# LINDBERGH KIDNAPPER JAILED – RANSOM MONEY FOUND HIDDEN UNDER GARAGE FLOOR IN EAST BRONX • (2019) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Ab95996d0ab6d36de ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text LINDBERGH KIDNAPPER JAILED – RANSOM MONEY FOUND HIDDEN UNDER GARAGE FLOOR IN EAST BRONX • AL CAPONE CONVICTED OF DODGING TAXES – SENTENCED TO 11 YEARS • DOGGED I.R.S. INQUIRY ON TAX CHEAT’S SPENDING HABITS LED TO HIS CONVICTION • QUEEN OF MEAN GUILTY OF TAX EVASION • CRIME FAMILY BOSS FAILED TO FILE FEDERAL INCOME TAX RETURNS • TAX CHEAT SENTENCED TO 6 YEARS FOR DEFYING I.R.S • “HOLLYWOOD MADAM” SENTENCED ON TAX EVASION CHARGES IN CONNECTION WITH HER HIGH-PROFILE PROSTITUTION RING • BASEBALL GREAT CONVICTED OF FAILING TO PAY TAXES • “SURVIVOR” WINNER SENTENCED TO 51 MONTHS IN PRISON • FAMOUS HOLLYWOOD ACTOR GETS 3 YEARS FOR NOT FILING TAX RETURNS • U.S. INDICTS FORMER ILLINOIS GOVERNOR FOR ALLEGED PUBLIC CORRUPTION DURING TERMS AS SECRETARY OF STATE AND GOVERNOR • 50 YEAR TERM FOR MINNESOTA MAN IN $3.7 BILLION PONZI FRAUD • FORMER TULSAN SENTENCED FOR $2 MILLION WIRE FRAUD SCHEME AND $500,000 TAX EVASION CASE • FORMER ILLINOIS U.S. REPRESENTATIVE SENTENCED TO 30 MONTHS FOR MISUSING CAMPAIGN FUNDS • BEANIE BABIES CREATOR SENTENCED FOR TAX EVASION • FIFA CORRUPTION CHARGES “WORLD CUP OF FRAUD” IRS CHIEF SAYS • IRS AGENT DISCOVERS THE IDENTITY OF A SILK ROAD KINGPIN • TAX PREPARERS SENT TO PRISON FRAUD GOVERNMENT OF MORE THAN $3.8 MILLION • THE IRS IS CLOSING IN ON CASES INVOLVING BITCOIN INCOME REPORTING • LOUISIANA RETURN PREPARER SENTENCED TO SEVEN YEARS IN PRISON FOR FILING FRAUDULENT TAX RETURNS • RESTAURANT OWNER SENTENCED FOR MULTIPLE FRAUD SCHEMES • LOS ANGELES RETURN PREPARER SENTENCED TO PRISON • NORTH CAROLINA RETURN PREPARER SENTENCED FOR FILING FRAUDULENT RETURNS • CIRCLEVILLE BUSINESSMAN SENTENCED FOR TAX FRAUD • STAPLETON COUPLE SENTENCED FOR INCOME TAX EVASION AND BANKRUPTCY FRAUD • LAS VEGAS MAN SENTENCED FOR MASSIVE TAX FRAUD • MAYOR’S EX-CAMPAIGN TREASURER SENTENCED FOR EMBEZZLEMENT • MINNESOTA TEMPORARY AGENCY OWNER SENTENCED TO PRISON FOR FAILING TO PAY TAXES • REAL ESTATE APPRAISER GETS PRISON TIME FOR ID THEFT AND TAX FRAUD • KANSAS BUSINESS OWNER SENTENCED FOR MAKING FALSE STATEMENT ON TAX RETURN • SENTENCE HANDED DOWN IN MULTI-MILLION DOLLAR SCHEME TO DEFRAUD BIBB COUNTY SCHOOLS AND TAXPAYERS • VIRGINIA PHARMACY OWNER SENTENCED TO PRISON FOR $5 MILLION EMPLOYMENT TAX FRAUD • ARIZONA WOMAN SENTENCED FOR MONEY LAUNDERING • EXECUTIVE WITH SOUTH CAROLINA TIES SENTENCED FOR STEALING $25 MILLION LINDBERGH KIDNAPPER JAILED – RANSOM MONEY FOUND HIDDEN UNDER GARAGE FLOOR IN EAST BRONX • AL CAPONE CONVICTED OF DODGING TAXES – SENTENCED TO 11 YEARS • DOGGED I.R.S. INQUIRY ON TAX CHEAT’S SPENDING HABITS LED TO HIS CONVICTION • QUEEN OF MEAN GUILTY OF TAX EVASION • CRIME FAMILY BOSS FAILED TO FILE FEDERAL INCOME TAX RETURNS • TAX CHEAT SENTENCED TO 6 YEARS FOR DEFYING I.R.S • “HOLLYWOOD MADAM” SENTENCED ON TAX EVASION CHARGES IN CONNECTION WITH HER HIGH-PROFILE PROSTITUTION RING • BASEBALL GREAT CONVICTED OF FAILING TO PAY TAXES • “SURVIVOR” WINNER SENTENCED TO 51 MONTHS IN PRISON • FAMOUS HOLLYWOOD ACTOR GETS 3 YEARS FOR NOT FILING TAX RETURNS • U.S. INDICTS FORMER ILLINOIS GOVERNOR FOR ALLEGED PUBLIC CORRUPTION DURING TERMS AS SECRETARY OF STATE AND GOVERNOR • 50 YEAR TERM FOR MINNESOTA MAN IN $3.7 BILLION PONZI FRAUD • FORMER TULSAN SENTENCED FOR $2 MILLION WIRE FRAUD SCHEME AND $500,000 TAX EVASION CASE • FORMER ILLINOIS U.S. REPRESENTATIVE SENTENCED TO 30 MONTHS FOR MISUSING CAMPAIGN FUNDS • BEANIE BABIES CREATOR SENTENCED FOR TAX EVASION • FIFA CORRUPTION CHARGES “WORLD CUP OF FRAUD” IRS CHIEF SAYS • IRS AGENT DISCOVERS THE IDENTITY OF A SILK ROAD KINGPIN • TAX PREPARERS SENT TO PRISON FRAUD GOVERNMENT OF MORE THAN $3.8 MILLION • THE IRS IS CLOSING IN ON CASES INVOLVING BITCOIN INCOME REPORTING • LOUISIANA RETURN PREPARER SENTENCED TO SEVEN YEARS IN PRISON FOR FILING FRAUDULENT TAX RETURNS • RESTAURANT OWNER SENTENCED FOR MULTIPLE FRAUD SCHEMES • LOS ANGELES RETURN PREPARER SENTENCED TO PRISON • NORTH CAROLINA RETURN PREPARER SENTENCED FOR FILING FRAUDULENT RETURNS • CIRCLEVILLE BUSINESSMAN SENTENCED FOR TAX FRAUD • STAPLETON COUPLE SENTENCED FOR INCOME TAX EVASION AND BANKRUPTCY FRAUD • LAS VEGAS MAN SENTENCED FOR MASSIVE TAX FRAUD • MAYOR’S EX-CAMPAIGN TREASURER SENTENCED FOR EMBEZZLEMENT • MINNESOTA TEMPORARY AGENCY OWNER SENTENCED TO PRISON FOR FAILING TO PAY TAXES • REAL ESTATE APPRAISER GETS PRISON TIME FOR ID THEFT AND TAX FRAUD • KANSAS BUSINESS OWNER SENTENCED FOR MAKING FALSE STATEMENT ON TAX RETURN • SENTENCE HANDED DOWN IN MULTI-MILLION DOLLAR SCHEME TO DEFRAUD BIBB COUNTY SCHOOLS AND TAXPAYERS • VIRGINIA PHARMACY OWNER SENTENCED TO PRISON FOR $5 MILLION EMPLOYMENT TAX FRAUD • ARIZONA WOMAN SENTENCED FOR MONEY IRS:CRIMINAL INVESTIGATION ANNUAL REPORT 2019 100 YEARS 1919-2019 LINDBERGH KIDNAPPER JAILED – RANSOM MONEY FOUND HIDDEN UNDER GARAGE FLOOR IN EAST BRONX • AL CAPONE CONVICTED OF DODGING TAXES – SENTENCED TO 11 YEARS • DOGGED I.R.S. INQUIRY ON TAX CHEAT’S SPENDING HABITS LED TO HIS CONVICTION • QUEEN OF MEAN GUILTY OF TAX EVASION • CRIME FAMILY BOSS FAILED TO FILE FEDERAL INCOME TAX RETURNS • TAX CHEAT SENTENCED TO 6 YEARS FOR DEFYING I.R.S • “HOLLYWOOD MADAM” SENTENCED ON TAX EVASION CHARGES IN CONNECTION WITH HER HIGH-PROFILE PROSTITUTION RING • BASEBALL GREAT CONVICTED OF FAILING TO PAY TAXES • “SURVIVOR” WINNER SENTENCED TO 51 MONTHS IN PRISON • FAMOUS HOLLYWOOD ACTOR GETS 3 YEARS FOR NOT FILING TAX RETURNS • U.S. INDICTS FORMER ILLINOIS GOVERNOR FOR ALLEGED PUBLIC CORRUPTION DURING TERMS AS SECRETARY OF STATE AND GOVERNOR • 50 YEAR TERM FOR MINNESOTA MAN IN $3.7 BILLION PONZI FRAUD • FORMER TULSAN SENTENCED FOR $2 MILLION WIRE FRAUD SCHEME AND $500,000 TAX EVASION CASE • FORMER ILLINOIS U.S. REPRESENTATIVE SENTENCED TO 30 MONTHS FOR MISUSING CAMPAIGN FUNDS • BEANIE BABIES CREATOR SENTENCED FOR TAX EVASION • FIFA CORRUPTION CHARGES “WORLD CUP OF FRAUD” IRS CHIEF SAYS • IRS AGENT DISCOVERS THE IDENTITY OF A SILK ROAD KINGPIN • TAX PREPARERS SENT TO PRISON FRAUD GOVERNMENT OF MORE THAN $3.8 MILLION • THE IRS IS CLOSING IN ON CASES INVOLVING BITCOIN INCOME REPORTING • LOUISIANA RETURN PREPARER SENTENCED TO SEVEN YEARS IN PRISON FOR FILING FRAUDULENT TAX RETURNS • RESTAURANT OWNER SENTENCED FOR MULTIPLE FRAUD SCHEMES • LOS ANGELES RETURN PREPARER SENTENCED TO PRISON • NORTH CAROLINA RETURN PREPARER SENTENCED FOR FILING FRAUDULENT RETURNS • CIRCLEVILLE BUSINESSMAN SENTENCED FOR TAX FRAUD • STAPLETON COUPLE SENTENCED FOR INCOME TAX EVASION AND BANKRUPTCY FRAUD • LAS VEGAS MAN SENTENCED FOR MASSIVE TAX FRAUD • MAYOR’S EX-CAMPAIGN TREASURER SENTENCED FOR EMBEZZLEMENT • MINNESOTA TEMPORARY AGENCY OWNER SENTENCED TO PRISON FOR FAILING TO PAY TAXES • REAL ESTATE APPRAISER GETS PRISON TIME FOR ID THEFT AND TAX FRAUD • KANSAS BUSINESS OWNER SENTENCED FOR MAKING FALSE STATEMENT ON TAX RETURN • SENTENCE HANDED DOWN IN MULTI-MILLION DOLLAR SCHEME TO DEFRAUD BIBB COUNTY SCHOOLS AND TAXPAYERS • VIRGINIA PHARMACY OWNER SENTENCED TO PRISON FOR $5 MILLION EMPLOYMENT TAX FRAUD • ARIZONA WOMAN SENTENCED FOR MONEY LAUNDERING • EXECUTIVE WITH SOUTH CAROLINA TIES SENTENCED FOR STEALING $25 MILLION LINDBERGH KIDNAPPER JAILED – RANSOM MONEY FOUND HIDDEN UNDER GARAGE FLOOR IN EAST BRONX • AL CAPONE CONVICTED OF DODGING TAXES – SENTENCED TO 11 YEARS • DOGGED I.R.S. INQUIRY ON TAX CHEAT’S SPENDING HABITS LED TO HIS CONVICTION • QUEEN OF MEAN GUILTY OF TAX EVASION • CRIME FAMILY BOSS FAILED TO FILE FEDERAL INCOME TAX RETURNS • TAX CHEAT SENTENCED TO 6 YEARS FOR DEFYING I.R.S • “HOLLYWOOD MADAM” SENTENCED ON TAX EVASION CHARGES IN CONNECTION WITH HER HIGH-PROFILE PROSTITUTION RING • BASEBALL GREAT CONVICTED OF FAILING TO PAY TAXES • “SURVIVOR” WINNER SENTENCED TO 51 MONTHS IN PRISON • FAMOUS HOLLYWOOD ACTOR GETS 3 YEARS FOR NOT FILING TAX RETURNS • U.S. INDICTS FORMER ILLINOIS GOVERNOR FOR ALLEGED PUBLIC CORRUPTION DURING TERMS AS SECRETARY OF STATE AND GOVERNOR • 50 YEAR TERM FOR MINNESOTA MAN IN $3.7 BILLION PONZI FRAUD • FORMER TULSAN SENTENCED FOR $2 MILLION WIRE FRAUD SCHEME AND $500,000 TAX EVASION CASE • FORMER ILLINOIS U.S. REPRESENTATIVE SENTENCED TO 30 MONTHS FOR MISUSING CAMPAIGN FUNDS • BEANIE BABIES CREATOR SENTENCED FOR TAX EVASION • FIFA CORRUPTION CHARGES “WORLD CUP OF FRAUD” IRS CHIEF SAYS • IRS AGENT DISCOVERS THE IDENTITY OF A SILK ROAD KINGPIN • TAX PREPARERS SENT TO PRISON FRAUD GOVERNMENT OF MORE THAN $3.8 MILLION • THE IRS IS CLOSING IN ON CASES INVOLVING BITCOIN INCOME REPORTING • LOUISIANA RETURN PREPARER SENTENCED TO SEVEN YEARS IN PRISON FOR FILING FRAUDULENT TAX RETURNS • RESTAURANT OWNER SENTENCED FOR MULTIPLE FRAUD SCHEMES • LOS ANGELES RETURN PREPARER SENTENCED TO PRISON • NORTH CAROLINA RETURN PREPARER SENTENCED FOR FILING FRAUDULENT RETURNS • CIRCLEVILLE BUSINESSMAN SENTENCED FOR TAX FRAUD • STAPLETON COUPLE SENTENCED FOR INCOME TAX EVASION AND BANKRUPTCY FRAUD • LAS VEGAS MAN SENTENCED FOR MASSIVE TAX FRAUD • MAYOR’S EX-CAMPAIGN TREASURER SENTENCED FOR EMBEZZLEMENT • MINNESOTA TEMPORARY AGENCY OWNER SENTENCED TO PRISON FOR FAILING TO PAY TAXES • REAL ESTATE APPRAISER GETS PRISON TIME TABLE OF CONTENTS Use arrow keys on keyboard for navigation. Page Forward Click on page number or title to go to that section. Page Back 2 Message from the Chief 58 Field Office Map 4 Message from the Deputy 60 Atlanta 6 100 Years of History in IRS:CI 64 Boston 12 2019 Snapshot 68 Charlotte 16 Organizational Chart 72 Chicago 18 Tax Crimes 76 Cincinnati 24 Electronic Crimes 80 Dallas 26 Non-Tax Crimes 84 Denver 30 International Operations 88 Detroit 33 Narcotics, Counterterrorism, & 92 Houston Transnational Organized Crime 96 Las Vegas 34 Specialized Units 100 Los Angeles 37 Commissioner's Protection Detail 104 Miami 38 Nationally Coordinated 108 Newark Investigations Unit 112 New York 40 Undercover Operations 116 Oakland 42 Asset Forfeiture 120 Philadelphia 44 National Forensic Laboratory 124 Phoenix 46 National CI Training Academy 128 Seattle 50 Professional Staff 132 St. Louis 51 Leadership Education 134 Tampa and Development 138 Washington D.C. 52 Equity, Diversity & Inclusion 142 Appendix 54 Communications & Education 55 Outreach/Community Engagement Click the menu button for more options. IRS: Criminal Investigation Annual Report 2019 1 MESSAGE FROM THE CHIEF enforcement agency. In looking through the We are working smarter using data analytics money movement in general. Criminals INSPIRE THE FUTURE. While the tools history of this great agency, it is hard not to to augment good old fashioned police stay current with the trends and adopt their of the trade may have changed, criminals be impressed with those who came before work and find those cases that have the methods to match the public’s tendencies. are still doing the same things they were us. At times when the country was battling biggest impact on tax administration. We The speed at which money moves today is doing 100 years ago. Skimming money from corruption and bribery and other financial are leading the world in our ability to trace almost instantaneous and the convenience a business to avoid employment taxes or crimes, it was IRS-CI who stepped up to virtual currency in financial investigations that comes with that opens the door for pretending to be someone else to file their solve some of the most notorious crimes of while still working our bread and butter tax criminals to exploit the latest technological taxes—these are all things criminals have the early 20th Century. As we look ahead to enforcement mission areas. Our conviction advancements. Years ago, we had time on done since our inception. And while it is develop and deploy the tools that will make rate is among the highest in federal law our side and we could allow things to play true that the threat and evolution of cyber- us successful in the 21st Century, we must enforcement and this year we will hire more out without losing a trace of a criminal or crimes is real and has impacted all financial use those lessons learned from the past to agents than we have in the last five years their proceeds. Now, money disappears crimes, I’m proud of what we have done inform our investigations and investigative combined. In the past 100 years, many in the blink of an eye. All that is needed as an agency to position ourselves to solve techniques of the future. This is how we things have changed, but some things have is a smartphone to move money from these sophisticated crimes. Today’s cyber continue to honor the badge and our great remained constant. Most crimes are still one location to another, anywhere in the criminals think we cannot catch them, but as Honor the Badge, Preserve the Legacy, history. CI has an unprecedented level of committed for financial gain and we are still world. The internet and the dark web have evidenced by some of the great casework in our agents have once again proved that there Master Your Craft, Inspire the Future. support from the Commissioner and Deputy the only federal agency that is authorized facilitated this change and law enforcement this report, I would say they are wrong. As is nowhere to hide. We will not stop in our These are the guiding principles that IRS Commissioner of the IRS based on our to investigate and recommend prosecution has had to make adjustments to keep I said in a recent press conference, criminals pursuit. Criminal Investigation lives by and that 2019 success of the past. It is up to us to continue on federal income tax cases. We take this up. CI has made significant investments used to hide by laundering their money was defined by. to earn that respect and trust moving very seriously and most of these cases in training our new employees and through shell companies around the country, I’m proud of all we have accomplished in forward. ultimately end in convictions and jail time. experienced employees and this investment but we traced them. They took their money FY19 and in our 100-year history. I’m proud We are the backbone of the US tax system is unmatched within the IRS. We instituted offshore and hid around the world, but we to lead this agency and I look forward to HONOR THE BADGE. I am excited to share the FY 2019 IRS Criminal Investigation PRESERVE THE LEGACY. Our cases just as enforcement is the backbone of any Master Your Craft training for special agents found them. They went on the dark web helping to write the next chapter of investi- Annual Report. While we use this report continue to be some of the most complex effective voluntary compliance tax system. while