Former Accounting Supervisor Pleads Guilty To Embezzling Funds From Johnson Co. District Court

Posted on May 16, 2022 by Camron Hoorfar

A Kansas woman pleaded guilty to federal charges of wire fraud and filing a false tax return related to a scheme to embezzle money from the Johnson County District Court in Olathe, Kansas. Court documents indicate that Dawna Kellogg stole at least $776,691.50 in cash while employed in the accounting department at the Johnson County District Court. As the Accounting Supervisor for the Court, Kellogg managed the accounting department, collected funds from each separate county system, recorded funds collected, processed daily reports, and deposited the collected funds into the Court’s bank account. The Court utilized a case management system named the Justice Information Management System (JIMS), which had an accounting function to maintain the Court’s financial transactions.

Kellogg stole cash that the Court received, such as bail bond payments, and either spent or deposited the embezzled proceeds into her personal accounts. Kellogg concealed the stolen cash by two primary means: (1) manipulating an unclaimed property account and (2) creating an open payable in the JIMS system and then issuing a check that was both drawn on and deposited into the Court’s bank account, which created a corresponding debit and credit and thus no increase or decrease in the amount under deposit.

Kellogg pleaded guilty to one count of wire fraud and one count of subscribing to a false tax return. As part of her plea agreement, Kellogg agreed to not contest that the total loss resulting from the scheme to defraud was $1,135,988.13, which consists of $359,296.63 from 2007 through 2009 and $776,691.50 from 2010 through June 2017.  Sentencing is scheduled for August.

In need of legal advice? Call our office at 816-524-4949 or click here to schedule a consultation.

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IRS reminds employers of penalty relief related to claims for the Employee Retention Credit

Posted on May 15, 2022 by Camron Hoorfar
Courtesy of the Internal Revenue Service

The Department of the Treasury and the Internal Revenue Service have received requests from taxpayers and their advisors for relief from penalties arising when additional income tax is owed because the deduction for qualified wages is reduced by the amount of a retroactively claimed employee retention tax credit (ERTC), but the taxpayer is unable to pay the additional income tax because the ERTC refund payment has not yet been received.

Treasury and the IRS are aware that this situation may arise, in part, due to the IRS’s backlog in processing adjusted employment tax returns (e.g., Form 941-X) on which the taxpayers claim ERTC retroactively. Based on applicable law, IRS guidance provides that an employer must reduce its income tax deduction for the ERTC qualified wages by the amount of the ERTC for the tax year in which such wages were paid or incurred. Taxpayers that claimed the ERTC retroactively and filed an amended income tax return reducing their deduction for the ERTC qualified wages paid or incurred in the tax year for which the ERTC is retroactively claimed have an increased income tax liability, but may not yet have received their ERTC refund.

This release reminds taxpayers that, consistent with the relief from penalties for failure to timely pay noted in Notice 2021-49, they may be eligible for relief from penalties for failing to pay their taxes if they can show reasonable cause and not willful neglect for the failure to pay. In general, taxpayers may also qualify for administrative relief from penalties for failing to pay on time under the IRS’s First Time Penalty Abatement program if the taxpayer:

  1. Did not previously have to file a return or had no penalties for the three prior tax years,
  2. Filed all currently required returns or filed an extension of time to file and
  3. Paid, or arranged to pay, any tax due.

Need tax help? Call our office at 816-524-4949 or click here to schedule a consultation.

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Checking in from Mohammad in Afghanistan

Posted on May 14, 2022 by Camron Hoorfar

Some of our valued members of our law office team include the children that we are able to sponsor. We read about Maryam in another recent blog post, but we also have an update from Mohammad, another child our office sponsors in Afghanistan. Mohammad has completed ninth grade since our last update, and he is preparing for high school. His mother and older brother have struggled to find sources of income amidst recent political changes. The family is currently facing a shortage of nutritious food as prices have increased, but they are grateful for support and assistance. We did not receive any photos with this recent update. Below you will find the most recent photo we have received of Mohammad.

If you are interested in sponsoring a child or making a donation, click here for more information.

