Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that CARLOS DJEMAL NEHMAD was sentenced today to 75 months in prison for orchestrating a scheme to fraudulently obtain over $20 million in tax refunds from the government of Mexico by creating the appearance of legitimate business activity through the transfer of over $100 million through dozens of shell companies in the United States and Mexico. DJEMAL’s sentence was imposed today in Manhattan federal court by U.S. District Judge Alvin K. Hellerstein. In addition to his prison sentence, DJEMAL was ordered to forfeit cash, artwork, and his shareholdings of Investabank, a Mexican bank in which DJEMAL was part owner.
U.S. Attorney Geoffrey S. Berman said: “Carlos Djemal Nehmad created an international network of shell companies in the United States and Mexico to defraud the Mexican government of millions of dollars. Today’s sentence is the cost of Djemal’s attempt to use the United States financial system to perpetrate fraud."
According to the allegations in the Indictment and other documents filed in federal court, as well as statements made in public court proceedings:
Beginning in or about June 2011 through in or about at least May 2016, DJEMAL orchestrated a scheme to defraud the Mexican government of tax revenue relating to Mexico’s value added tax (“VAT"). The Mexican government imposes VAT on goods sold from one Mexican company to another; however, when certain goods (such as cellular phones) are exported from Mexico, the previously paid VAT is refunded to the exporter. DJEMAL created companies in Mexico and recruited individuals in the United States to create and control dozens of companies in the United States (“Front Companies") purportedly doing business as importers and exporters of cellular phones in order for DJEMAL to fraudulently obtain VAT refunds from the Mexican government.
In order to carry out the scheme, DJEMAL caused Front Companies in Mexico to purchase outdated cellular phones from other companies seeking to sell outdated inventory. DJEMAL then caused these phones to be exported to Front Companies in the United States owned and operated by others that he recruited to the scheme. During the export process, DJEMAL obtained fraudulent invoices and created export documents that falsely inflated the value of the phones being exported, thereby enabling him to fraudulently seek inflated VAT refunds from the Mexican tax authority.
Once the phones were shipped to the United States, they were transferred to one or more Front Companies in the United States only to be shipped back to a different Front Company in Mexico. Through this process, the phones were shipped repeatedly in a circular fashion between Front Companies controlled by DJEMAL and his co-conspirators in Mexico and the United States, enabling DJEMAL to obtain multiple fraudulent VAT refunds for the same phones.
In order to create the appearance of legitimate cell phone sales, each transfer of phones was generally accompanied by a transfer of funds to and from accounts held in the name of the relevant Front Companies. Between approximately June 2011 to approximately May 2016, DJEMAL and his co-conspirators moved more than $100 million through dozens of accounts maintained by Front Companies in this fashion, including through accounts maintained at a financial institution in the Southern District of New York, in order to obtain over $20 million in VAT refunds from the Mexican government.
In addition to the 75-month prison term, DJEMAL was sentenced to three years of supervised release and ordered to forfeit and pay restitution in the amount of $21 million.
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Mr. Berman praised the outstanding investigative work of Internal Revenue Service, Criminal Investigations, Department of Homeland Security, Homeland Security Investigations and Customs and Border Protection, the Federal Deposit Insurance Corporation, Office of the Inspector General, and the helpful assistance of the Mexican Tax Administration Service, the Mexican Secretary of Finance and Public Credit, and the Mexican Office of the General Prosecutor.
This case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorney Daniel M. Tracer is in charge of the prosecution.
Source: U.S. Department of Justice, Office of the United States Attorneys
