Andover Attorney Charged In Superseding Indictment with $1 Million Tax Refund Check Scam
BOSTON – An attorney specializing in real estate closings and a co-conspirator were charged today with depositing more than $1 million in fraudulently obtained IRS refund checks into several different bank accounts, including the attorney’s trust accounts, in an effort to launder the proceeds.
Attorney R. David Cohen, 63, and Francisco Oscar “Frank” Grullon, 48, both of Andover at the time of the alleged crime, were charged in a superseding indictment with conspiracy, conversion, and receipt of stolen United States property, and conspiracy to commit money laundering. Cohen and Grullon were indicted in January 2015, and Cohen was arrested by complaint in December 2014. Grullon is believed to be outside of the United States.
According to the superseding indictment and an affidavit filed in the case, the investigation identified a scheme in which individuals filed fraudulent tax returns with fictitious W-2 information, usually a name and social security number of a resident of Puerto Rico, whose residents are not required to file federal income tax returns. Once the fraudulent returns were accepted by the IRS, refund checks were sent to designated addresses in Lawrence, East Boston, and New York controlled by his co-conspirators.
Beginning in October 2011, Cohen, Grullon, and another co-conspirator deposited at least 156 fraudulently deposited tax refund checks totaling $1,027,084 into various local banks to launder them through Cohen’s “Interest On Lawyer’s Trust Accounts” (IOLTA), as well as through bank accounts in the name of AD Professional Association, Inc. When questioned by bank officials about the large amount of third-party U.S. Treasury checks Cohen was depositing and negotiating through his IOLTA and personal accounts, Cohen falsely claimed that the payees were his clients. When one bank requested proof of third-party endorsement of the checks, Cohen falsely signed and notarized a form purporting to state that the payee had endorsed the check to AD Professional Association.
The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000, or twice the loss or gain from the offense. The charge of conversion and receipt of stolen U.S. property provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000, or twice the loss or gain from the offense. The charge of money laundering provides a sentence of no greater than 20 years in prison, five years of supervised release, a fine of $500,000, or twice the value of the property involved in the transaction. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistance with the investigation was provided by the Department of Homeland Security and U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Public Corruption and Special Prosecutions Unit.
The details contained in the charging documents are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.