officers found several weapons, $7,100 in cash, and more than two kilograms of oxycodone. In addition to DENVER several drug and weapons charges, Duncan was also found guilty of five counts of money laundering related to the purchases of money orders with drug-trafficking proceeds. He used the money orders to pay rent for his apartment and a payment on his car. Duncan laundered at least $272,231 in cash deposits, purchases, and money orders. Duncan was sentenced to 30 years in prison. Thein Maung and his daughter, Phyo Mi, ran a shady tax preparation business from their home in Iowa. To boost the amount of tax refunds customers received, Maung and Mi prepared taxes for a fee and included several schedules, forms, and false claims for credits without their customers’ knowledge or approval. The returns included false claims for residential energy credits, business-expense deductions, and moving-expense deductions for military service members. The duo primarily catered to immigrants and refugees, who worked at meat-packing facilities. Their clients had little to no ability to read, write, or speak English. From 2018 to 2022, Maung and Mi caused over 1,600 tax returns to be filed. The fraudulent tax returns claimed over $3.5 million in residential energy credits. Maung was sentenced to 12 years in prison, and Mi was sentenced to nine years in prison. Jeffrey Stenstrom owned and operated a commercial remodeling and repair business from 2006 through 2021. Stenstrom entered contracts to perform repair work for clients and hired sub-contractors to do the work. With the help of his now deceased co-conspirator, Brett Cook, Stenstrom billed clients for work not completed, overbilled for other work, and submitted inflated invoices to insurance companies to fraudulently collect insurance proceeds to which clients were not entitled. In addition to the fraud scheme, Stenstrom also owed personal income taxes for the years 2012 through 2016. After the IRS assessed a tax debt of $1.7 million for income earned during those years, Stenstrom took steps to hide pricey assets he owned in the name of a third party. When the IRS placed a tax levy on Stenstrom’s accounts, he continued his scheme to evade payment of his taxes by directing work to a fraudulent company created by Cook. Stenstrom deposited his fraud proceeds into bank accounts, commingling them with legitimate funds, and used the proceeds to fund a lavish lifestyle. Stenstrom was sentenced to 78 months in prison. He was also ordered to pay more than $5 million in restitution to the victims of his crimes and nearly $2 million to the IRS. NORTHERN AREA Learn more about this case. ST. LOUIS Learn more about this case. Learn more about this case. PHOENIX Puerto Rico U.S. Virgin Islands View FO Photo Gallery SOUTHERN AREA 2023 | CI ANNUAL REPORT 33 X CLOSE WESTERN AREA ST. LOUIS WESTERN AREA 1222 Spruce Street, St. Louis, MO 63103 StLouisFieldOffice@ci.irs.gov Click on a city to go to that Field Office or on an area name to go to that Field Office area. NORTHERN AREA SEATTLE Guam DENVER Special agents take photos at a search warrant. ST. LOUIS OAKLAND LOS ANGELES Special agent prepares at Women in Federal Law Enforcement annual conference. PHOENIX Puerto Rico U.S. Virgin Islands An investigative analyst boxes up closed case files. The St. Louis Field Office Special Agent in Charge presents on CI. Special agents participate in National Night Out 2023 in Prairie Village, Kansas. SOUTHERN AREA 2023 | CI ANNUAL REPORT 34 NORTHERN AREA Click on a city to go to that Field Office or on an area name to go to that Field Office area. BOSTON DETROIT CHICAGO NEWARK Guam CINCINNATI NEW YORK PHILADELPHIA Puerto Rico WESTERN AREA U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 35 NORTHERN AREA X CLOSE Click on a city to go to that Field Office or on an area name to go to that Field Office area. BOSTON NORTHERN AREA 15 New Sudbury Street, Boston, MA 02203 BostonFieldOffice@ci.irs.gov Money Manager Sentenced for Defrauding Clients of Millions of Dollars CONNECTICUT Bridgeport • Hartford • New Haven • Norwalk MAINE South Portland MASSACHUSETTS Boston • Springfield • Woburn • Worcester NEW HAMPSHIRE Manchester • Portsmouth RHODE ISLAND Warwick VERMONT Burlington Guam THE BOSTON FIELD OFFICE covers the six New England states, including Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont, each of which has their own judicial district. New England is home to some of the greatest sports franchises, a long coastline of beautiful beaches, and several of the oldest and most renowned colleges and universities in the country. The Boston Field Office’s relationship with the U.S. Attorney’s Office and our law enforcement partners is one of the best in the country. The Boston Field Office special agents are vital members of several task forces, including OCDETF, JTTF, cybercrimes, securities fraud, and health care fraud. View FO Photo Gallery Steven Xigoros used his position as