Home Knoxville Press Releases 2009 Loudon Businessman Pleads Guilty to Wire Fraud, Money Laundering, and Tax Charges
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Loudon Businessman Pleads Guilty to Wire Fraud, Money Laundering, and Tax Charges

U.S. Attorney’s Office March 23, 2009
  • Eastern District of Tennessee (865) 545-4167

KNOXVILLE, TN—James R. “Russ” Dedrick, U.S. Attorney of the Eastern District of Tennessee, announced today that Joseph D. Brandenburg, 37, of Loudon, Tennessee, pled guilty today before United States District Judge Thomas W. Phillips to three counts of wire fraud, one count of money laundering and one count of filing a false tax return. Brandenburg is scheduled to be sentenced on July 13, 2009, at 2:00 p.m.

Brandenburg, operator of Extreme Logistics, LLC (Extreme), pled guilty to all counts of an Information filed on February 6, 2009. The Information charges that Extreme established a contractual relationship, commonly referred to as “factoring,” with Prime Financial Services, Inc. (Prime), a business that purchased accounts receivables. Under the factoring arrangement, Extreme would submit an invoice to Prime upon completion of a route hauled by Extreme on behalf of Bowater, TNT-GM, or TNT-BMW. Prime would pay Extreme a percentage of the invoice amount up front and the remaining balance, minus Prime’s fee, would be paid to Extreme after Bowater, TNT-GM, or TNT-BMW forwarded payment for the shipment to Prime.

During the plea hearing, Brandenburg admitted that he devised a scheme where he caused invoices to be submitted to Prime which falsely represented that Extreme had hauled loads of freight which Brandenburg knew had not been hauled. Prime then wire transferred funds into Extreme’s bank account after receiving the bogus invoices. Brandenburg acknowledged three fraudulent transactions in June 2005, which totaled $151,553.61.

Also, in support of his guilty pleas, Brandenburg admitted that in July 2005, he laundered the proceeds of the wire fraud scheme by transferring $30,000 from Extreme Logistics’ bank account to another business known as Extreme Properties, LLC. Additionally, Brandenburg admitted that he filed a false tax return for calendar year 2005, that reported a total loss of $1,806,235.00. Brandenburg acknowledged that he failed to report income on his tax return, which included personal purchases that he made from the Extreme Properties account. These items included building materials for his personal residence in Loudon, Tennessee, wages paid to laborers for work performed on his residence, and personal ATVs.

The plea agreement signed by Brandenburg sets forth that, for the purposes of the United States Sentencing Guidelines, his wire fraud scheme amounted in losses in excess of $1 million. Also, Brandenburg acknowledged that the tax loss to the United States resulting from false tax returns filed for 2004, 2005 and 2006 was between $400,000 and $1 million. Brandenburg agreed to pay restitution to the Internal Revenue Service a total of $633,772 in unpaid taxes for 2004 through 2006 plus at least $147,152 in interest.

This investigation is being conducted jointly by the Internal Revenue Service, Criminal Investigation Division (IRS-CID), and the Federal Bureau of Investigation (FBI).

 

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