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Osama “Sam” Mustafa was released awaiting sentencing and will be monitored electronically.
Friday, April 19, 2013
After a detailed look at his bank records, jurors in Roanoke convicted a Florida businessman Friday of participating in a multistate scheme to collect millions of dollars in fraudulent income tax refunds.
Osama “Sam” Mustafa, found guilty on all counts, is the third of three defendants convicted of corrupting the workings of the Internal Revenue Service. After a weeklong trial, he was convicted of conspiracy to commit bank fraud, conspiracy to commit money laundering and conspiracy to defraud the federal government.
The IRS has repeatedly fallen victim to scammers who obtained tax refund checks and refund-anticipation loans based on bogus tax returns filed using stolen identities. Mustafa, who lives in the Tampa area, bought the checks from unnamed people for a portion of their face value and used business bank accounts to turn them into cash with which he bought multiple cars, homes and businesses, according to his indictment.
Mustafa, along with Roanoke businessman Muawia “Mike” Abdeljalil and Khaldoun Khalil Khawaja of Tampa, who are brothers, accessed nearly $18 million in U.S. Treasury checks that never should have been issued in the first place from 2009 until being charged in May 2012, prosecutors said.
The other two men pleaded guilty and await sentencing behind bars, authorities said. Mustafa was released on a previously established bond.
Judge Samuel Wilson first considered whether to lock up Mustafa, too, once convicted. But the judge said that given that the Gary, Ind.-born Mustafa is a U.S. citizen and close to family, including a daughter at home on the verge of finishing medical school, he appears likely to return to court as ordered for the next phase of the case. Plus, he will be monitored electronically.
The U.S. attorney’s office for the Western District of Virginia took up the case after consultation with Florida authorities and has noted that the checks were deposited in banks in the Roanoke Valley, Florida and elsewhere. Banks told investigators they detected unusual activity and sometimes closed the men’s accounts as a result. But the defendants opened more accounts.
When he returns to court, in addition to sentencing, Mustafa will face an effort led by Assistant U.S. Attorney Joseph Mott to recover the funds through further proceedings.
“This takes the profit out of crime,” Mott told jurors as they reviewed of a long list of assets to judge whether they were connected to the crimes. After a second round of deliberations, jurors judged that all the assets were connected and thus subject to forfeit.
How much Mustafa might forfeit is unclear, but there are signs the government’s investigation and controls placed on his assets are already affecting his lifestyle.
“His family now receives food stamps,” defense lawyer Tony Anderson told the judge. “Let him go home, get his affairs in order.”
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