Phoenix Men Convicted in Money Laundering and Tax Scheme
WASHINGTON-- Gino Carlucci and Wayne Mounts, both residents of Arizona, have been convicted of conspiracy to commit money laundering and conspiracy to defraud the Internal Revenue Service (IRS), the Department of Justice and IRS announced today. A federal jury also convicted Carlucci for filing a false income tax return in 2004. The jury returned a not guilty verdict for Carlucci on a separate witness tampering charge. The verdict came following an eight day trial before Chief Judge Kathryn H. Vratil of the District of Kansas, sitting by special designation in Phoenix.
Carlucci and Mounts were indicted by a federal grand jury in April 2010. According to the evidence presented at trial, Carlucci and Mounts devised several false schemes to defraud Joseph Flickinger, a tax return preparer, and Flickinger’s taxpayer and investment clients out of funds and assets. Flickinger himself had been running a Ponzi-type scheme in which he defrauded his investment clients of their life savings. At the time of Carlucci and Mounts’s fraud, Flickinger was under indictment in the Southern District of Ohio on tax fraud charges.
As established at trial, Carlucci and Mounts’s false schemes included a purported investment in a fraudulent casino project in Antigua. In addition, at the time of the charged conduct, the Securities and Exchange Commission (SEC) had frozen all of Carlucci’s assets due to his involvement in a civil securities matter in Utah. Carlucci and Mounts’s second scheme involved defrauding Flickinger and others of money that was supposedly going to be used to pay Carlucci’s SEC penalty. Carlucci and Mounts had a third scheme which involved helping Flickinger hide from the government monies that he had defrauded from his own investment clients, in part by Carlcucci and Mounts promising to wire the funds through a series of accounts in the Caribbean so that the funds could not be traced or seized by the government.
The evidence at trial established that after getting the last of Flickinger’s funds, Carlucci set Flickinger up to be arrested by assisting him in arranging a private jet to flee to Antigua, where Flickinger believed the funds were hidden. Instead, Carlucci anonymously tipped off the
government to the scheme, causing Flickinger to be arrested. Carlucci and Mounts then used the money for their own personal benefit by withdrawing cash in structured amounts and transferring cashier’s checks and wire transfers to nominee accounts for their own benefit. In addition, Carlucci and Mounts spent over $150,000 of the funds to buy a 43-foot luxury boat that Carlucci later concealed from the government for over two years. Despite personally benefitting from the money in 2004, Carlucci signed and filed a false individual income tax return that failed to report any of the money he got in the scheme, and instead reported that he was due a refund due to the Earned Income tax credit. The evidence showed that the government located and seized the boat, which was being hidden at an associate’s home in Phoenix, in 2007.
Chief Judge Vratil remanded both Carlucci and Mounts into custody pending their Oct. 3, 2011, sentencing. Carlucci and Mounts each face a maximum sentence of 20 years in prison for the conspiracy to commit money laundering conviction and a maximum sentence of five years in prison for the conspiracy to defraud the IRS conviction. Carlucci also faces an additional three years on the false return conviction.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax/.
John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division, commended the special agents from the IRS Criminal Investigation Division who investigated the case as well as Tax Division attorneys Richard Rolwing, Hayden Brockett and Monica Edelstein who prosecuted the case. Principal Deputy Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office for the District of Arizona for their assistance in this matter.