Compliance Blog

Written by Shari R. Pogach, Regulatory Paralegal

It’s been a busy, busy week here in Washington, DC, so here’s something a little lighter for you as we head into the last weekend before Christmas.

The Internal Revenue Service (IRS) puts out an annual report that highlights successful criminal investigation enforcement actions achieved during a fiscal year. As you would think, these investigations focus on tax-related identity theft, money laundering, public corruption, cybercrime and terrorist financing. But here’s what caught my eye. In its fiscal year 2015 annual report there is a section on the IRS Illegal Source Financial Crimes Program, which includes all tax, tax-related, money laundering and currency violations.

Under this program, the IRS investigates criminal violations involving financial institution fraud.  And, apparently the “ability to bring income tax and money laundering charges augments prosecutors’ effectiveness in combating fraud committed against financial institutions, whether the violators work within or outside of the institution.” Two successful fraud investigations in fiscal year 2015 involved credit unions:

“Former Federal Credit Union Employee Sentenced for Bank Fraud and Filing False Tax Returns

On March 25, 2015, in Valdosta, Georgia, Kelly Yawn was sentenced to 41 months in prison and ordered to pay $628,539 in restitution to the fraud victims and $139,865 to the IRS. On Jan. 6, 2015, Yawn pleaded guilty to bank fraud and filing false tax returns. Between February 2008 and November 2011, while employed by a federal credit union Yawn accessed the credit union’s computer system to prevent electronic transactions (ACH) and written share drafts from posting to her account. Using that scheme, Yawn was able to misdirect for her own benefit more than 900 share drafts and more than 1,200 ACH transactions, totaling more than $499,000 that were paid from credit union funds. Yawn took additional actions to cover up the transactions so that they would not be discovered by the credit union or outside auditors by posting fraudulent deposits to credit union accounts. Yawn also filed federal income tax returns for 2008 through 2011 and failed to include the money she received from the scheme on her federal tax returns as income in those years.

Ohio Man Sentenced for Defrauding Credit Union

On Feb. 23, 2015, in Cleveland, Ohio, John Struna, of Concord Township, was sentenced to 43 months in prison and ordered to pay more than $2.3 million in restitution. Struna was also ordered to forfeit a restaurant he owned, a condominium and a 2014 Mazda. Struna previously pleaded guilty to conspiracy to commit bank fraud, bank fraud, making false statements and money laundering. Struna defrauded the Taupa Lithuanian Credit Union, based in Cleveland, out of $2.3 million. Credit union CEO Alex Spirikaitis, former teller Michael Ruksenas and Vytas Apanavicius were previously found guilty for their roles in conspiracies related to defrauding the credit union. Struna maintained both personal and corporate accounts at Taupa dating back to 1995. He began a conspiracy with Spirikaitis in 2002 and continued through 2013, during which time Spirikaitis caused Taupa to make approximately 46 fraudulent transfers into Struna’s accounts. In 2011, Struna requested and received $112,105 from Spirikaitis for the purchase of a condominium located in Fort Myers, Florida. At no time did Struna submit any credit applications or loan documents. The fraudulent transfers totaled approximately $2.3 million. From 2002 through 2013, Struna repaid only approximately $15,000 of the $2.3 million Spirikaitis transferred into his accounts.”

The IRS report is worth scanning as within the other case example descriptions are indicators of how criminals perpetrated their criminal activity through financial institutions even when not actively defrauding the institution itself.