Owner of Miami-Dade Wholesale Distributing Company Sentenced in Tax Fraud Scheme
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and José A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announced that defendant David Bradman, 54, of Miami, was sentenced yesterday afternoon to 12 months and 1 day in prison, to be followed by 1 year of supervised release for his role in a tax fraud scheme. The court also ordered Bradman to perform 200 hours of community service during supervised release. A restitution hearing is scheduled for June 3, 2013. Bradman had previously pled guilty to one count of making false income tax returns for an S Corporation, Forms 1120S, in violation of Title 26 U.S.C § 7206(1) for tax year 2005.
According to statements made in court and documents filed in the case, Bradman was the sole owner and operator of Diplomat Trading, Inc., in Miami, Florida. The company was a wholesale distributor of consumer electronics that exported merchandise to Latin America. In 2000, a scheme was devised in which the defendant and others set up a Panamanian corporation, CHF Electronics (CHF), and opened a bank account in the company’s name in Panama. Thereafter, on October 20, 2002, a false note was created to make it appear as though Diplomat Trading had borrowed $6,301,008.16 from CHF Electronics. The note was signed by Bradman. Checks representing purported payments on this note were sent from Diplomat Trading to CHF Electronics. Bradman inflated the amounts listed as mortgages, notes and bonds payable, and the corresponding interest deductions, in his tax returns for his S Corporation, Forms 1120S, in the name of Diplomat Trading, Inc. Bradman created the illusion of a bona fide commercial business relationship between Diplomat Trading and CHF Electronics. In fact, however, Bradman controlled both Diplomat Trading and CHF Electronics, and knew that these two companies did not have a genuine commercial business relationship.
In addition, according to documents filed with the court, Bradman used CHF Electronics to cycle money for his personal use. In 2005, Bradman had a second company, MDA Inversiones, incorporated in Panama. Approximately $700,000 was moved from CHF’s bank account in Panama to a Panamanian bank account for MDA Inversiones. A majority of those funds were then wired to the United States so that Bradman could purchase two properties in Miami, Florida.
Mr. Ferrer commended the investigative efforts of the Internal Revenue Service, Criminal Investigation Division. This case is being prosecuted by Assistant U.S. Attorney Lois Foster-Steers.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.