introducing new specialized training for thinking that their actions were anonymous, gative excellence for IRS-CI. to highlight our successes during the past and impactful cases in the world and our professional staff as well. You can expect but they weren’t, and we again found them. year, this particular year had special meaning regularly appear on the front page of the MASTER YOUR CRAFT. The evolution these investments to continue. They now deal in crypto-currency, again as we celebrated our 100th year as a law nation’s largest newspapers and websites. of financial crime mirrors the evolution of –Chief, Don Fort thinking this will make them anonymous, but HONOR THE BADGE 2 IRS: Criminal Investigation Annual Report 2019 PRESERVE THE LEGACY MASTER YOUR CRAFT IRS: Criminal Investigation Annual Report 2019 3 MESSAGE FROM THE DEPUTY in the headlines of some of the most inventory. talked-about cases of the year. We on top of the criminal methodologies is our counterparts in the United Kingdom, Investigation Division has worked in all our bread and butter. We will continue to Australia, Canada, and the Netherlands. areas during fiscal year 2019. The case validated pilot programs and solidified CI Special Agents are in demand. As the support cases in this area while looking We have found ways to better share summaries in this report touch every field units designed to better use data to Chief said, we are the only ones who to use our limited resources to positively information through appropriate channels office, every state and nearly every region aide in finding and solving the best can investigate tax crimes, but U.S. affect tax administration in the most but have already done more in this area of the world. Though we spend most of financial crime cases. We took another Attorneys want IRS-CI agents in all of impactful way possible. in the last year than in the previous 10 our time talking about cases, it should be step into the center of the world stage their financial crime cases. The fact of the years combined. The J5 also focuses noted that these successes are a result in solving some of the most complex matter is, if a case involves money and In the international arena, we continue on enablers of international tax evasion of having the most sophisticated financial cybercrimes. And we nourished interna- it’s a crime that rises to the federal level, to work with our partners to break down and on the use of crypto-currency to crime law enforcement personnel the tional partnerships, broke down barriers IRS-CI almost always has jurisdiction. walls and work together in areas of evade international tax obligations. In world has ever seen. I look forward to of information sharing, and showed the There is no better example to this than common goals. Perhaps there is no better just 18-months, we are already seeing continuing to accomplish great things in world’s criminal population that there is in tracing cryptocurrency transactions. example of these types of partnerships the benefits to this group both in the FY 2020 and for the next 100 years! nowhere that they can hide from us. Cryptocurrencies are undermining the than our work with the Joint Chiefs development of new tools and in the financial and tax system. Companies pay of Global Tax Enforcement, or J5. The numbering of real cases. We expect our 2019 was a watershed year for IRS-CI. We began bringing on a new wave of employees in cryptocurrency or receive J5 formed in June of 2018 following a first operational results from this group in We continued to focus on better case special agents and professional staff this crypto for goods/services. They do not call to action from the Organization for FY20. selection to ensure we added the year—117 special agents and 38 profes- pay taxes and entities shift income to Economic Cooperation and Development most egregious tax crimes to our case sional staff this year. With plans for 10 offshore exchanges with no reporting (OECD) to do more to battle international This annual report is a proud reflection of inventory. We continued to pursue the more special agent classes in FY20, we requirements, utilizing exchanges with tax evasion. The J5 includes IRS-CI and the tremendous cases that the Criminal cases that have the biggest impact on are finally in a position to increase our little to no AML practices. Understanding tax administration, finding ourselves staffing levels and add more cases to our the advancements in this area and staying 4 IRS: Criminal Investigation Annual Report 2019 –Deputy Chief, Jim Lee IRS: Criminal Investigation Annual Report 2019 5 100 YEARS OF CRIMINAL INVESTIGATION ORGANIZATION AND FUNCTIONS OF THE INTELLIGENCE UNIT States Senator. He was assassinated just prior to the time set for presenting evidence to the federal grand jury relative to his tremendous income from "political racketeering." The basic organizational structure of the Intelligence Unit, like the In 1919, Commissioner Daniel C. Roper decided to create an Bureau of Internal Revenue, remained essentially unchanged from The Teapot Dome Scandal of the 1920s shocked Americans by Intelligence Unit to perform similar functions as the Post Office 1919 through 1951. Jurisdictionally separate organizations, or "units," revealing an unprecedented level of greed and corruption within the Inspectors for the Bureau of Internal Revenue. Commissioner administered the different types of tax. Under that arrangement, the federal government. Albert Fall, a former Secretary of the Interior, Roper with the approval of the Secretary of the Treasury and Intelligence Unit was a centralized organization. Special agents in was charged with accepting bribes from oil companies in exchange the Postmaster General effected transfers from the Post Office the field worked under the Special Agent in Charge of a geographic for exclusive rights to drill for oil on federal land. The Teapot Dome Inspection Service of six experienced Post Office Inspectors to the area. The Special Agent in Charge, in turn, reported directly to the investigation resulted in the collection of approximately $6,000,000 Bureau of Internal Revenue on July 1, 1919. Chief of the Intelligence Unit in Washington, D.C. in taxes. Elmer L. Irey was designated as Chief, Intelligence Unit, and shortly thereafter, W H. Woolf, also connected with the Office of The files of the Bureau of Internal Revenue detail thousands the Chief Post Office Inspector, was appointed as Assistant Chief. of reports of investigations which resulted in convictions of tax During the negotiations for the transfer of Post Office Inspectors Charles E. Mitchell, a New York banker, brought a change in the TYPES OF SPECIAL INVESTIGATIONS income tax law whereby wealthy taxpayers could no longer escape tax liability by claiming fictitious losses from alleged sales of securities. The American Optical Company was convicted in a scheme to evaders. to the Bureau of Internal Revenue to create an organization for an The principal activity of the Intelligence Unit was the investi- evade income taxes by understating, in its inventory, the accumu- Intelligence Unit, it was stipulated by the Postmaster General that gation of income tax fraud cases. These cases involved prominent lation of gold borings and dust which were melted into gold bricks, Mr. Roper could have “six men of his own choosing but no more." individuals in professional, commercial and public life. Large each weighing one thousand ounces. The income from their sale was diverted to the individual owners of the business. This enabled Commissioner Roper to choose Post Office corporations were investigated with success for the Unit. The Unit Inspectors who had excellent records as investigators and were successfully investigated numerous racketeers and public enemies suited for the work which they would be called upon to perform in who had amassed fortunes through their illegal activities. this service. This original group of Post Office Inspectors, selected The Intelligence Unit conducted numerous investigations pertaining to estate tax frauds and attempted evasion of miscellaneous taxes such as gasoline, theater ticket and tobacco taxes. In 1924, the Unit was also assigned the responsibility of investi- as a nucleus of the newly created Intelligence Unit, became the gating applications of attorneys and agents to practice before the first Special Agents in Charge of Divisions in the new organization. Treasury Department and investigating charges against enrolled They were able to establish efficient and practical investigative agents and attorneys. Investigations involving attempted bribes, extortion, embezzlement, irregularities on the part of Internal Revenue THE EARLY YEARS protocols because of their long experience in conducting thorough During that 1950's, the Intelligence Unit's principal functions Al Capone, so called Public Enemy No. 1 and the most notorious and impartial investigations. An esprit de corps developed in the continued to be investigating tax fraud, charges against Internal leader of organized racketeering in the USA, was investigated by the Intelligence Unit because of their success, with the members of the Revenue employees and performing background investigations of Intelligence Unit. His conviction on income tax evasion was the first Unit feeling an individual pride in its achievements. applicants for Internal Revenue positions. decisive blow against organized crime. The New York income tax evasion drive against racketeers preying IRS: Criminal Investigation Annual Report 2019 representatives in various schemes to violate the revenue laws were also common. During Prohibition, much of the work of the Intelligence Unit concerned investigations of service employee collusion with persons engaged in the illicit trafficking of liquor, liquor permit on legitimate industry likewise was very effective. The tax evasion frauds and major conspiracies to violate the National Prohibition Act. investigation of prominent motion picture stars resulted in several Edward Donegan who was a casual or odd-job laborer became criminal prosecutions and brought to the Treasury substantial a millionaire within about four months through bootlegging amounts in taxes and penalties. following the implementation of National Prohibition of alcohol in Dishonest public officials including peace officers, judges, mayors 6 employees and collusion between employees and taxpayers or their the U.S. in January 1920. Through the use of an insider within the of large cities, governors of states, legislators, and members of the Bureau of Prohibition, he was able to illegally withdraw alcohol United States Senate also were investigated by the Intelligence Unit. from warehouses ostensibly for legal purposes himself and sold Huey Long was one of the best-known public figures investigated fraudulent permits to other bootleggers. Donegan’s activities were for tax fraud. Long was Governor of Louisiana and was later a United discovered after he attempted to bribe Internal Revenue agents who IRS: Criminal Investigation Annual Report 2019 7 visited him in connection with another investigation. The Intelligence Unit, at the direction of the Commis- enforcement efforts devoted to Racketeer tax returns. On January 1, 1960, all investigative functions who diverted the planes to the Amman desert and involving persons enrolled or applying for enrollment to blew them up. Sky marshal duties were subsequently sioner of Internal Revenue and the Secretary of the second interim report was issued, Internal Revenue practice before the IRS were transferred to Inspection. assumed by Customs Security Officers. Treasury, frequently conducted special investigations initiated a Special Tax fraud Drive to subject every This was done to permit Intelligence to concentrate its which were not related to tax frauds or personnel known racketeer to a thorough tax investigation. A efforts on investigating criminal tax violations. delinquency. This phase of Intelligence Unit activity master list of nearly 30,000 names was compiled for was varied in scope but included the Lindbergh baby this purpose. The director of the drive used the facilities systems within IRS during the 1960's created new wide organizational review study group. The group kidnapping case. of the Intelligence Unit in the National Office. Racket tools for Intelligence to ferret out tax fraud. Data was was concerned about the public being misled by the squads comprised of special agents, revenue agents used to detect unreported income and to identify title, "Intelligence,'' and sought a more proper and and deputy collectors were formed in offices throughout fraudulent returns, false claims for refund and failures understandable title. Although the group had initially the country and were placed under the overall direction to file. It also permitted the high-speed analysis of recommended the title "Criminal Enforcement," "Criminal THE LATE THIRTIES AND FORTIES From 1935 to 1943, the Intelligence Unit conducted In April 1951, shortly after the Kefauver Committee's The introduction of automatic data processing (ADP) On July 2, 1978, the Intelligence Division was renamed the Criminal Investigation Division. This was based on the recommendations of a Service- an unprecedented number, nearly 42,000 "miscel- of the Intelligence Unit's Special Agents in Charge. voluminous business records to establish laneous" investigations. These were background Support for the drive diminished rapidly in mid-1952, and document tax evasion. For the first investigations resulting from the Unit's expanded when Congress did not appropriate the additional time in modern criminology, data was used other important enforcement efforts. There were two responsibility, during that period, to investigate funds requested, and officials realized that many of to coordinate information that culminated major projects initiated against narcotics traffickers. applicants for practically all Internal Revenue positions, the cases completed involved smalltime criminals and in the 1965 indictment of 86 alleged Jurisdiction over wagering tax enforcement was as well as applicants for positions of importance in other petty gamblers. Soon after, the racketeer program bookmakers in the New York City area. returned to the Intelligence Division. And significant Treasury segments. was integrated with the overall Intelligence effort, with During World War II, the Intelligence Unit performed emphasis placed on investigating major racketeers. In the years following the assassination Investigation" was eventually