Myrtle Beach family sentenced to federal prison in tax, COVID fraud scheme
MYRTLE BEACH, S.C. (WMBF) - Three members of a Myrtle Beach family were found guilty of defrauding the federal government out of more than half a million dollars.
Two members of a Myrtle Beach family were sentenced to federal prison, and a third to probation, for their roles in a scheme to defraud the United State government out of over $500,000.
According to the Department of Justice, the family members submitted false tax returns, and by stealing economic impact payments sent to others as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
- Donna Karakatsani, 48, was sentenced to two years in prison
- Her son, Ivo Krasimirov Ivanov, 29, was sentenced to a year and a half in prison
- Todor Milkov Stoenchev, 54, Karakatsani’s husband and Ivanov’s stepfather, was sentenced to five years of probation given his more limited role in the scheme.
United States District Judge Sherri A. Lydon sentenced Karakatsani to 24 months in federal prison, and Ivanov to 18 months in federal prison, both to be followed by a three-year term of court-ordered supervision.
There is no parole in the federal system.
Lydon sentenced Stoenchev to five years’ probation.
Additionally, the DOJ recovered approximately $380,000 of stolen funds primarily through sales of the ill-gotten property, and the defendants were ordered to pay an additional $150,893.58 in restitution.
Court documents how the defendants used the money for personal expenses and to buy real estate.
Evidence presented to the court showed that beginning sometime in 2020, the IRS, along with the Department of State OIG, began an investigation into the family regarding false claims for tax refunds and stolen refunds.
Karakatsani and Ivanov held themselves out as tax preparers and targeted foreign individuals, usually Bulgarians, who had spent time in the United States, according to court documents.
Court documents show Karakatsani and Ivanov recruited foreign nationals through the internet and at various locations around Myrtle Beach.
They also submitted numerous tax returns in the names of these foreign individuals, and would often cause those foreign individuals to receive refunds, primarily education credits. However, as foreign workers, they were not entitled to these education credits.
According to court documents, to prevent their scheme from being detected, the family enlisted other individuals to open U.S. bank accounts to deposit the refunds, and paid these individuals $100 for each account they opened.
Ultimately, 68 bank accounts were opened across 16 different banks in the names of 14 different individuals.
The investigation revealed the defendants altered their scheme when, as part of the CARES Act, the government sent economic impact payments to qualifying individuals to their bank accounts on file.
Hundreds of economic impact payments were deposited into the bank accounts under the defendants’ control.
Court documents show the family members kept the economic impact payments for themselves although they were aware that neither they nor the foreign individuals to whom the payments were directed, were entitled to these funds.
Ultimately, they defrauded the government out of $530,292.60.
“During a time when many families were struggling to make mortgage payments, this family was buying houses with money they stole from the American people,” said U.S. Attorney Adair F. Boroughs. “This fraud scheme was complex, lasted over several years, and took place primarily during a pandemic when these funds were sorely needed. These Defendants deserve their sentences, and I want to thank our federal partners who followed every lead, including interviewing dozens of foreign nationals and poring through mountains of tax returns and foreign-language correspondence. Their quick and thorough investigation also allowed the Government to recover a substantial portion of the stolen funds.”
The case was investigated by the IRS and Department of State OIG, with assistance from the Department of Treasury’s Bureau of the Fiscal Service, the Myrtle Beach Police Department, and the Horry County Police Department. Assistant U.S. Attorney Derek A. Shoemake, who also serves as the Office’s Coronavirus Fraud
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with multiple agencies to enhance efforts to combat and prevent pandemic-related fraud. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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