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Press Release

Eight members of large tax fraud conspiracy sentenced in false claims and money-laundering scheme

For Immediate Release
U.S. Attorney's Office, Northern District of Georgia

ATLANTA – Eight additional members of a large Atlanta-based tax fraud and money laundering conspiracy have been sentenced for their roles in stealing funds from the U.S. Treasury.  The defendants were all indicted in United States v. Calvin C. Barnes a/k/a “Big Cal”, Sharon Cecal, Kenneth Cottrell, Zechariah Daniel a/k/a “Zech” a/k/a Leroy Harris, Derrick Lawson, Reynolds Scott III, Anthony Shivers and Calvin C. William a/k/a “Lil’ Cal.”

 

“These defendants conspired to file false claim after false claim against the United States, treating the U.S. Treasury like an ATM and stealing from every honest taxpayer in the process,” said U.S. Attorney Byung J. Pak.  “In addition to prison sentences, these defendants have all been ordered to pay substantial amounts of restitution to claw back the fruits of their criminal conduct and ensure crime doesn’t pay.”

 

“Tax fraud schemes are becoming more complex and perpetrators are continually creating new ways to generate fraudulent claims to the IRS,” said James Dorsey, Acting Special Agent in Charge. “IRS Criminal Investigation will continue to work with our law enforcement partners in uncovering these schemes and bringing the criminals to justice.”

 

“The Secret Service and our law enforcement partners work tirelessly to maintain the taxpayers’ trust in our economic system.  We will continue to combine our investigative capabilities to actively pursue and arrest offenders who violate this trust,” said Kenneth Cronin, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.  “Today’s sentencing should be a warning to criminals and their conspirators that stealing from the American people will not go unpunished.”

 

According to U.S. Attorney Pak, the charges and other information presented in court: In 2009, 2010, 2011 and 2012, members of the conspiracy filed and caused to be filed over 100 fraudulent corporate tax returns, claiming $35 million in refunds for fuel taxes falsely claimed to have been paid on fuel purchased for off-road company vehicles.  The IRS actually paid the co-conspirators over $5.6 million from those falsely claimed tax refunds, before those losses were stopped at the time of the first arrest in this investigation in May 2012.  The false claims were made in the names of hijacked corporations and shell companies, none of which used off-road vehicles or paid the fuel tax claimed for refund.

The Internal Revenue Service began investigating the case while the conduct was still ongoing, based on certain similarities in the returns.  However, there was a large break in the investigation when a defendant in an unrelated federal fraud case learned of the conspiracy and decided to cooperate with law enforcement.  The cooperator worked with agents of the U.S. Secret Service to organize a series of undercover meetings with members of the conspiracy, which he recorded.  In the meetings, Anthony Shivers and his brother Charlie Shivers III, a leader of the conspiracy, described the roles of numerous members of the conspiracy and how the returns were prepared and filed.

 

Based on the information and recordings provided by the cooperator, agents obtained a search warrant for the home of Charlie Shivers III, which was executed the morning of Saturday, May 12, 2012 at the same time as his arrest.  The search recovered numerous copies of fraudulent U.S. corporation income tax returns, copies of tax refund checks, some bank records, notes of addresses to which fraudulent checks had been mailed, and cryptic handwritten notes of the dates returns had been filed and the amounts of refunds requested.  Using the large volume of evidence gathered during the search and cooperation from several defendants who began cooperating with law enforcement after it, agents were able to learn the extent of the conspiracy and identify pending fraudulent returns that were part of it, preventing further losses to the U.S. Treasury.

 

Kenneth Cottrell, who has worked as a tax preparer, was personally involved in the preparation of some of the fraudulent returns.  Calvin L. Barnes, Sharon Ceacal, Zechariah Daniel, Derrick Lawson, Reynolds Scott III and Calvin C. Williams were primarily involved with negotiating the fraudulently obtained refund checks and distributing the proceeds to coconspirators. Anthony Shivers assisted his brother Charlie Shivers III with whatever needed to be done in the conspiracy.

 

U.S. District Judge Thomas W. Thrash imposed sentences on the eight defendants, who had all pleaded guilty, as follows:

 

  • Calvin L. Barnes, a/k/a “Big Cal”, 36, of Forest Park, Georgia, was sentenced to one year and one day in prison, followed by three years of supervised release. The court announced that it intends to also order restitution of approximately $1,043,851, but held open the final restitution order for seven days to determine whether Barnes is entitled to credit for certain pre-sentencing payments to the IRS.  Barnes pleaded guilty to count six (theft of government funds) on March 1, 2017. 

 

  • Sharon Ceacal, 51, of Warner Robins, Georgia, was sentenced on August 2, 2017 to a year and a day in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $1,549,250.  Ceacal pleaded guilty to count one (false claims conspiracy) on January 11, 2017.

 

  • Kenneth Cottrell, 33, of Atlanta, Georgia, was sentenced on July 31, 2017 to 6 months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $754,586.  Cottrell pleaded guilty to count one (false claims conspiracy) on March 1, 2017.

 

  • Zechariah Daniel, a/k/a “Zech”, a/k/a “Leroy Harris”, 36, of Atlanta, Georgia, was sentenced on August 2, 2017 to two years, four months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $2,566,491.  Daniel pleaded guilty to count one (false claims conspiracy) on December 20, 2016.

 

  • Derrick Lawson, 43, of Lithonia, Georgia, was sentenced on August 3, 2017 to one year, six months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $1,021,705.  Lawson pleaded guilty to count five (theft of government funds) on February 15, 2017.

 

  • Reynolds Scott III, 49, of Atlanta, Georgia, was sentenced on August 2, 2017 to four months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $1,549,250.  Scott pleaded guilty to count one (false claims conspiracy) on December 20, 2016.

 

  • Anthony Shivers, 47, of Lovejoy, Georgia, was sentenced on May 1, 2017 to three years, five months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $505,399.  Shivers pleaded guilty to count one (false claims conspiracy) on February 15, 2017.

 

  • Calvin C. Williams, a/k/a “Lil’ Cal”, 48, of Smyrna, Georgia, was sentenced on August 2, 2017 to 10 months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $1,876,014.  Williams pleaded guilty to count one (false claims conspiracy) on December 20, 2016.

 

Three other defendants were previously sentenced for their roles in the scheme, after being charged under separate indictments:

 

  • Charlie Shivers III, of Atlanta, Georgia, pleaded guilty to two counts of filing false claims against the United States on August 9, 2012, and was sentenced to seven years in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $5,630,681.66.

 

  • Kenneth Michael Pettis, Sr., was sentenced to four years, three months in prison, to be followed by three years supervised release.  Pettis had tried to cash two large refund checks generated by the scheme, using fake IDs, and pleaded guilty to one count of conspiracy to steal government funds. 

 

  • Demetrius Weddle was sentenced to two years, seven months confinement, to be followed by three years supervised release.  Weddle pleaded guilty to bank fraud, after being caught trying to cash one of the refund checks generated by the scheme. 

 

This case was investigated by the U.S. Secret Service and Internal Revenue Service Criminal Investigation, with valuable assistance from the DeKalb County Police Department.

 

Assistant U.S. Attorney Alana R. Black prosecuted the case.  The previous, related cases against Charlie Shivers III and Kenneth Michael Pettis were prosecuted by Assistant U.S. Attorneys Gale McKenzie and Alana R. Black, and the case against Demetrius Weddle was prosecuted by Assistant U.S. Attorney Stephen H. McClain.

 

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

Updated October 24, 2017

Topic
Financial Fraud