A Twinsburg man will be arraigned Feb. 28 in a Cleveland federal court on charges of conspiring to and making false claims for income tax refunds totaling more than $8.8 million, according to a Feb. 13 press release from the U.S. Attorney's Office, Northern District of Ohio.
A federal grand jury returned a 31-count indictment Feb. 13 charging a Brian D. Krantz, 45, of Twinsburg, with one count of conspiring to make false claims against the United States and 30 counts of making false claims for income tax refunds totaling approximately $8,825,147, according to the indictment.
Cleveland-based Terry Gilbert, attorney for Krantz, did not return calls seeking comment by press time.
The U.S. Treasury issued 17 refund checks totaling approximately $3.6 million payable to Krantz and various corporations controlled by Krantz as a result of the alleged scheme, according to the indictment.
Krantz will be arraigned Feb. 28 at 11 a.m. in U.S. District Court, Northern District of Ohio.
An alleged co-conspirator named in the indictment, Bryan D. McCallum, has pleaded guilty to a two-count information charging him with the false claims conspiracy and with making the same 30 false claims. His case remains in front of Judge Sara Lioi, also of the U.S. District Court, Northern District of Ohio.
An attorney for McCallum was not immediately known.
Assistant U.S. Attorney Justin Roberts, who is prosecuting the case with Assistant U.S. Attorney John Siegel, said it is unclear whether McCallum's case would be consolidated with Krantz's.
"This defendant [Krantz] is accused of violating tax laws to enrich himself," Dettelbach said in a Feb. 13 release from the U.S. Attorneys Office in Cleveland. "Those individuals who engage in this type of financial fraud should know they will not go undetected and will be brought to justice."
During the years charged in the indictment, Krantz owned and controlled two corporations engaged in financial services and/or real estate investment business activities, in which he employed McCallum as an accountant.
The indictment alleges that from approximately April 2009 through June 8, 2010, Krantz and McCallum conspired to make false claims for tax refunds using income tax returns filed with the IRS in the names of Krantz, companies formed by Krantz and McCallum, and several "shelf" companies purchased by Krantz. A "shelf" company is a corporate or other formal non-operating business entity established for the purpose of being held for sale to another person.
According to the indictment, Krantz used more than $1 million of the refund proceeds to finance a real estate venture he established with other partners, known as Phoenix Ventures Partners LLC. Krantz and McCallum allegedly misled Krantz's real estate partners in to believing that a group of Colorada-based hard money lenders had provided the funds.
The Criminal Investigation Division of the Internal Revenue Service investigated the case, Roberts said.
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