adopted. The 1970's also saw the introduction of a number of enforcement actions were started against unscrupulous of President John F. Kennedy in 1963, tax return preparers, multiple tax refund schemes, and special agents of the Intelligence Division promoters of abusive tax shelters. additional duties in the form of assisting Treasury's In 1952, following a series of Congres- Foreign Funds Control Unit in locating and freezing sional investigations into "tax fixing", there were called upon to assist the U.S. Secret Service in the funds and other valuables belonging to Axis-power was a comprehensive reorganization of protection of the President and other officials. aliens living in the United States. This was done to the Bureau of Internal Revenue. As part deprive the enemy of resources that might finance of the reorganization, the Intelligence espionage and sabotage. Unit's organizational name was changed THE EIGHTIES In February 1980, the Cash Flow Project was THE SEVENTIES The Bank Secrecy Act was enacted in 1970 as a result initiated in the Jacksonville District. Its objective was to investigate money launderers and corrupt bank to Intelligence Division. Its criminal of concern expressed by law enforcement officials over Officials who violated currency laws by using financial on tax investigations of individuals who had profited investigation program was decentralized the laundering of illegal funds through domestic banks institutions to launder large sums of currency generated excessively from the war, black market activities, and through integrating with other field and foreign tax havens. Since then, the Act has proven primarily from narcotics trafficking. Cash Flow was part the unprecedented amounts of currency in circulation. revenue programs under District Directors. In addition, an effective tool for identifying and investigating tax of Operation Greenback, a coordinated Treasury effort. To meet this increased work load, the Intelligence responsibility for conducting character and conduct evaders and for cutting the flow of money generated by field ranks were increased to more than 1,200 special investigations of employees was reassigned to the illegal activities, especially narcotics trafficking. agents. This rapid expansion necessitated the transfer recently created Inspection Service. After World War II, the Intelligence Unit concentrated of investigators from other enforcement agencies. In the early 1950's, hearings of Senator Estes Kefauver's Committee investigating organized the type of violation and the method of proof. a number of special agents were detailed with other On March 21, 1982, as part of a reorganization of the federal agents as "sky marshals" on international and IRS National Office, the Criminal Investigation Division domestic flights. The detail was ordered by President was elevated to assistant commissioner level, and the crime and, later, the beginning of the Strike Force Richard M. Nixon and prompted by the skyjacking of office of Assistant Commissioner (Criminal Investi- concept. three U.S. commercial aircraft by Palestinian terrorists gation) was established. THE SIXTIES THE FIFTIES During a six-month period in late 1970 and early 1971, On May 27, 1980, the Criminal Investigation Division issued objective prosecution criteria, generally geared to The 1960's introduced a major drive on organized crime generated concern about the limited extent of 8 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 9 In 1987, development began on the Automation of Rossotti vowed to reform and improve the work of the their counterparts in the law enforcement community prosecuted some of the worlds most wanted Darkweb Criminal Investigation (ACI) Project, which provided a Internal Revenue Service during his Senate confirmation to follow the money trail to uncover terrorist financing criminals including Ross Ulbricht aka Dread Pirate nationwide, integrated computer system to enhance hearing. As a first step to bringing positive change to throughout the world. CI personnel assisted at Ground Roberts who operated the Silk Road Darkweb market productivity. Among its many planned features were the IRS, Commissioner Rossotti promised thorough Zero and associated areas to help uncover evidence place, Alexandre Cazes aka Alpha02 and Admin who financial analysis tools for computing taxable income reviews of each of its major components, including the from the attack. CI personnel were also assigned operated AlphaBay, the Largest Online 'Dark Market as and tax; an investigative report generator; a support Criminal Investigation Division (CI). in Iraq and Afghanistan to assist with international well as investigating numerous other illegal Darkweb terrorist financing, money laundering and threat finance sites. system to prepare documents such as summonses, As part of The Restructuring and Reform Act of 1998 requests for returns, and letters; and a case and time (RRA 98), the IRS was redesigned to serve taxpayers reporting system. Also, in the 1980's, a project was and tax practitioners more effectively and efficiently. In May 2003, CI special agents were deployed to pornography site in the world was taken down. IRS-CI, undertaken to detect tax evaders through "business Included in this redesign was a comprehensive review Iraq to lead the U.S Treasury’s financial “jump teams” agents became aware of Welcome to Video, the largest opportunities" newspaper ads. The Tax Haven Offshore of the Criminal Investigation Division (CI) lead by Judge to uncover the Saddam regime’s ill-gotten gains from child sexual exploitation market by volume of content, Bank Project was also established because of the William Webster, which made dozens of detailed the Iraqi people. Saddam’s regime used because of their work on previous Darkweb market- increased use of tax haven countries by U.S. taxpayers. recommendations including major structural and proxies, fronts and bank accounts around places. IRS-CI was able to trace bitcoin transactions operational changes. the globe to hide assets. This required on the site to people all over the world who were painstaking financial investigative work uploading and downloading this material, as well as find uncovering hidden and layered assets that the location of the site administrator. By analyzing the The Criminal Investigation Division became a founding partner of a major interagency drug investigation project known as the Organized Crime Drug Enforcement Task TWO THOUSAND TO PRESENT activities. In October 2019, the largest Darkweb child Force (OCDETF). OCDETF was designed to disrupt In July 2000, CI finalized the historic reorganization. Saddam, his family, and associates had blockchain and de-anonymizing bitcoin transactions, major drug trafficking operations and related crimes, A number of long sought goals, including line authority nested outside of Iraq. CI special agents IRS-CI special agents were able to identify hundreds such as money laundering, tax and weapon violations, over all CI special agents and employees, referral played a leading and pivotal role in the U.S of predators around the world - even though those and violent crime. authority to the Department of Justice for Treasury’s efforts. users thought that they could remain anonymous. As a CI investigations and a direct reporting CI special agents helped uncover a variety of illegal result of the investigations, Jong Woo Son, 23, a South relationship to the Commissioner were activities related to mortgage and financial fraud which Korean national, was indicted by a federal grand jury in achieved. Until July 2000, CI personnel caused the financial crisis in 2008, resulting in multiple the District of Columbia for operating the site. implemented a reorganization of CI at the district, reported most directly to multifunction convictions of fraudsters who helped to perpetuate the regional and national levels. CI district operations were al (i.e., civil and criminal) IRS district financial crisis. consolidated and reduced in number to 34. The seven directors, a relationship mirrored at IRS CI regional offices were eliminated. In their place, four headquarters with an Assistant Commis- investigation in the corruption by officials and associates Long, Leona Helmsley, Whitey Bulger, Michael “The SES Directors of Investigations (DI) were established: sioner for CI reporting to a multifunctional connected with the Fédération Internationale de Situation” Sorrentino, Fédération Internationale de National Training, the National Forensic Laboratory, executive subordinate to the Commissioner. As a result Football Association (FIFA), the governing body of Football Association (FIFA), and the Silk Road. But, the National Transcription Center, and Criminal Case of RRA98, all CI resources were placed under the Chief international soccer. Multiple individuals were indicted Chief Don Fort says, “Not every case has grabbed Processing Systems. of CI, who in turn reported directly to the IRS Commis- on wire fraud, racketeering, and money laundering. national attention, most every agent and employee sioner. Mark Matthews was the first Chief for IRS IRS-CI Chief Richard Weber vowed to "issue Fifa a that works or has worked for CI has never risen to Criminal Investigation following the reorganization. red card" following the indictment by the US Justice prominence because of their job with IRS-CI and the Department for corruption. cases they worked. In fact, we usually stay behind the THE NINETIES In October 1993, the Assistant Commissioner (CI) The National Office was also reorganized. The Division of National Operations was created, with three offices: Narcotics/ Money Laundering, Tax Crimes, and Special Throughout the 21st Century, IRS-CI has continued Investigative Techniques. The Review Division and the to support its proud heritage of being the worlds finest Finance Division were enlarged and made separate. financial investigators. Later, a Division of Policy and Information was formed. Following the September 11, 2001, terrorist attacks During the fall of 1997, IRS Commissioner Charles O. on the United States, CI personnel work diligently with 10 IRS: Criminal Investigation Annual Report 2019 In 2015, IRS-CI was the co-lead agency in the IRS-CI has kept pace with the ever changing cyber In July 2019, IRS-CI celebrated their 100 Year Anniversary. Over the past century, IRS-CI has worked high profile cases including those involving Huey scenes doing what we do best – work hard and work world by developing a cybercrimes investigative every day to protect the integrity of the US financial program that has successfully investigated and system.” t IRS: Criminal Investigation Annual Report 2019 11 2019 SNAPSHOT FOR MANY YEARS while practicing on the outside, I admired the investigative abilities and professionalism of every special agent and the overall strength of the entire CI organization. Since coming onboard as Commissioner, my admiration and respect have increased exponentially. CI is the backbone for the entire IRS organization – fair, impartial, diligent and, where appropriate, tenacious! The FY19 Annual Report summarizes various CI activities throughout the year but vastly understates the importance of CI to the overall IRS Mission. CI supports the efforts of compliant taxpayers by visibly demonstrating the risks of noncompliance thereby helping otherwise honest taxpayers stay honest and compliant. The best of the best! TAX FRAUD IDENTIFIED OTHER FINANCIAL CRIMES CONVICTION RATE $1.8B $4.4B 91.2% 1726 PROCEEDS IDENTIFIED WARRANTS EXECUTED 1.24 DIGITAL DATA SEIZED PETABYTES – CHARLES P. RETTIG , Commissioner, Internal Revenue Service 12 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 13 2019 SNAPSHOT 2019 SNAPSHOT INTERNATIONAL CYBER CRIMES GENERAL TAX FRAUD 28% PUBLIC CORRUPTION ABUSIVE TAX SCHEMES IRS:CRIMINAL INVESTIGATION U.S. ATTORNEY'S OFFICE 15% CORPORATE FRAUD SPECIAL AGENTS 2019 2,009 0.5% EMPLOYMENT TAX GENERAL FRAUD IDENTITY THEFT TAX REFUND FRAUD 75.1 11.9 NON-TAX 2018 BSA DATA 12% MONEY LAUNDERING PROFESSIONAL STAFF NARCOTICS 11.3 OCDETF Organized Crime Drug Enforcement Task Force IRS:CIVIL 26% OTHER FEDERAL AGENCIES DIRECT INVESTIGATIVE TIME SPENT* PERCENTAGES 2,019 7% 728 2019 7.7% PUBLIC 7% STATE/LOCAL GOV'T 4% INVESTIGATION SOURCES 2018 789 IRS:CI STAFFING *1.4% Uncategorized 14 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 15 2019 SNAPSHOT Office of the Chief Chief of Staff Chief Deputy Chief Review & Program Evaluation International Operations Operations, Policy, & Support Strategy Refund & Cyber Crimes Technology Operations & Investigative Services Field Operations East National Forensic Laboratory Finance Systems & Analysis Business Systems Development Cybersecurity Electronic Crimes Field Operations West Financial Crimes Human Resources Operations, Scheme Development, and Support Narcotics Counterterrorism, & Transnational Organized Crime Special Investigative Techniques National CI Training Academy Cyber Crimes Warrants & Forfeiture Treasury Liaison FinCEN Liaison TEOAF Liaison 16 IRS: Criminal Investigation Annual Report 2019 Applied Analytics Communications & Education Program Management, Acquisition, & Contracts Equity, Diversity & Inclusion Midstates Area Field Offices Northern Area Field Offices Southern Area Field Offices Western Area Field Offices Chicago Boston Atlanta Denver Dallas Cincinnati Charlotte Las Vegas Detroit Newark Miami Los Angeles Houston New York Tampa Oakland St. Louis Philadelphia Washington, DC Phoenix NCIU Seattle Technical Operations Center User Support IRS: Criminal Investigation Annual Report 2019 17 TAX CRIMES TAX CRIMES 1500 942 INVESTIGATIONS INITIATED PROSECUTIONS RECOMMENDED 848 SENTENCED GENERAL TAX FRAUD ABUSIVE TAX SCHEMES General tax fraud investigations are at the core of CI’s law CI focuses on the investigation of promoters and clients who willfully enforcement efforts and directly influence the American public’s participate in domestic and offshore tax schemes in violation of the confidence and compliance with the tax laws. The integrity of our tax laws. Participants in these abusive schemes create structures tax system depends heavily on taxpayers’ willingness to self-assess such as trusts, foreign corporations, and partnerships to make it taxes owed and voluntary file tax returns. CI investigations help appear a trustee, nominee, non-resident alien, or other foreign assure law-abiding taxpayers that individuals who deliberately under- entity is the owner of the assets and income, when in fact the true report or omit income from their