Federal Criminal Defense Blog : Georgia Federal Criminal Defense Lawyer & Attorney : Gillen Withers & Lake Law Firm : White Collar Crime, RICO, Trial : Atlanta, Savannah, GA

According to the Atlanta Journal-Constitution, the IRS found more than 52,000 fraudulent tax returns filed in Georgia in 2010, worth $41 million in refunds, an increase over the 29,000 fraudulent returns discovered in 2009 and the almost 16,000 returns in 2008. Last year, the Service and the Georgia Department of  Revenue launched more than 20,000 investigations of tax fraud in Georgia, and initiated 200 criminal cases.

Many of the fraudulent returns involve identity theft, including stolen Social Security numbers and bank information. The article also cites the cases of tax preparers who have become involved in fraudulent tax schemes. It furthermore describes a scheme by Decatur, Georgia, residents Michael Romeo St. Romain and Brian Dupree several years ago which obtained more than $475,000 in fraudulent refunds and would have netted another $1 million in refunds before St. Romain and Dupree were caught. The men are currently serving approximately five year sentences in federal prison. Another Georgia man, Michael Stringer, obtained $560,000 from false state tax returns in 2008, attempting to defraud the State of $1.4 million.

Representatives of the Gwinnett County Police Department stated that their White Collar Crime Unit receives approximately 10 cases of tax fraud each week, increasing to 15 to 20 per week in March and April.

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The Federal Trade Commission has ranked Georgia 4th among the States and Atlanta 19th among cities for identity theft crimes, as reported in the Atlanta Business Chronicle. The rankings are based on complaints received by the FTC in 2010.

Significant among Georgia's numbers are 2,882 complaints of government benefits or documents fraud; 911 complaints of bank fraud and 328 complaints of loan fraud.

Atlanta moved up substantially from its 2010 of 123 among major metro areas.

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Samuel Curtis, III, a Texas resident, has been charged with four counts of health care fraud and aggravated identity theft in the U.S. District Court for the Southern District of Georgia for allegedly attempting to steal more than $500,000 from Medicare, according to an article in the Florida Times-Union. Curtis is alleged to have operated Perferred Prosthetics and Orthotics, a medical equipment supply company doing business in Georgia and Texas, and to have allegedly stolen information from Medicare physicians and recipients and used the information to submit false claims to Medicare. The indictment alleges that Curtis and others routinely billed Medicare for ankle, knee and back braces and other medical devices that either were never provided to patients, were not medically necessary or had not been prescribed by a doctor. Curtis' associate, Cecil Risher, of Brunswick, Georgia, was arrested earlier in the investigation.

In other Georgia news, according to 7th Space, Sandeo Dyson, a former inmate of the Atlanta City Detention Center, has found himself indicted once again in the U.S. District Court for the Northern District of Georgia for allegedly obtaining information about crimes being committed in Georgia and North Carolina from other inmates and then selling the information to criminal defendants in cases in the Northern District for five to ten thousand dollars apiece, earning an approximately $50,000 from the scheme. The defendants would offer the information provided by Dyson to have their sentences reduced for cooperation. Dyson allegedly instructed the defendants to lie to authorities by concealing the fact that they had no real personal knowledge of the proffered information, and had  purchased the information from Dyson. Dyson is charged with one count of conspiracy to obstruct justice and to make false statements, three counts of obstruction of justice, and two counts of false statements.

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Knoxvillenews.com has been intensively covering here, here, here and elsewhere the trial of David C. Kernell, son of Tennessee State Representative Mike Kernell of Memphis and former University of Tennessee student, who was charged in the U.S. District Court for the Eastern District of Tennessee with hacking into the electronic mail account of former Governor of Alaska and Vice Presidential candidate Sarah Palin in 2008. The jury received the case today, and is still deliberating. The trial began last week.

Kernell, 22, is charged with guessing the answers to various security questions to gain access to Palin's Yahoo! e-mail account shortly after she was chosen to be Arizona Senator John McCain's running mate during the 2008 U.S. presidential campaign. Screenshots, pictures and a new password for the e-mail account were then posted on the website 4Chan. Ten other individuals in the U.S. and abroad proceeded to access the account more than 70 times.

Kernell, who was a 20 year-old economics major at the time, was charged with identity theft and other offenses. Palin herself testified on Friday, and her daughter, Bristol Palin, testified last week. Kernell did not testify.

Assistant U.S. Attorney Greg Weddle argued to the jury yesterday that Kernell intended to do something malicious from the beginning. Authorities seizing Kernell's computer found a New York Times article questioning whether Palin was using private e-mail accounts for government business. Assistant U.S. Attorney Mark Krotoski quoted Kernell's message on the 4Chan discussion board: "'I'm not going to ruin someone's life' but I'll give you the key, the pass(word)." Weddle cited Kernell's statement to persons who posted the information for him on the website 4Chan "make me proud."

Kernell's attorneys defended that Kernell did not believe that such a high-profile public figure could use such a poorly protected e-mail account. They argued to the jury that Kernell only used information available in newspaper articles and from the official state of Alaska website, and that what Kernell did was stupid and closer to a prank than a crime.

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On Friday, Max Ray Butler, also known as the "Iceman" on the internet and by various other aliases, was sentenced to 13 years' imprisonment in the U.S. District Court for the Western District of Pennsylvania, according to a Department of Justice press release. The Court also ordered Butler to pay $27.5 million in restitution.

Butler was charged with engaging in computer hacking and identity theft on a massive scale, including hacking into financial institutions and credit card processing centers to steal customers' information. Butler would provide the victims' financial information to an accomplice, Christopher Aragon, who would use the information to purchase merchandise, or would sell information on the internet. Butler nd Aragon also created a website called "Cardersmarket," to acquire, use and sell credit card information Butler and Aragon recruited approximately 4,500 people through the site.

The Secret Service arrested in San Francisco Butler back on September 5, 2007 in San Francisco. A search of his computer revealed more than 1.8 million stolen credit card account numbers. Visa, MasterCard, American Express and Discover have reported that the amount of fraudulent charges on the cards totaled approximately $86.4 million.

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In another sign that nothing is sacred and no area safe from crime, even the adult undergarment industry has now been marred by fraud. Benjamin Essien, 34, owner and operator of Logic World Medical, a Houston-based durable medical equipment (DME) company, pled guilty to conspiracy to commit healthcare fraud, five counts of healthcare fraud and two counts of aggravated identity theft in the U.S. District Court for the Southern District of Texas, according to a press release by the FBI. Essein was charged with a scheme which began in 2004 of using names, addresses and account numbers of Medicaid beneficiaries to file false claims for adult urinary incontinence supplies many of which were never delivered to the beneficiaries, some of which were never purchased from suppliers, and which were not needed or were never prescribed by a physician. Essein continued to bill Medicaid for the supplies--which included adult diapers, underpads, wipes, and pull-up briefs--even after his delivery contractors were informed by the beneficiaries that they did not need or want the supplies. Essien billed Medicaid for the maximum amount allowable for supplies each month per beneficiary including extra large size diaper briefs, which apparently have the highest Medicaid reimbursement rate, regardless of the actual size needed by the beneficiary. it is alleged that Essein received payments from Medicaid for claims totaling approximately $1,101,865.37. he will be sentenced in May.

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