Our countdown of the top ten tax crimes of 2024 has come to an end. The final two entries outline a calculated fall from grace by a crypto bro, and a civilian army employee who helped herself to funds intended for military families.
#2: Binance Founder Sentenced After Guilty Plea
Following the spectacular downfall of FTX founder Sam Bankman-Fried, his competitor Changpeng Zhao—founder of Binance—also faced serious legal trouble. Zhao pled guilty to failing to maintain an adequate money laundering deterrence program. Zhao resigned from his company and paid $4 billion to settle the ongoing allegations from the Department of Justice (DOJ).
The Internal Revenue Service (IRS) criminal investigation of Zhao gained few headlines and concluded with a four-month prison term. Zhao completed the term in September 2024, allowing him to return to private life. Of note in this prosecutorial cycle, Zhao worked with his attorneys and with the government, which was pursuing him and his company. In response to the request from the prosecution for a three-year sentence, Judge Richard Jones, who sentenced Zhao, said, “Your conduct does not warrant a 36-month sentence.”
The assertive strategy undertaken by Zhao and his legal team yielded the necessary outcome: a substantial fine, resignation from his company, and a minimal prison sentence. With relatively little notoriety, Zhao is moving on nicely—he recently applied for a presidential pardon.
#1: Fraudulent tax returns, employee theft and 15 years in prison
At the top of the IRS:CI list (or the bottom, depending on how you look at it) is Janet Mello, a civilian employee of the U.S. Army who used her job as a financial program manager for the Army to commandeer grant funds, which she diverted to her bogus business called Child Health and Youth Lifelong Development (CHYLD).
Between 2016 and 2023, Mello deposited checks from a grant that she arranged for CHYLD to the tune of $108,917,749. She diverted funds 49 times and used her fraudulently obtained gains to buy real estate, numerous automobiles, jewelry, and clothes. Not surprisingly, like most individuals who are embezzling funds or business employment taxes, Mello underreported her income for five years.
The money she stole was intended to pay for services to military families, and the U.S. attorney general minced no words describing her actions, “Janet Mello betrayed the trust of the government agency she served and repeatedly lied in an effort to enrich herself. Rather than $109 million in federal funds going to the care of military children throughout the world, she selfishly stole that money to buy extravagant houses, more than 80 vehicles and over 1,500 pieces of jewelry. Her actions reflect exactly the opposite of what it means to serve your country, and my office will continue to work tirelessly to prosecute those who illegally seek personal gain at the expense of their fellow citizens.”
These cases offer a narrative involving two bold crimes where the player was caught beyond a shadow of a doubt. Zhao made good use of legal strategy, including a plea, to build an effective transition from serious prison time to penalties, that for him, are probably already fading. Mello went down with a conviction and a 15-year prison term.
Whatever the gig—money laundering, tax fraud, siphoning off payroll taxes—there will eventually be a price to pay. Consider the cost and speak with an experienced criminal tax attorney.
Hiding Something From the IRS?
If you are involved in a tax crime, your best defense is knowledge and a highly skilled legal tax defense. If you believe you are being surveilled by the IRS, make good choices. Call us at 440-250-9709 or reach out to set up a consultation. We serve domestic and international clients from offices in Cleveland and Chicago.
Not sure what to expect if you are already under scrutiny? Download our free eBook, Will I be Charged with Criminal Tax Fraud? for insights into warning signs, and potential legal defenses.
