Fugitive Scamming Nuns

FBI Captures New Jersey Fugitive Charged with Scamming Nuns 

U.S. Attorney’s OfficeFebruary 27, 2012

Eastern District of Pennsylvania(215) 861-8200

PHILADELPHIA—Adriano Sotomayor, 54, of Margate, New Jersey, was captured today in Las Vegas, Nevada, by the FBI Fugitive Squad, announced United States Attorney Zane David Memeger. Sotomayor is a defendant in a 13-count wire fraud indictment¹ returned by a federal grand jury in Philadelphia. He has been a fugitive since November 16, 2011, one day after he was charged with 13 counts of wire fraud. The indictment alleges that defendant Sotomayor defrauded members of the Dominican Sisters of the Rosary of Fatima (“Sisters of Fatima”), and others, between May 2009 and June 2011.

According to the indictment, the defendant launched his scheme by causing an elderly nun to believe that she had been named in a will as the beneficiary of an estate estimated at approximately $2.1 million. In order to lure the elderly nun into this scheme, the defendant caused his victim to believe that the man who notified her about the will was a Catholic priest from New Jersey, and the testator was one of his parishioners.

The indictment contends that the defendant fraudulently induced the elderly nun to begin sending money to him in Atlantic City, New Jersey, by telling her that she needed to pay taxes, processing fees, and various legal fees associated with the fictitious will. According to the indictment, the defendant went on to target other victims in Levittown and Philadelphia who initially sent money to the defendant on the elderly nun’s behalf. According to the indictment, the defendant caused at least 24 victims to send a total of at least $439,153 from Pennsylvania and elsewhere to him in New Jersey over a two year period. The defendant received wire transfers at the Trump Plaza Hotel and Casino, the Showboat Hotel and Casino, and Bally’s Park Place, among other places.

If convicted the defendant faces a maximum possible sentence of 260 years’ imprisonment, a $3.25 million fine, three years of supervised release, and a $1,300 special assessment.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Karen M. Klotz.

¹ An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty. 

Obama Responsible for Greater Oil & Gas Production?

U.S. Chamber’s Energy Institute Comments on President Obama’s Energy Speech

February 23, 2012

WASHINGTON, D.C.—Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, issued the following statement in response to President Obama’s remarks on energy delivered at the University of Miami today:

 

“As the President said, there is no silver bullet that will decrease gas prices and improve our energy security. However, there are a series of significant steps that this President could take that would lead us to a more secure energy and economic future, but this Administration has rejected that path.

 

“Today’s speech contained two fundamental mischaracterizations. The first is the notion that raising taxes on oil companies is going to lower gas prices. It won’t, and we know it won’t because it has been tried before. The result was higher prices and more imports. 

 

“The second is that this Administration is somehow responsible for the uptick we’ve seen recently in domestic production. It’s not. Because of the restrictions this Administration has placed on accessing public land, as well as the ever-increasing amount of red tape, the energy industry has moved to produce oil and gas on private lands. Also, credit is due to policy decisions made years ago in previous Administrations. The fact that the Administration would repeatedly try to take credit for this shows a troubling lack of understanding of energy production in this country. 

 

“The results of the President’s ‘just say no’ energy policy will be felt in the years to come. The facts speak for themselves. President Obama’s administration has issued 50.7 percent fewer annual leases on public lands than President Clinton’s did. Gulf of Mexico energy production is down 16 percent since 2009 and is projected to decrease even further in 2012. President Obama denied the Keystone XL pipeline permit, which would have created thousands of jobs and provided all Americans with a steady supply of oil from a friendly ally. He also has banned new offshore areas from oil and gas exploration, and recently his Administration took one million acres of onshore land rich with oil shale off the table.

 

“The American people can see that the current approach is not working. But we cannot have a constructive conversation about energy policy as long as this Administration fails to put forward any new ideas, relying instead on four year old campaign rhetoric. It isn’t enough just to be for an ‘all of the above’ energy policy in a speech. It’s time to actually propose one.”

 

The mission of the U.S. Chamber of Commerce's Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.

 

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

e-News from the IRS

e-News for Small Business from the IRS:

Issue Number:  2012-4

Inside This Issue

1. Worker classification webinar
2. VOW to Hire Heroes Act
3. Upcoming phone forum from Employee Plans
4. Retirement news for employers
5. Updated audit technique guide
6. Guidance on employee tool and equipment plans
7. Recent IRS announcements  

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  1.  Worker classification webinar

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The Feb. 15 webinar will cover employee and independent contractor issues and the Voluntary Classification Settlement Program.

