BALTIMORE MAN CHARGED IN CONNECTION WITH $35 MILLION TAX FRAUD CONSPIRACY

Martin C. Carlson, United States Attorney for the Middle District of Pennsylvania announced today that Joel S. Lowenstein, age 63, of Baltimore, Maryland, has been charged in connection with an international tax fraud conspiracy that sought to obtain more than $35 million in federal and state income tax refunds using the identities of approximately 3,300 federal prisoners. Ten men, including the leader of the conspiracy, Marvin Berkowitz, age62, of Jerusalem, Israel, were indicted by a federal grand jury in Chicago, Illinois, in a 41-count indictment that was unsealed yesterday after Berkowitz and the others were arrested in Israel and other locations throughout the United States. Lowenstein, has agreed to plead guilty to conspiracy to commit mail fraud and will appear at a future date in Harrisburg, Pennsylvania for his arraignment.

The charges filed yesterday in Chicago and Pennsylvania indicate that Berkowitz directed the fraud from Israel between 2003 and early 2009. Berkowitz recruited numerous individuals in the United States to obtain the names and social security numbers of federal prisoners from federal court records and then supply him with the information so he could submit phony tax returns to the IRS and state taxing authorities seeking millions of dollars in tax refunds. Berkowitz recruited other individuals to open P.O. Boxes and/or supply him with addresses for the tax refunds to be mailed to and then forward to him the refund checks. Berkowitz is alleged to have caused the IRS to issue more than $1.5 million in bogus tax refunds and caused various state taxing authorities to issue more than $2.5 million in bogus tax refunds. Lowenstein is alleged to have helped Berkowitz by opening four P.O. Boxes in Pennsylvania and Maryland and forwarding numerous tax refund checks to Israel worth between $200,000 and $400,000 from 2005 to 2009.

If convicted, Lowenstein faces up to five years imprisonment and/or fines totaling $250,000. No date has been set for his arraignment in federal court in Pennsylvania.

The case against Lowenstein was investigated by the U.S. Postal Inspection Service and the IRS and is being prosecuted by Assistant United States Attorney Bruce Brandler.

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An Indictment or Information is not evidence of guilt but simply a description of the charge made by the Grand Jury and/or United States Attorney against a defendant. A charged Defendant is presumed innocent until a jury returns a unanimous finding that the United States has proven the defendant’s guilt beyond a reasonable doubt or until the defendant has pled guilty to the charges.