Canadian Man Convicted for Involvement in $3.5 Million Conspiracy to Defraud the United States
An Ontario, Canada, man was convicted yesterday in the U.S. District Court for the Western District of New York on charges of conspiracy, making a false claim against the United States and illegally transferring stolen money in foreign commerce, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney William J. Hochul Jr. of the Western District of New York.
Kevin Cyster, 52, of Burlington, Ontario, was convicted by a federal jury after a six-day trial. According to court documents, Cyster was a ringleader of a group of Canadian citizens who forged Internal Revenue Service (IRS) forms to falsely claim that almost $10 million in income had been withheld on their behalf by various Canadian financial institutions. They arranged for Ronald Brekke to file the false forms electronically with the IRS.
Subsequently, Cyster and his co-conspirators used the false filings to file false federal income tax returns seeking refunds based on the fictitious withholding amounts. Although the IRS identified some of the fraudulent returns, refunds totaling more than $3.5 million were sent to Cyster and his co-conspirators before the scope of the fraud was detected.
Cyster was charged along with Renee Jarvis, Jonathan Neufeld, Christina Starkbaum, Daveanan Sookdeo, Jose Compuesto and Timothy Johnson. Jarvis has been convicted, Neufeld and Starkbaum are deceased, and charges are pending against Sookdeo, Compuesto and Johnson. Brekke was convicted on federal fraud charges in the state of Washington.
Sentencing is scheduled for Jan. 4, 2016, before Chief U.S. District Judge Frank P. Geraci Jr. of the Western District of New York, who also presided over the trial of the case. The charges carry a statutory maximum penalty of 30 years in prison and a $7 million fine.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Hochul thanked the special agents of IRS-Criminal Investigation, under the direction of Special Agent In Charge Shantelle P. Kitchen, who investigated the case, and Assistant U.S. Attorney John J. Field of the Western District of New York and Trial Attorneys Jeffrey A. McLellan and Thomas F. Koelbl of the Tax Division, who are prosecuting the case.