Baltimore Resident Convicted Of Filing Claims For Over $23 Million In Fraudulent Tax Refunds, Alternative Fuel Credits And Refunds, And For A Scheme To Defraud Credit Unions

Baltimore, Maryland - A federal jury has convicted Makushamari Gozo, age 40, a native of Zimbabwe residing in Baltimore, Maryland, on 23 counts that he filed claims for more than $23 million in fraudulent alternative fuel tax credits and refunds and personal tax refunds, as well as that he engaged in a scheme to fraudulently obtain more than $3 million in loans from credit unions. The verdict was returned late on July 31, 2013.

The guilty verdict was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.

“The evidence showed that Makushamari Gozo received over $370,000 in fraudulent federal tax refunds and caused the IRS to issue checks for more than $12 million in tax credits and refunds for alternative fuel that he falsely claimed his sham companies had purchased,” said U.S. Attorney Rod J. Rosenstein. “At the same time, Mr. Gozo also attempted to obtain over $3 million in fraudulent loans from credit unions.”

“Fraud schemes cause tremendous financial damage to everyone, and the American taxpayer is the real victim when the IRS is targeted by fraudsters,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “Mr Gozo’s scheme to defraud the IRS was an attack on our nation’s tax system, but through the efforts of IRS Criminal Investigation and the United States Attorney’s Office for the District of Maryland he was brought to justice and convicted by a jury of his peers. IRS Criminal Investigation in partnership with its law enforcement partners will continue to pursue the criminals who commit these crimes and steal from the U.S. Treasury.”

According to information presented at his one week trial, beginning in 2010, Gozo used several entities he controlled to file fraudulent claims for tax refunds. Specifically, Gozo filed individual income tax returns falsely claiming that for tax years 2007 through 2011, he earned wages from two of his companies and was entitled to tax refunds totaling more the $417,000. In addition, Gozo filed tax returns falsely claiming that a third company had sustained losses in tax years 2007 through 2009, which entitled Gozo to more than $76,000 in tax refunds. According to evidence at trial, between October 31, 2011 and February 17, 2012, Gozo also filed false excise tax returns claiming that a fourth company was entitled to approximately $22,657,137 in alternative fuel tax refunds and credits based on having purchased or used over 39 million gallons of alternative fuel. In fact, the entities were all sham businesses that existed in name only.

In addition, the evidence showed that between July 2010 and September 2010, Gozo engaged in a scheme to defraud several credit unions to obtain fraudulent automobile and business loans. Specifically, Gozo submitted four loan applications to the credit unions for the purchase of luxury automobiles that Gozo never actually bought. On the applications, Gozo made materially false statements about his income and employment, in order to make himself appear like a successful businessman and to persuade the credit unions to approve the loan applications. In support of his loan applications, Gozo presented to the credit unions: the same fraudulent W-2 forms that he had submitted to the IRS with his Forms 1040 for tax years 2007, 2008, and 2009; fraudulent pay stubs, which falsely claimed that Gozo made substantial income from one of his businesses; fraudulent “Used Vehicle Buyers Orders” which falsely claimed that Gozo had contracted to purchase the luxury automobiles included on the loan applications; and fraudulent verifications of insurance coverage on the luxury automobiles referenced on the loan applications.

According to the trial testimony, Gozo also submitted a fraudulent loan application for an $3 million business loan in the name of another one of his sham companies. On the application, Gozo made fraudulent statements about the financial and business affairs of the company in order to make it appear financially successful and to persuade the credit union to approve the credit line application. In support of the business loan application, Gozo submitted several false corporate tax returns claiming that the company controlled millions of dollars in assets.

Gozo faces a maximum sentence of five years in prison on each of the 18 counts of making a false claim; and 30 years in prison on each of the five counts of bank fraud. U.S. District Judge Catherine C. Blake has scheduled sentencing for October 25, 2013 at 10:30 a.m. Gozo has been detained since his arrest on July 20, 2012.

United States Attorney Rod J. Rosenstein praised the IRS Criminal Investigation for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys David I Sharfstein and Peter M. Nothstein, who are prosecuting the case.