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South Florida jail scams turn IRS into ATM
Miami Herald ^ | 2/21/10 | Cammy Clark

Posted on 02/22/2010 12:03:26 PM PST by ruralvoter

Inmates at a South Florida jail were masters at picking Uncle Sam's pocket, filing for more than $1 million in bogus tax refunds. Now the feds are fighting back.(snip)Detainees turned the IRS into their own private ATM, filing for about $1 million in fraudulent refunds.

Before the scam was uncovered, they hauled in as much as $100,000 for themselves, their friends and relatives, say past and present law-enforcement officials. It was easy money.

``I was shocked that inmates could steal from the IRS that easily and that blatantly and not be prosecuted. Even when the case was handed to them on a platter,'' said Rick Roth, a retired Monroe County Sheriff who said the feds dragged their feet in prosecuting the perpetrators.

Only this month -- nearly three years after the local investigation was completed -- was evidence brought before a Miami grand jury, said Jonathan Ellsworth, who was the chief local investigator on the case. Indictments could come this week.

About 50 inmates in the lockup near Key West were in on the scheme, which involved using a standard Internal Revenue Service form to claim the bogus refunds, said Ellsworth, who retired a month ago.

The evidence includes a taped phone conversation at the jail involving one of the alleged ringleaders, Shawn Clarke, who, according to Ellsworth, said: ``I'm through with the street crime. I'm strictly white collar from now on. I love the IRS.''

(Excerpt) Read more at ...

TOPICS: Crime/Corruption; Culture/Society; News/Current Events; US: Florida
KEYWORDS: crime; felons; keywest; taxfraud
Gee, I sure hope all of them retain their voting rights. They're very civic minded. /s
1 posted on 02/22/2010 12:03:27 PM PST by ruralvoter
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To: ruralvoter

I don’t know whether to laugh or cry..................

2 posted on 02/22/2010 12:10:43 PM PST by Red Badger (Education makes people easy to lead, difficult to drive; easy to govern, but impossible to enslave.)
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To: ruralvoter
The reporters just don't get it. They were not defrauding the IRS. They were defrauding American taxpayers.
3 posted on 02/22/2010 12:16:25 PM PST by MIchaelTArchangel (Is anyone in the 0bama administration competent at anything?!!?)
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To: ruralvoter
you should see the theft from the School Board

No Joke ...they actually made this cop chief of the Key West Police Department

It’s Okay For a Cop (the New Key West Police Chief) To Have sex With a Minor (17 yr old boy) in a patrol car and at his home


This Attorney after having been convicted for three nickels with mandatory jail time is given community service to work on land development deals for the city and county .... precisely what he was convicted of feloniously doing for his clients

Convicted on FBI Tapes @ Nudist Bar, Key West Bag Man Gets Only Probation From Retiring Judge

You can't make this stuff up


4 posted on 02/22/2010 12:33:07 PM PST by Elle Bee
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To: ruralvoter
The Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO Act or RICO) is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. While its intended use was to prosecute the Mafia as well as others who were actively engaged in organized crime, its application has been more widespread.

Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes—27 federal crimes and 8 state crimes—within a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and/or sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of "racketeering activity."

When the U.S. Attorney decides to indict someone under RICO, he or she has the option of seeking a pre-trial restraining order or injunction to temporarily seize a defendant's assets and prevent the transfer of potentially forfeitable property, as well as require the defendant to put up a performance bond. This provision was placed in the law because the owners of Mafia-related shell corporations often absconded with the assets. An injunction and/or performance bond ensures that there is something to seize in the event of a guilty verdict.

Key West PD

In June 1984, the Key West Police Department in Monroe County, Florida was declared a criminal enterprise under the Federal RICO statutes after a lengthy United States Department of Justice investigation. Several high-ranking officers of the department, including Deputy Police Chief Raymond Cassamayor, were arrested on federal charges of running a protection racket for illegal cocaine smugglers. At trial, a witness testified he routinely delivered bags of cocaine to the Deputy Chief's office at City Hall.

