Woman Convicted After 7 Day Jury Trial of Mortgage and Tax Fraud

Allison Tussey —  February 5, 2014 — Leave a comment

Melanie Ferreira, 61, Lagrangeville, New York, was found guilty on all counts of a four-count Indictment that charged her with engaging in a series of frauds, which included cheating the Internal Revenue Service (“IRS”) out of nearly half a million dollars, and perpetrating a bank fraud scheme.

The verdict came following a seven-day jury trial in White Plains Federal Court before U.S. District Judge Cathy Seibel.

According to the Indictment and the evidence at trial:

Ferreira perpetrated a bank fraud scheme against the Bank of America (BOA), which was the bank that held the mortgage for her house in Dutchess County, New York (“House 1”). In May 2010, she caused a forged cashier’s check for $316,966.05, purporting to be drawn on the Federal Reserve Bank of Cleveland, Ohio (“Check 1”), to be sent to BOA in satisfaction of the mortgage on House 1. Believing that Check 1 was legitimate, BOA filed a satisfaction of mortgage. BOA subsequently determined that Check 1 was fraudulent and filed suit in New York State Supreme Court in order to have the mortgage reinstated.

On June 2, 2012, Ferreira sent a personal check in the amount of $305,000 (“Check 2”) to BOA, purporting, again, to pay off the balance of her mortgage. On the memo line of Check 2, Ferreira wrote, in red ink, “FOR DISCHARGE OF DEBT EFT ONLY.” Check 2 was written on a bank account that had been closed two years before.

In addition, on October 15, 2009, Ferreira filed a U.S. Individual Income Tax Return, Form 1040, for the year 2008 (“2008 Return”). In her 2008 Return, she falsely reported interest income of $661,600 from three different banks. She then falsely claimed that she had paid taxes in the amount of $661,536 to the IRS for Tax Year 2008. On that basis, she claimed a refund of $440,924. In reality, she actually earned only $17 in interest income in 2008. Further, contrary to her claim on her 2008 Return that she had already paid $661,536 in federal taxes, she actually paid only $236.

On October 23, 2009, the IRS wired $440,924 to Ferreira’s bank account. That same day, Ferreira wired $44,100 to the individual listed on her tax return as her “tax preparer” and $88,172 to the individual who introduced her to the “tax preparer.”

The following spring, on April 15, 2010, Ferreira tried to carry out the same type of scheme –The following spring, on April 15, 2010, Ferreira tried to carry out the same type of scheme – requesting of a refund of over $332,033 – when she filed her Form 1040 for the year 2009, but this time, the IRS rejected her refund request. Thereafter, when the IRS notified Ferreira that she was required to pay back the $440,924 plus interest and penalties, Ferreira sent the IRS a series of incomprehensible documents and a worthless check for $759,033.05 written on a closed account.

As reflected in papers filed in Court: Ferreira’s schemes – sometimes known as a 1099-OID scheme and an electronic funds transfer or “EFT” scheme – are schemes often used by adherents to the Sovereign Citizens Movement, a group comprised of individuals who, although they reside in the United States, assert the position that they do not have to answer to any government authority, including courts, taxing entities, motor vehicle departments or law enforcement.

Ferreira faces a maximum sentence of 58 years in prison and a maximum fine of $1,000,000, or twice the gross gain or gross loss from the offense. Judge Seibel set a sentencing date of May 20, 2014 at 2 p.m.

Judge Seibel remanded the defendant following the conviction.

Preet Bharara, the United States Attorney for the Southern District of New York, announced the verdict.

Mr. Bharara praised the outstanding investigative work of the law enforcement partners involved in the investigation, including the FBI’s Joint Terrorism Task Force and the IRS.

This prosecution is being handled jointly by the Office’s Terrorism and International Narcotics Unit.

U.S. Attorney Preet Bharara stated: “Melanie Ferreira thought she could enjoy the fruits of law-abiding taxpayers’ money while evading the tax laws and defrauding the government. Through today’s jury verdict, she learned how wrong she was.”

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