Federal Government Contractor Indicted for Involvement in Illegal Kickback Scheme and Tax Evasion
An Enterprise, Alabama, resident was arrested today after a federal grand jury sitting in the Southern District of Florida in Fort Lauderdale indicted him on one count of accepting unlawful kickbacks from 2009 through 2014, and five counts of tax evasion for tax years 2009 through 2013, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.
According to the allegations in the indictment, Victor Villalobos worked for a federal contractor in Fort Rucker, Alabama, identified in the indictment as Company A, that furnished supplies, materials equipment and services to the government. In 2009, Villalobos approached an individual identified in the indictment as Person X, who owned and operated Company B, a subcontractor of Company A based in Fort Lauderdale. Villalobos solicited illegal kickbacks as payment on the federal subcontracts that Person X held in connection with Company A’s prime contract. Villalobos agreed that in exchange for kickback payments he would refrain from conduct that would unfavorably affect Person X’s business relationship with Company A and would also help ensure that Person X obtained additional subcontracting business. On Jan. 26, 2015, Villalobos met with Person X and accepted an envelope containing $5,000 in cash. They met again approximately two weeks later and Villalobos accepted a bag containing $55,000 in cash as kickback payments. From June 2009 to December 2014, Villalobos received approximately 57 separate wire funds transfers totaling more than $1.9 million in kickback payments from various foreign and domestic bank accounts controlled by Person X.
Villalobos concealed these kickbacks by incorporating nominee entities, opening nominee bank accounts and failing to report the illegal kickback payments as income on his individual federal income tax returns for 2009 through 2013.
If convicted, Villalobos faces a statutory maximum sentence of 10 years in prison for the illegal kickback scheme and a statutory maximum sentence of five years in prison for each count of tax evasion. He also faces potential fines of up to $250,000 on each count.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, the U.S. Air Force’s Office of Special Investigations and the U.S. Department of Defense’s Office of the Inspector General, who investigated this case, and Trial Attorneys Charles M. Edgar Jr. and Jason H. Poole of the Tax Division, who are prosecuting this case. Ciraolo also thanked the U.S. Attorney’s Office of the Southern District of Florida for their substantial assistance.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.