Husband and Wife Charged with Running $3.7 Million Advance Fee Scheme and Tax Evasion
Allegedly Developed Relationships with Religious Groups as Part of the Scam
Greenbelt, Maryland - A federal grand jury has indicted husband and wife Shannon and Yvette Johnson, ages 49 and 50, respectively, of Laytonsville, Maryland, and Corona, California, on charges in connection with an alleged fraudulent advance fee scheme and tax evasion. The indictment was returned on June 25, 2012 and unsealed upon the couple’s arrest in Corona on July 17, 2012. They were ordered to appear in U.S. District Court in Greenbelt today at 2:00 p.m. for arraignment.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Kathryn Keneally of the U.S. Department of Justice Tax Division; Special Agent in Charge Rick A. Raven of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.
"People who create elaborate schemes that have no purpose other than to mislead investors and defraud the IRS run the very high risk of prosecution," stated Rick A. Raven, Special Agent in Charge, IRS-Criminal Investigation, Washington D.C. Field Office. “Tax evasion and money laundering schemes of this magnitude not only harm hard working Americans but also undermine our nation's economic strength.”
The 26 count indictment alleges that the Johnsons ran an advance fee scheme from 2006 to 2009. Shannon Johnson allegedly held himself out as a wealthy international investment banker who could provide millions, and sometimes billions, of dollars and euros in financing to businesses and individuals. In return for substantial advance banking fees, the Johnsons promised to provide investors with money which they claimed they held in an overseas bank account. The Johnsons developed relationships with pastors, ministers, and religious-based organizations to sell themselves as philanthropists on a humanitarian mission. Clients wired and mailed the advance fees to multiple bank accounts controlled by the Johnsons in different states.
The indictment alleges that despite receiving approximately $3.7 million in advance fees from individuals and businesses, the Johnsons never provided the promised financing. Instead, they allegedly used the money to live an extravagant lifestyle which included the purchase of Bentley, Mercedes Benz and BMW automobiles, the leasing of a $3.5 million residence in California for $18,000 a month, travel on private jets and the funding of the mortgage on their Laytonsville residence.
The indictment also alleges that the Johnsons committed money laundering by using the proceeds of their fraud to engage in monetary transactions in excess of $10,000, transactions which included the purchase of the luxury vehicles as well as payment for private jet services.
The Johnsons are also alleged to have committed tax fraud. The Johnsons allegedly filed individual tax returns for the tax years 1998 through 2001 using false W-2s to fraudulently generate a total of $66,097 in refund claims, evaded the payment of their 2002 through 2006 corporate and individual taxes totaling $98,220, and evaded the assessment of their 2007 through 2009 taxes. The Johnsons allegedly attempted to conceal their income and assets from the IRS by selling assets in their own names, titling assets in the names of nominees, using multiple bank accounts in three states to disperse and conceal income, using nominees and fraudulent taxpayer identification numbers to open and maintain bank accounts, and by using multiple business names to conduct business.
The Johnsons face a maximum sentence of 20 years in prison for conspiracy to commit wire and mail fraud; 20 years in prison on each of four counts to commit wire fraud and one count of mail fraud; and 10 years in prison for conspiracy to commit money laundering; 10 years in prison on each of 14 counts for money laundering; three years in prison for corruptly endeavoring to obstruct and impede the IRS; and five years in prison on each of four counts for tax evasion.
The indictment seeks forfeiture of at least $3.7 million.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the IRS Criminal Investigation and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant Chief John N. Kane of the U.S. Justice Department, Tax Division and Assistant United States Attorney Emily Glatfelter, who are prosecuting the case.