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FOURTEEN INDIVIDUALS CHARGED WITH TAX VIOLATIONS INVOLVING FIRST-TIME HOME BUYER TAX CREDIT FRAUD

THURSDAY, MARCH 24, 2011

BOSTON, Mass. - Fourteen individuals have been charged with committing various crimes arising from their abuse of the federal government’s stimulus program by filing false claims with the Internal Revenue Service (IRS) in which they fraudulently claimed the First-Time Home Buyer Tax Credit.

“The filing of false tax returns and the abuse of the First-Time Home buyer Tax Credit program are serious crimes. It is critically important that taxpayers who play by the rules do not end up paying for refunds to people who commit fraud and blatantly lie on the forms submitted to the IRS,” stated United States Attorney Carmen M. Ortiz.

U.S. Attorney Ortiz; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation, Boston Field Division; Cortez Richardson, Special Agent in Charge of the U.S. Department of Housing and Urban Development’s Office of the Inspector General; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation - Boston Field Division; and J. Russell George, the Treasury Inspector General for Tax Administration, announced today that nine indictments have been returned and one information filed involving 14 separate individuals.

“At the IRS, protecting taxpayer money is a matter of the highest priority,” stated IRS Special Agent in Charge William P. Offord. “Individuals who fraudulently claim the First Time Home Buyer Tax Credit undermine our tax system, and will be held accountable. Honest and law abiding citizens are fed up with those who use deceit and fraud to line their pockets with other
people's money,” concluded Offord.

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

Richard DesLauriers, FBI Special Agent in Charge said, “Today’s charges reflect the fruits of a collaboration among the FBI, IRS, HUD, United States Attorney’s Office and state law enforcement agencies that began in 2009 to specifically thwart financial schemes related to the federal government’s effort to stimulate the economy. The group uncovered a series of schemes by those who illegally attempted to benefit from the stimulus program.

“Through the FBI’s task-force and intelligence-based model of investigating, the FBI will continue to use every capability and tool it has to root out others engaged in stimulus fraud. Additionally, the FBI will continue its efforts to prevent and deter mortgage fraud by investigating those who act illegally when obtaining mortgages,” concluded DesLauriers.

“HUD-OIG is dedicated to eliminating fraud in our nation’s housing programs. It is particularly egregious when individuals use tax payer funds to unjustly enrich themselves,” Acting Inspector General Michael P. Stephens.

Seven individuals 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. If convicted, these individuals, 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, all face up to five years in prison, to be followed by three years of supervised release, and a $250,000 fine.

An eighth individual, Michael Doyle, 44, of Hudson, NH, was also indicted for filing false, fictitious and fraudulent claims with the IRS and faces the same penalties. The indictment of Doyle alleges that he was a long time 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 Home Buyer Tax Credit, even though he had purchased his home in 2007 and therefore wasn’t eligible for the stimulus related benefit.

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 Home Buyer 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 Methuen brothers, George Saad, 32, and Elias Saad, 29, 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 Home Buyer 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 Home Buyer 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, 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 Ortiz’s Public Corruption Unit.

The details contained in the indictments and information are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

 

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