tax returns are held accountable ownership and control remains with a U.S. taxpayer. for their actions. Common practices involved in general tax fraud investigations include keeping two sets of books, making false entries in books and records, claiming personal expenses as business REFUND FRAUD PROGRAM expenses, claiming false deductions or credits against taxes owed, 18 CRIMINAL INVESTIGATION’S (CI) primary resource sources, such as money obtained through embezzlement, bribery, and hiding or transferring assets. CI special agents use their financial The Refund Fraud Program consists of three parts–identity theft commitment is to develop and investigate tax crimes, both legal and frauds. The individuals can be legitimate business owners but investigative expertise to uncover and quantify the seriousness of investigations, the Questionable Refund Program (QRP), and the and illegal source. Prosecution of these cases supports the overall obtain their income through illegal means. These investigations these schemes. They also work closely with DOJ prosecutors to Abusive Return Preparer Program (RPP) for both Individual Master IRS compliance goals and enhances voluntary compliance with the focused on methods through which individuals seek to “launder” gather the necessary evidence to bring these cases to a successful File (IMF) and Business Master File (BMF). These programs cover tax laws. CI works some of these investigations with our federal, their ill-gotten income by making it appear the income is from a conclusion. criminals who file fraudulent tax returns to steal government state and local law enforcement partners and also coordinates legitimate source. Frequent money laundering techniques include funds. This type of theft erodes voluntary compliance and taxpayer with foreign tax and law enforecement agencies. the manipulation of currency reporting requirements, layering confidence in the integrity of the tax system. It also results in the of transactions and international movement of funds. In these loss of vital funds needed to support government programs, many of The Illegal Source Financial Crimes Program encompasses tax types of investigations, CI Special Agents work together with our which impact the most vulnerable Americans. and tax-related, money laundering and currency violations. These federal, state and local law enforcement partners, as well as with investigations focus on individuals deriving income from illegal foreign tax and law enforcement agencies. IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 19 TAX CRIMES CYBER CRIMES The Questionable Refund Program identifies credits. The preparers’ clients may or may Employment taxes include federal income fraudulent claims for tax refunds. Generally, not know their returns were falsified. tax withholding, Social Security taxes, and these schemes involve individuals filing multiple fraudulent tax returns using the personally identifiable information of federal unemployment taxes. EMPLOYMENT TAX FRAUD individuals who knowingly or unknowingly IDENTITY THEFT CYBER CRIMES same period, data loss incidents reported with their IRS civil counterparts to aid to the IRS has drastically increased. These taxpayer and revenue protection efforts. The Since 2015, CI has been building a data loss incidents include data intrusions, IRS also uses this information to develop cybercrimes program to address the business email compromise, phishing internal defenses that help identify and exponential growth of cybercrime impacting schemes, and bank account takeovers prevent further losses associated with the tax, financial, and economic systems victimizing private sector entities involved fraudulent claims. are used to facilitate the scheme. A Employment tax fraud takes many forms. of the United States. A Cyber Crime Unit in the tax eco-system and the IRS. These significant number of these investigations Some of the most common forms include Identity theft refund fraud occurs when (CCU) with locations in our Los Angeles thefts target detailed financial data, prior year CI’s cybercrime investigative efforts focus include cases also considered identity employee leasing, paying employees in cash, someone uses the personally identifiable and Washington, D.C. Field Offices was tax returns, and payroll records that criminals on subjects using the internet as an essential theft investigations (stolen identity refund filing false payroll tax returns, and failing information (PII) of another individual–for part of the initial launch of the program and use to generate SIRF claims that mirror a means to commit the crime, remain fraud-SIRF). to file payroll tax returns (“pyramiding”). example name, Social Security number, a headquarters Cyber Crimes office and victim’s actual tax return. During these types anonymous, elude law enforcement, and Pyramiding is when a business withholds address–without permission, to commit cybercrimes coordinators in each of our 21 of cybercrime investigations, special agents conceal financial transactions, ownership of In contrast, Abusive Return Preparer taxes from its employees, but intentionally fraud or other crimes. These cases are Field Offices followed. CCU investigations use their close working partnerships with assets, or other evidence. As with all types Program investigations involve the orches- fails to forward them to the IRS. After a commonly referred to as stolen identify involve the internet and internet based other law enforcement agencies and their of crimes within CI’s area of responsibility, trated preparation and filing of false income liability accrues, the individual starts a refund fraud (SIRF) investigations. The technologies that enable criminals to engage capabilities as law enforcement officers special agents working cybercrimes investi- tax returns by corrupt return preparers. new business and begins to accrue a new scam usually occurs when an identity thief in illegal activity with anonymity and without to gather valuable information about SIRF, gations use the same “follow the money” These preparers often claim inflated personal liability. Some employers withhold taxes uses a legitimate taxpayer’s identity to file a defined physical presence. The CCU refund fraud crimes, and information that strategy that made CI’s involvement in or business expenses, false deductions, from their employees’ paychecks and use a fraudulent tax return and claim a refund. focuses its efforts on multijurisdictional affects the integrity of IRS online systems. complex investigations a mainstay since the excessive exemptions, and unallowable tax the funds for their personal expenses. Generally, the identity thief will use a stolen investigations posing the most significant They share criminal intelligence in real-time creation of the agency in 1919. SSN and other personally identifiable threats to the U.S. tax and financial systems. information (PII) to file a fraudulent tax return These crimes typically involve the use of and attempt to get a refund early in the filing crypto currencies to facilitate the criminal season before the legitimate taxpayer, files activity. their tax return. Field office special agents and professional staff working cybercrime investigations are focused primarily on cyber enabled investigations that involve theft and fraud and are increased in scale by the use of computers, computer networks, or other forms of technology. Over the past several years, CI has seen an increasing growth in the number of criminals using the cyber environment to facilitate stolen identity refund fraud (SIRF) and other refund fraud schemes. During this 20 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 21 CYBER CRIMES South Korean National and hundreds of others charged worldwide in the takedown of the largest darknet child pornography website, which was funded by bitcoin On March 5, 2018, agents from the IRS-CI, CYBER CRIMES which are currently being analyzed by the than one million bitcoin addresses, signifying National Center for Missing and Exploited that the website had capacity for at least one Children (NCMEC), contained over 250,000 million users. unique videos, and 45 percent of the videos The xDedic Marketplace, a website involved in the illicit sale of compromised computer credentials and personally identifiable information, Shut Down! unlicensed Money Service Business (MSB) money transmitting business, laundering and exchanged at least 25 million dollars of monetary instruments, and failure to for drug dealers, credit card fraudsters, maintain an effective anti-money laundering and other illicit activities. Kalra owned program. Kalra also exchanged bitcoin for and operated a Bitcoin Kiosk (aka Bitcoin U.S. dollars and at the time of his arrest, currently analyzed contain new images that The agencies have shared data from have not been previously known to exist. the seized server with law enforcement On January 24, 2019, seizure orders were ATM) that would exchange large amounts attempted to exchange over $400,000 HSI, National Crime Agency in the United around the world to assist in identifying executed against the domain names of the of money with no Know Your Customer with undercover agents representing the Kingdom, and Korean National Police in Welcome To Video offered these videos and prosecuting customers of the site. This xDedic Marketplace, effectively ceasing the requirements or Anti-AML program. This proceeds to be from drug sales. Digital South Korea arrested Jong Woo Son, 23, for sale using the cryptocurrency bitcoin. has resulted in leads sent to 38 countries website’s operation. The xDedic Marketplace is believed to be the first federal criminal assets, cash, a Bitcoin Kiosk, and money in a South Korean national, for his operation Typically, sites of this kind give users a forum and yielded arrests of 337 subjects around operated across a widely distributed case charging an unlicensed money bank and crypto currency accounts taken of Welcome To Video. The server that to trade in these depictions. This Darknet the world. The operation has resulted in network and utilized bitcoin in order to remitting business that used a Bitcoin at the time of his arrest resulted in approxi- he used to operate this Darknet market, website is among the first of its kind to searches of residences and businesses of hide the locations of its underlying servers kiosk. Kalra plead guilty to distribution of mately 1.2 million dollars in seizures. t that exclusively advertised child sexual monetize child exploitation videos using approximately 92 individuals in the United and the identities of its administrators, methamphetamine, operating an unlicensed exploitation videos available for download bitcoin. In fact, the site itself boasted over States. Notably, the operation is responsible buyers, and sellers. Buyers could search by members of the site, was also seized. one million downloads of child exploitation for the rescue of at least 23 minor victims for compromised computer credentials The operation resulted in the seizure of videos by users. Each user received a unique residing in the United States, Spain and the on xDedic by desired criteria, such as approximately eight terabytes of child sexual bitcoin address when the user created an United Kingdom, who were being actively price, geographic location, and operating exploitation videos, the largest child sexual account on the website. An analysis of the abused by the users of the site. system. Based on evidence obtained during exploitation site of its kind. The images, server revealed that the website had more the investigation, authorities believe the website facilitated more than $68 million in fraud. The victims span the globe and all industries, including local, state, and federal government infrastructure, hospitals, 911 and emergency services, call centers, major metropolitan transit authorities, accounting and law firms, pension funds, and universities. California man pleads guilty to federal narcotics, money laundering charges for running unlicensed bitcoin exchange and ATM Kunal Kalra – Kalra, AKA “shecklemayne,” “coinman,” or “Kumar,” operated an 22 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 23 ELECTRONIC CRIMES ELECTRONIC CRIMES the defendants created false paperwork EVERY INVESTIGATION CRIMINAL INVESTIGATION conducts In FY 2019, eCrimes personnel participated in over 400 search involves digital and multimedia evidence. This includes many warrants or other digital forensic operations performed at over • Digital currency identification (bitcoin wallets, etc.) • Internet activity and history analysis (including production records, blending tickets, and bills of lading), used temporary sources, such as: Personal computers, Mobile devices (phones, 525 locations; seized 1.24 petabytes of data from over 2,530 • Dark web activity tablets, etc.), Small and large business computers/servers, Server computers, laptops, external devices and 705 mobile devices. Electronic Crimes continues as the premier source for digital • Targeted searches • Data conversion from proprietary formats “toll processing” agreements, and engaged farms, Cloud storage, and the Dark net. The proper collection and • Encryption and password recovery analysis of digital evidence requires specialized skills and training, and multimedia evidence in IRS-CI. The eCrimes unit is one it appear that biodiesel and related products the premier digital forensics units in all of U.S law enforcement. • Taint reviews and segregation • Website preservations allowing this evidence to be admissible in court proceedings. • Deduplication of large data sets (such as email) • Recovery of hidden and deleted data • Recovery & repair of damaged disk drives eCrimes also runs a state of the art forensics lab in Woodbridge, CI Electronic Crimes’ primary function is the forensic acquisition, VA, where some of the most complex digital evidence extraction analysis and testimony of the digital and multimedia evidence and analysis is performed. • Extraction of data from proprietary financial software (tax preparation, accounting, payroll, point of sale systems, custom database, etc.) “burner phones,” backdated records and in fraudulent financial transactions to make had been bought and sold, all to support the filing of the false claims. In total, the IRS mailed $511,842,773 in U.S. related to ongoing criminal investigations. Electronic Crimes Treasury checks to Washakie Renewable (eCrimes) has a presence in 60 CI posts-of-duty across the United Energy. Jacob Kingston, Isaiah Kingston, States via 73 