2 Hawaii women among 6 people indicted in continuing federal tax fraud investigation
Sep. 27—A federal investigation into a scheme to file false tax returns and then use Hawaii businesses, banks and trusts to launder the refunds resulted in the indictment of two women who allegedly conspired to manage more than $1.6 million in proceeds, .
Hannah Kim Heart and Sook Young Jung are the fifth and sixth people charged in connection with the ongoing probe. The case represents the third tax fraud indictment this year that lists "co-conspirator 1 " as the owner of the Gimmel Group LLC, a domestic limited-liability company in Hawaii that "purported to be a personal investment business, " according to the 15-count indictment handed down July 15 and unsealed Sept. 9.
"This office will continue to investigate and prosecute those who violate criminal laws in order to avoid the tax-paying obligations other members of the community meet, " said Assistant U.S. Attorney Elliot Enoki.
The Gimmel Group was incorporated April 29, 2015, and administratively terminated by the state on Dec. 7, 2018, according to the Department of Commerce and Consumer Affairs.
Heart and Jung allegedly conspired with the Gimmel Group's owner and a signatory of Mortgage Compliance Advisors &Solutions LLC, a Florida company, by recruiting at least five other people to file false tax returns to obtain refunds they did not deserve.
The five are listed only by their initials in the indictment : C.H., B.K.K., C.S.W., S.S.L. and J.H.
From 2015 to 2019, Heart, Jung and the owner of Gimmel Group allegedly used MCA &S to act as their recruit's mortgage lender to help fill out Internal Revenue Service Form 1099-MISC and form 1040 to claim fake, sizable tax withholdings. The conspirators allegedly filed a false 2014 amended individual income tax return that claimed a refund of $464, 904 and a false 2015 individual income tax return that claimed a refund of $1, 134, 902, according to DOJ.
Heart and Jung paid the owner of the Gimmel Group "substantial fees " based in part on a percentage of tax refunds received and the amount of work done to facilitate false returns, according to the indictment. The pair created fake trusts and opened bank accounts in the name of the trusts to conceal the proceeds and prevent the IRS from recovering the money.
Heart and Jung cut cashier checks from to the accounts to pay alleged co-conspirators.
Some received $200, 000 cashier checks in 2016, others—B.K.K. and C.H.—got $34, 424 and $532, 424 for "assisting in the false tax filings and concealment, " according to court documents. The pair also authored letters and sent faxes to the IRS to block their collection efforts and assert that their allegedly fraudulent returns were real.
Jung was arrested Sept. 4 in Seattle, and her matter was transferred to the U.S. District Court for the District of Hawaii. Heart was arrested Sept. 18 in Honolulu.
If convicted, Heart and Jung each face maximum sentences of 10 years in prison for each count of money laundering, three years for filing a false tax return and five years for conspiracy to defraud the United States.
IRS Criminal Investigation is investigating the case.
Trial Attorneys Sarah A. Kiewlicz and Valerie G.
Preiss of the Tax Division and Assistant U.S. Attorney Gregg Paris Yates of the U.S. Attorney's Office are prosecuting.
The federal probe resulted in at least two other sets of charges this year.
In May a federal indictment revealed that from 2015 to 2021, , along with an unnamed co-conspirator, prepared and filed a Form 1099-MISC reporting bogus tax withholding, as well as a false 2014 amended individual income tax return that requested a refund of $225, 327, based on those fraudulent withholdings.
After receiving the alleged false return, the IRS issued a refund to the Chocks. The Chocks allegedly took steps to prevent the IRS from retrieving the money once the government tried to collect. Michael Chock is accused of using local banks to launder the money, according to DOJ.
In June another Ewa Beach couple, , were indicted for conspiring to defraud the United States by filing a false tax return. also was charged with four counts of money laundering.
From 2015 to 2019 the couple and another individual not named by DOJ in the indictment allegedly filed a false 2014 amended individual income tax return claiming a refund of $188, 239 that was not based on real financial information. After the IRS issued the refund, Braumuller-Hawver allegedly laundered the fraudulently obtained tax refund through a series of financial transactions using local banks, according to DOJ.
The Gimmel Group owner is listed as an unidentified co-conspirator in each indictment.
