CEO of Free Truth Enterprises Charged with Tax Fraud and Mortgage Loan Fraud
|U.S. Attorney’s Office January 23, 2013|
CINCINNATI—A federal grand jury has indicted Regina Shields, 40, of Cincinnati, Ohio, charging her with scheming to file false claims for federal income tax refunds with the Internal Revenue Service (IRS), as well as wire fraud and money laundering in connection with a mortgage fraud.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, Cincinnati Field Office; and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI); announced the indictment unsealed today following her arrest.
The indictment charges Shields with four counts of filing false claims for federal income tax refunds with the IRS, one count of wire fraud, and one count of money laundering. In addition, the indictment contains two forfeiture allegations, one of which calls for the forfeiture of $141,491 relative to the wire fraud that was charged in this case.
According to the indictment, Regina Shields formed a non-profit corporation called Free Truth Enterprises, and since 2000, Shields has served as the president and CEO. From 2007 through 2010, Shields allegedly filed federal income tax returns claiming that she was employed by and received significant W-2 wages from Free Truth Enterprises. The income tax returns also claimed significant withholdings by Free Truth Enterprises. As a result of the withholdings and deductions claimed in the income tax returns, Shields received substantial tax refunds for each of those tax years.
However, Free Truth Enterprises allegedly did not have any significant receipts or engage in charitable activity. Free Truth Enterprises did not pay any withholdings to the IRS or make payroll payments to Shields that were consistent with her income tax returns and W-2 forms. For the 2007 through 2010 income tax years, Shields allegedly received $61,315 in claims for fraudulent federal income tax refunds.
In addition, the indictment states that between 2007 and 2008, Shields resided at 2985 Timbercrest Drive, Cincinnati. At that time, the brother of Shields’ boyfriend owned the property. In 2007, the mortgage lender initiated foreclosure proceedings on the property. Allegedly, the property was auctioned as part of the foreclosure process, and the winning bid of $164,000 was placed by Shields through the name of Property Negotiation Group LLC.
At the sheriff’s sale, Shields allegedly presented a check in the amount of $164,000 from Property Negotiation Group LLC for the Timbercrest property. However, the bank account that the check was written from had been closed for months and the check was subsequently returned for insufficient funds.
An indictment is merely an accusation. All defendants are presumed innocent until and unless proven guilty. File false claims for federal income tax refunds with the IRS is punishable by up to five years in prison and a fine of $250,000. Wire fraud is punishable by up to 20 years in prison and a fine of $250,000. Money laundering is punishable by up to 10 years in prison and a fine of $250,000 or twice the amount of the criminally derived property involved in the transaction.
Shields appeared before U.S. Magistrate Judge Stephanie K. Bowman today, who released her on bond.
This case is being prosecuted by Assistant United States Attorney Timothy Mangan and was investigated by special agents of IRS-Criminal Investigation and FBI.