SA-CIS, five computer investigative forensic analysts E-CRIMES MEDIA (CIFA), senior analysts supporting the SA-CISs in the, forensic intelligence regarding use of cryptocurrencies the defendants variously with aiding in the and Lev Dermen were also charged with to commit crimes. preparation and filing of false claims and false conducting $148,005,592 in international tax returns, conspiracy to commit money money laundering transactions designed assistant contractors, and one administrative support employee. LOS ANGELES FIELD OFFICE: In Westwood, CA Kunal Kalra The SA-CISs, Senior Analysts and CIFAs receive advanced 25, known as “Kumar,” “shecklemayne” and “coinman agreed to LAS VEGAS FIELD OFFICE: On January laundering offenses, money laundering, to conceal the location and ownership training in the proper procedures of collecting, acquiring, analyzing plead guilty to federal criminal charges for owning and operating an 17, 2019, a second superseding indictment conspiracy to commit obstruction of justice of their fraud proceeds. The indictment and testifying on digital and multimedia evidence. Additionally, unlicensed money transmitting business. He exchanged up to $25 was returned charging Jacob Kingston, Isaiah offenses, destroying and concealing records further charged that they conducted money they provide support in drafting search warrants, court orders million in cash and virtual currency for individuals, including Darknet Kingston, Lev Aslan Dermen (also known as subject to federal search warrants, and laundering transactions when purchasing and subpoenas. They travel across the country to participate on drug dealers and other criminals, some of whom used his bitcoin Levon Termendzhyan), Rachel Kingston, and witness tampering. luxury assets, including personal residences search warrants and conduct the digital and multimedia evidence ATM kiosk. Sally Kingston with conspiracy to commit costing $3.5 million and $3.1 million, and a mail fraud by filing $1.1 billion in fraudulent According to the plea agreement, the From May 2015 through October 2017, Kalra operated a virtual claims for refundable renewable fuel tax defendants filed 39 false claims with the To ensure the highest of digital forensics standards in U.S. law currency exchange business where he exchanged U.S. dollars credits with the IRS and laundering over $3.1 IRS seeking $1,166,792,650 in refundable This case required SA-CISs to seize and enforcement, the Treasury Computer Forensic Training Program for Bitcoin and vice versa. Kalra charged commissions for billion. The 46-count indictment also charged fuel tax credits. Aligned with the scheme, analyze hundreds of terabytes of data (TCFTP) was created as a joint-agency training program. The exchanging dollars for Bitcoin, and he only dealt with high-volume obtained pursuant to nine simultaneous TCFTP initiative was formalized in 1997, with its origins reaching customers willing to exchange at least $5,000 per transaction. search warrants. In addition, dozens of back to 1989, as a means of coordinating resources and leveraging Kalra established bank accounts in the names of others, including phones containing relevant text message assets for law enforcement agencies in the Department of the false businesses, which allowed him, to conceal his illicit business threads, virtual machines, enterprise level Treasury. Today, the participating agencies of the TCFTP include activities. Karla also operated a Bitcoin ATM. e-mail message archivers and accounting seizures. CI, Homeland Security Investigations (HSI) and U.S. Secret 24 TYPES OF FORENSIC ANALYSIS THE SA-CISS AND CIFAS PERFORM INCLUDE: $1.8 million Bugatti Veyron automobile. systems were also seized, processed Service (USSS). All digital forensics training is standardized A key element to the success of the case was the technical and analyzed. Many of the electronic across the 3 agencies; therefore a Special Agent – Computer expertise and ability of the IRS Criminal Investigation Special devices contained key evidence that was Investigative Specialist (SA-CIS) with CI and USSS can work in Agents to seize, image and analyze the Bitcoin ATM that was instrumental in gaining plea agreements tandem on the same investigation and ensure the work is done instrumental in executing this crime. IRS-CI special agents ranging from 15-to-30 years in prison for the in a uniform fashion. TCFTP receives funding support from the developed procedures enabling the forensic seizure and processing defendants. t Treasury Executive Office of Asset Forfeiture (TEOAF) who funds of log files and cryptocurrencies that allowed investigators to the TCFTP through the Treasury Forfeiture Fund. “follow the virtual money trail,” which led to other valuable IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 25 NON–TAX CRIMES NON–TAX CRIMES 985 INVESTIGATIONS INITIATED 951 PROSECUTIONS RECOMMENDED MONEY LAUNDERING 878 SENTENCED The trail can also reveal the crooks who made money through crime. CI special agents are experts at uncovering money trails. They take Money laundering, as defined in the National Money Laundering part in a wide variety of investigations, financial task forces, and Strategy, is criminal finance. When criminals or criminal organizations narcotics task forces including Organized Crime Drug Enforcement seek to disguise the illicit nature of their money by introducing it Task Force (OCDETF) and the High Intensity Drug Trafficking Area into the stream of legitimate commerce and finance, they launder (HIDTA). money. The traditional image of money laundering portrays someone manually washing drug money from city streets, and turning it into legitimate financial transactions, such as those for bank deposits and BANK SECRECY ACT PROGRAM other assets. The Bank Secrecy Act (BSA) mandates the disclosure of foreign bank SPECIAL AGENTS IN the IRS Criminal Investigation (CI) Illegal Frequent money laundering techniques include: Source Financial Crimes Program investigates tax and tax related • Manipulating currency reporting requirements, • Layering transactions, • Using Black Market Peso, and • Moving funds internationally. crimes, money laundering, and currency violations. The investigations focus on individuals getting income from illegal sources, 26 In contrast, criminals today can press a computer button to move accounts, the reporting of certain currency transactions conducted large amounts of criminally derived funds into or through the United with a financial institution, and the reporting of the transportation States and foreign financial institutions. They launder money through of currency across United States borders. Through the analysis of a wide variety of enterprises, such as banks and money transmitters BSA data, CI has identified significant, complex money laundering to stock brokerage houses, casinos, and Bitcoin exchanges. The schemes and other financial crimes. CI is one of the largest law flow of illegal funds around the world is estimated to be hundreds of enforcement consumers of BSA data. billions of dollars. The CI BSA program has grown substantially since its start in early such as embezzlement, bribery, and fraud. They also focus on The law enforcement community recognizes CI’s special agents Whenever money, whether it be legal or illicit, moves through a 2000. The primary objective of the program is to analyze BSA money-laundering schemes where individuals “launder” their as the premier experts in money laundering investigations. financial system, it leaves behind a trail of transactions. Uncovered information to identify significant financial criminal activity. Although ill-gotten gains by making the money appear as if it came from trails identify who willingly enables and finances crime. These people FinCEN is the agency tasked with administering the BSA, they have legitimate sources. often view crime with deliberate blindness, negligence, or disregard. no criminal enforcement authority. All criminal enforcement of BSA IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 27 NON­–TAX CRIMES NON–TAX CRIMES PUBLIC CORRUPTION CORPORATE FRAUD L.A. County Public Official and Contractor Who Paid Him Bribes Agree to Plead Guilty to Federal Bribery and Tax Charges. is delegated by the U.S Treasury Secretary Each of the SAR RTs and FCTFs operate to IRS-CI. Other federal agencies can in slightly different fashion, based on investigate criminal violations of the BSA, direction and oversight from their respective CI investigates elected and appointed The Corporate Fraud Program concentrates but CI is the only federal agency that actively U.S Attorney’s offices (USAO), but once individuals who violate the public’s trust. on violations committed by publicly-traded reviews all BSA data for leads and possible CI special agents identify leads in their These individuals are from all levels of or private corporations and their senior In a plea agreement filed on April 25, 2019, requested by Contreras for, among other criminal violations. CI uses various data respective areas, they meet with partici- government including local, county, executives. Some specific criminal acts Los Angeles County’s Internal Services things, work that did not occur and materials analytics tools to actively analyze BSA data pating law enforcement agencies to discuss state, federal, and foreign officials. Public involving corporate fraud include falsifying, Department employee, Mohammad R. that were not used on county projects. and identify leads for possible investigation. and disseminate the leads for action. It corruption investigations include criminal fabricating, or destroying company records. Tirmazi, 50, of Alta Loma, California, pled Tirmazi also admited that he did not report, CI leads SAR Review Teams (SAR RTs) should be noted that all of the major federal offenses, such as bribery, extortion, Fraudsters use the false information to guilty to accepting bribes and subscribing or force Contreras to correct, violations of and Financial Crimes Task Forces (FCTF) in agencies use BSA data to supplement their embezzlement, kickbacks, tax fraud, and complete tax returns, financial statements, to a false 2016 tax return in which he failed the County’s Building and Safety Code or all 93 judicial districts across the country. investigations, but only CI regularly triage’s money laundering. and reports for regulatory agencies or to report $192,800 in income, including the National Electrical Code that Tirmazi The FCTF and SAR-RT focus on specific BSA data for leads and possible criminal investors. Corporate Fraud can also include approximately $137,400 in bribe payments discovered during inspections of Tel-Pro’s geographic areas and involve collaboration violations. CI’s financial investigative focus Corruption by public officials results in executives who entitle themselves to from contractor, Enrique Contreras, of work. Some of those violations related to between CI and federal, state, and local allows them to leverage BSA data better the loss of many taxpayer dollars. Public unauthorized compensation, or who receive Palmdale. Contreras also agreed to plead asbestos removal and Tel-Pro’s failure to law enforcement agencies for identifying than any other U.S law enforcement agency. officials that violate the public trust are unapproved payments and bonuses, guilty to paying bribes and subscribing to properly install cables. In his plea agreement, and investigating financial crimes, including As a result, 12% of all CI investigations often prosecuted to the full extent of the corporate funds, or bogus loans to pay for a false 2015 tax return in which he failed Tirmazi admitted he generally considered BSA violations, money laundering, narcotics initiated in fiscal year 2019 were the direct law, with large fines and increased jail personal expenses. to report $281,422 in income. According Tel-Pro’s work to be “shoddy,” but he trafficking, and terrorist financing. result of BSA data. CI currently has upwards time for offenders. In addition, the United to court documents, from 2014 to 2016, overlooked its poor work because of the of 175 special agents and investigative States is often a desirable destination for Tirmazi accepted a total of nearly $300,000 bribes he received from Contreras. t CI strengthens the BSA program area by analysts working on SAR RTs and FCTF the monies of corrupt foreign officials. This maintaining excellent working relationships around the country. type of corruption undermines democratic with anti-money laundering officials within institutions and threatens national security. GENERAL FRAUD of Tel-Pro Voice & Data, Inc, a low voltage electrical wiring company, that performed work for the county. In exchange for the bribes, Tirmazi approved change orders in bribe payments from Contreras, the owner CI special agents also investigate healthcare the financial industry. During the past year, and financial institution fraud. When CI CI participated in numerous local, regional, brings income tax and money laundering national, and international anti-money charges to a criminal case, it enhances laundering forums and conferences prosecutors’ effectiveness to combat presenting on various topics including CI’s these and other types of fraud. CI special role in investigating financial crimes, case agents work with federal, state, and local studies, and typologies. CI also continues law enforcement partners, as well as with to partner with the Financial Crimes foreign tax and law enforcement agencies, Enforcement Network (FinCEN) and other to follow and uncover a trail of illicit money in federal law enforcement agencies to provide these investigations. feedback and outreach to the financial industry. 28 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 29 INTERNATIONAL OPERATIONS THE HAGUE OTTAWA LONDON FRANKFURT THE GLOBAL FIGHT against tax and economic crimes transcends borders and requires innovative DUBAI approaches. IRS-CI’s Office of International Operations MEXICO CITY (IO) works collaboratively in support of agency goals, objectives, and activities. IO enhances IRS’s international strategy by combating HONG KONG BARBADOS PANAMA CITY BOGOTA offshore tax, money laundering, transnational organized crime, terrorism financing and other financial crimes. It unites our domestic, foreign tax, and law enforcement agency SYDNEY partners. IO also works with other organizations to leverage bi- and multilateral agreements and resources. 