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Prosecutors in Roanoke said the defendants illegally obtained and deposited fraudulent income tax refunds.
Wednesday, August 28, 2013
Moments after two brothers in green pinstripes were led from a Roanoke courtroom Tuesday en route to prison, the prosecutor predicted it will be a struggle to recover about $18 million they and another man embezzled from the Internal Revenue Service with fraudulently obtained income tax refund checks.
Joseph Mott, an assistant U.S. attorney, previously won guilty pleas on charges of conspiracy to defraud the government and other counts from one-time Roanoke convenience store owner Muawia “Mike” Abdeljalil of Roanoke and Khaldoun “Tony” Khawaja, a Florida businessman, who have been sitting in jail.
On Tuesday, U.S. District Court Judge Samuel Wilson sentenced the two men to prison — Abdeljalil for four years, nine months, and Khawaja for five years, 10 months. Khawaja’s sentence was a shortened version of what he might have otherwise received, but he got a break after prosecutors said he helped authorities develop and prosecute the case, including by testifying against his brother.
In addition to sending them to prison, Wilson ordered the men to repay the money taken in an elaborate scheme that has bedeviled authorities in south Florida. There, officials have reported an epidemic of hundreds of millions of dollars of falsely obtained tax refunds based on bogus tax returns filed using stolen identities. Some of the checks passed in the scheme were issued in the names of dead people and prisoners, according to officials.
The federal government has had a practice of issuing refund checks after a cursory, initial review to ensure that the name and Social Security number on a return match. Various banks and the U.S. Treasury Department lost funds when the checks were deposited as part of the scheme.
In an indictment unsealed in Roanoke last year, authorities alleged that Khawaja and another defendant in Florida, Osama “Sam” Mustafa, purchased about 4,000 ill-gotten checks from other parties who were not charged by Roanoke authorities, paying a percentage of their face value, from 2009 until being charged in May 2012. The men then presented the checks for payment at financial institutions.
For his part, Abdeljalil received shipments of refund checks sent by mail or package express from Khawaja in Florida and assisted the scheme by presenting 442 of the checks worth $1.8 million for payment at financial institutions where he had accounts, according to the prosecution and evidence presented in court. Abdeljalil transferred the money to his brother, minus a 5 percent transaction fee. Wilson ordered him to repay the whole $1.8 million in restitution.
Khawaja, who has been held responsible for a much larger fraud, was ordered to repay $17.6 million in restitution.
“Now we’ve got to enforce that. Find assets to recover it from,” Mott said after court. “It will be a difficult job.”
Wilson said the pair, who are Palestinians, will be presented to federal authorities for possible deportation when they get out of prison.
Wilson plans to sentence Mustafa, who was convicted by a Roanoke jury in April, on Sept. 23.
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