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  2.  VOW to Hire Heroes Act

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Additional guidance on the expanded Work Opportunity Tax Credit is now available on IRS.gov.

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  3.  Upcoming phone forum from Employee Plans

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IRS is offering a free phone forum, Governmental Plan Proposed Guidance, on  May 15.

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  4.  Retirement news for employers

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The winter 2012 edition of Retirement News for Employersincludes articles on:

• Using the IRA required minimum distribution rules for SEP, SIMPLE IRA and SARSEP plans
• Reporting 2010 Roth rollovers and conversions on 2011 returns
• Contributing to an IRA and claiming the Saver’s Credit for 2011

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  5.  Updated audit technique guide

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The Artists and Art Galleries ATG includes potential audit issues, definitions for artists and art galleries, and charitable donation issues.

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  6.  Guidance on employee tool and equipment plans

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IRS.gov has guidance about “tool plans” marketed in various industries that require employees to provide their own tools.

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  7.  Recent IRS announcements

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• IR-2012-21, IRS Issues Rules for Providing K-1s Electronically
• IR-2012-17, IRS Releases Guidance on How to Claim Expanded Veterans Tax Credit; Certification Requirements Streamlined
• IR-2012-16, IRS Unveils New Version of Smartphone App; IRS2Go 2.0 Offers Videos, Tax Help

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Entrepreneurs Must Consider New Tax Matters

Excerpt from an article in The New York Times
Sunday, February 12, 2012

Entrepreneurs Must Consider New Tax Matters 

By CONRAD DE AENLLE

TEPID economic growth has left many people out of work or underemployed. While some wait for a better job, or any job at all, to come along, others will try to create their own jobs from scratch by starting a business.

What budding entrepreneurs may not realize is that there is a fair chance of creating tax headaches for themselves, too. Going into business is likely to mean more forms to fill out, tax authorities warn, and more complexity because the paperwork often relates to obscure nooks and crannies of federal and state tax codes.

“Tax and compliance issues are more complicated than ever before,” said Warren Hudak, head of the accounting firm Hudak & Company in New Cumberland, Pa. “Virtually every new employer has difficulty getting used to withholding taxes and the sheer volume of work that’s involved.”

Between what they must send in on behalf of their workers and their own income, sales and payroll tax obligations, “employers could be filing tax payments three, four, five times a month,” Mr. Hudak said. “It makes it very hard for a small-business guy who understands widgets to keep up with those things.”

Laura Zander recalls the bewilderment that she and her husband, Doug, felt when they left their jobs as software engineers in San Francisco during the dot-com bust and set up their “little, teeny yarn shop” in Truckee, Calif., in 2001. The shop evolved into Jimmy Beans Wool, which does about $6 million in annual sales, mostly online, from the company’s new base in Reno, Nev.

“Things seemed overly complicated in the beginning,” she said. “There was a learning curve.”

One “unfortunate tax event,” she said, provided an expensive lesson. The couple mistakenly took a substantial write-off for the cost of inventory one year early on, when it turned out that the deduction was supposed to be taken gradually as the merchandise was sold. Correcting the error greatly raised their stated income and therefore their tax liability.

“The tax bill ended up being significantly more than we thought,” Ms. Zander said. “It totally smacked us in the face. It was something nobody told us, and I swear we asked four or five accountants.”

Tax Evasion Allegations

From the FBI, Chicago Division:

Operators of Elgin Adult Entertainment Club and Alleged Internet Gambling Business Charged with Concealing More Than $4 Million of Income from the IRS

U.S. Attorney’s Office February 02, 2012

Northern District of Illinois (312) 353-5300

— filed under: Breaking News, Chicago Top Stories, Press Release, White-Collar Crime

CHICAGO—The operators of an adult entertainment club in Elgin were charged today with conspiracy to impede the Internal Revenue Service in the collection of federal taxes, as well as separately operating an illegal Internet gambling business, in connection with allegedly diverting more than $4 million in unreported income to themselves from the two businesses. The defendants, Anthony Buttitta and his father, Dominic Buttitta, were charged in a two-count criminal information filed in U.S. District Court, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Alvin Patton, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

Anthony Buttitta, 42, of St. Charles, and Dominic Buttitta, 69, of South Barrington, were each charged with one count of conspiracy to defraud the United States by obstructing the IRS in the collection of taxes and one count of operating an illegal gambling business. They will be ordered to appear for arraignment at a later date in U.S. District Court. The Buttittas operate Blackjacks Gentlemen’s Club in Elgin through Elgin Entertainment Enterprises, Inc., which manages Blackjacks. Between 2005 and 2009, they also ran an Internet gambling business, including the websites Skybook.com, Largejoe.com, and Theredhotel.com.