Click on Headline:

Key West Police Department Called a 'Criminal Enterprise' - New York Times

5 posted on 02/22/2010 12:34:47 PM PST by Elle Bee
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To: ruralvoter
The comments are better than the stories:


6 posted on 02/22/2010 12:40:55 PM PST by Elle Bee
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To: ruralvoter
Convicted on FBI Tapes at Nudist Bar, Key West Bag Man Gets Only Probation From Retiring Judge

Bribery suspects met at nudist pool bar - 02/09/2007


Citizen Staff

KEY WEST -- Prosecutors on Thursday showed to a jury surveillance video and photographs of meetings between an indicted former county attorney and their star witness, including one at a popular clothing-optional resort's pool bar.

Former County Attorney Jim Hendrick met political consultant Randy Hilliard at Atlantic Shores Resort on July 11, 2003 -- nine days after a former county mayor met with federal investigators at the Sheraton Suites hotel and admitted taking a bribe in exchange for building permits on a Marathon resort project the county had denied, court documents state.

Hendrick is accused of arranging the bribe, as well as a subsequent cover-up after the FBI arrested London. Prosecutors say Hendrick and Hilliard, who was once was listed in the telephone book as the Prince of Darkness, met at Atlantic Shores to discuss the cover-up. Hilliard, who already had admitted his role and received immunity from prosecution, secretly taped several conversations with Hendrick for the FBI.

Two days before their meeting, Hilliard called Hendrick, who told him the statute of limitations had run out for bribery charges, prosecutors say. Hendrick invited Hilliard, who lives in Miami, to come to Key West to talk about his "legal representation," court documents say.

Unbeknownst to Hendrick, Hilliard had an audio recording device in his white, Speedo-style swimsuit and another in his sports bag, said FBI agent Michael Pilapil, who specializes in undercover surveillance. Several undercover federal agents also watched from the bar.

"I can't help but ask if the agents kept their clothes on," federal prosecutor Christopher Clark jokingly asked Pilapil, who replied yes. In the photos, Hendrick wore shorts and a tan T-shirt, and Hilliard wore his scant swim trunks and a big yellow hat.

Prosecutors did not play the audio recordings from that day, showing only two still photographs and describing the scene. The agent said they had trouble recording because the "breezy" weather conditions and loud music created "a lot of interference."

The agent did play a video recording showing the two men meeting on March 8, 2004, in a small cottage at Hendrick's former Flagler Avenue home. Hendrick allegedly told Hilliard he "should conform his testimony [to an upcoming federal grand jury] with London's fictitious account," prosecutors said in court records. Hendrick allegedly gave Hilliard documents relating to the Halls Resort development project "to assist in the [cover-up] endeavor," records say.

Prosecutors did not play an audio recording from that meeting to substantiate the accusations, and provided no explanation as to why not. Court records do not contain full transcriptions of the audio recordings Hilliard made of eight phone calls and three meetings with Hendrick.

The FBI agent also testified Thursday that former County Mayor Jack London went to Hendrick's law firm twice on July 1, 2003 -- the day after London confessed to the FBI.

The FBI arrested Hendrick at his Whitehead Street office on May 19, 2005, charging him with conspiracy, witness tampering and obstruction of justice.

Hilliard and London admitted to splitting $82,500 in exchange for getting the Monroe County Commission to approve the building permits for Marathon developer Marvin Rappaport's Halls Resort, court records show. Hilliard agreed to cooperate with the FBI, Internal Revenue Service and U.S. Attorney's Office in exchange for immunity from prosecution.

London initially was charged with three counts of giving false statements to federal investigators and filing a false tax return. In exchange for his testimony against Hendrick, the FBI dropped all but the false income tax charge, to which he pleaded guilty in August 2005. London died of a stroke in November, leaving Hilliard as the government's key witness.


Citizen Staff

KEY WEST -- A jury found former County Attorney Jim Hendrick guilty of conspiracy, witness tampering and obstruction of justice Friday, after deliberating for about two hours.

Hendrick, 59, immediately was taken to the Federal Detention Center in Miami, where he will remain in custody until his May 4 sentencing. He faces up to 20 years in prison and $1 million in fines, according to the U.S. Attorney's Office.