an accountant, tax preparer and investment advisor to persuade clients to entrust their money to him to make various investments, to purchase securities, and to lend him money for purported business ventures. However, he lied to his clients and defrauded them of more than $4.3 million. In one instance, Xigoros stole the entire life savings of an elderly couple, who gave him more than $1.3 million to make investments on their behalf. He then used the money to pay his own expenses, including his gambling debts. Xigoros also failed to pay taxes, owing more than $1 million to the IRS. While on pre-trial release, he was arrested trying to flee to Greece to evade prosecution. In October 2022, Xigoros pleaded guilty to two counts of wire fraud, one count of aggravated identity theft, and one count of filing a false tax return. Xigoros was sentenced to more than 9 years in prison in February 2023. He was also ordered to pay more than $4.7 million in restitution to his victims and the IRS, as well as to forfeit more than $4 million. Learn more about this case. Operator of Aircraft Supply Businesses Sentenced to 11 Years in Prison for $7 Million Fraud Scheme Massachusetts and Connecticut Men Sentenced for Their Roles in a Ponzi and Tax Fraud Scheme Thomas D. Renison was the former owner of a privately held investment company that purportedly pooled money Kyle J. Wine owned and operated several commercial from investors to invest in various New England-based aircraft supply companies. Over the course of at least four businesses. Over the course of at least three years, Renison years, Wine defrauded investors of his companies by using and Timothy Allcott fraudulently raised and solicited funds their money to purchase aircraft airframes and engines. by misrepresenting how funds would be invested, the He then sold the aircraft airframes and engines and hid company’s investment track record, and the safety of the the resulting profits from his investors. Wine used his BOSTON DETROIT investments. Renison’s company took in over $6 million victims’ invested funds for his own personal use. As part of CHICAGO from investors but only invested half of that amount. Most the scheme, Wine convinced an investment firm based in of those NEWARK investments yielded significant losses. Despite the Darien, Connecticut, to invest $4.5 million in the purported NEW YORK losses, Renison and Allcott used the investor funds to pay acquisition and sale of an Airbus A320-231 airframe and PHILADELPHIA themselves exorbitant commission fees, to satisfy monthly two aircraft engines. Wine created fake domain names interest obligations to other earlier investors, and to invest CINCINNATI and email accounts, and he used the accounts to send in different undisclosed businesses. The SEC had previously fraudulent correspondence to the victim to trick the investor barred Renison from working in the securities industry. into believing that Wine’s company was attempting to sell Renison and Allcott disguised commissions paid to Renison the Airbus airframe and the engines to certain buyers. In as loans to Renison’s wife to conceal Renison’s ownership fact, Wine had already sold one engine for $2.45 million and in the business. In addition, Renison failed to declare more the Airbus airframe for $1.3 million. He never informed the than half a million dollars of commission income and failed investor of those sales, and he did not share the proceeds to pay over $150,000 in taxes. Renison was sentenced to of the sales with the investor. Wine also used some of four years in prison and was ordered to pay $6.2 million in these invested funds to purchase another aircraft engine restitution. Allcott was sentenced to two and a half years without the knowledge of the victim investor. In total, Wine’s Puerto over Rico $5 million and pay in prison and was ordered to forfeit fraud scheme caused more than $7 million in losses to 13 over $6 million restitution for his role in the Ponzi scheme. separate victims. Wine was sentenced to 11 years in prison for this $7 million fraud scheme. Learn more about this case. Learn more about this case. WESTERN AREA U.S. Virgin Islands SOUTHERN AREA 2023 | CI ANNUAL REPORT 36 X CLOSE NORTHERN AREA BOSTON NORTHERN AREA 15 New Sudbury Street, Boston, MA 02203 BostonFieldOffice@ci.irs.gov Click on a city to go to that Field Office or on an area name to go to that Field Office area. The Boston Field Office’s ASAC delivers remarks at a press conference after the orchestrator of a nationwide conspiracy to facilitate cheating on college entrance exams was sentenced. Guam Special agents prepare to run the Boston Marathon, a 26.2 mile trek through eight cities and towns around the greater Boston area. BOSTON DETROIT CHICAGO NEWARK NEW YORK PHILADELPHIA Special agents participate on a law enforcement panel during the Connecticut Ch [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%3A98f90e402a134fb9. Public record. Not legal advice.