Scammers and tax cheats are stealing from the rest of us – The Royal Gazette

Cheats: those who do not pay their taxes are stealing from those of us who do

Governments in the free world have a responsibility, literally, a fiduciary duty to their country to preserve and protect the nation and its residents.

The Bermuda Constitution 1968 in Chapter 1, formally states: “Proctection: Of fundamental rights and freedoms of the individual, of right to life, from inhuman treatment, from slavery and forced labour, from arbitrary arrest or detention, to secure protection of law for privacy of home and other property, of freedom of conscience, of freedom of expression, of freedom of assembly and association, of freedom of movement, from discrimination on the grounds of race, etc, from deprivation of property, for provisions for time of war or emergency, and in enforcement of fundamental rights.“

As written by Mickey Edwards in The Atlantic: “The business of government is service — well managed, one hopes, and not wasteful, but never at a profit. There is no such thing as government money. Governments have no money; they have only what they take from their citizens, either in taxes or by inflation. And if government accrues profit, it can only have done so by taxing too much or eroding the value of the citizens’ income and savings — in either case doing harm, not good, to the people who have created it for the advantages such a common effort is presumed to bestow.”

Governments of today are swift to prosecute and punish those individuals, business, nonprofits, money launderers, and so on decimating the public purse for personal gain. Tax evasion, for starters, is stealing – from the rest of us. Punishment is severe, lots of prison time, financial restitution, reputational destruction, and in some cases, deportation.

So, readers, here for your amusement or disgust are a few of the top ten high-profile, egregious, tax fraud cases (perpetrators in religion, disability services, health safety, etc.) brought to justice by the US IRS Criminal Investigation unit for calendar year 2021.

Albuquerque couple sentenced to federal prison in Ayudando Guardians case

Susan Harris and William Harris were sentenced to 47 and 15 years in federal prison, respectively. They stole funds from Ayudando Guardians Inc., a nonprofit organisation that provided guardianship, conservatorship, and financial management to hundreds of people with special needs.

Orlando sisters sentenced in $25 million tax fraud scheme

Petra Gomez and her co-conspirator, her sister, Jakeline Lumucso, were sentenced to eight and four years in federal prison, respectively. They operated a tax preparation business with five locations in central Florida that filed more than 16,000 false tax returns for clients from 2012 to 2016 with a total estimated loss to the IRS of $25 million.

Russian bank founder sentenced for evading exit tax upon renouncing US citizenship

Oleg Tinkov, aka Oleg Tinkoff, was ordered to pay more than $248 million in taxes and sentenced to time-served and one year of supervised release after he renounced his US citizenship in an effort to conceal large stock gains that were reportable to the IRS after the company he founded became a multibillion dollar entity.

Owner of bitcoin exchange sentenced to prison for money laundering

Rossen G Iossifov, a Bulgarian national, was sentenced to 121 months in federal prison for participating in a scheme where popular online auction and sales websites — such as Craigslist and eBay — falsely advertised high-cost goods (typically vehicles) that did not actually exist. Once victims sent payment for the goods, the conspiracy engaged in a complicated money laundering scheme where US-based associates would accept victim funds, convert these funds to cryptocurrency, and transfer the cryptocurrency to foreign-based money launderers.

Ex-pastor of Orange County church sentenced to 14 years in federal prison for orchestrating $33 million con that defrauded investors

Kent RE Whitney, the ex-pastor of the Church of the Health Self, was sentenced to 14 years in federal prison and ordered to pay $22.66 million in restitution to victims after defrauding investors of $33 million by orchestrating a church-based investment scam. At his direction, church representatives appeared on television and at live seminars to make false and misleading claims to lure investors to invest in church entities. Victims sent more than $33 million to the church and received fabricated monthly statements reassuring them that their funds had been invested, when, little to no money ever was.

DC Solar owner sentenced to 30 years in prison for billion-dollar Ponzi scheme

Jeff Carpoff, the owner of California-based DC Solar, was sentenced to 30 years in federal prison and forfeited $120 million in assets to the US Government for victim restitution. He purchased a sports team, luxury vehicles, real estate and a Nascar team with the proceeds.

San Fernando Valley family members sentenced to years in prison for fraudulently obtaining tens of millions of dollars in Covid relief

The Ayvazyan family received sentences ranging from 17.5 years in prison to ten months of probation for crimes ranging from bank and wire fraud to aggravated identity theft. The family used stolen and fictitious identities to submit 150 fraudulent applications for Covid-relief funds based on phony payroll records and tax documents to the Small Business Administration, and then used the funds they received to purchase luxury homes, gold coins, jewellery designer handbags and more. They are currently fugitives.

Readers, don’t get too smug about this happening elsewhere! Our Bermuda Government has its own problems in collecting outstanding non-payment of tax duties.

Anecdotal commentary is that there is more than $130 million in tax delinquencies outstanding, nor are we seeing any significant penalties assessed, garnishment of wages, bank accounts, property, or prison time. Readers, please advise if this is incorrect.

These are harsh comments.

Readers, it is important to note that these individuals and businesses are stealing from you, each and every one of you that do pay your taxes responsibly.

Plus, tax assessments tend to rise due to insufficient funds to meet the government budget, hurting your careful budget even more while some of your compatriots pay nothing.

References

“The Difference Between Business and Government”, The Atlantic, Mickey Edwards, June 13, 2010 https://tinyurl.com/yc2rk4zb

IRS

https://www.irs.gov/newsroom/irs-ci-counts-down-the-top-10-cases-of-2021

• Martha Harris Myron, a native Bermudian with US connections, is a former qualified international financial planner, Founder: FinLit-Bermuda™ Initiative, author of The Bermuda Islander Financial Planning Primers, a Google News Contributor since 2016, international financial consultant to the Olderhood Group Bermuda Ltd., and financial columnist to The Royal Gazette. All proceeds from these articles are donated by the Royal Gazette to the Bermuda Sloop Foundation for 2022. Contact: martha@pondstraddler.com

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