His wife, Vera Vasek, maintained his innocence to reporters outside the federal courthouse in Key West and said he would appeal his conviction.

"We will continue to fight, every step of the way, to prove his innocence," Vasek said.

A judge denied Hendrick's request for bond while he files his appeal on the four charges, which include two counts of witness tampering.

Jurors declined to answer media questions as they left the courthouse. An alternate, who did not take part in the deliberations, said she had not formed an opinion about Hendrick's guilt or innocence.

"They came back so quickly, I thought it would have went the other way," said Joan Teach, who stayed to listen to the verdict. "I really did not have a chance to process it all. I was tired by the end of each day. ... We also could not take our notes home. I really didn't have a chance to form an opinion. I really didn't."

Hendrick's attorney, Ed Shohat, declined to comment on the verdict.

Prosecuting attorney Brenda Morris, who questioned Hendrick on cross-examination and gave closing arguments, also declined to comment about the case.

Morris and fellow federal prosecutor Christopher Clark built a case that Hendrick was involved in a bribery scheme and subsequent cover-up as federal investigators began questioning people about it. Former County Mayor Jack London and political consultant Randy Hilliard admitted that developer Marvin Rappaport paid them $82,500 to secure building permits to redevelop his Hall's Resort in Marathon in 1996.

The Planning Department previously had said the redevelopment plans did not conform to development regulations. London, who was to testify in the trial, died in November.

Hendrick did not receive money, but allegedly arranged the bribe and orchestrated the cover-up, prosecutors said. He advised London to leave the country to avoid having to testify before a grand jury. He also tried to get Hilliard to tailor his grand jury testimony to mirror what London had told FBI agents, prosecutors said.

Key to the prosecution was the testimony of London's widow, Elaine, who gave a detailed account of a lunch she had with her husband and Hendrick at the Pier House on March 17, 2004. In talking about the case possibly going before the federal grand jury in Key West, Hendrick told London to go to Ireland, Elaine London testified.

Morris finished her closing argument citing part of Elaine's testimony, when she said the two had referred to themselves as "the two most powerful men in Monroe County."

"He's just a man. He's an arrogant man," Morris told the jury. "He has duped Monroe County for years and he thinks maybe he can get away with it ... I submit to you that the defendant never thought Elaine London would have the strength to come in here and testify."

London was arrested at the Key West International Airport before his flight to Ireland in 2004 and charged with lying to federal agents and tax evasion for not reporting the bribe money. The statute of limitations on the bribe had run out. The feds dropped the lying charge after London began cooperating with the FBI.

Hilliard, who was granted immunity for his testimony, was another key witness, having secretly taped conversations between himself and Hendrick for the FBI. On one tape, Hendrick said London "rose in our eyes when he didn't stand up and tell them what we had done," referring to himself and developer Pritam Singh. In another, Hendrick told Hilliard "in the eyes of the government I am your co-conspirator."

The courtroom was filled with Hendrick supporters, many of whom looked stunned and gasped when the verdict was read. Minutes before, Hendrick, a self-proclaimed Buddhist, closed his eyes and appeared to be meditating as the crowd sat quietly awaiting the verdict.

The scene was a stark contrast from most days of the three-week trial. Jokes had been exchanged between prosecutors and defense attorneys, and Hendrick supporters mingled among each other during breaks.

Hendrick sentence appealed


Citizen Staff

Federal prosecutors have filed an appeal to the sentence of former Monroe County Attorney Jim Hendrick, who was placed on probation and ordered to do community service for obstructing justice and witness tampering in a federal public corruption case.

The U.S. Attorney's Office filed the appeal with the U.S. Court of Appeals for the 11th Circuit, according to a two-page legal brief filed with the court on Tuesday. There were no supporting documents filed that spell out why prosecutors are asking for review of the sentence. A brief will be filed, and that will contain the legal arguments, U.S. Attorney's Office spokeswoman Yovanny Lopez said.

Federal Judge Shelby Highsmith chose not to sentence Hendrick to prison last month, but instead opted for five years of probation, 2,500 hours of community service and a $50,000 fine. Highsmith cited Hendrick's "previous good works, his charity work and his pro bono legal work." Highsmith also mentioned that no other person tied to the crime was sentenced to prison. Highsmith deviated from sentencing guidelines, which took into account Hendrick's first-time offender status and the severity of the crime. Hendrick was facing three to five years in federal prison.

