From the Office of the United States Attorney for the District of Maryland:
Baltimore, Maryland – A federal grand jury indicted Beverly Carden, age 53, and her husband Kevin Carden, age 54, both formerly of Bel Air, Maryland, yesterday on charges arising from a scheme to steal at least $2.5 million from their clients and the IRS.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
“The indictment alleges that the defendants falsely told clients that their money was being used to pay their taxes, when in fact the defendants were stealing it,” said U.S. Attorney Rod J. Rosenstein. “Customers who hire payroll services companies expect that they will not have to worry, but this case is a reminder that people always need to be vigilant when they trust someone with their money.”
The defendants owned and operated AccuPay, Inc., a payroll service company located at 206 E. Churchville Road in Bel Air. Part of the payroll services that AccuPay offered to its clients was to complete and file federal and state tax returns, collect the funds from the clients to pay the taxes, and then pay those taxes to the taxing authorities. Beverly Carden oversaw all aspects of AccuPay’s business. Kevin Carden was responsible for inserting the clients’ payroll information into software that generated tax forms to be filed with the taxing authorities and for paying the clients’ employment taxes.
According to the 16 count indictment, from 2006 to March 2013, the defendants withdrew from the clients’ funds the full amount of taxes owed, but then paid the taxing authorities only a portion of such funds, fraudulently retaining at least $2.5 million for themselves. The defendants misrepresented to their clients that those funds had been paid to the relevant taxing authorities.
The indictment alleges that in order to keep the clients unaware that their taxes were not fully paid, Kevin Carden changed the address listed for certain clients to the address for AccuPay, without the clients’ consent, causing all future IRS correspondence, including notices of underpayment, to be sent to AccuPay rather than the client. In the instances in which clients received notice from the taxing authority that they had not paid the taxes they owed in full, the defendants falsely advised the clients that the underpayment was due to a mistake by the taxing authority, an error made by AccuPay employees or the software AccuPay used to file tax returns.
The indictment further alleges that to contact the IRS about her clients’ employment tax issues without her clients’ knowledge, Beverly Carden affixed or caused to be affixed client signatures on IRS power of attorney forms without the clients’ permission.
In late 2011, the defendants allegedly sent their clients a letter introducing a new chief financial officer (CFO) at AccuPay who was to audit all tax deposits and filings for all tax clients back to 2009 for compliance and correctness. The letter stated that the CFO was an Ivy League graduate with degrees in both accounting and law, who had over 30 years experience as a CPA, was formerly a special investigator with the New Jersey Attorney General’s office, as well as a former IRS Special Agent. The CFO was not identified by name. Beverly Carden made a similar representation in a letter to the office of a U.S. Congressman in which she attempted to explain difficulties that AccuPay was having with the IRS. Although the defendants did hire a CPA who was a former IRS revenue agent and former investigative auditor for the New Jersey Attorney General’s Office, who had attended but not graduated from an Ivy League institution, that individual was hired to prepare the defendants’ personal tax returns and AccuPay’s corporate tax returns – not to audit any payments or filings made on behalf of AccuPay’s clients.
Finally, the indictment alleges that the defendants filed a false individual tax return for 2011 in which they substantially understated their income, that Kevin Carden filed a false individual tax return for 2012 in which he substantially understated his income, and Beverly Carden failed to file a tax return for 2012.
The indictment seeks forfeiture of at least $2.5 million.
The defendants face a maximum sentence of 30 years in prison for conspiracy to commit mail and wire fraud; 20 years in prison on each of three counts of mail fraud and five counts of wire fraud; 10 years in prison for conspiracy to commit money laundering and on each of three counts of money laundering; three years in prison on each of two counts for filing a false tax return and one year for failing to file a tax return. The defendants are expected to have their initial appearances in federal court in Florida today and tomorrow.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the IRS – Criminal Investigation and FBI for their work in the investigation. Mr. Rosenstein praised the Bel Air Police Department for their assistance in the investigation, and thanked Assistant U.S. Attorney Evan T. Shea, who is prosecuting the case.