Enforcement actions focused on tax and COVID-related fraud, money laundering, cybercrimes
Over 2,500 criminal investigations, the identification of more than $10 billion from tax fraud and financial crimes, and a nearly 90% conviction rate are just a few highlights from the IRS-Criminal Investigation (IRS-CI) Fiscal Year 2021 Annual Report. The report, released Thursday, details statistics, important partnerships and significant criminal enforcement actions from IRS-CI, the criminal investigative arm of the IRS, for the past fiscal year, which began October 1, 2020, and ended September 30, 2021.
“IRS-CI’s Houston Field Office covers approximately two-thirds of the entire State of Texas, an area made up of incredibly diverse communities, cultures, and individuals who are the pride and heart of Texas. As the only federal law enforcement agency with the authority to investigate criminal violations of the Internal Revenue Code, we are the backbone of our nation’s voluntary tax compliance system that provides for infrastructure, education and national defense,” said Houston Field Office Special Agent in Charge Rick Goss. “While our core mission focus has been and will remain the strict enforcement of our tax laws, the special agents, analysts, and professional staff of the Houston Field Office play a very important role in both stopping and deterring a myriad of other financially related crimes.”
The Houston Field Office’s area of responsibility encompasses the U.S. District Court’s Southern and Western districts of Texas, with field office boundaries ranging from Houston to El Paso and from Waco to Laredo. Due to the proximity to the Mexican international border and having some of the fastest-growing cities and counties in the United States within its jurisdiction, Houston special agents work a variety of cases, emphasizing traditional taxrelated crimes such as employment tax, corporate fraud, identity theft, unscrupulous return preparers and general fraud. The Houston Field Office also provides crucial support to task forces involving counterterrorism, public corruption, human trafficking, drugs, and complex money laundering violations.
In fiscal year 2021, IRS-CI built upon its existing network of U.S. field offices and international attachés to combat financial crimes across the globe. The agency’s alliance with the Joint Chiefs of Global Tax Enforcement (J5) helped strengthen public-private partnerships with financial institutions and the Fin-Tech industry to deter and identify criminal activity. Additionally, IRS-CI established its first cyber attaché in The Hague, Netherlands, to proactively support cyber investigative needs in coordination with Europol.
“IRS-CI continues to lead tax and financial investigations here in the U.S. and across the globe,” said IRS-CI Chief Jim Lee. “In fiscal year 2021, as we faced the second year of a global pandemic, our team of agents continued to overcome personal and professional challenges to target criminals who exploited the U.S. tax and financial systems for personal gain.”
While IRS-CI agents spent most of their investigative manhours, about 72%, investigating tax-related crimes like tax evasion and tax fraud during fiscal year 2021, they also made significant contributions to money laundering, narcotics trafficking, public corruption, terrorism and COVID-19 fraud investigations.
Some of the Houston Field Office’s more notable cases that resulted in criminal prosecution in Fiscal Year 2021 include:
A 15-year sentence was handed down to Luis de Jesus Rodriguez of Houston, also known as the “H-Town Hunter,” for running an international sex trafficking conspiracy involving the recruitment and exploitation of numerous young women.
Bobby Rouse of Houston, a former executive of Continum Healthcare LLC, received a 10- year sentence for the healthcare scam he and others ran which billed Medicare $189 million in fraudulent partial hospitalization program services.
James Clinton Fletcher, of Odessa, was sentenced in Midland to 15 years in prison for his defrauding of both family and friends of $18 million, as well as his willful failure to pay over employee withholding taxes, amounting to $1.2 million to the IRS, while he ran the now defunct San Jan, LLC.
Robert “Scott” Villarreal was sentenced to seven years in prison, along with his ex-wife Tamara Villarreal to five years in prison, for their role in a fraud scheme that embezzled millions from Tamara’s former employer, Austin-based Richardson Enterprises, as well as their subscribing to a false federal tax return for 2013.
Bradley Lane Croft, the owner of San Antonio-based Universal K-9, Inc., was sentenced in April 2021 to nearly 10 years in prison for a scheme to defraud the federal government of more than $1.5 million in Veterans Affairs GI Bill benefits as well as submitting false federal tax returns for 2016 and 2017.
With the new fiscal year underway, also comes new and unique challenges and changes, including the continual developments in cyber related crimes and international threats. The diverse backgrounds of the special agents and staff of the Houston Field Office stand ready to meet these challenges and help ensure that criminals who seek to prey on our nation’s citizens through tax fraud and other financially related crimes are quickly stopped, caught, and ultimately prosecuted.
The report includes additional case examples for each U.S. field office, an overview of IRS-CI’s international footprint, details about the specialized services provided by IRS-CI and investigative statistics, broken down by discipline, for fiscal year 2021.