30 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 31 NARCOTICS, COUNTERTERRORISM, & TRANSNATIONAL ORGANIZED CRIME INTERNATIONAL OPERATIONS Through collaboration, the operation the ability to develop leads for domestic for Economic Cooperation and Development vigorously confronts crime, such as interna- and international investigations that have (OECD) and the U.S. Department of State IRS-CI NARCOTICS AND COUNTERTERRORISM (NCT) In 2019, NCT partnered with the Organization for Economic tional tax compliance, narcotics trafficking an international nexus. The vigilance of sponsors the training. program supports these programs: Cooperation and Development (OECD) Task Force on Tax Crimes and terrorism, that threatens the national IRS-CI special agent attachés serves to and economic security of the United States. uncover emerging schemes perpetrated In FY 2019, IO had several significant • President’s Strategy to Transnational Organized Crime Financing Awareness Handbook for tax examiners and tax IRS-CI also partners with criminal tax by promoters, professional enablers, and accomplishments: • The U.S. National Drug Control Strategy auditors. The purpose of this handbook is to raise awareness on authorities from the J5 countries, Australia, financial institutions. These entities facilitate • The National Money Laundering Strategy money laundering and terrorist financing techniques. Canada, The Netherlands, and the United tax evasion of federal tax obligations by U.S. • Expanded its global footprint by opening a Kingdom. Our alliances have enabled taxpayers. new post in Dubai in August 2019. our forces to multiply because we share and Other Crimes to update their Money Laundering and Terrorist • The U.S. Government’s National Counterterrorism Strategy One of the largest drug rings ever prosecuted in Buffalo, NY • Hosted international delegations from The IRS-CI contributions include reducing or eliminating the profits and tried to hide their drug proceeds as income from sea cucumbers. information and collaborate on international IO also educates foreign governments Netherlands, Dominican Republic, Mexico, financial gains of individuals, entities, and transnational criminal While on the witness stand, IRS Special Agent David Turri painted criminal investigations to fight crime on an and agencies on crime detection, investi- Iceland, Philippines, Taiwan, Turkey, China, organizations whose crimes involve financing terrorism, narcotics the picture of an organization so big, it shipped its cocaine and international scale. gative techniques, case studies, emerging Balkans, Israel, Kenya, and New Zealand. trafficking, and money laundering. Our special agents investigate heroin – anywhere from 30 to 70 kilograms at a time – on pallets in trends, and best practices. Special agents These meetings allowed CI to build closer criminal violations of the Internal Revenue Code, Bank Secrecy tractor trailers. Another witness said that in 2013, the organization Internationally, IO has special agent attachés train foreign governments through collab- collaborative relationships, share information Act and Federal Money Laundering statutes. In addition, we use shipped 100 kilograms of cocaine to a house on Niagara Falls strategically stationed in 11 foreign countries orative efforts with the International Law including newly-developing trends and our unique financial-investigation skills to trace profits from illegal Boulevard in the Town of Tonawanda, New York. (Canada, Mexico, Colombia, Panama, Enforcement Academies (ILEA) in Budapest, investigative techniques. activities to individuals or criminal organizations to dismantle or Barbados, The Netherlands–Europol, Hungary; Bangkok, Thailand; San Salvador, • Developed cooperation between the disrupt schemes and prosecute criminals. England, Germany, China, Australia, and El Salvador; and Gaborone, Botswana. In J5 countries that enhanced more than 50 Dubai). Attachés continuously build and addition, IO conducts training at the Interna- investigations. Through this initiative, we NCT assigns CI personnel to the White House Office of National the organization took in $19 million during a 2-year period ending in maintain strong alliances with foreign tional Academy for Tax Crime Investigation exchanged more data in the last year than in Drug Control Policy to support its related strategy and the National 2015. He added that the drug ring laundered its money by setting governments, and law enforcement and at Guardia di Finanza Economic and Financial the previous 10 years combined. t Money Laundering Strategy. Other personnel have assignment to up front companies in California, such as seafood wholesalers with industry partners. These alliances give CI Police School in Ostia, Italy. The Organization multi-agency task forces. Here are some examples: names like Triton Foods. They relied on sales records to falsely During his testimony, Turri took the jury through a series of false bank deposit records and purchase orders to demonstrate how show the distribution of large amounts of sea cucumbers in Buffalo. • Organized Crime Drug Enforcement Task Force (OCDETF) • OCDETF Fusion Center (OFC) Indicted with multiple other defendants, the courts accused • High Intensity Drug Trafficking Area (HIDTA) Herman Aguirre of being a leader of the organization and, with • High Intensity Financial Crimes Area (HIFCA) co-defendant Jose Ruben Gil, a link to the Sinaloa cartel. Gil, who • Drug Enforcement Administration Special Operations Division (SOD) claims he met with “El Chapo,” pleaded guilty in February 2019 • El Paso Intelligence Center and testified against Aguirre. t IRS-CI focuses its narcotics investigations on high-priority OCDETF investigations because its contributions can have the greatest effect on dismantling large criminal organizations. 32 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 33 SPECIALIZED UNITS GLOBAL ILLICIT FINANCIAL TEAM (GIFT) SPECIALIZED UNITS and other Iranian entities subject to U.S. economic sanctions. UniCredit Bank Austria (BA), another financial institution in the UniCredit Group, headquartered in Vienna, Austria, agreed to (DANY) has also agreed to amend its DPA sanctions. The charges in the indictment Washington, D.C., field office. Since the GIFT IS AN IRS-CI LEAD TASK FORCE to investigate organi- forfeit $20 million and entered into a non-prosecution agreement with SCB and extend it for two additional as to Elyassi are merely allegations, and agreement began, the group has initiated zations that illicitly move money used to support international to resolve an investigation into its violations of IEEPA. UniCredit years, with an additional financial penalty Elyassi is presumed innocent until proven over 180 investigations with great success. crime organizations. These investigations are conducted with SpA, the parent of both UCB AG and BA, has agreed to ensure of $292,210,160. SCB has also entered guilty beyond a reasonable doubt in a court The average jail sentence in these types of various partner agencies, including Homeland Security Investi- that UCB AG and BA’s obligations are fulfilled. into separate settlement agreements with of law. cases ranges from 6 months to 4 years. gations (HSI) and the Defense Criminal Investigative Service numerous U.S and foreign regulators where (DCIS). An IRS-CI supervisory special agent (SSA) oversees the Over the course of almost 10 years, UCB AG knowingly and they agreed to pay additional penalties task force, which includes special agents and professional staff willfully moved at least $393 million through the U.S. financial totaling more than $477 million. The from CI and partner agencies. The SSA reports to the special system on behalf of sanctioned entities, most of which was Justice Department has agreed to credit agent-in-charge in the Washington, D.C., field office. The GIFT for an entity the U.S. Government specifically prohibited from a portion of these related payments and, is a major conduit of IRS–CI’s money laundering strategy and accessing the U.S. financial system. UCB AG engaged in this after crediting, will collect $52,210,160 of a focal point for the newly formed CI money laundering cadre. criminal conduct through a scheme, formalized in its own bank the fine, in addition to SCB’s $240 million Reminiscent of Eliot Ness and Elmer Irey’s further covered in subsequent CI Annual The cadre consists of special agents from all 21 field offices who polices and designed to conceal from U.S. regulators and banks forfeiture. “T-Men,” IRS-CI continues its partnership Reports. coordinate activities and allocate resources to effectively execute the involvement of sanctioned entities in certain transactions. CI’s money laundering strategy. UCB AG routed illegal payments through U.S. financial In connection with the conspiracy, a Bureau (TTB) to combat illicit tobacco and institutions for the benefit of the sanctioned entities in ways that former employee of SCB’s branch in Dubai, alcohol trade. The TTB was created in concealed the involvement of the sanctioned entities, including United Arab Emirates (UAE), referred to January 2003, when the Bureau of Alcohol, through the use of companies that UCB AG knew would appear as Person A, pleaded guilty in the District Tobacco, Firearms and Explosives or ATF, unconnected to the sanctioned entity despite being controlled by of Columbia for conspiring to defraud the was extensively reorganized under the As the Swiss Bank Program winded down the sanctioned entity. United States and to violate IEEPA. A provisions of the Homeland Security Act of in 2017, CI ramped up an International Tax two-count criminal indictment also charged 2002 and realigned to the Department of Group (ITG) to continue their focus on this Mahmoud Reza Elyassi, an Iranian national Justice. The act called for the tax collection type of work. An SSA leads this group and former customer of SCB Dubai, with functions to remain with the Department of special agents, investigative analysts, participating in the conspiracy. Elyassi and of the Treasury, thereby creating TTB. TTB and professional staff, which report to a his co-conspirators registered numerous regulates and collects taxes on trade and special agent-in-charge in the Washington, Standard Chartered Bank (SCB), a global financial institution supposed general trading companies in the imports of alcohol, tobacco, firearms, and D.C., field office. The ITG focus’ on investi- headquartered in London, England, has agreed to forfeiture UAE, and used those companies as fronts ammunition within the United States. In gations concerning international financial of $240 million, a fine of $480 million, and to the amendment for a money exchange business located in 2009, TTB entered into an inter-agency entities, ultra-high net worth individuals, UniCredit Bank AG (UCB AG), a financial institution and extension of its deferred prosecution agreement (DPA) Iran. Between November 2007 and August agreement with CI to provide special agents and tax fraud promotors. Additionally, ITG headquartered in Munich, operating under the name HypoVer- with the Justice Department for an additional two years for 2011, Elyassi used a business account at to enforce TTB’s criminal provisions. These remains involved in CI’s J5 tax enforcement einsbank, and part of the UniCredit Group has agreed to conspiring to violate the International Emergency Economic SCB’s Dubai branch to cause U.S. dollar special agents are strategically dispersed efforts with the governments of the enter a guilty plea to conspiring to violate the International Powers Act (IEEPA). This criminal conspiracy, lasting from 2007 transactions to be sent and received across the country and overseen by an SSA. United Kingdom, Canada, Australia, and Emergency Economic Powers Act (IEEPA) and to defraud the through 2011, resulted in SCB processing approximately 9,500 through the U.S. financial system for the This group’s sole focus is combating the the Netherlands. During FY2019, the United States by processing hundreds of millions of dollars of financial transactions worth approximately $240 million through benefit of individuals and entities ordinarily illicit tobacco and alcohol trade. The TTB ITG spearheaded an effort to train 40 CI transactions through the U.S. financial system on behalf of an U.S. financial institutions for the benefit of Iranian entities. resident in Iran in violation of U.S. economic reports to the special agent-in-charge in the Special Agents from across the country entity designated as a weapons of mass destruction proliferator Additionally, The New York County District Attorney’s Office GIFT investigations include: • Illegal money transfer businesses • International real estate fraud • Financial institutions concealing and disguising illegal transactions • Identity theft • Public corruption and extortion • Government contract fraud • Sale of contraband goods UniCredit Group Banks agree to pay over $1.3 billion for violating sanctions 34 IRS: Criminal Investigation Annual Report 2019 Standard Chartered Bank admits to illegally processing transactions in violation of Iranian sanctions and agrees to pay more than $1 billion ALCOHOL AND TOBACCO TAX AND TRADE BUREAU (TTB) Recent investigative efforts include the indictment of various individuals for willfully attempting to evade or defeat Federal Tobacco Excise Tax and other related violations. These investigations will be with the Alcohol and Tobacco Tax and Trade INTERNATIONAL TAX GROUP (ITG) IRS: Criminal Investigation Annual Report 2019 35 COMMISSIONER'S PROTECTION DETAIL SPECIALIZED UNITS concerning international tax investigative The internal controls failures allowed pay a penalty of $10,680,554.64 to the techniques and related issues that threaten Walmart foreign subsidiaries in Mexico, United States. In addition to paying a the integrity and fairness of the tax system. India, Brazil and China to hire third party penalty, LLB-Switzerland has agreed Investigations this group initiates are intermediaries (TPIs) without establishing to cooperate in any related criminal or long-term and require agents to use all sufficient controls to prevent those TPIs civil proceedings in return for the DOJ’s law enforcement tools at the CI’s disposal. from making improper payments to agreement not to prosecute the company Recent investigations include the following: government officials in order to obtain for tax-related criminal offenses committed store permits and licenses. In a number of by LLB-Switzerland. Walmart agrees to pay $137 million to resolve foreign corrupt practices act case instances, these control deficiencies were reported to senior Walmart employees