December 24, 09

NEWS / Four Men Indicted on Charges They Conspired to Steal $435,000 from The State of New Jersey by Filing

TRENTON ¨C Attorney General Anne Milgram announced that four men were indicted today on charges they conspired to steal more than $435,000 by filing hundreds of fraudulent state income tax returns using stolen and fictitious identities.

According to Criminal Justice Director Deborah L. Gramiccioni, the Division of Criminal Justice Major Crimes Bureau obtained a state grand jury indictment charging the following four men with conspiring in a scheme to fraudulently obtain at least 585 state tax refund checks totaling $435,577 between February 2005 and February 2008:

¡öJohnson Coker, 50, a.k.a. ¡°Johnny Tunde¡± and ¡°Adeyemisi Toyusini,¡± of Old Bridge, was charged with conspiracy, money laundering, receiving stolen property, and use of personal identifying information of another, all in the second degree.
¡öTaiwo D. Daisi, 39, of Roselle, was charged with conspiracy, money laundering, and receiving stolen property, all in the second degree.
¡öUgochukwu H. Madubuike, 30, of Orange, was charged with conspiracy, money laundering and receiving stolen property, all in the second degree.
¡öAdebowale Sheba, 38, of Franklin Township (Somerset County), was charged with second-degree conspiracy.
Sheba is also charged in the indictment with two counts of second-degree theft by deception for using the alias ¡°Adebayo A. Michael¡± and false employment and earnings information to obtain mortgage loans to buy two homes in Newark. He obtained loans totaling $278,950 for one home, and loans totaling $235,000 for the other. In addition, Coker was charged with a single count of second-degree theft by deception for using fraudulent employment and earnings information to obtain a $417,000 mortgage loan to purchase his home in Old Bridge.

¡°These men stole nearly half a million dollars from the State of New Jersey and its taxpayers by filing hundreds of fraudulent tax returns,¡± said Attorney General Milgram. ¡°Fortunately, due to the repetitive nature of the fraud, auditors in the Division of Taxation detected similarities in the refund checks and returns, and worked with the Division of Criminal Justice to uncover the scheme.¡±

Deputy Attorney General Denise Grugan presented the case to the state grand jury. The investigation was led by Auditor Thomas R. Bair Jr. of the Division of Taxation Office of Criminal Investigation and Sgt. Robert Walker, Detective Richard A. Loufik and Deputy Attorney General Grugan of the Division of Criminal Justice Major Crimes Bureau.

¡°This is a far-reaching tax fraud case,¡± said Director Gramiccioni. ¡°The state auditors, detectives and deputy attorney general did an outstanding job in following the trail of these fraudulent tax refund checks to expose this conspiracy.¡±

The state charged the four men by complaint warrant on Nov. 18, when state and federal authorities arrested Coker, Daisi and Sheba. Madubuike had been arrested by federal authorities in November 2008. The four men also have been charged by the U.S. Attorney¡¯s Office for the District of New Jersey in connection with thousands of fraudulent U.S. income tax returns.

Last week, the Division of Criminal Justice obtained guilty pleas from two women involved in the scheme to steal state tax return checks. The women, Mischa R. Spray, 32, of North Arlington, and her sister, Mia N. Allison, 38, of Hackensack, each pleaded guilty on Dec. 17 to an accusation charging third-degree receipt of stolen property before Superior Court Judge Edward M. Neafsey in Mercer County. The women admitted they assisted Coker by depositing fraudulent tax return checks into personal or business bank accounts they controlled in return for a share of the proceeds, typically 10 percent.

Under their plea agreements, each of the women must cooperate fully in the ongoing prosecutions and must pay restitution for the amount of the fraudulent tax return checks they retained, plus a penalty and interest. Mischa Spray must pay $12,705, and Mia Allison, $20,951. In return, the state will recommend that they receive sentences of probation.

All of the men are from Nigeria, with the exception of Madubuike, who was born in the U.S. Daisi is a naturalized U.S. citizen. Coker and Sheba are not U.S. citizens.

The fraudulent refund checks were mailed to 27 different addresses controlled by the defendants. They were cashed against, or deposited into, bank accounts maintained by Coker, Daisi, Madubuike and the two women who pleaded guilty. Daisi operated a business called Chrysolyte Universal and Tax Services Professional from his apartment and used its bank account to deposit checks. Allison used an account that she opened for a fictitious company.

Tax returns were filed using stolen identities, including stolen Social Security numbers. Madubuike was formerly employed as a case worker for the New Jersey Division of Youth and Family Services, and some returns were filed using the identifies of his DYFS clients. Other identities were fictitious. Some Social Security numbers were invalid or did not match the names under which the returns were filed. Several Social Security numbers were from deceased people.

The investigation began when auditors from the Division of Taxation Office of Criminal Investigation detected numerous refund checks payable to multiple taxpayers that were co-endorsed with the same name. The tax returns associated with the refund checks had similar taxpayer information, including filing status as head of household, one or two dependent children, wages ranging from $7,000 to $16,500 with no payroll tax withholdings, and business losses reported on an accompanying Schedule C. Wages were reported on identical W-2s, apparently produced from the same software package. In all instances, the taxpayers completed the Earned Income Tax Credit Schedule with income levels that qualified for the EITC.

Division of Taxation OIC auditors expanded the scope of their review, identifying and investigating checks that were co-endorsed with different names but fit the suspicious pattern. They referred the case to the Division of Criminal Justice. The joint investigation is ongoing.

Second-degree crimes carry a maximum sentence of 10 years in state prison and a $150,000 fine. The second-degree money laundering charge carries an enhanced fine of $500,000 and a potential anti-money laundering penalty of $250,000. Third-degree crimes carry a maximum sentence of five years in prison and a $15,000 fine. The charges in the indictment are merely accusations and the defendants are presumed innocent until proven guilty.

The indictment was handed up to Superior Court Judge Linda R. Feinberg in Mercer County, who assigned the case to Mercer County, where the defendants will be arraigned in court at a later date.

http://www.nj.gov/oag/newsreleases09/pr20091223d.html

Tags: criminal investigation,