Month: March 2020

U.S. Accountant Pleads Guilty in Panama Papers Investigation

A Massachusetts-based accountant who was charged along with three others in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panamanian-based global law firm, and its related entities, pleaded guilty today to wire and tax fraud, money laundering, aggravated identity theft and other charges.


A Massachusetts-based accountant who was charged along with three others in connection with a decades-long criminal scheme perpetrated by Mossack Fonseca & Co. (Mossack Fonseca), a Panamanian-based global law firm, and its related entities, pleaded guilty today to wire and tax fraud, money laundering, aggravated identity theft and other charges. 

Richard Gaffey, aka “Dick Gaffey,” 75, of Medfield, Massachusetts, pleaded guilty to one count of conspiracy to commit tax evasion and to defraud the United States, one count of wire fraud, one count of money laundering conspiracy, four counts of willful failure to file Reports of Foreign Bank and Financial Accounts (Financial Crimes Enforcement Network Reports 114), and one count of aggravated identity theft.

“This defendant worked with the Mossack Fonseca law firm and exploited his role as an accountant to create fraudulent shell companies and defraud the United States of millions of dollars over decades,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “Today’s guilty plea reflects the Department’s commitment to prosecute financial professionals and other gatekeepers to the U.S. financial system who abuse the public’s trust.”

“Richard Gaffey went to extraordinary lengths to circumvent U.S. tax laws in order to maintain Harald Joachim von der Goltz’s wealth and hide it from the IRS,” said U.S. Attorney Geoffrey S. Berman of the Southern District of New York.  “Using the specialized criminal services of global law firm Mossack Fonseca, Gaffey assisted others in violating U.S. tax laws for decades.”

According to the allegations contained in the indictments, other filings in this case, and statements during court proceedings, including Gaffey’s guilty plea hearing, since at least 2000 through 2018, Gaffey conspired with others to defraud the United States by concealing his clients’ assets and investments, and the income generated by those assets and investments, from the IRS through fraudulent, deceitful, and dishonest means. 

During all relevant times, while acting as an accountant, Gaffey assisted U.S. taxpayers who were required to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts.  Gaffey helped those U.S. taxpayers evade their tax reporting obligations in a variety of ways, including by hiding the beneficial ownership of his clients’ offshore shell companies and by setting up bank accounts for those shell companies.  These shell companies and bank accounts made and held investments totaling tens of millions of dollars.  For one U.S. taxpayer, Gaffey advised the taxpayer how to covertly repatriate approximately $3 million to the United States by reporting to the IRS a fictitious company sale  to thereby evade paying the full U.S. tax amount. 

Gaffey was assisted in this scheme through the use of Mossack Fonseca law firm, including Ramses Owens, a Panamanian lawyer who previously worked at the Mossack Fonseca.

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Gaffey was the U.S. accountant for co-defendant Harald Joachim von der Goltz.  From 2000 until 2017, von der Goltz was a U.S. resident and was subject to U.S. tax laws, which required him to report and pay income tax on worldwide income.  In furtherance of von der Goltz’s efforts to conceal his assets and income from the IRS, Gaffey falsely claimed that von der Goltz’s elderly mother was the sole beneficial owner of the shell companies and bank accounts at issue because, at all relevant times, she was a Guatemalan citizen and resident, and – unlike von der Goltz – was not a U.S. taxpayer.  In support of this fraudulent scheme, Gaffey submitted the name, date of birth, government passport number, address, and other means of identification of von der Goltz’s elderly mother to a U.S. bank in Manhattan. 

Gaffey is scheduled to be sentenced by Judge Berman on June 29, 2020.  Von der Goltz, who pleaded guilty on Feb. 18, 2020, is scheduled to be sentenced by Judge Berman on June 24, 2020. 

An indictment is merely an allegation and any charged defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Assistant Attorney General Benczkowski praised the outstanding investigative work of IRS-Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and thanked the Justice Department’s Tax Division and the FBI for their significant assistance in the investigation.  Assistant Attorney General Benczkowski also thanked the Criminal Division’s Office of International Affairs as well as law enforcement partners in France, the United Kingdom and Germany for their assistance in the case.

The Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), working in partnership with the Southern District of New York’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit are handling this case.  MLARS Trial Attorneys Michael Parker and Parker Tobin, along with Assistant U.S. Attorneys Eun Young Choi and Thane Rehn, are in charge of the prosecution.