and LLB-Switzerland and some of its executives. The internal control failures employees, including members of the Walmart Inc. and a wholly owned Brazil- allowed the foreign subsidiaries in these bank’s management, conspired with a Based Subsidiary, WMT Brasilia S.a.r.l. countries to generate additional profits. Swiss asset manager and U.S. clients to (WMT Brasilia), have agreed to pay a combined criminal penalty of $137 million to resolve the government’s investigation into violations of the Foreign Corrupt conceal those U.S. clients’ assets and LLB Verwaltung (Switzerland) AG's assistance to U.S. taxpayers to commit tax evasion results in 10.6 million penalty Practices Act (FCPA). WMT Brasilia pleaded income from the Internal Revenue Service (IRS) through various means, including using Swiss bank secrecy protections and nominee companies set up in tax haven guilty in connection with the resolution. LLB Verwaltung (Switzerland) AG, formerly jurisdictions. At its peak, LLB-Switzerland Walmart also entered into a three-year known as “Liechtensteinische Landesbank had approximately one hundred U.S. clients non-prosecution agreement and agreed to (Schweiz) AG” (LLB-Switzerland), a holding nearly $200 million in assets. The retain an independent corporate compliance Swiss-based private bank, reached majority of those accounts were in the monitor for two years. The $137 million a resolution with the United States names of nominee entities. t penalty includes forfeiture of $3.6 million Department of Justice (DOJ), and will THE COMMISSIONER’S PROTECTION DETAIL (CPD) is a U.S. Treasury, and other venues in Washington, D.C., as well as specially trained cadre of IRS-CI Special Agents, who provide around the globe. In a typical year, the CPD protects the Commis- personal security and protection of the IRS Commissioner. Since sioner on approximately 500 protective movements, 20 domestic According to Walmart’s admissions, 1999, this dedicated team has been charged with protecting the trips, and 2-3 international visits. from 2000 until 2011, Walmart personnel Commissioner during official business operations. CPD agents failed to implement sufficient controls provide protection of the Commissioner within the National Capital CPD agents are trained in protective service operations with to guard against improper payments to Region and while in travel status, foreign and domestically. an emphasis on operational planning, motorcade operations, and a fine of $724,898 from WMT Brasilia. protective intelligence, and preventing and responding to attacks. government officials in certain Walmart foreign subsidiaries. Even though senior As the leader of the IRS, the Commissioner frequently attends Protective operations are a team effort and require detailed Walmart personnel knew of these issues, meetings, conferences, publicized hearings and speaking advanced preparations aimed at identifying and mitigating Walmart did not begin to change its internal engagements in locations such as the White House, U.S. Capitol, potential risks, threats, and vulnerabilities. t accounting controls until 2011. 36 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 37 NATIONALLY COORDINATED INVESTIGATIONS UNIT NATIONALLY COORDINATED INVESTIGATIONS UNIT The NCIU has focused its current case In FY 2019, the NCIU referred a total of 106 unit has used the NCIU FATCA data model to development efforts on several national cases to all 21 CI field offices, ensuring open and refer 69 investigations to LB&I. initiatives that CI’s Executive Steering maximum geographic and program area Committee identified as priorities. The coverage. The average criminal deficiency for In the virtual currency space, the NCIU leads unit’s current priorities are: virtual currency, NCIU referrals is approximately $4.6 million, CI’s effort to develop criminal investigations international tax, significant money which is noticeably higher than the average from Coinbase john doe summons data. The laundering, employment tax, the Department deficiency in traditional tax investigations (at unit works closely and collaboratively with of Homeland Security’s National Targeting approximately $2.9 million). LB&I to provide continuous feedback, and Center, and the Whistleblower Program. The to share the knowledge and insight it gains NCIU successfully developed data models The NCIU works with multiple internal and from analyzing the Coinbase data. NCIU is for multiple initiatives that lead to significant, external stakeholders to advance its mission also working with other CI sections such impactful investigations in the field. More of data-driven case development. The as Refund, Cyber Crimes, and Operations importantly, the unit demonstrated the NCIU is working with multiple CI sections Policy & Support, to create a national virtual power of data analytics and its benefit for and field offices. Also, it has substantially currency case development guide for field law enforcement through the significant increased its partnerships within the IRS agents. number of referrals it made, and through by participating in, and sometimes leading, quantitative and qualitative controls. cross-BOD working groups. It is also In addition to its joint enforcement efforts promoting data analytics to the various and bilateral investigative referrals, the NCIU BODs and their executive leadership. facilitated and managed multiple detail To further expand CI’s data-driven analytics in FY 2019, the NCIU has successfully opportunities where IRS employees from developed and launched new data models In order to lead service-wide enforcement different BODs were detailed to CI to learn for the following three national initiatives: efforts in international tax compliance, the about the data-driven case development NCIU joined, and has become an integral methodology. International – Foreign Account Tax member of the LB&I Joint International Tax Compliance Act (FATCA) Shelter Information Center (JITSIC) group. The NCIU will continue increasing its The NCIU uses its insight and expertise footprint and impact by hiring additional IN FISCAL YEAR (FY) 2017, we launched the Nationally team-based approach. The NCIU is proactively addressing key International – U.S. Citizens Living to analyze FATCA data and develop cases personnel and launching initiatives that Coordinated Investigations Unit (NCIU) as a proof of concept. issues in non-compliance and emerging threats by building Abroad (USCLA) from that data. NCIU is also collaborating enhance CI’s ability to effectively enforce the The NCIU addresses historically persistent challenges to Criminal strategic partnerships with internal and external stakeholders. In with LB&I to craft and facilitate a holistic nation’s criminal tax law and related financial Investigation’s (CI) core mission, which is to identify, select, and addition to innovative, national case development, the NCIU offers approach for combating non-compliance in crimes. t develop cases. The NCIU focuses its case development efforts on continuous support to CI field offices by offering initiative-specific national initiatives and is at the forefront of the data-driven pilot for training and investigative research. The NCIU also works closely the entire agency. with multiple IRS business operating divisions (BODs) to facilitate Virtual Currency the international tax space. In FY 2019, the a collaborative, service-wide approach to enforcement, and to The NCIU is modernizing IRS criminal investigative tools to promote data analytics throughout the entire IRS. make them more reliant on data analytics with a centrally led, 38 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 39 UNDERCOVER OPERATIONS UNDERCOVER OPERATIONS SIGNIFICANT CASE were primarily immigrants with little undercover IRS Criminal Investigation knowledge of the tax system and limited agents went to Pastars posing as clients for On August 23, 2019, a court sentenced a language skills. “That population is most tax preparation. Both were very clear that Lina Pastars of Federal Way, Washington to vulnerable,” Martinez said. “They were left they had no employee business expenses, one year in prison for 8 counts of aiding and to flounder by themselves when the IRS and their employers reimbursed all their assisting the preparation of false income tax came knocking at their door.” expenses. Nevertheless, Pastars claimed returns. Pastars operated a tax preparation thousands of dollars in unreimbursed business out of her home and collected According to testimony at trial and records expenses so that the returns showed a higher fees from customers by falsely filed in the case, the investigation began refund. Pastars increased the fee that she inflating their deductions, so that her clients in 2015, when the IRS audited one of her charged each undercover agent saying, “If received a larger refund. clients whose 2012 tax return claimed more I do deduction I charge more.” Undercover than $30,000 in unreimbursed business audio and video of these exchanges were At the sentencing hearing in U.S. District expenses. The client claimed Pastars admitted into evidence and played for the Court in Seattle, Chief U.S. District Judge had claimed the deductions without their jury. t Ricardo S. Martinez said Pastars’s clients knowledge. In March and April 2015, CI’S UNDERCOVER PROGRAM HISTORY In the late 1970s, the UCO was decentralized. The National Office retained review, approval, funding and training authority, In 1929, Michael Malone successfully infiltrated Al Capone’s and districts were responsible for the initiation and daily Chicago gang for nearly two years. Because of his work, the management of the operation. This organization continues today. government successfully prosecuted Capone and his top enforcer, Frank Nitti, for tax crimes. In the 1980s, UCO focused on offshore banking schemes and illegal tax shelters. The estimated revenue loss from these In 1963, the Undercover Operation (UCO) was centralized shelters was about $120 billion by 1985. With the advent of into the National Office. UCO focused on illegal gambling and money laundering laws, undercover agents became proficient at organized crime, and most operations lasted longer than one conducting investigations into the laundered illegal proceeds of year. narcotics traffickers. In the late 1960s, CI initiated the Courier Project to corroborate Today, CI uses undercover operations in investigations on CRIMINAL INVESTIGATION (CI) has a long history of using and leadership teams initiate and manage day-to-day operations in persistent allegations concerning the movement of casino unscrupulous tax return preparers, offshore tax schemes, money undercover techniques to investigate crime. These techniques are their respective field offices. receipts by couriers to offshore tax havens. UCO infiltrated launderers, dark web marketplace operators, and those who organized crime organizations that used fall guys to operate seek to conceal the movement of money for illegal purposes, casinos. including tax evasion. t well-documented, and they play a significant role to bring criminals to justice. Special Investigative Techniques (SIT) oversees CI's CI has a cadre of active undercover agents and some go “shopping” for undercover activities and reviews, approves, funds, and trains return preparer schemes. In FY 2019, agents conducted approximately personnel who carry out undercover operations. Special agents 420 undercover operations and shopped more than 90 return preparers. 40 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 41 WARRANTS & FORFEITURES WARRANTS & FORFEITURES IRS CRIMINAL INVESTIGATION Asset 4,500-square-foot house and property in businesses were set up on American Indian Forfeiture program uses seizure and March 2019 after Tucker’s wife abandoned tribal lands in name only as an attempt to forfeiture authority as an investigative tool to the home. She left behind furnishings, an art extend loans with rates higher than what disrupt and dismantle criminal enterprises. collection and exercise equipment. some states allow. The businesses actually The program seeks to deprive criminals of operated largely out of an office building in property used in, or acquired through, illegal Viewers of the Netflix series, “Dirty Money” activities. CI takes a leading role in these may recognize Tucker’s Leawood residence, investigations because of their financial because portions of the documentary were Tucker is serving a 16-year, 8-month federal expertise and resources. filmed there. Tucker was convicted in 2017 prison sentence. The forfeiture order grants on multiple charges related to $2 billion the government the authority to seize IRS-CI is one of the largest contributors to payday loan businesses that authorities Tucker’s proceeds and property he acquired the Treasury Forfeiture Fund (TFF), which said extended unethical consumer loans from illegal proceeds he made through his the Treasury Executive Office for Asset under terms that deceived borrowers. The businesses. t Overland Park, Kansas Forfeiture manages. These funds are used to reimburse victims of criminal activity and to pay for law enforcement related expenses, such as training, equipment, and the cost of conducting significant investigations. In addition, CI shares a portion of forfeited funds with federal, state and local law enforcement agencies. In FY19, IRS-CI seized over 500 assets worth an estimated value of $901.8 million and forfeited approximately $502.7 million in ill-gotten proceeds. More than 1,000 people visited the Leawood, Kansas, Hallbrook neighborhood last month to buy $85,626 worth of imprisoned payday loan businessman Scott Tucker’s abandoned possessions at an estate sale, according to a recent court filing. People bought Tucker’s professional racing memorabilia, furniture, exercise equipment and other property. IRS-CI special agents took possession of Tucker’s 42 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 43 NATIONAL FORENSIC LABORATORY NATIONAL FORENSIC LABORATORY REQUESTS SCIENTIFIC SERVICES 132 CASES TRIAL GRAPHICS AND DESIGN 115 CASES DATA PROCESSING CENTER 130 CASES FOR MORE THAN 40 years, scientists and that include electronics (audio, video, and primarily for CI Special Agents preparing for technical experts at the National Forensic image intelligibility), latent prints (finger and trial, Trial Graphics and Design also assist Laboratory (NFL) have reported the results palm print development and comparison), in the creation of high-level presentations of forensic testing and technical services to