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Tennessee Businessman Sentenced to 31 Years in Prison for Fraud

August 30, 2013, by The McKellar Law Firm, PLLC

Former Nashville, Tennessee area business owner, Richard Olive, 49, of Vero Beach, Florida, was convicted on charges of mail fraud, wire fraud, and money laundering by federal jury on March 7, 2013. Olive was ordered to serve 31 years in prison and to pay $5,992,181.24 in restitution to approximately 190 victims for crimes related to his operation of National Foundation of America (NFOA), headquartered in Franklin, Tennessee.

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According to a press release from the U.S. Attorney's Office, from January 2006 through May 2007, Olive represented that NFOA was a charitable organization. He stated multiple times to potential investors that NFOA was recognized by the IRS as a 501(c)(3) organization, even though he only donated approximately $108,000 to charity. That amount is less that ½ of 1% of the $23.6 million NFOA received. Olive continued to state this though he was counseled to cease at least twice by his attorney. Olive obtained assets of over $30 million during the time of operation, promising that in exchange for an "installment bargain contract," NFOA would provide a "guaranteed payout over a guaranteed period of time," as well as a "generous tax deduction." Evidence revealed at the trial showed that NFOA lacked the assets to meet these promises.

Later discoveries in the investigation showed that Olive solicited assets that included annuities, which have high penalties upon their surrender. Once Olive possessed the annuities, he promptly surrendered them to access the cash, incurring more penalties. With this cash, he began living a lavish lifestyle. Olive paid $153,000 on his personal credit card, funded a private jet for a family vacation to New Orleans, settled a lawsuit filed against him for $250,000, and purchased several properties, including a $690,000 condominium in Las Vegas.

Evidence at trial demonstrated that Olive deliberately misrepresented information pertaining to NFOA. In February 2006, merely days after NFOA gained its incorporation, Olive consulted a financial advisor and provided the advisor with fabricated financial statements that stated NFOA held substantial assets and had been operation in both 2003 and 2004. Three months later, he consulted with another financial advisor stating that the company had $35 million worth in assets. However, since its creation till June 2006, the charitable tax returns filed with the State of Tennessee, NFOA had only received $2.8 million in revenue. Olive was also served with a cease-and-desist order from five different states when they detected a misrepresentation of the company as an IRS recognized 501(c)(3) charitable organization. In May 2007, NFOA was seized and liquidated by the Tennessee Department of Commerce and Insurance.

Due to Olive's leadership in this sophisticated scheme, the large amount of money taken from numerous defenseless victims, and the misrepresentation of NFOA being a charitable organization, the District Court concluded additional sentencing enhancements were to be applied.

Self-Proclaimed "Queen of Tax Fraud" Begins 21-year Prison Sentence

July 19, 2013, by The McKellar Law Firm, PLLC

Tennessee criminal defense attorneys will rarely have clients as outspoken as self-proclaimed "queen" of tax refund fraud Rashia Wilson. Wilson was sentenced earlier this week to 21 years in federal prison for tax fraud, aggravated identity theft, and weapons charges.

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Wilson, a 27-year-old resident of Tampa, Florida, admitted to stealing in excess of $3 million by using stolen social security numbers to file fraudulent tax returns. Wilson is suspected of taking nearly $20 million in total due to the tax refund scheme in which she was engaged. Wilson used the money on a variety of items, including throwing a $30,000 birthday party for her 1-year-old.

Prior to her arrest, Wilson taunted the Government by posting items to her Facebook account, including these gems:

YES I'M RASHIA THE QUEEN OF IRS TAX FRAUD THE SAME ONE WHO PUT EVERYBODY ON AND ERRYBODY FORGET WHERE THEY COME FROM

IMA NEED A BIHH TO PLZZZZZ KNOW THEY PLACE U SAY YA R BETTER THAN ME BUT I BEG TO DIFFER MY WHOLE NAME IS PAID IM'A MILLION AIRE FOR THE RECORD SO IF U THINK INDICTING ME WILL B EASY IT WON'T I PROMISE U!

TO DA RAT WHO WENT N TOLD AS IF 1ST LADY DON'T HAVE DA TPD UNDER HER SPELL I RUN TAMPA RIGHT BOUT NOW ANY 1 OF U HOES CAN ALL GET TURNED N WIT ME N I BET I WONNT DO NO TIME DUMB BITCHS

Wilson's predictions about the difficulty in indicting her and about not serving time ended up being as spot on as her spelling. Wilson was singing a different tune at her sentencing hearing and asked the judge to "please don't take me away from my children by sending me to prison for a long time." "That would be something you should have considered...that you didn't want to be taken away from your children," the judge replied.

