Dallas Check Cashing Business Owner Sentenced to 21 Months in Federal Prison for Role in Stolen Tax Refund Scheme

DALLAS — A Dallas check cashing business owner, Obinna Njoku, who pleaded guilty to his role in a stolen tax refund scheme, has been sentenced by U.S. District Judge Sam A Lindsay to 21 months in federal prison and ordered to pay $309,679 in restitution, announced U.S. Attorney John Parker of the Northern District of Texas.

Njoku pleaded guilty in August 2015 to a superseding information charging one count of conspiracy to launder monetary instruments.  At Monday’s sentencing hearing, Judge Lindsay ordered Njoku to surrender to the Bureau of Prisons on May 10, 2016.

According to the factual resume filed in the case, Njoku was the sole director of All-Ways Insurance Group, LLC, and he owned and operated All-Ways Check Cashing, Inc., a money service business licensed in Texas and federally, as an agent of MoneyGram.  In 2012, All-Ways had at least two locations in Dallas, including one on Forest Lane.  Njoku was also the designated anti-money laundering compliance officer for All-Ways, in its agency for MoneyGram, and represented to MoneyGram that All-Ways had implemented an anti-money laundering compliance policy and would comply with all reporting and recordkeeping requirements.

From January through April 2012, according to the factual resume, Njoku was asked by several individuals to cash, through All-Ways, numerous checks purported to be federal income tax refunds issued to individuals in the Dallas area.  The individuals asking Njoku to cash these checks brought “batches” of checks, often eight to 12 at a time, to Njoku at the Forest Lane All-Ways location.  These “batches” often had consecutive check numbers, and each check was always for less than $10,000.  The individuals who brought the checks to Njoku to cash were not the individuals to whom the checks were payable.  The total amount of each “batch” of checks presented to Njoku, as well as the amount of cash released to the respective individual presenting the “batch” of checks, was usually well over $10,000.

Njoku believed, according to the factual resume, that the individuals asking for the checks to be cashed had prepared and filed federal income tax returns for the persons to whom the checks were issued, and those individuals had generated illegally inflated refund amounts.  While he believed the checks were likely derived from criminal activity involving fraudulent federal tax returns, Njoku did not ask or seek any details.  Instead, Njoku deliberately blinded himself to what he suspected was the source of the checks and deposited the checks into his All-Ways bank accounts at Comerica Bank.  As his commission for cashing these checks, Njoku kept 25 to 35 percent of the overall amount of each check “batch” presented to him for cashing, which was much more than the usual three to five percent he collected from other check cashing customers. 

The investigation by special agents with Internal Revenue Service Criminal Investigation revealed that the checks presented to Njoku for cashing resulted from fraudulently filed federal income tax returns, and the payees on those checks had their identities stolen by individuals who used their personal information to file fraudulent tax returns and fraudulently claim refunds.  These fraudulent federal tax returns submitted in these victims’ names were electronically filed, used an incorrect address for the taxpayer, claimed a refund, and directed the refund to be processed as an e-Collect check.  The total amount of the checks obtained through wire fraud and cashed by Njoku through All-Ways was at least $300,000, according to the factual resume.

Internal Revenue Service Criminal Investigation investigated the case.  Assistant U.S. Attorney John J. de la Garza was in charge of the prosecution.

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