polygraph, questioned documents, and ink and other special projects. Furthermore, investigators for use in exploring potential chemistry. The Trial Graphics and Design the Data Processing Center is responsible criminal violations of the Internal Revenue section is responsible for breaking down for taking information, either hard copy or Code and related financial crimes. Results complicated cases into succinct effective electronic, and compiling it into a database of the NFL’s work are used by CI Special visuals that help show, rather than tell, that is delivered to the customer and can be Agents, or other customers of the laboratory all the elements of extremely complex used to more efficiently manage and analyze to analyze elements of, help build, or investigations. Although these services are case-related data. t strengthen an investigation. Often, support provided by the NFL doesn’t end with delivery of a scientific report or product. Whether it be a visual information specialist providing and adjusting graphics before or at trial, or a forensic scientist testifying to their findings, an important function of the NFL is to support judicial proceedings where and when required. Although the NFL has just 60 employees, the laboratory’s work is critical in ensuring the efficient processing of crucial evidence in CI investigations. The NFL consists of three sections, each offering specific scientific or technical services. For instance, the Scientific Services section offers forensic disciplines 44 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 45 NATIONAL CI TRAINING ACADEMY TRAINING AND NCITA New special agents complete six months In addition to SAIT, the NCITA provides Budapest, Hungary; Bangkok, Thailand; of training including the 11-week Criminal advance training to special agents in the San Salvador, El Salvador; and Gaborone, Investigator Training Program (CITP) run use of force, firearms instruction, building Botswana. CI also partners with the Guardia by FLETC. The CITP covers basic criminal entry and defense tactics. The NCITA also di Finanza Economic and Financial Police investigation skills, federal criminal law, provides leadership development programs School’s International Academy for Tax courtroom procedures, enforcement operations, for all levels, from pre-management Crime Investigation in Ostia, Italy. The interviewing skills, and firearms training through senior management, to ensure the Organization for Economic Cooperation and common to all federal law enforcement agents. identification and development of future Development (OECD) sponsors this training. leaders. Each year, the NCITA develops Following the CITP, new special agent continuing professional education courses IRS-CI special agents receive refresher trainees take the NCITA Special Agent for special agents and professional staff with training regularly. They attend quarterly Investigative Techniques (SAIT) course. an emphasis on emerging trends such as firearms, defensive tactics and semi-annual The SAIT program trains recruits in tax law, cybercrime and crypto currencies. building entry training. Through frequent use evidence gathering, interviewing, report IRS CRIMINAL INVESTIGATION (CI) special agents are the and ethical behavior throughout the CI workforce. The NCITA’s best trained and finest financial investigators in the world. They primary focus is training new special agents in the fundamentals begin their training at the National Criminal Investigation Training of financial investigations. Agents learn to recognize the elements Academy (NCITA). The NCITA is located at the Federal Law of tax offenses, and methods of proof unique to federal tax Enforcement Training Center (FLETC) in Brunswick, Georgia and investigations. They acquire all the knowledge, skills, and abilities is dedicated to fostering the highest levels of professionalism required to be federal law enforcement's finest financial investigators. 46 IRS: Criminal Investigation Annual Report 2019 of force training, they maintain their skills and writing, methods of proving unreported The NCITA also provides foreign abilities, so they always use good judgement income, and money laundering violations. It governments and agencies training in and the appropriate degree of force also provides physical fitness conditioning crime detection, investigative techniques, necessary to safely carry out enforcement and use of force training. case studies, developing trends, and best activities. These activities include issuing practices. CI trains foreign governments search warrants, arrests, surveillance, armed in partnership with the International escorts, dignitary protection, undercover Law Enforcement Academies located in activities and seizures. t IRS: Criminal Investigation Annual Report 2019 47 HISTORY OF THE CONSOLIDATED FEDERAL LAW ENFORCEMENT TRAINING CENTER (CFLETC) Special Agent Basic Training #1 Special Agent Basic Training #1905 BEFORE 1970, THE quality of training received by federal law enforcement officers and FY 2019 HIGHLIGHTS: agents varied greatly from agency to agency. • A total of 34 classroom trainings: Standardized training was an unexplored concept, • 8 course development trainings held at NCITA and inadequate facilities and duplication of effort were prevalent as each agency independently • 19 slot classes held at NCITA trained its own personnel. • 6 special agent basic trainings (SABT) held for approximately 160 new students. For the first time in IRS-CI history, 2 of the SABT classes were held at the Charleston FLETC. Studies conducted in the late 1960s revealed an urgent need for Enforcement Training Center (FLETC) relocated from Washington, high-quality, cost-effective training by a cadre of professional DC to Glynco, and began training in September. Glynco is the instructors using modern training facilities and standardized course headquarters site and main campus for the FLETC, which has content. Congress responded by authorizing funds for planning grown to include facilities in Artesia, New Mexico, Charleston, and constructing the Consolidated Federal Law Enforcement South Carolina, Cheltenham, Maryland, and Gabarone, Botswana. • 4 Naloxone Train the Trainer classes held in Cheltenham, Maryland as a bureau of the Department of the Treasury (Treasury Order On September 30, 1970, IRS-CI signed a Memo of Understanding #217) and began training operations in temporary facilities in with FLETC to conduct Special Agent Basic Training (SABT) on the Washington, DC. FLETC base. IRS-CI has conducted training at FLETC for almost 50 • 8 Master Your Craft training classes conducted in Brunswick FLETC, Charleston FLETC and Woodbridge, VA. Training Center (CFLETC). In 1970, the CFLETC was established years. In May 1975, after an extensive review of existing facilities, the former Glynco Naval Air Station near Brunswick, Georgia, was For more information on the FLETC, including its history, selected. In Summer 1975, the newly renamed Federal Law please visit www.fletc.gov. t 48 IRS: Criminal Investigation Annual Report 2019 • NCITA conducted its first ever Basic Investigative Analyst Training (BIAT) and Advanced Investigative Analyst Training (AIAT) in FY 2019. IRS: Criminal Investigation Annual Report 2019 49 PROFESSIONAL STAFF IRS-CI EMPLOYS 728 professional staff serving in many Additionally, CI is on course to onboard by the end of FY 2019 20 administrative and investigative capacities. Our budget analysts, student volunteers as investigative analysts in the field, and one management and program analysts, administrative officers, student volunteer who will work in communications at HQ. CI executive secretaries and computer support professionals all work student volunteers assist special agents and other personnel to tirelessly behind the scenes to support the mission of IRS-CI. Our plan and complete work assignments on time, collect and analyze staff also actively participates in the Chief’s Advisory Council to information, prepare documents, communicate information clearly provide CI leadership with crucial insight on relevant issues from and concisely during formal or informal meetings, contribute to around the country. team efforts, and use various tools and technologies to prepare LEADERSHIP EDUCATION AND DEVELOPMENT and share documents. CI also recruited 2 Pathways Presidential Our 296 investigative staff has a tremendous effect on case Management Fellows. This is a highly selective program for development and support. These compliance support assistants, individuals with a recent graduate degree. CI Presidential tax fraud investigative analysts, and investigative analysts assist Management Fellows perform research and analyst work, special agents with public records research, interviews, bank while enrolled in a rigorous training curriculum that focuses on record scheduling and analysis, and specialized tax and law accelerating their development. enforcement data source research. Professional staff positions are critical to advancing the law During 2019, 176 staff in several CI job series received compre- enforcement efforts of CI. These staff take assignments in applied hensive training at the Federal Law Enforcement Training Center analytics, field offices, such as the Nationally Coordinated Investi- in Glynco, Georgia. They learned about various investigative data gative Unit (NCIU), Refund Crimes, and International Operations. sources and case development tools. They use analytical software to develop sophisticated leads and support complex cases for the special agents in the field. Various field offices throughout the country and Technology Investigative analysts attend training alongside special agents and Operations & Investigative Services (TOIS) leveraged Operation other professionals to stay current with investigative techniques, IN FY 2019, IRS Criminal Investigation (CI) developed the Reinvention and relevance in the 21st century require CI to Warfighter, an umbrella program that enabled CI to recruit 6 report writing and analytic tools. They also support investigations Leadership Education and Development (LEAD) unit to provide emphasize continuous learning so CI’s current and future leaders interns, who are disabled veterans, from the Department of relating to national threats, the opioid crisis, terrorist financing, and the framework for developing exceptional leaders with a distinct embrace learning for its personal and professional value. This Defense (DoD) and Department of Veteran’s Affairs (VA). The other emerging threats through work with the High Intensity Drug skillset. These skills are uniquely geared to fulfill CI’s organizational produces a culture of growth and competitiveness, making interns volunteered to take challenging assignments involving Trafficking Areas, Joint Terrorism Task Force and other federal law commitment to be the worldwide leader in tax and financial CI’s leaders more efficient, collaborative, mobile and mission extraction and analysis of critical information from investigative enforcement task forces. t criminal investigations. oriented. All these factors are key to enhancing employee data sources. Through this program, CI provided training and engagement. As the goals and investigative work of CI become work experience to those who served our country and have now LEAD provides the mechanism to identify and select leaders early increasingly complex, the skillset of the leadership team must returned to the federal and civilian workforce. Additionally, through in their careers and progressively develop them for executive adapt continuously to meet future challenges. LEAD is designed the Veteran Recruitment Act Hiring Authority, CI hired 12 veterans leadership positions. LEAD promotes a people-first leadership to provide employees with pathways and opportunities to gain the who accepted assignment in field offices and TOIS. This veteran approach and an ongoing learning environment to encourage experience and perspective they’ll need to become tomorrow’s hiring accounted for 13 percent of CI’s overall hiring. diversity, excellence and achievement. LEAD does this using leaders. In FY 2019, LEAD hosted multiple courses and seminars Strategy, Human Resources, and our National Criminal Investigator for future leaders, front line managers and senior leadership. t Training Academy. 50 IRS: Criminal Investigation Annual Report 2019 IRS: Criminal Investigation Annual Report 2019 51 EQUITY, DIVERSITY & INCLUSION OFFICE EQUITY, DIVERSITY & INCLUSION OFFICE Additionally, the EDI staff prepares CI’s Other responsibilities include monitoring the the business environment is about more Management Directive 715 (MD 715) report. organization's effort to enhance diversity than one’s gender, race and ethnicity. It They also monitor and evaluate the organiza- initiatives and analyzing trends in the also includes religious and political beliefs, tion's compliance with the directive and other following areas: education, socioeconomic backgrounds, sexual policies established by the Equal Employment Opportunity Commission (EEOC). The directive helps identify program limitations and uncover potential discrimination of equal opportunities for all employees. It also provides EEO plans to remove barriers and respond to problems. The EDI staff develops action plans to eliminate • EEO complaints • Disciplinary actions • Promotions • Awards • Separations • Employee development and training • Recruitment and hiring initiatives and practices • Retention orientation, cultures and disabilities. CI and its senior leadership team are stellar advocates for a workplace where our practices, policies, and procedures unequivocally support and promote a diverse and inclusive workplace, which fills our workplace environment with dynamic and engaging interactions. barriers and correct program deficiencies to ensure compliance with the following 6 CI continues to strive to be an employer essential elements of a model EEO program of choice with our ongoing commitment as defined by MD 715: to workplace equality, encouragement • Demonstrated commitment from agency leadership • Integration of EEO into the agency’s strategic mission • Management and program accountability • Proactive prevention of unlawful discrimination • Efficiency in dispute resolution and complaint processing • Responsiveness and legal compliance THE MISSION OF the Criminal Investigation (CI) Equity, Diversity, EDI is responsible for identifying, examining [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%3Ab95996d0ab6d36de. Public record. Not legal advice.