Hendrick on Wednesday called the prosecutors' move "unusual."

"I am not an expert, but it seems unusual," said Hendrick, a former public defender and former county attorney. "Now they have left me no choice but to appeal."

On prosecutors challenging his sentence, he said: "It's sort of being like indicted. You don't have an have opportunity to decline it."

Hendrick is awaiting Highsmith's ruling on a motion to have the conviction on counts of conspiracy, witness tampering and obstruction of justice thrown out.

Former federal prosecutor and now practicing Miami attorney Steven E.M. Hartz said there is precedent for prosecutors to request a new sentencing, especially in public corruption cases.

"It does happen from time to time," Hartz said. "They will appeal a sentence if they feel it's inheritably unfair to the interest of the United States. They don't do it every day."

Hartz called Highsmith an "excellent judge who is very experienced."

A jury in February agreed with prosecutors' arguments that Hendrick helped political consultant Randy Hilliard and former Monroe County Mayor Jack London devise a story to cover up a bribe from a local developer. Hendrick then urged London to flee to Ireland when the government started investigating.

Marathon developer Marvin Rappaport testified that he paid Hilliard $82,500 — Rappaport called it a consulting fee, the FBI called a bribe — in exchange for the Monroe County Commission's approval of building permits for a resort project in 1996. Rappaport received that approval.

. "The Prince of Darkness has ruined Atlantic Shores for us. Now we will never be able to go there again without wondering what the guys are stuffing into their Speedos." (From Key West Citizen's VOICE)

Bubba system appears to be judicially endorsed

As a retired former prosecutor and magistrate judge, I am appalled by Judge Shelby Highsmith's grant of probation to Jim Hendrick. Hendrick was convicted of three felony crimes, the character of which no lawyer with any decency whatsoever could conceive of committing. As the former county attorney, one would expect Hendrick to be the type of person who would enforce justice, not obstruct it. Witness tampering is something we decent lawyers think of as only occurring in bad mystery novels. Then, according to the jury, Hendrick conspired to cover his own butt, as he continues to do. He has now made it known that he will pursue his appeal, all the while denying any wrongdoing in the face of the absence of reasonable doubt. After receiving his sentence, he triumphantly pumped his fist in the air. Is this a repentant man, who deserves probation? I think not. I fully expect to read in tomorrow's Citizen that the motion for acquittal was granted. Perhaps lifetime appointments for federal judges should be rethought.

Rita Eaton

Key West

Hendrick's sentence sends wrong message

Probation for former Monroe County Attorney Jim Hendrick is totally outrageous, flying in the face of justice and common sense, while sending a strong message that attorneys and public officials are above the law. Further, Hendrick should have been disbarred the very moment he became a convicted felon for witness tampering and covering up a bribe to former Monroe County Mayor Jack London. Instead of probation, Federal Judge Shelby Highsmith should have thrown the book at Hendrick, sending the opposite message to elected officials, developers and their legal counsel alike who become involved with bribes or sleazy land deals.

Former Mayor London disgraced himself and his office by accepting a bribe, fueling existing public skepticism, while making the words "honest government" an oxymoron. Sadly, whatever good deeds London accomplished in office will be forgotten and his legacy will be reduced to his worst deed. Some will cry unfair, but is it really?

And now it's somewhat ironic our current County Mayor Mario Di Gennaro lobbied the good judge for nothing less than a wrist slap for Hendrick. To date, the mayor himself has acted more as an advocate for big developers than a legitimate representative for our residents, not to mention his own problems with the law when it comes to Sunshine Law violations.

Moreover, for Di Gennaro to subsequently suggest Hendrick be allowed to do pro bono legal work as atonement for his criminal sins represents a blatant betrayal of public trust and open contempt for laws, which most of us must obey.

In the future, Hendrick should be seen beside the Overseas Highway with a nail in one end of a stick and himself attached to the other, cleaning up the very islands he soiled.

