TAMPA —
A car dealer accused of nearly $9 million in tax refund fraud whose freedom vexed Tampa’s police chief for months was arrested Monday on 32 federal criminal charges.
Authorities say Russell B. Simmons Jr., 42, owner of Simmons Auto Sales on North 34th Street, used the proceeds of tax fraud to buy a $60,000 Bentley coupe and a lot of diamond jewelry, including a $30,000, 18-karat gold Rolex perpetual date watch with a diamond dial; a 14-karat gold men’s bracelet with 2,420 diamonds; a 14-karat chain and “RS” pendant with 703 diamonds; and a 14-karat ring with 110 diamonds.
http://liarcatchers.com/fraud_investigation.html
He was also found with a lot of cash: Simmons and some friends were stopped in November at the airport in Orlando en route to a boxing match in Las Vegas. The group was carrying $75,000 among them. The others told investigators the money came from Simmons, Assistant U.S. Attorney Mandy Riedel said.
Simmons is “very big to us,” said John Joyce, special agent in charge of the Tampa office of the U.S. Secret Service, which helped investigate the case. Joyce called him “one of the bigger players” targeted through Operation Rainmaker, a joint federal, state and local investigation into tax refund fraud.
Defense attorney Nicholas Matassini Jr. said Simmons plans to “vigorously defend the case.” He added, “Clearly, both sides have a lot of work to do.”
Simmons was among a number of business owners arrested in the joint investigation last summer, initially on state identity theft and credit card fraud charges, after Secret Service agents searched his business Aug. 31. However, the charges were dismissed because of the pending federal investigation, and Simmons was allowed to go free.
As the case wore on, Tampa Police Chief Jane Castor went public with her irritation at the slow pace of the investigation into a piece of the tax fraud scourge spreading among street criminals. Authorities say hundreds of millions of dollars in bogus income tax returns have been processed from the Tampa area alone.
“We have an individual that we know did in the ballpark of $9 million in tax fraud,” Castor said in February. “He was arrested and charged in September. And there’s no reason for us to believe that he’s slowed down at all.”
In March, Tampa Detective Sal Augeri testified before a U.S. Senate subcommittee in Washington about tax refund fraud and described the Simmons case without naming him. “We have no reason to believe he has stopped committing this crime,” Augeri said then.
Police spokeswoman Andrea Davis said Tuesday that Castor learned of Simmons’ federal arrest while she was out of town and “is pleased.”
Joyce said he shared the frustration at how long it took to investigate the case.
Joyce gave two reasons: the sheer number of crimes with amount of evidence involved and the extra time it takes to bring tax cases because of laws binding the Internal Revenue Service and the Justice Department in tax fraud cases.
“Anytime there’s somebody who we feel is guilty of a crime that is still running around while we build our case is certainly frustrating to all of us,” Joyce said.
Joyce said Simmons committed fraud, “quite honestly, pretty much out in the open, with really no fear of ever getting caught.”
Simmons stands out among tax thieves, Joyce said, because he “seems to have understood all angles of this type of fraud.”
Until now, suspects have been accused either of filing fraudulent tax returns or of laundering money obtained by others through fraudulent tax returns. Simmons is charged with both.
He was “redeeming checks for people from the community, selling cars and at the same time then with the proceeds, he would buy more cars to keep his business going,” Joyce said.
Still, money laundering is his main crime, Joyce said.
“I think his filing was secondary to his actually redeeming the checks for members of the community. Less work involved for him.”
Prosecutor Riedel told U.S. Magistrate Anthony Porcelli on Tuesday that investigators were able to trace, “soup to nuts,” $1.8 million worth of fraudulent tax refunds obtained by Simmons through the IRS.
In addition, using Internet addresses from Simmons’ home and business, investigators developed information about $8.9 million in fraudulent refunds obtained through the online company TurboTax. Some of these refunds were stopped by the IRS, Riedel said, and it’s not clear how much went through.
“The risk is there’s a great deal of money and we don’t know where it is,” Riedel told the judge.
Charges against Simmons include wire fraud, filing false claims and theft of government property. The eight wire fraud charges against Simmons each carry a maximum of 20 years in federal prison.
Joyce said Simmons put proceeds of the tax refund scam into his business accounts, “essentially laundering money through his accounts, and in addition to that, he was also taking those proceeds as debit cards and buying money orders even further laundering the money, the proceeds, to disguise what essentially going on.”
When people brought fraudulent Treasury checks to Simmons, he would cash them for 50 percent of face value or less, Joyce said.
“His explanation would be, ‘I’m the one taking the risk for this. You’ve got the checks. I’m going to take these off your hands.’ And the person would — obviously they were gained illegally — would have no problem. It wasn’t their money to lose.”
Simmons also sold cars to the fraudsters, Joyce said, charging “a lot more than the car was actually worth. But the person, again, was using stolen proceeds, so it wasn’t as if they were actually taking a loss.”
Porcelli set bail for Simmons at $50,000, and said he must follow a curfew if released, restricted to his home from 8 p.m. to 8 a.m. The judge also ordered Simmons to sign a waiver allowing court officials to inspect his business records if they suspect more fraud.
As widespread as Simmons’ fraud had grown, Jones said, he doesn’t expect this prosecution alone will slow the crime.
“I know, just because of the way criminal activity works, that there are other people out there doing this now,” he said. “And eventually, they’ll come on our radar and eventually they’ll be arrested and charged. But it takes time.”