Justice.gov (March, 2020) U.S. Accountant Pleads Guilty in Panama Papers Investigation

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Five Sentenced in South Florida to Prison Terms for Their Roles in Tricare and Medicare Fraud Scheme

U.S. District Judge Cecilia M. Altonaga has sentenced five defendants, including a doctor, to federal prison terms for their roles in a scheme that defrauded Tricare and Medicare out of more than $9.6 million.


U.S. District Judge Cecilia M. Altonaga has sentenced five defendants, including a doctor, to federal prison terms for their roles in a scheme that defrauded Tricare and Medicare out of more than $9.6 million. The defendants tricked beneficiaries into having the federal health care programs pay for medically unnecessary compounded prescription medicines and cancer genetic tests. Their sentences are as follows:

  • Dr. Mangala Ramamurthy, 64, of Texas was sentenced to 34 months for her role in the scheme: prescribing compounded pain creams and referring Genetic Cancer tests that were medically unnecessary. Dr.  Ramamurthy earlier pled guilty to conspiracy to defraud the U.S. and conspiracy to receive healthcare kickbacks.
     
  • John Scholtes, 56 of Boca Raton, Florida, was sentenced to 97 months for his role in the scheme. Scholtes earlier pled guilty to conspiracy to commit healthcare fraud, conspiracy to defraud the U.S., and conspiracy to receive healthcare kickbacks.
     
  • Anthony Mauzy, 43, of California, was sentenced to 49 months for his role in the scheme. Mauzy earlier pled guilty to conspiracy to commit healthcare fraud.
     
  • Thomas Sahs, 41, of California, was sentenced to 45 months for his role in the scheme. Sahs earlier pled guilty to conspiracy to commit healthcare fraud.
     
  • Rajesh Mahbubani, 46, of Texas, was sentenced to 49 months for his role in the scheme. Mahbubani earlier pled guilty to conspiracy to commit healthcare fraud.

On January 31, 2020, a sixth co-conspirator, Senthil Kumar Ramamurthy, 38, of Texas, was sentenced to 121 months in federal prison for his role in the scheme. S.K. Ramamurthy earlier pled guilty to conspiracy to commit healthcare fraud, conspiracy to defraud the US, and conspiracy to receive healthcare kickbacks. S.K. Ramamurthy is the son of Dr. Ramamurthy. 

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Cynthia Bruce, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Southeast Field Office, and SAC Omar Pérez Aybar, Special Agent in Charge for Health and Human Services, Office of Inspector General (HHS-OIG) made the announcement. 

Tricare is the health care program for the U.S. military that pays the health care costs of active and retired military personnel and their families, including the costs of medically necessary prescription medications. Medicare is a federally-funded program that provides free or below-cost health care benefits to certain individuals, primarily the blind, elderly, and disabled.

According to court records, the co-conspirators targeted Tricare for about 10 months, starting in 2014. After making their way onto U.S. military bases, co-conspirators convinced Tricare beneficiaries to sign-up for compounded prescription medications that the beneficiaries did not need. To encourage sign-up, co-conspirators falsely told the beneficiaries that the pharmacies would custom-design their medications or that the medications were free. In fact, the medications were not custom-designed and the patients had co-payments. Compounding pharmacies paid the co-conspirators millions of dollars in kickbacks in exchange for sending the pharmacies expensive prescription orders. 

In mid-2015, Tricare scaled back its reimbursements for compounded medications. The defendants turned to Medicare. They paid doctors to refer Medicare beneficiaries to a lab in Georgia for cancer genetic screening testing, even though the doctors had never examined the beneficiaries. As with the compounded medications, the cancer genetic screening tests were not medically necessary.

The owner of the Georgia lab, Minal Patel, 40, was indicted in the Southern District of Florida in September 2019. An indictment is an accusation and a defendant is innocent until proven guilty. 

To date, fraudulent compounding pharmacy schemes have caused estimated losses to Tricare in excess of $2 billion. Fraudulent genetic testing lab schemes have caused estimated losses to Medicare of approximately $2.1 billion.   

U.S. Attorney Fajardo-Orshan commended the investigative efforts of DCIS and HHS-OIG.  Assistant United States Attorneys Kevin J. Larsen, Anna Maria Martinez, and John C. Shipley prosecuted the case. Assistant United States Attorney Daren Grove is handling the asset forfeiture matters. 

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Justice.gov (February, 2020) Five Defendants Sentenced in South Florida to Prison Terms for Their Roles in Tricare and Medicare Fraud Scheme

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