According to the charges, both Buttittas filed false federal corporate tax returns for calendar years 2002 through 2009, and false federal individual income tax returns for calendar years 2002 through 2008 that substantially under-reported the total income they received from the operation of Blackjacks and the gambling business. They allegedly concealed the diverted funds from their tax preparers and the IRS and used the unreported income to acquire personal property and to pay personal expenses.

The charges allege that the defendants received approximately $3,704,959 from “house” fees they collected from women for each shift they worked as dancers at Blackjacks. Anthony Buttitta directed club employees to maintain logs of the house fee collections, and both defendants later destroyed and caused the destruction of the log sheets, the charges allege. They also placed agents of their Internet gambling business on the payroll of another company to provide the employees with the appearance of a legitimate source of income and benefits. In return, the charges allege that they solicited and received kickbacks in the form of cash from the agents and concealed the payments from their tax preparers, bookkeepers and the IRS.

The defendants allegedly received approximately $1 million in gross wagers from the gambling business between 2005 and 2009, and made approximately $400,000 in net profits. The charges seek forfeiture of $400,000 as illegal proceeds.

At various times between 2005 and 2008, the defendants allegedly obtained unreported income from individuals as payment of losing wagers in the form of direct payments toward the purchase of a $2.9 million condominium in Las Vegas and a condominium in Costa Rica, as well as personal credit card payments. In 2005 and 2006, Anthony Buttitta used approximately $400,000 in cash to pay for building and acquiring his home in St. Charles, according to the charges.

Each count carries a maximum penalty of five years in prison and a $250,000 fine, and restitution is mandatory. In addition, defendants convicted of tax offenses must pay the costs of prosecution and remain liable for any and all back taxes, as well as a civil fraud penalty of 75 percent of the underpayment plus interest. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorney Patrick King.

The public is reminded that an information contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

How to Contact the IRS

Link to e-mail received from IRS Jan. 4, 2012

How to Contact the IRS

Call Us With Your Tax Questions Live assistance is available Monday through Friday. There is also a 24 hour recorded assistance line for your convenience. Contact Your Local IRS Office IRS Taxpayer Assistance Centers for when you believe your issue is best handled face-to-face. Hours of service and other local information is provided on a per state basis. IRS Mailing Addresses ("Where to File") For those who don't file their federal tax returns electronically, the "Where to File" pages provide mailing addresses for filing all paper tax returns. You may also use your appropriate "Where to File" address for other written correspondence with the IRS. Contact Us for Status of Your Refund Want to check on the status of your refund? You can check online with the Where's My Refund application, or call 1-800-829-4477. (Please wait at least four weeks before calling.) Contact Your Taxpayer Advocate If you have an ongoing issue with the IRS that has not been resolved through normal processes, or you have suffered, or are about to suffer a significant hardship/economic burden as a result of the administration of the tax laws, contact the Taxpayer Advocate Service. We have offices in all 50 states, the District of Columbia, and Puerto Rico. How to Make an Offshore Voluntary Disclosure  Taxpayers wanting to report undisclosed income or assets should come in through the IRS Voluntary Disclosure Program. Call the Health Coverage Tax Credit (HCTC) Customer Contact Center The Health Coverage Tax Credit (HCTC) pays 80% of a qualified health plan premium for eligible individuals, either monthly as their health plan premium becomes due or yearly as a credit on their federal tax return. If you have questions about HCTC, give us a call. Contact IRS Internationally International Services: IRS contact information for taxpayers who live outside the United States. Suspicious e-Mails, Phishing, and Identity Theft The IRS does not send out unsolicited e-mails asking for personal information. An electronic mailbox has been established for you to report suspicious e-mails claiming to have been sent by the IRS. How Do You Report Suspected Tax Fraud Activity? If you have information about an individual or company you suspect is not complying with the tax law, report this activity. Contact the IRS.gov Web Site Help Desk If you need help finding something on the site, understanding our different file formats, printing files you've downloaded, installing or using the tax products CD-ROM, or any similar technical problem, here is the place to seek assistance. Send Us A Comment About the Web Site This is NOT the place for tax law questions or questions regarding your specific tax return, but you can give us some constructive feedback regarding the web site if you like. Give us your email address if you want a response, but don't include any social security numbers or other personal tax account information.