Friday, March 25, 2011

14 Charged with Homebuyer Tax Credit Fraud

Boston - Fourteen individuals have been charged with committing various crimes in which they fraudulently claimed the First-Time Homebuyer Tax Credit, including one longtime IRS employee.
Seven individuals from Massachusetts were indicted separately for filing false tax returns with the IRS and obtaining tax refunds after falsely claiming the First-Time Home Buyer Tax Credit even though they had not in fact purchased a home. They include Celestino Alves, 43, of Brockton; John Davis, 32, of Dorchester; Trystin Johnson, 34, of Mattapan; Maxine Thevenin, 33 of Dorchester; Jerry Janvier, 32, of Hyde Park; Samuel Jean, 33, of Dorchester; and Theresa Finocchio, 38, of Canton. Each of them faces up to five years in prison, followed by three years of supervised release, and a $250,000 fine.

An eighth individual, Michael Doyle, 44, of Hudson, N.H., was also indicted for filing false, fictitious and fraudulent claims with the IRS and faces the same penalties. Doyle was a longtime employee of the IRS who falsely claimed to have purchased his home in 2008 in order to obtain a tax refund by claiming the First-Time Homebuyer Tax Credit, even though he allegedly had purchased his home in 2007 and therefore wasn’t eligible for the stimulus-related benefit.

“Congress created and modified the Homebuyer Credit to stimulate the economy and help taxpayers achieve the American Dream, not to line the pockets of wrongdoers,” said Treasury Inspector General for Tax Administration J. Russell George in a statement. “It is especially troubling when fraud is committed by IRS employees. Their actions damage the integrity of our nation’s tax system. TIGTA will continue to vigorously investigate allegations of wrongdoing by IRS employees.”

Two individuals, Christopher Proe, 27, of Michigan and Junior Lopez, 29, of Southbridge, Mass., were indicted together for conspiring to defraud the government by filing tax returns which falsely claimed the First-Time Homebuyer Tax Credit. The indictment alleges that Proe and Lopez filed these false tax returns after obtaining identity information from third parties under false pretenses and creating false W-2 forms for a fictitious company called Lawn Brothers Landscaping. The indictment further alleges that Proe and Lopez filed over 50 fraudulent tax returns for the tax year 2008 and obtained over $500,000 in tax refunds which they directed to bank accounts controlled by Proe and Lopez.

Proe and Lopez each face a maximum penalty of 10 years in prison, to be followed by three years of supervised release and a $250,000 fine on the conspiracy counts. On the substantive count, they each face up to five years in prison, to be followed by 3 years of supervised release and a $250,000 fine.Additionally, two brothers, George Saad, 32, and Elias Saad, 29, of Methuen, Mass., were charged in an information with conspiring to commit wire fraud and submitting false claims for tax refunds. Along with the brothers, George Saad’s wife, Harlene Grullon, 34, of Methuen, and Kristijan Katjna, 32, of Boston, were also charged with falsely claiming the First-Time Homebuyer Tax Credit and making false statements on mortgage applications to the Department of Housing and Urban Development and to the Federal Housing Administration.

The information alleges that George and Elias Saad conspired to commit wire fraud by recruiting people to purchase properties on their behalf and then claiming the First-Time Homebuyer Tax Credit on those falsely obtained properties. Frequently, those properties were obtained by lying on the mortgage application and falsely stating that the “straw” purchasers were buying the properties when, in fact, George and Elias Saad were the true purchasers.

If convicted of conspiracy, George and Elias Saad each face up to five years in prison, to be followed by three years of supervised release and a $250,000 fine. George Saad, Grullon, and Katjna each face up to five years in prison on the false statement counts, to be followed by three years of supervised release and a $250,000 fine. The false statement counts carry an additional maximum of two years imprisonment, to be followed by one year of supervised release and a $250,000 fine.

The cases were investigated by the Internal Revenue Service’s Criminal Investigation division, the U.S. Department of Housing and Urban Development, Office Inspector General, the Federal Bureau of Investigation - Boston Field Office and the Treasury Inspector General for Tax Administration. They are being prosecuted by Assistant U.S. Attorneys Fred M. Wyshak, Jeffrey M. Cohen and Robert Fisher of U.S. Attorney Carmen Ortiz’s Public Corruption Unit.

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