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CFPB Orders Bank of America to Pay $10 Million Penalty for Illegal Garnishments

Posted on May 13, 2022 by Camron Hoorfar

The Consumer Financial Protection Bureau (CFPB) finalized an enforcement action against Bank of America for processing illegal, out-of-state garnishment orders against its customers’ bank accounts. Bank of America unlawfully froze customer accounts, charged garnishment fees, garnished funds, and sent payments to creditors based on out-of-state garnishment court orders that should have been processed under the laws and protections of the states where the consumers lived, according to a CFPB press release.

Need to speak with an attorney? Call our office at 816-524-4949 or click here to schedule a free consultation.

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Consumer Debt Soared by $52 Billion in March

Posted on May 12, 2022 by Camron Hoorfar

Consumer debt levels for March 2022 rose by $52.4 billion, an annual increase of 14%, seasonally adjusted, according to Federal Reserve data. Revolving credit, which includes credit cards, grew 21.4%. Despite strong wage growth—average hourly earnings grew 5.5% in the last 12 months—consumers are seeing these gains offset by the highest inflation in 40 years. The cost of food has risen about 9% over the past year, and a gallon of gas now averages $4.279 at the pump.

The Federal Reserve recently announced a half-point rate hike as part of a series of actions aimed at tackling runaway inflation. This means that interest rates on everything from credit cards to car loans will rise, putting further pressure on the household budget. “All of this newfound debt that Americans have is only going to get more and more expensive in the coming months,” said Matt Schulz, chief credit analyst for Lending Tree. The rise in debt levels is likely driven by two factors, Schulz said. First, there is some pent-up spending after lockdown. Then there are other cash-strapped individuals who are turning to credit cards to pay for basic needs that have grown more expensive, he said.

Struggling with debt? You have options. Call our office at 816-524-4949 or click here to schedule a free consultation.

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U.S. Retail Gasoline Prices Hit New Record, as Refiners Struggle to Meet Demand

Posted on May 11, 2022 by Camron Hoorfar

U.S. retail gasoline prices rose on Tuesday hitting another all-time high, surpassing the previous one set in March as global refiners grapple with a bottleneck that has caused prices to surge ahead of driving season. According to the American Automobile Association, the average retail cost of a gallon of gasoline as of early Tuesday was $4.374, up from the previous record of $4.331. Since March 30, Brent crude futures are down 7%, but gasoline futures are up 9.4%, hitting a record high of $3.7590 per gallon on Friday before selling off on Monday. Refinery closures due to both scheduled maintenance and unplanned upsets have driven up fuel prices, even as the United States and other countries have moved to boost global crude supply. Global fuel stockpiles are shrinking as demand returns to pre-pandemic levels. The invasion of Ukraine and subsequent sanctions on Russia by the United States and its allies led to further supply shortages. HF Sinclair Corp. CEO, Mike Jennings, has estimated that the world has lost 1 million barrels of refining capacity and 1.5 million barrels of oil supply since the pandemic.

Struggling financially amidst soaring gas prices and inflation? Call our office at 816-524-4949 or click here to schedule a free consultation to discuss your options.

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Former Paralegal for Chicago Law Firm Charged With Embezzling Bankruptcy Estate Funds

Posted on May 10, 2022 by Camron Hoorfar

A former paralegal for a Chicago law firm has been indicted for allegedly embezzling more than $600,000 from bankruptcy estate accounts. Becky Sutton fraudulently embezzled the funds from 2009 to 2018 while working on bankruptcy matters at the firm, according to an indictment in U.S. District in Chicago. The indictment states that Sutton arranged the fraudulent transfers of bankruptcy funds from fiduciary bank accounts intended  for creditors to accounts Sutton controlled, including her personal bank account, credit card account, student loan account, and mortgage account.  In one instance, Sutton used a company with a name similar to a true creditor to disguise her fraudulent diversion of the funds, the indictment states. 

The indictment charges Sutton with three counts of wire fraud and three counts of embezzlement from the estate of a debtor. The indictment seeks forfeiture from Sutton of $611,263 in alleged criminally derived proceeds. It is important to remember that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each wire fraud count is punishable by up to 20 years in federal prison, while each embezzlement count carries a maximum sentence of five years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Considering bankruptcy? Call our office at 816-524-4949 or click here to schedule a free consultation to discuss your options with an attorney.

