Friday, November 30, 2007
Another tax evasion fraud scheme. Charged with two counts of filing false tax returns.
Three Tax-Related Charges Added to Charges Arising From a $32 Million
Computer Equipment Leasing Scheme
Baltimore, Maryland - A federal grand jury indicted Alan B. Fabian, age 43, of Cockeysville, Maryland, today for two counts of filing false tax returns and one count of making false statements in connection with a tax return, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Fabian previously had been indicted on federal charges for mail fraud, money laundering, bankruptcy fraud, perjury and obstruction of justice arising out of a scheme to defraud a computer equipment leasing company, financial institutions and a government consulting company of $32 million.
Today’s superseding indictment alleges that on April 15, 2003 Fabian, a certified public accountant, filed a false individual federal tax return for the tax year 2002 indicating that he and his spouse had total income of $475,827 when in fact, he knew that he had unreported additional income of at least $500,000 obtained from his participation in the equipment leasing scheme that is the subject of the pending indictment. He also allegedly indicated that $46,425 in federal taxes had been withheld on his behalf in 2002, when in fact he knew that only $14,654.68 in federal taxes had been withheld that year.
Similarly, the superseding indictment alleges that on October 15, 2004 Fabian filed a false individual federal tax return for the tax year 2003 indicating that he and his spouse had total income of $573,893 when in fact, he knew that he had unreported additional income of at least $1 million obtained from his participation in the fraudulent computer equipment leasing scheme. He also allegedly indicated that $46,000 in federal taxes had been withheld on his behalf in 2003, when in fact he knew that only $13,969.80 had been withheld that year.
Today’s indictment also alleges that on December 27, 2005 Fabian filed an individual federal tax return for the tax year 2004 which indicated that $504,000 in federal taxes had been withheld on his behalf in 2004, when in fact he knew that only $28,985 in federal taxes had been withheld that year.
Allegations included in the earlier indictment and repeated in the superseding indictment returned today charge that from March 2001 to July 2004, Fabian caused Strategic Partners International LLC and later, Strategic Partners International, Inc., companies that he formed (collectively, SPI), to enter into sale-leaseback transactions to purportedly purchase $32 million in computer hardware and software, when in fact SPI either never purchased such equipment or purchased substantially less expensive equipment. As a result of this scheme, the indictment alleges that Fabian caused his employer to make approximately $800,000 in rent payments to the leasing company and funding sources on purported leases entered into by SPI. Fabian is alleged to have diverted substantial amounts of cash provided to SPI by the leasing company for his personal benefit, including at least $500,000 to purchase real estate in North Carolina, $600,000 to pay for private jet travel and $3.9 million to form and operate the Centre for Management and Technology (CMAT), a not-for-profit entity located in Baltimore.
The indictment also repeats allegations that on August 31, 2004, two of the funding sources filed a petition forcing SPI, Inc. involuntarily into bankruptcy. From June 2004 to at least January 2007, Fabian engaged in a scheme to defraud the bankruptcy court and creditors of SPI in order to keep the proceeds of his mail fraud scheme out of reach of SPI’s creditors by creating false documents and giving false testimony. Fabian is alleged to have perjured himself in the course of two depositions in the SPI, Inc. bankruptcy case.
Finally, the indictment repeats charges that Fabian obstructed justice by: falsely testifying before the bankruptcy court in December, 2006 about transfers of funds he made from SPI to purchase real estate in North Carolina; filing false financial statements with the bankruptcy court on three occasions in 2004 and 2005; and influencing a business associate to provide false information to a forensic accountant retained by the bankruptcy trustee.
The indictment seeks forfeiture of $32 million in substitute assets, including eight properties in North Carolina and a property in Hunt Valley, Maryland; cash; a Silverton yacht; three vehicles; and Fabian’s interest in several companies.
Fabian faces a maximum sentence of three years on each of two counts of filing false tax returns and five years for making false statements. Fabian faces a maximum sentence of 20 years in prison for each of the nine counts of mail fraud; 10 years in prison for each of the nine counts of money laundering and one count of obstruction of justice; and five years in prison for each of the two counts of bankruptcy fraud and two counts of perjury.
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.
United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Tonya Kelly Kowitz and Jonathan Biran, who are prosecuting the case