But putting all of that aside, there is even a larger message here for the voters, which is if there's an appearance of impropriety, it's time for a closer look. And voters should always look carefully at any candidate's contribution reports and indeed follow the money.

Personally, I believe most folks are crying out for honest government and honest elected officials, but these same folks must take the time to participate in the most basic level of democracy, which is casting an informed vote. As we continue to elect those with conflicts and special interests, we can expect selective representation and often blind eyes and deaf ears to the voters themselves.

All of us have some issue with government, but in a case of this nature, where the criminal act is so very blatant and the subsequent scandal is so shameful, a mere slap on the wrist seems most offensive to each and every honest citizen. Let's pay attention now, and next time get it right at the ballot box.

Bob Johnson

Editor's note: Bob Johnson is a former mayor of Islamorada.


7 posted on 02/22/2010 12:42:59 PM PST by Elle Bee
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To: ruralvoter

Oh, boo hoo. REPEAL the 16th Amendment. Institute a sales tax. No more IRS. The states would collect the money as they do now. Simple.

8 posted on 02/22/2010 12:51:58 PM PST by mc5cents
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To: ruralvoter
``I was shocked that inmates could steal from the IRS that easily and that blatantly and not be prosecuted. Even when the case was handed to them on a platter,''

It doesn't surprise me one bit.

The people running the IRS are angry young black women.

9 posted on 02/22/2010 12:55:10 PM PST by kcvl
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To: mc5cents
but you would put all of thse AFSCME members, tax lawyers and accountants out of work !!!

The Horror!


10 posted on 02/22/2010 1:00:38 PM PST by Elle Bee
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To: ruralvoter

So what’s the IRS going to do about it? Have them thrown in jail?

11 posted on 02/22/2010 1:00:59 PM PST by Razzz42
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To: ruralvoter

The scam was simple.


Inmates at the Stock Island Detention Center, their friends and family members filed 1040EZ forms (the short form) along with the one-page 4852 form, which is a substitute for the W-2 when an employer doesn’t provide one. The scammers filled in the names of phony or defunct businesses and fabricated tax withholding and income figures, which they often claimed to have earned at a time when they were incarcerated. Many went through unverified.

In most cases, the requested refunds were for about $5,000.

``Some even filed multiple returns for past years and they had never filed a tax return before in their entire lives,’’ Ellsworth said.

The plot began to unravel in December 2006 after a how-to note was found in an inmate’s jail cell.

12 posted on 02/22/2010 1:00:59 PM PST by kcvl
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To: ruralvoter
``I was shocked that inmates could steal from the IRS that easily and that blatantly and not be prosecuted. Even when the case was handed to them on a platter,'' said Rick Roth, a retired Monroe County Sheriff who said the feds dragged their feet in prosecuting the perpetrators.

Meanwhile, if you owe them money and are not in jail, they won't waste any time in levying bank accounts or seizing assets.

13 posted on 02/22/2010 1:02:38 PM PST by spodefly (I have posted nothing but BTTT over 1000 times!!!)
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To: MIchaelTArchangel
Well, yes they were stealing from us taxpayers per se. But the fact is the IRS is the bureaucracy that has gotten so bloated that it is easy to defraud them. We don't need an IRS. We need people to pay as they go with a sales tax. The economy would take off like never before and the US would once again take it's place as the best economy in the world. Income taxes with all the loopholes built in to the "code" are a farce and a drag on the economy. Social engineering on steroids.

I repeat, repeal the 16th amendment and institute the Fair Tax.

14 posted on 02/22/2010 1:08:46 PM PST by mc5cents
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To: mc5cents

Could be a good idea.

But, when do I, as a business owner, get paid for being tax collector for the state? After all, it is I who charge and collect and remit the sales tax. As of now, I do it for free for the government.

15 posted on 02/22/2010 1:46:41 PM PST by AlmaKing
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To: mc5cents

Could be a good idea.

But, when do I, as a business owner, get paid for being tax collector for the state? After all, it is I who charge and collect and remit the sales tax. As of now, I do it for free for the government.

16 posted on 02/22/2010 1:48:12 PM PST by AlmaKing
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