According to an official IRS statement, a federal grand jury indicted two Texas men for their roles in one or more alleged conspiracies involving wire fraud, money laundering and tax fraud.
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Pending charges against John K. Eckerd, Jr., of Dallas, Texas, and Afif Baltagi, of Houston, Texas, were unsealed yesterday. Prosecutors believe Eckerd is the leader of the multi-state scam.
Co-conspirator Jason E. Adkins, of Jackson, Ohio, was previously sentenced in this case. Todd Wilkin, of Hillsboro, Ohio, pleaded guilty to the charges and is currently awaiting sentencing in federal custody.
Eckerd, Baltagi and their conspirators defrauded more than 50 investors out of more than $50 million. According to the IRS, between 2012 and the end of 2018, Eckerd represented himself to potential investors as a businessman specializing in off-road tires.
Baltagi was a logistics expert for a transportation company, which gave him access to a large tire storage facility.
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Purportedly, prospective investors were told their money would be used to buy off-road tires at greatly reduced prices, and that the tires would later be resold at significantly higher prices. These people were promised that they would receive an ROI of 15% to 20% within six months.
The conspirators, however, did not actually have a tire resale business and, in fact, bought or sold rare tires.
Instead, they laundered the money given to them by potential investors by creating bank accounts for numerous fraudulent businesses. In addition to the money laundering and fraud charges, Eckerd filed no taxes for the 2016 and 2017 tax years.
The IRS notes that conspiracy to commit wire fraud carries a maximum prison sentence of 20 years. Conspiracy to commit money laundering also carries a potential maximum penalty of 20 years in prison. Finally, conspiracy to defraud the United States by tax fraud is a federal crime that can carry up to five years in prison.
Please note that Eckerd and Baltagi have only been charged, not yet convicted, and remain innocent until proven guilty under US law.
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