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Tuesday, August 28, 2018

Canadian Man Sentenced to Prison for Promoting Tax Fraud Scheme

Conspired to File $10 Million in False Tax Refund Claims

A Canadian man who led a multi-million dollar tax fraud conspiracy was sentenced to 60 months in prison today, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney James P. Kennedy Jr. for the Western District of New York.

According to documents filed with the court and evidence introduced at a related trial, Daveanan Sookdeo, 46, formerly of Ontario, Canada, promoted a scheme in which Canadian citizens filed false tax returns with the Internal Revenue Service (IRS) that fraudulently sought nearly $10 million in income tax refunds.  After the participants in the scheme received their tax refunds, they travelled to the United States where they opened bank accounts at various financial institutions to deposit the refund checks.  The coconspirators then moved the money back to Canada by wire transfers and other means.  The fraudulent tax filings resulted in actual losses to the government of over $3.5 million dollars.

Sookdeo profited from the scheme by charging his coconspirators an upfront fee for the false documents used in the scheme, as well as a percentage of any tax refunds obtained through the scheme.  Sookdeo worked with Ronald Brekke, a coconspirator in California, to prepare fraudulent Forms 1099-OID that participants in the scheme attached to their false income tax returns.  Sookdeo also personally filed nine false tax returns and obtained a tax refund check in the amount of $73,662.25. 

Sookdeo was arrested in Trinidad and Tobago in 2017 and later extradited to the United States.  In May 2018, Sookedo pleaded guilty to conspiracy to defraud the United States and to commit theft of government funds, and filing a false claim against the United States. 

In addition to the term of imprisonment imposed, U.S. District Judge Frank P. Geraci Jr. ordered Sookdeo to serve a three year term of supervised release and pay restitution to the IRS in the amount of $3,553,303.

Sookdeo is the fifth Canadian citizen to be convicted, and the second to be sentenced, for his role in this scheme. In January 2016, Kevin Cyster of Burlington, Ontario, was sentenced to 135 months in prison after a jury convicted him of conspiring to defraud the United States and commit theft of government funds, making a false claim against the United States and transferring stolen money in foreign commerce. Renee Jarvis, Timothy Johnston, and Jose Compuesto, also of Canada, pleaded guilty to conspiring to defraud the United States and commit theft of government funds and are awaiting sentencing.  Sookdeo’s California-based coconspirator, Ronald Brekke, is currently serving a 12-year prison sentence

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Kennedy thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Melissa S. Siskind and Thomas F. Koelbl and Assistant U.S. Attorney John Field of the Western District of New York, who prosecuted this case.

Additional information about the Tax Division’s enforcement efforts may be found on the division’s website.

Financial Fraud
Press Release Number: 
Updated August 28, 2018