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MoneyGram Sued for Allegedly Delaying Transfers and Withholding Refunds

Posted on May 9, 2022 by Camron Hoorfar

The international money transfer company MoneyGram harmed customers by delaying transfers and failing to properly investigate and fix transfer errors, according to a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) and New York’s attorney general. The suit accuses MoneyGram of repeatedly defying a variety of consumer protection laws and failing to correct problems identified by regulators. Officials at the consumer bureau did not specify how many customers they believe were harmed, but they pointed to MoneyGram’s broad reach: The company transmits around $100 billion a year for some 47 million customers in 200 countries. Immigrant workers often rely on MoneyGram and its competitors to send money to relatives back home.

Letitia James, New York’s attorney general said “Companies have an obligation to be transparent with consumers, treat them fairly and follow the law, but MoneyGram repeatedly failed to do so.” MoneyGram responded in a written statement calling the suit “frivolous.” Rohit Chopra, the consumer bureau’s director, cast MoneyGram’s actions as part of a pattern of misdeeds. The company paid $18 million in 2009 to settle fraud charges brought by the Federal Trade Commission, and paid $125 million in 2018 to settle charges that it had violated its earlier agreement with the commission and a 2012 deal with the Justice Department regarding its anti-fraud measures.

If you’re in need of legal help, call our office at 816-524-4949 or click here to schedule a consultation.

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JCPenney Owners Offer to Buy Kohl’s for $8.6 Billion

Posted on May 8, 2022 by Camron Hoorfar

The owners of JCPenney have made an offer to acquire rival Kohl’s in a deal that could value the department-store chain at upwards of $8.6 billion. Under the proposal, shopping-mall giant Simon Property and Canada-based Brookfield Asset Management — which together pulled JCPenney out of bankruptcy in December 2020 — have offered to acquired Kohl’s for $68 a share. Sources say that the plan is for JCPenney’s corporate parents to continue to maintain two separate brands while streamlining operations and cutting costs. The bidders’ plan for Kohl’s is to slash costs by $1 billion over the next three years. Kohl’s, based in Wisconsin, put itself up for sale earlier this year at the urging of activist investors Macellum and Engine Capital, who were unhappy with the direction of the company. Private equity giants Sycamore Partners and Leonard Green & Partners as well as Saks Fifth Avenue’s Canada-based parent company Hudson’s Bay are reportedly interested in acquiring Kohl’s.

Interested in speaking with an attorney? Call our office at 816-524-4949 or click here to schedule a consultation.

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Doctor Sentenced in $12 Million Medicare Fraud and Device Adulteration Scheme

Posted on May 7, 2022 by Camron Hoorfar

Donald Woo Lee, a California doctor, was sentenced to 93 months in prison for defrauding Medicare, re-packaging single-use catheters for re-use on patients, and submitting false declarations in a bankruptcy proceeding. Court documents indicate that Lee recruited Medicare beneficiaries to his clinics, falsely diagnosed them, and provided the beneficiaries with medically unnecessary procedures. Lee billed these procedures to Medicare using an inappropriate code in order to obtain a higher reimbursement. This practice is known as “upcoding.” Additionally, the evidence showed that Lee re-packaged used, contaminated catheters for re-use on patients. These catheters were cleared by the FDA for marketing as single-use only. The re-use of these devices put patients at risk of infection and other bodily injury.

Lee submitted claims of approximately $12 million to Medicare for the vein ablation procedures he performed, and received $4.5 million as a result. In 2019, Lee was convicted after a five-day trial, when a jury found him guilty of seven counts of health care fraud and one count of adulteration of a medical device. Lee also pleaded guilty on March 2, 2020, to one count of submitting false declarations in a bankruptcy proceeding. In addition to the term of imprisonment, Lee was sentenced to serve three years of supervised release and ordered to pay more than $4.5 million in restitution to Medicare.

If you’re interested in speaking with an attorney, call our office at 816-524-4949 or click here to schedule a consultation.

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