Melanie Ferreira, 62, Lagrangeville, New York, was sentenced to 51 months in prison following her conviction for engaging in a series of frauds, which included cheating the Internal Revenue Service out of nearly half a million dollars, and perpetrating a bank fraud scheme wherein she caused a forged cashier’s check to pay off her mortgage.
U.S. District Judge Cathy Seibel, who presided over Ferreira’s seven-day jury trial in February 2014, imposed the sentence.
According to the Indictment and the evidence presented at trial:Ferreira perpetrated a bank fraud scheme against the Bank of America (BOA), the bank that held the mortgage for her house in Dutchess County, New York (“House 1”). In May 2010, she caused a forged cashier’s check for $316,966.05, purporting to be drawn on the Federal Reserve Bank of Cleveland, Ohio (“Check 1”), to be sent to BOA in satisfaction of the mortgage on House 1. Believing that Check 1 was legitimate, BOA filed a satisfaction of mortgage. BOA subsequently determined that Check 1 was fraudulent and filed suit in New York State Supreme Court in order to have the mortgage reinstated. On June 2, 2012, Ferreira sent a personal check in the amount of $305,000 (“Check 2”) to BOA, purporting, again, to pay off the balance of her mortgage. On the memo line of Check 2, Ferreira wrote, in red ink, “FOR DISCHARGE OF DEBT EFT ONLY.” Check 2 was written on a bank account that had been closed two years before.
Also according to the indictment, on October 15, 2009, Ferreira filed a U.S. Individual Income Tax Return, Form 1040, for the year 2008 (“2008 Return”). In her 2008 Return, she falsely reported interest income of $661,600 from three different banks. She then falsely claimed that she had paid taxes in the amount of $661,536 to the IRS for 2008. On that basis, she claimed a refund of $440,924. In reality, in 2008 she actually earned only $17 in interest income. Further, contrary to her claim on her 2008 Return that she had already paid $661,536 in federal taxes, she actually paid only $236.
On October 23, 2009, the IRS wired $440,924 to Ferreira’s bank account. That same day, Ferreira wired $44,100 to the individual listed on her tax return as her “tax preparer” and $88,172 to the individual who introduced her to the “tax preparer.”
The following spring, on April 15, 2010, Ferreira tried to carry out the same type of scheme—requesting a refund of more than $332,033—when she filed her Form 1040 for the year 2009, but this time, the IRS rejected her refund request. Thereafter, when the IRS notified Ferreira that she was required to pay back the $440,924 plus interest and penalties, Ferreira sent the IRS a worthless check for $759,033.05 written on a closed account.
Ferreira’s schemes—sometimes known as a 1099-OID scheme and an electronic funds transfer or “EFT” scheme—are often used by adherents to the Sovereign Citizens Movement, a group of individuals who, although they reside in the United States, assert the position that they do not have to answer to any government authority, including courts, taxing entities, motor vehicle departments or law enforcement.
In addition to the prison term, Judge Seibel sentenced Ferreira to three years of supervised release. Ferreira was also ordered to make restitution and to forfeit $440,924 that she had wrongfully obtained from the IRS. Ferreira was ordered to forfeit approximately $96,000 worth of gold Krugerrands and silver coins that she had purchased with the proceeds of her crimes.
In sentencing Ferreira , Judge Seibel noted that the defendant’s offenses involved “blatant, shameless lies” and that the defendant had “thumbed her nose” at the Government and the Court. The Judge added that Ferreira showed “no respect for the system” and acted like she was “above the law.”
Preet Bharara, the United States Attorney for the Southern District of New York, announced the sentence.
Mr. Bharara praised the outstanding investigative work of the law enforcement partners involved in the investigation, including the Federal Bureau of Investigation’s Joint Terrorism Task Force and the IRS.
This prosecution is being handled jointly by the Office’s Terrorism and International Narcotics Unit and the White Plains Division. Assistant United States Attorneys Jason P.W. Halperin and Marcia S. Cohen are in charge of the prosecution.
U.S. Attorney Preet Bharara said: “Melanie Ferreira thought she could enjoy the fruits of law-abiding taxpayers’ money while evading the tax laws and defrauding the government. Through yesterday’s sentence, she learned how wrong she was.”