Accountants behaving badly: kickback schemes, hiding money from the IRS, embezzlement spree

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Plus, the accountant from Pennsylvania loves tax evasion, the CPA from North Carolina charged with securities fraud, and the accountant from Kentucky gets jail time for sex trafficking.

Accountant sentenced to prison for role in doctor bribery scheme [Press-Telegram]
George Hammer – an accountant who allowed the owner of a Long Beach, California hospital to pay more than $40 million in illegal kickbacks to doctors in return for referring thousands of patients in spinal surgery – was sentenced to 15 months in federal prison on June 24 for a tax offense related to the scheme.

Hammer, 69, was sentenced in Los Angeles by U.S. District Judge Josephine Staton, who also ordered the defendant to pay an $8,000 fine and forfeit $500,000 of the proceeds of the scheme, according to the office of the US attorney.

Hammer, who pleaded guilty in August 2018 to one count of filing a false tax return, was the chief financial officer of various companies controlled by Michael D. Drobot, owner of Pacific Hospital in Long Beach.

New Jersey CPA admits hiding $147,000 from IRS [CPA Practice Advisor]
CPA William Kawam told a judge June 30 that he failed to disclose nearly $147,000 of income on his tax returns over a three-year period, authorities said.

Kawam, 57, of Hewitt, NJ, pleaded guilty last week to charges of underwriting false tax returns and conspiring to defraud the United States during a video conference call before U.S. District Judge Madeline Cox Arleo.

According to the U.S. District Attorney’s Office of New Jersey, Kawam and an unnamed co-conspirator developed a scheme in 2015 to conceal money from the IRS. Kawam’s partner in crime compensated the CPA for part of his accounting services by giving Kawam one of his company’s credit cards, which the accountant was allowed to use to pay his personal expenses, sources said. responsible.

Kawam failed to report the charges as income, and his co-conspirator failed to report the charges as business expenses. Kawam failed to report $146,605 for the 2015, 2016 and 2017 tax years, resulting in a tax loss of approximately $54,400.

Marin’s former accountant sentenced for embezzlement [Marin Independent Journal]
Stephanie Simontacchi, a former accountant who worked for a seaside resort in Marin Headlands, was sentenced on July 1 to more than two years in prison for embezzlement and tax evasion.

Simontacchi, 48, of Petaluma, Calif., stole 81 checks while working for the Cavallo Point Lodge near Sausalito, federal authorities said. She embezzled $384,363.28 between October 2012 and March 2016. Later, while working as an accountant at Redwood Credit Union, she embezzled about three dozen checks worth nearly $440,000, according to the US Attorney’s Office in San Francisco. The credit union crimes occurred from April 2016 to April 2019.

The prosecution also said Simontacchi prepared false tax returns for the years 2013 through 2019, missing the government more than $100,000.

A federal grand jury indicted Simontacchi on 18 counts in June 2021. The charges included bank fraud, embezzlement and tax evasion. Simontacchi pleaded guilty in February to one count for each crime. She agreed to pay at least $821,525.52 in restitution, the prosecution said.

Chester County accountant, on probation, found guilty in tax case [Daily Local News]
Michael Goldner was convicted last month of tax evasion and failing to file tax returns after a trial in US District Court in Philadelphia.

Goldner, 51, of Malvern, Pennsylvania, has been charged by the United States Attorney’s Office with charges stemming from his alleged plan to use his money and his employer’s bank accounts to hide his real income and thus avoid to pay its legitimate tax obligations. Goldner was charged in June 2021 with one count of tax evasion and two counts of failing to file personal income tax returns, according to a press release from U.S. attorney Jennifer Arbittier Williams.

Evidence presented at his trial, which ended with a guilty verdict on June 3, showed that for the 2013 to 2017 tax years, Goldner reported more than $4 million in income and $1.8 million. million dollars in taxes owed, of which he paid less than $100,000. Additionally, from 2016 to 2020, Goldner evaded payment of these unpaid taxes while earning a substantial income.

For the years 2016 and 2017, Goldner filed tax returns that did not report this additional income from his employer. For the 2018 and 2019 tax years, he did not file any returns at all.

In 2015, Goldner pleaded guilty to wire fraud and tax evasion after defrauding potential investors. He was on probation for the case at the time of his arrest in the ongoing tax evasion case, having been convicted in 2016 and ordered to pay $5 million in restitution.

