Commonalities

7

What do luxury cars, a $3.5 million residence in California and private jets have in common? A press release from the Department of Justice states that a husband and his wife enjoyed all three of these benefits as a result of their fraudulent scheme that bilked their victims out of more than $3.7 million and the Internal Revenue Service (IRS) of more than $160,000 in taxes.

The press release states that for nearly four years, the 51-year-old husband posed as an international investment banker and ran an advanced fee scheme with his wife. In exchange for their investment, the fraud team promised to give their victims money that was purportedly held in a foreign account. (They even went as far as to give their investors false financial documents to prove that the funds existed, when in reality they did not.)

Because the two posed as philanthropists on a humanitarian mission, religious organizations, businesses and individuals fell for the ruse and mailed or wired advance fees which were deposited into multiple bank accounts across different states. (The wife’s job was to open up the bank accounts and conduct transactions with the money received from investors.)

As you can guess, the victims never saw any return on their investments. The press release states that the man and woman bought a Bentley, Mercedes Benz and BMW with the illegally-gained funds. They also were able to afford the $18,000 a month rent on a California residence and the mortgage on their Maryland home while managing to fit in a few trips on a private jet.

All enjoyment aside, the scheme ran even deeper when they added tax evasion to the mix. They were also able to avoid more than $164,000 in individual and corporate taxes on the money they received from the illegal scheme. (For some years, they evaded the assessment of their taxes completely.)

The husband admitted to victimizing at least 11 individuals and businesses through the scam and will serve six years in prison plus three years of supervised release. In addition, he will have to forfeit $3.7 million, cooperate with the IRS on determining how much back tax is owed and pay the agency for additional taxes, interest and penalties due. His wife pleaded guilty to her part in the scheme.

Almost all fraudsters have a few things in common. They are selfish, greedy and could care less about the welfare of their victims. Other commonalities include punishment. At the end of the day, they have to pay for their crime. For these two, it looks like there will be no more luxury vehicles, expensive residences and certainly no plain trips. They will have to adapt to a new lifestyle where everything is common.

Source: Today’s ”Fraud of the Day” is based on a press release titled, ”Former Maryland Resident Sentenced for His Role in $3.7 Million Advance Fee Scheme and Tax Evasion,” issued by the Department of Justice on September 8, 2014.

A Corona, California, man was sentenced today to serve six years in prison to be followed by three years of supervised release in connection with a fraudulent advance fee scheme and tax evasion.

Shannon Johnson, 51, formerly of Laytonsville, Maryland, was sentenced by Chief U.S. District Judge Deborah K. Chasanow, who also entered an order that Johnson forfeit $3.7 million, and as a special condition of his supervised release, cooperate with the Internal Revenue Service (IRS) in determining all taxes owed for tax years 2002 through 2009, and to pay the IRS all additional taxes, interest and penalties.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.