Tax fraud can come in many shapes and sizes. Sometimes, it can appear in a vacuum and involve a taxpayer or another person filing a tax return with false or erroneous information. But in a large number of federal criminal cases that involve tax fraud, there is another type of fraud or illegal activity present. In a recent hearing, a federal judge sentenced a former mortgage professional to a lengthy prison sentence for both tax and mortgage fraud.
According to a Department of Justice Press Release, Charise Stone, 46, was convicted of tax fraud, mortgage fraud, and passing fictitious financial instruments on May 27th. Last Friday, Stone was sentenced to serve a five-year prison sentence in a federal penitentiary. After her release, she will be required to serve a three-year supervised release and pay back over $2 million in restitution to the financial institutions that she crossed, as well as the IRS.
Court documents show that Stone targeted homeowners who were underwater in their home mortgages, meaning that the home’s market value was less than the amount of the home loan. Stone was found to have induced desperate homeowners into transferring the property to her or to one of the entities that she controlled. Stone then would negotiate a short sale with the mortgage lender, which set an agreed-upon price that the house would be sold for but would subsequently sell the home for more, pocketing the difference. Prosecutors proved that Stone was able to illegally collect over $2 million using the method described above.
In order to keep the scheme looking legitimate from a documentation standpoint, Stone enlisted the help of Jose Marinay, the owner of an escrow company that exclusively handled the short sales that were a part of the scheme. According to the DOJ press release, Marinay falsified HUD-1 documents and destroyed others after the closing period ended for the properties that were sold. He pleaded guilty to conspiracy to commit wire-fraud.
The tax fraud charges that were levied against Stone stemmed from fictitious bonds that were sent to the IRS in an attempt to settle her tax debt. In a further act of fraud, she sent fake international promissory notes to her creditors. Stone’s crimes came to light after an FBI investigation uncovered her fraudulent mortgage activities. Once the Bureau had begun investigating, the IRS Criminal Investigation Division was called upon to look into Stone’s tax affairs.
Although we don’t expect that any of our readers are engaged in mortgage fraud, we do think it important to identify the reality that the different governmental investigative agencies work very closely together. If any branch of the federal or state government is investigating a taxpayer, the individual is at risk with regard to any other government agency and their investigative officials. Thus, if you are currently being investigated for any wrongdoing, regardless of the type, and also have uncertainties about your tax compliance, it is in your best interest to contact an experienced tax attorney as soon as possible. As soon as criminal investigations begin, it is imperative that counsel be present during any questioning or examinations.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience representing taxpayers that are going through an examination, investigation, or full-blown civil or criminal litigation. When the IRS or DOJ come knocking, they are bringing their best attorneys and investigators, make sure that you have an effective team of zealous advocates on your side when you answer. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.