Canadian Man Found Guilty Of $3.5 Million Conspiracy To Defraud The United States

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051
 
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced today that Kevin Cyster, 52, of Burlington, Ontario, Canada, was convicted after a six day jury trial of conspiracy, making a false claim against the United States, and illegally transferring stolen money in foreign commerce. The charges carry a maximum penalty of 30 years in prison and a $7,000,000 fine.

Assistant U.S. Attorney John J. Field and Trial Attorneys Jeffrey A. McLellan and Thomas F. Koelbl, from U.S. Department of Justice Tax Division, who handled the prosecution of the case, stated that Cyster was a ringleader of a group of Canadian citizens who forged Internal Revenue Service (IRS) forms to falsely claim that almost $10,000,000 of income had been withheld on their behalf by various Canadian financial institutions. They arranged for the false forms to be filed electronically with the IRS by Ronald Brekke.

Subsequently, Cyster and his co-conspirators used the false filings to file false federal income tax returns seeking refunds based on the fictitious withholding amounts.  Although the IRS identified some of the fraudulent returns, refunds totaling more than $3,500,000 were sent to Cyster and his co-conspirators before the scope of the fraud was detected.

Cyster was charged along with Renee Jarvis, Jonathan Neufeld, Christina Starkbaum, Daveanan Sookdeo, Jose Compuesto, and Timothy Johnson. Jarvis has been convicted. Neufeld and Starkbaum are deceased. Charges are pending against Sookdeo, Compuesto and Johnson. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

Ronald Brekke was convicted on federal fraud charges in Washington State.

The trial verdict is the result of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-In-Charge Shantelle P. Kitchen.

Sentencing is scheduled for January 4, 2016 at 11:00 am before Chief U.S. District Judge Frank P. Geraci who presided over the trial of the case.