Rochester Man Pleads Guilty to Fraud Charges
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Chauncee McFarland, 35, of Rochester, N.Y., pleaded guilty before U.S. District Judge David G. Larimer to conspiracy to defraud the United States, and a scheme to defraud insurance premium finance companies. The charges carry a maximum sentence of 20 years in prison.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that from 2010 to 2012, McFarland owned McFarland Tax Company, a tax return preparation business. The defendant conspired with an employee, Kenyatta Hubbard, to prepare false income tax returns for clients. McFarland and Hubbard reported fictitious employment in order to increase the Earned Income Tax Credit refunds claimed on behalf of the clients. As a result of the scheme, the Internal Revenue Service paid tax refunds totaling $391,888.
Thereafter, from September 2012 to September 2013, acting on his own as a licensed insurance broker, McFarland devised a scheme to defraud premium finance companies. Premium finance companies engage in the business of lending money to finance insurance policy premiums for clients. McFarland prepared fraudulent premium finance agreements that falsely represented that he was seeking to obtain financing for purported clients. Based upon the fraudulent documents, the companies provided the requested financing. The defendant then diverted the financing to his personal use, and did not use it to purchase insurance policies for any clients. McFarland obtained $29,634 through this scheme.
Kenyatta Hubbard was convicted for her role in the conspiracy to prepare false income tax returns for clients and is awaiting sentencing.
The plea is the culmination of an investigation by Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Acting Special Agent in Charge, New York Field Office, Special Agents of the U.S. Postal Inspection Service, Boston Division, under the direction of Acting Inspector in Charge, Shelly A. Binkowski, and Investigators of the New York State Department of Financial Services, under the direction of Superintendent Benjamin Lawsky.McFarland will be sentenced on September 9, at 10:00 a.m. before Judge Larimer.