Federal indictment charges CPA with securities fraud [Justice Department]
A federal grand jury in Charlotte, North Carolina, indicted Mac Wayne Billings, 48, of Raleigh, with securities fraud on June 22 for defrauding at least 19 victims of more than $3.6 million. .

hereit is Billings details‘U.S. Attorney’s Office for the Western District of North Carolina’s Alleged Securities Fraud:

According to the allegations in the indictment, between 2012 and 2019, Billings engaged in securities fraud through his company, Alpha Finance Company (ALPHA), located in Sparta, North Carolina. North. The indictment alleges that Billings fraudulently obtained more than $3.6 million from at least 19 victims in Alleghany, Wilkes and Surry counties, soliciting them to invest in ALPHA through “bonds.” . A bond note is a type of debt instrument that is generally not backed by collateral. As alleged in the indictment, Billings, who is a licensed CPA in North Carolina, falsely promised ALPHA victim-investors that their money would be used to make high-interest consumer loans. on which investors would receive interest payments. Contrary to its promises, Billings used little, if any, investor funds to make new consumer loans. Instead, Billings used some of the investors’ money to make payments to other investors and to pay himself more than $1 million in salary and distributions from ALPHA.

The indictment further alleges that Billings used investment statements, emails and meetings to mislead and deceive victim-investors into believing that ALPHA was a profitable business and that the victims’ investments were safe. In this regard, Billings allegedly failed to disclose material information regarding ALPHA’s financial and business problems to victim-investors, including that he had sold or mortgaged most of ALPHA’s assets to money lenders. Based on the fraudulent information provided by Billings, many investor-victims renewed and/or made additional investments with ALPHA, which caused them to suffer additional financial losses.

Finally, lawsuits filed by the North Carolina Banking Commissioner (NCCOB) and the North Carolina Attorney General’s Office alleged that Billings failed to comply with North Carolina laws governing consumer credit and retail installment loans. Billings defaulted in those lawsuits. Consequently, the NCCOB revoked ALPHA’s license due to non-compliance with the North Carolina Consumer Finance Act. Courts in Alleghany and Wake counties declared ALPHA’s loan null and void, leaving the victim-investors with no assets to recoup their losses.

If convicted, Billings faces a maximum prison sentence of 20 years and a $5 million fine.

Delaware auditor avoids felony charges and is guilty of misconduct [Associated Press]
The jury in the bribery trial of Delaware State Auditor Kathy McGuiness acquitted her on July 1 of charges of theft and intimidation of witnesses, but found her guilty on three counts.

Jurors deliberated for about four hours over two days before finding McGuiness, a Democrat elected in 2018, guilty of conflict of interest, official misconduct and structuring a contract with a consulting firm to avoid compliance with the rules of government procurement.

This is the first time in Delaware history that a statewide sitting elected official has been convicted on criminal charges.

Even though her fellow Democrats were quick to call her to resign, misdemeanor convictions do not prevent McGuiness from holding public office, and she said she still plans to seek re-election in November.

“Horrible crimes.” Former Ky. accountant convicted for role in sex trafficking conspiracy. [Lexington Herald-Leader]
Mark Milslagle, a former accountant in Lexington, KY, was sentenced to five years and 10 months in prison on June 28 for his role in a sex trafficking conspiracy that a federal judge has ruled a horrific crime.

Milslaglethe sentence of also includes a special assessment of $5,000 and a fine of $22,000, and he will be under judicial supervision for 15 years after his release from federal prison.

Milslagle, 51, was part of a scheme that targeted young drug-using women, who entered prostitution so they could continue to receive the painkillers they needed to avoid painful withdrawal symptoms.

The leader of the conspiracy was Logan Ray Towery, a former Berea City Council member who later lived in London and dealt drugs. Towery admitted to using drugs to lure and coerce women into having sex with him. He often threatened to withhold drugs in order for women to participate in sex acts, according to his plea agreement. He also gave free pills to women in order to get them addicted, then provided them to his clients of prostitution to pay off their debt and continue using drugs. Towery told authorities that Milslagle was his biggest customer. He delivered women to Milslagle in motels in London and Corbin.

According to his LinkedIn page, Milslagle was the owner of MJM Tax & Accounting Services in Lexington, KY.

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