Milton Tillman, Jr. and “Moe” Tillman, III Indicted on Federal Charges Relating to Operation of 4 Aces Bail Bonds
Bail Bond Business Allegedly Concealed Ownership and Hid Taxable Income Tillman, Jr. Also Charged with No-Show Job at Baltimore Port

BALTIMORE—A federal grand jury has indicted Milton Tillman, Jr., age 53, and his son, Milton Tillman, III, a/k/a “Moe,” age 35, both of Baltimore, Maryland, for conspiracy to defraud the Treasury Department, making false statements on tax returns, and unlawfully engaging in the business of insurance. Milton Tillman, Jr. is also charged with wire fraud in connection with a scheme to defraud Ports America Baltimore, Inc., where he worked as a member of the International Longshoremen’s Association AFL-CIO (ILA). The indictment was returned on February 23, 2010 and unsealed today. The Tillmans are scheduled to have an initial appearance in U.S. District Court in Baltimore today at 4:00 p.m.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; Special Agent in Charge Robert L. Panella of the U.S. Department of Labor – Office of Inspector General; and Special Agent in Charge C. André Martin of the Internal Revenue Service – Criminal Investigation.

“The indictment alleges that Milton Tillman, Jr. and Milton “Moe” Tillman, III conspired to defraud the IRS and operate a bail bond business in violation of federal law, while Milton Tillman, Jr. collected pay for a no-show job at the Port of Baltimore,” said U.S. Attorney Rod J. Rosenstein. “Because the bail bond industry plays a major role in Maryland’s criminal justice system, the integrity of the system is jeopardized by corrupt bail bondsmen.”

FBI Special Agent in Charge Richard A. McFeely added, “This case demonstrates the FBI’s commitment to work in partnership with federal and local law enforcement to investigate corruption in the criminal justice system and root it out.”

“The indictment sends a message that IRS-Criminal Investigation operates year round to protect the integrity of our system of taxation,” stated C. André Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington D.C. Field Office. “No matter what your career is, all U.S. citizens are obligated to comply with the tax laws.”

According to the 28 count indictment, Moe and Milton Tillman operated 4 Aces Bail Bonds, Inc. (4 ACES) with offices at 2332 E. Monument Street in Baltimore and 1101 North Point Boulevard, Suite 121 in Baltimore. 4 ACES engaged in the bail bonding business, securing the release of individuals who were charged in the District and Circuit Courts of Maryland and elsewhere. Beginning on December 28, 2004, 4 ACES also did business as Global Surety, incorporated by Moe Tillman. In return for assuming the risk of an arrestee’s future appearances in court, 4 ACES collected a fee, usually a percentage of the bail amount set by the court. A percentage of each fee collected by 4 ACES was forwarded to the surety insurance company insuring the bond. 4 ACES’ share of the fees constituted virtually all of the company’s gross receipts. Between 2001 and 2006, the number of bail bonds written increased quickly, so that the company’s gross receipts reported to the IRS went from $188,337 in 2000, to $5,822,588 in 2006.

The indictment alleges that from 2001 through October 2007, Milton and Moe Tillman structured the ownership and business operations of 4 ACES in ways that concealed from the IRS Milton Tillman’s control of the company and the amount and disposition of the income Moe and Milton Tillman derived from the company. The indictment alleges that Moe and Milton Tillman failed to report to the IRS the use of 4 ACES funds to pay some of Milton Tillman’s personal expenses, such as payments on life insurance policies, car payments on his 2004 BMW, and payment of his personal income taxes. In addition, Milton and Moe Tillman allegedly transferred 4 ACES funds to themselves or corporations they controlled and used the funds for their personal gain. The Tillmans allegedly used the pretense that some of the transfers were non-taxable loans, then used the funds to invest in real estate through the payment of earnest money deposits, closing costs and monthly mortgage payments, as well as for other purposes.

Milton Tillman was also a member of the International Longshoremen’s Association AFL-CIO and was assigned to particular shifts to unload or load cargo vessels on behalf of Ports America Baltimore, Inc., a stevedoring company. The indictment alleges that in addition to misrepresenting to the IRS the extent to which he worked as a longshoreman, Milton Tillman allegedly defrauded Ports America, obtaining wages and fringe benefit payments for hours that he did not work at his job. The indictment alleges that Tillman obtained approximately 64 payroll checks that included payment for hours he did not work, including hourly wages and benefits he received while on vacation in Brazil, Spain and Las Vegas.

Specifically, the indictment charges that Milton Tillman filed false tax returns for 2002 through 2006, substantially underrreporting his total income, and that Moe Tillman did the same with his 2005 and 2006 tax returns. In addition, the indictment charges that Moe Tillman filed false corporate tax returns for 2004 through 2006. Furthermore, the indictment charges that Milton Tillman was prohibited from engaging in the business of insurance due to a previous conviction involving dishonesty and that Moe Tillman was aware that his father was prohibited from engaging in the business of insurance, but still permitted his father to participate in the bail bond business. Finally, Milton Tillman is charged with wire fraud in connection with the scheme to defraud Ports America.

U.S. Attorney Rosenstein gave special thanks to Acting Maryland Insurance Commissioner Beth Sammis and Maryland Attorney General Douglas F. Gansler for the work of their agencies in the investigation and prosecution of this case.

The Tillmans face a maximum sentence of five years in prison on the conspiracy charge; three years in prison on each count of filing a false tax return; and five years in prison for unlawfully engaging in and permitting a prohibited person to participate in the business of insurance. Milton Tillman also faces a maximum of 20 years in prison on each of 15 counts of wire fraud.

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.

Anyone with information about criminal activity involving bail bonds should call the FBI at 410-265-8080 or send an e-mail message to baltimore@ic.fbi.gov.

United States Attorney Rod J. Rosenstein thanked Assistant United States Attorneys Martin C. Clarke and Stephen M. Schenning, who are prosecuting the case.