SOURCES
"Tax fraud 'queen' sentenced to 21 years" - The Tampa Bay Tribune

"Rashia Wilson, The 'Queen of IRS Tax Fraud' Gets 21 Years Behind Bars" - OpposingViews.com

Tennessee Woman Sentenced to Federal Prison for Tax Evasion and Wire Fraud

Kingston, Tennessee resident Jessica Potter Stafford, 34, was sentenced today in the Eastern District Court by U.S. District Court Judge Thomas W. Phillips, to serve 27 months in prison and pay restitution of almost $120,000 to the Internal Revenue Service and $111,794.35 to her former employer, Robert McManus. This sentence is a result of Stafford pleading guilty on February 3, 2011, to 10 counts of wire fraud and three counts of income tax fraud.

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According to a press release from the United States Attorney's Office, Stafford was employed as Director of Administration for several businesses owned by Robert McManus. In the course of her employment, she was issued credit cards to be used for the sole purpose of paying expenses relating to her employment duties. Stafford later admitted that from January of 2005, through August of 2008, she used company credit cards to charge more than $200,000 in personal charges at local retail stores. The filed plea agreement states that Stafford then paid for the unauthorized charges with McManus' funds. Stafford admitted that she incurred income that she failed to report on her federal income tax returns for 2006, 2007, and 2008.

As with many economic crimes, the underlying economic fraud (i.e., the wire fraud) was also accompanied by tax related charges. The philosophy of the Government is rather straightforward: if someone steals funds, he/she is not going to report this income on his/her tax return. Failure to report income on a tax return is tax fraud. In other words, the tax fraud charges are like shooting fish in a barrel for the Government if they can prove the non-tax related fraud charge (e.g., wire fraud). In this case with defendant Stafford, according to her plea agreement, she failed to report over $405,000 in income during these years, resulting in additional tax due to the United States of over $119,000.

An Overview of Food Stamp Fraud

April 20, 2011, by The McKellar Law Firm, PLLC

Food Stamp Fraud, which is now known as fraud related to the Supplemental Nutrition Assistance Program (SNAP), is an economic crime that is increasing rapidly in regards to the number of federal prosecutions. SNAP is administered by the U.S. Department of Agriculture and often violations of SNAP regulations result in civil penalties, such as monetary fines and/or suspension from the SNAP program.

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Criminal prosecutions can occur though, as illustrated by these two recent cases:

1. Earlier this month, an Oregon grocery store owner was indicted for with fraud under the Supplemental Nutrition Assistance Program. Prosecutors allege that the defendant was purchasing Electronic Benefit Transfer (EBT) cards from participants in the food stamp program, and paying them approximately half the value of the cards in cash. Both federal and Oregon state law prohibit exchanging or redeeming food stamp benefits for cash.

2. Last month, 13 people were indicted in Kansas for various charges, including conspiracy to defraud the government, wire fraud, and food stamp fraud. Prosecutors claim that defendants at two grocery stores were responsible for 2,600 fraudulent transactions, which resulted in almost $600,000 in stolen benefits.

Food stamp fraud is primarily addressed at 7 U.S.C. § 2024 and is covered in the United States Sentencing Guidelines under the Theft and Fraud crimes of USSG § 2B1.1. Per the statute, if the amount of loss is greater than $5,000, the crime is a felony, punishable by up to 20 years.

East Tennessee Couple Plead Guilty in Immigration Fraud Case

February 16, 2011, by The McKellar Law Firm, PLLC

Immigration fraud cases are not very common in this part of the country, but a couple from Greeneville, Tennessee, recently pleaded guilty to immigration fraud, among other crimes. According to an article by Jamie Satterfield in the Knoxville News Sentinel, an East Tennessee woman and her bodyguard entered guilty pleas earlier this week to defrauding illegal immigrants in Tennessee and North Carolina of nearly $100,000 via claims of expertise in getting them legal citizenship.

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On Monday, Debra Lynn Gouge and Jawad Lashin pleaded guilty before Greeneville U.S. District Judge Ronnie Greer to the following charges:

1. Wire Fraud [18 U.S.C. § 1343] 2. Concealment of Material Fact [42 U.S.C. § 408(a)(4)] 3. Fraud & False Statement Regarding a Tax Return [26 U.S.C. § 7601]

Plea documents indicate that the two defendants held themselves out to be immigration "specialists." Once unsuspecting immigrants paid for so-called immigration services, defendant Gouge would present her customers with documents to sign so that she could send the form to immigration officials to secure them legal citizenship. However, defendant Gouge failed to send in these forms.

The plea documents further indicate that "Gouge and (Lashin) never sent any immigration documents to any United States agencies. When customers questioned Gouge and (Lashin) about their status, Gouge and (Lashin) provided the customers false answers which were designed to stall their customers. In some instances, (Lashin) threatened customers with deportation."

Defendant Gouge also admitted to improperly receiving Social Security disability benefits while engaging in this immigration scam and also for failing to report her income to the IRS. Both defendants are set for a sentencing hearing on June 27th.