Convicted Felon Pleads Guilty to Elaborate Tax Fraud Scheme

RICHMOND, Va. – David Solomon, aka David Chityal, 39, of Budapest, Hungary, pleaded guilty today to charges of conspiracy to commit mail and wire fraud for his role in an elaborate tax fraud scheme he designed with a co-conspirator while in prison.

In a statement of facts filed with the plea agreement, Solomon admitted that he was incarcerated in a federal correctional facility with an individual identified as Conspirator 1 from approximately September 2009 and March 8, 2010.  Conspirator 1 previously was convicted in the Eastern District of Virginia of a $126 million fraud scheme and sentenced to 100 years of imprisonment.  Conspirator 1 also was ordered to pay approximately $128 million in restitution to victims of his fraud.  Conspirator 1 previously had conveyed certain assets to his Bankruptcy Estate for this restitution, including approximately $2 million in tax refunds.  When Solomon was released from prison and deported to his native Canada, he remained in touch with Conspirator 1.  Together they engaged in a scheme to obtain these approximately $2 million in tax refunds so that Conspirator 1 could obtain a particular New York attorney for his criminal appeal.  Using this attorney, Solomon and Conspirator 1 changed the Internal Revenue Service (IRS) power of attorney forms so that the tax refund checks would be sent to the New York attorney, not Conspirator 1’s Bankruptcy Estate for his victims.  In September 2010, the IRS sent the $2 million tax refund checks to the New York attorney, who in turn sent the checks to an attorney in Canada.  The Canadian attorney flew to the federal correctional facility in which Conspirator 1 was incarcerated and Conspirator 1 endorsed the checks.  The Canadian attorney then flew with the negotiated checks to the Turks and Caicos Islands to deposit them in a trust account.  He was within hours of depositing the checks when the lawyer for Conspirator 1’s Bankruptcy Estate trustee learned what had happened and contacted the Canadian attorney.  The tax refunds were returned to the Bankruptcy Estate and paid to Conspirator 1’s fraud victims.

Solomon was indicted by a federal grand jury on March 20, 2012, and was extradited from Hungary on Oct. 26, 2015. Solomon faces an agreed-upon maximum penalty of five years in prison when sentenced on Feb. 8, 2016. The maximum statutory sentence is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by Senior U.S. District Judge Robert E. Payne.  Assistant U.S. Attorneys Thomas A. Garnett and Jessica D. Aber are prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:12-cr-44.

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