COUPLE FROM TENNESSEE SENTENCED FOR FILING FALSE CLAIMS FOR TAX REFUNDS

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, April 15, 2014

Tennessee Husband and Wife Sentenced to 36 Months for Tax Fraud
James E. Beavers and Beverly S. Beavers of Knoxville, Tenn., were each sentenced to serve 36 months in prison followed by three years of supervised release, the Justice Department and Internal Revenue Service (IRS) announced today.  James and Beverly Beavers were also each ordered to pay restitution in the amount of $591,123.  On March 20, 2013, a jury sitting in Knoxville, Tenn., found the couple guilty of conspiracy to defraud the United States and filing false claims for tax refunds.  They have been in custody since they were convicted.

Court documents and the evidence at trial showed that James Beavers held a Ph.D. in civil engineering and was employed as an engineering consultant.  He was formerly employed as the director of an academic engineering center at the University of Tennessee.  Beverly Beavers owned a small formalwear and jewelry store in Knoxville.

According to court documents and the evidence presented at trial, in June 2009, James and Beverly Beavers arranged to have a fraudulent 2008 tax return prepared by PMDD Services LLC, a tax return preparation firm that helped clients claim exorbitant tax refunds specifically intended to help the clients pay off their personal debts.  The tax return falsely reported that their personal debts, including the amount of the Beavers’ mortgage and the limits on their credit cards, were actually income on which federal income tax was withheld.  This fictitious income and tax withholding were reported to the IRS on false Forms 1099-OID, which were prepared by Penny Jones of PMDD Services based on information provided by James and Beverly Beavers.  As a result of the fraudulently inflated income and withholding, the Beavers’ 2008 tax return claimed a fraudulent tax refund of over $591,000.  Upon receiving the funds, James and Beverly Beavers paid off their home mortgage, then conveyed their newly unencumbered real estate to sham trusts in order to impede IRS efforts to collect the erroneously paid refund.  They later filed false amended tax returns for the 2006 and 2007 tax years, also prepared by Jones, requesting fraudulent tax refunds of $193,056 and $202,625, respectively.  Jones pleaded guilty to related tax crimes and was sentenced to 144 months in prison in January 2013.

Assistant Attorney General Kathryn Keneally of the Tax Division commended the efforts of special agents of IRS – Criminal Investigation who investigated the case and Trial Attorneys Jonathan Marx and Jed Silversmith of the Tax Division who prosecuted the case, with local assistance from the U.S. Attorney’s Office for the Eastern District of Tennessee.

4 ADOPTION SERVICES EMPLOYEES CHARGED WITH CONSPIRACY TO DEFRAUD U.S. GOVERNMENT

FROM:  U.S. JUSTICE DEPARTMENT  
Tuesday, February 11, 2014
Four Employees of Adoption Services Provider Charged with Conspiracy to Defraud the United States in Connection with Ethiopia Operations

Four current and former employees of International Adoption Guides Inc. (IAG), an adoption services provider, have been indicted by a grand jury in South Carolina for allegedly conspiring to defraud the United States in connection with IAG’s adoption services in Ethiopia.   IAG is a South Carolina company that identified children in Ethiopia for adoption and arranged for their adoption by U.S.-based parents.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney William N. Nettles of the District of South Carolina and Assistant Secretary Gregory B. Starr of the Department of State’s Bureau of Diplomatic Security made the announcement.

“The defendants are accused of obtaining adoption decrees and U.S. visas by submitting fraudulent adoption contracts signed by orphanages that never cared for or housed the children, thus undermining the very laws that are designed to protect the children and families involved,” said Acting Assistant Attorney General Raman.  “As today’s indictments show, the Justice Department, alongside its partners both here and abroad, will respond vigorously to these criminal schemes and will act to protect the many families and children who rely on the integrity of the adoption process.”

“The Bureau of Diplomatic Security uses its global presence to vigorously investigate any fraud related to the acquisition of U.S. visas,” said Assistant Secretary Starr.  “The Department of State’s Bureaus of Consular Affairs and Diplomatic Security are firmly committed to working with the U.S. Department of Justice to investigate and bring to justice people who victimize children and families by abusing inter-country adoption system and bribe officials to facilitate their actions.”

The international program director and coordinator for IAG, James Harding, 53, of Lawrenceville, Ga., was arrested today in Georgia.  Alisa Bivens, 42, of Gastonia, N.C., who oversaw the Ethiopian operations from the United States, is scheduled to make an appearance at a later date in U.S. District Court in Charleston, S.C.   The company’s executive director, Mary Mooney, 53, of Belmont, N.C., was apprehended in Belize by Belizean authorities and transported to the United States.  Haile Mekonnen, age unknown, an Ethiopian national who ran IAG’s operations on the ground in Ethiopia, was also charged in the indictment.

According to the indictment, the defendants allegedly engaged in a five-year conspiracy to violate laws relating to the adoption of Ethiopian children by U.S. parents.  The scheme involved, among other things, paying orphanages to “sign off” on contracts of adoption with the adopting parents as if the children had been raised by those orphanages — even though the children had never resided in those orphanages and had not been cared for or raised there.  These orphanages could not, therefore, properly offer these children up for adoption.  In some instances, the children resided with a parent or relative.

As part of the charged conspiracy, the defendants then allegedly submitted or caused to be submitted these fraudulent contracts of adoption to Ethiopian courts in order to secure adoption decrees, and submitted or caused to be submitted the fraudulent contracts of adoption and the fraudulently procured adoption decrees to the U.S. Embassy in Ethiopia in order to obtain U.S. visas for the children to travel to the United States to be with their new families.  The indictment also charges that the defendants’ scheme involved paying bribes to an Ethiopian government official and agreeing to create counterfeit U.S. Customs and Immigration Service forms that were to be submitted to the Ethiopian government.

The charge of conspiring to defraud the United States carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.


This ongoing investigation is being conducted by the Bureau of Diplomatic Security.   The prosecution is being conducted by Assistant United States Attorney Jamie Schoen of the District of South Carolina and Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section.