Auto Transport Company Owner Pleads Guilty to Falsifying DOT Records, Bank Fraud, ID Theft, Tax Evasion,
PROVIDENCE – The owner of an East Providence automobile transport company Thursday admitted to a federal court judge that he falsified U.S. Department of Transportation (DOT) - Federal Motor Carrier Safety Administration (FMCSA) records and continued to operate a fleet of auto transport trucks after having been cited for, among other things, allowing drivers to operate without a current or properly classified license; failing to maintain certifications that drivers were medically able to drive and failing to implement a driver alcohol or controlled substances testing program; and allowing drivers to exceed the maximum number of hours of driving allowed under the law.
Appearing before U.S. District Court Chief Judge William E. Smith, Michael Chaves, 39, owner of CAT Inc., also admitted to fraudulently obtaining more than $400,000 from various financial institutions; that he utilized another person’s personal identifying information to continue to illegally operate his auto hauling business after being ordered to shut down by the FMCSA for safety violations; and that he took numerous evasive steps to avoid paying personal income taxes to the IRS.
Chaves pleaded guilty to a ten-count information charging him with falsification of records, aggravated identity theft, five-counts of bank fraud, two-counts of wire fraud, and tax evasion, announced United States Attorney Aaron L. Weisman, Special Agent in Charge of Internal Revenue Service Criminal Investigation Kristina O'Connell, and Special Agent in Charge of the Region II U.S. Department of Transportation Office of Inspector General Douglas Shoemaker.
In addition to admitting to operating a scheme whereby he attempted to influence and impede FMCSA investigations and administrative compliance reviews by falsifying U.S. DOT records, Chaves admitted to operating various schemes to fraudulently obtain loans and funds from several banks and credit unions. Chaves admitted to fraudulently obtaining loans from at least six different financial institutions totaling $332,000, by providing fraudulent earning statements, tax returns, motor vehicle purchase contracts, and Department of Motor Vehicle documents.
Chaves also admitted to employing a fraudulent check scheme by submitting 15 fraudulent checks he created to an automobile seller’s bank account from which he obtained $64,453 and that he allegedly caused the fraudulent wire transfer between financial institutions of $72,864.28.
Chaves also admitted that he took several steps to evade income taxes by, among other things, commingling business and personal expenses; using a check casher to divert third-party income; creating fraudulent third-party checks and cashing them using a check casher, rather than a bank; and maintaining approximately 15 different bank accounts using at least 5 different company names.
Chaves is scheduled to be sentenced by U.S. District Court Chief Judge William E. Smith on November 25, 2019.
The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.
The matter was investigated by Internal Revenue Service Criminal Investigations and the U.S. Department of Transportation Office of Inspector General, with the assistance of the East Providence Police Department and the National Crime Insurance Bureau.