Recent IRS CI Investigations Highlight Breadth of the Division’s Enforcement Focus

The Internal Revenue Service’s Criminal Investigation Division (IRS CI) conducts investigations focused on all forms of criminal tax evasion and tax fraud. But, its enforcement jurisdiction is also much broader, and it routinely works with the U.S. Department of Justice (DOJ) and other federal authorities to substantiate charges for a wide range of non-tax-related federal crimes. As a result, when facing scrutiny from IRS CI, taxpayers need to be extremely careful, and they need to work closely with a Texas criminal tax lawyer who can effectively defend them against all types of federal white-collar charges.

IRS CI publishes press releases highlighting its recent enforcement efforts almost daily, and these press releases shed light on the breadth of the division’s enforcement focus. Here are some recent examples (Brown Tax, P.C. did not represent the targets in these cases):

Former NFL Player Charged with Fraud, Aggravated Identity Theft, and Other Federal Crimes

An IRS CI investigation recently led to the indictment of a former NFL player who is accused of using loans purportedly obtained to finance two real estate development projects for personal expenses and other unrelated expenses. As a result of the indictment, the former player is facing multiple federal charges—none of which involve tax-related crimes. The charges include mail fraud, wire fraud, engaging in monetary transactions with criminally derived property, and aggravated identity theft. If convicted, he faces a mandatory minimum sentence of two years and the potential for decades behind bars.

Owner of Money Services Business Admits to Filing More Than $325 Million in False Currency Transaction Reports

Earlier this month, the owner of a money services and check cashing business pleaded guilty to filing more than $325 million in false currency transaction reports. Currency transaction reports are required under the Bank Secrecy Act (BSA) for transactions involving more than $10,000 in currency and are intended to help federal authorities “prevent, detect, and stop illicit activity.”

According to IRS CI, the defendant filed “thousands” of currency transaction reports that contained material misstatements and omissions. These included misrepresenting that the transactions occurred at a licensed facility when they had not, as well as failing to disclose the party conducting the transactions at issue. These allegations led to charges for conspiring to cause a financial institution to file false currency transaction reports and operating and aiding and abetting the operation of an unlicensed money-transmitting business, each of which carries up to a five-year prison term and a fine of up to $250,000 or twice the amount of the gain resulting from the offending transactions, whichever is greater.

CPAs Sentenced to Federal Prison for “Billion-Dollar Syndicated Conservation Easement Tax Scheme”

An IRS CI investigation recently led to 20-month federal prison sentences for two CPAs charged with promoting and selling abusive syndicated conservation easements. According to an October 16, 2024 press release:

“The scheme entailed the creation of partnerships that would purchase land and land-owning companies and then donate conservation easements over that land or the land itself. Appraisers would value the land and the partnerships would then claim a charitable contribution tax deduction based on the appraised value of the conservation easement, resulting in tax deductions flowing to the wealthy clients who purchased units in the partnership. Many of these clients joined the tax shelters after the donation of the interest in land and after the close of the relevant tax year.

“[The defendants] both knew that, contrary to law, these syndicated conservation easement tax shelters lacked economic substance and that their wealthy clients participated in these sham investments only to obtain a tax deduction and received only a tax benefit for their participation in the tax shelters.”

IRS CI’s investigation led to multiple charges; and, in addition to their jail sentences, the CPAs are each also facing millions of dollars in restitution liability. The investigation led to charges against nine other defendants as well, two of whom were convicted at trial and seven of whom pleaded guilty to various federal crimes.

Company and Its CEO Plead Guilty to “Massively Defrauding” Two Federal Relief Programs

In another October press release, IRS CI announced that a company and its CEO have pleaded guilty to “massively defrauding” two federal relief programs. According to IRS CI, the defendants stole more than $100 million from the Federal Communication Commission’s (FCC) Lifeline program over a period of nearly 10 years and stole an additional $140,000 under the Paycheck Protection Program (PPP) during the COVID-19 pandemic. The investigation under the Lifeline program led to charges for conspiring to defraud and commit offenses against the United States, while the PPP fraud investigation led to charges for money laundering. The CEO faces up to 15 years of federal imprisonment, and the defendants jointly face liability for more than $110 million in restitution and forfeiture.

$160 Million Medicare Fraud Investigation Leads to 15-Count Conviction in Federal Court

After a 10-day trial, it took a jury less than five hours to convict a defendant on all 15 counts charged following an IRS CI investigation focused on Medicare fraud. According to IRS CI, the defendant illegally purchased contact information for Medicare beneficiaries, and then used their information to bill the federal healthcare benefit program for more than $160 million in fraudulent reimbursements. IRS CI’s investigation led to charges for conspiracy to commit mail and health care fraud, money laundering, bribery, and other federal crimes, and the defendant faces decades behind bars along with close to $200 million in financial liability at sentencing.

Have You Been Contacted By IRS CI? Request a Confidential Consultation with an Experienced Texas Criminal Tax Lawyer Today

At Brown Tax, P.C., we defend high-income and high-net-worth clients who are facing serious consequences in IRS CI investigations. If you have been contacted by IRS CI, we encourage you to contact us promptly for more information. To request a confidential consultation with an experienced Texas criminal tax lawyer at our firm, call 888-870-0025 or tell us how we can reach you online now.