Douglas Edelman, a 73-year-old former defense contractor, has admitted to tax crimes in connection with a scheme designed to defraud the United States and evade taxes on his income from contracts with the U.S. Department of Defense. The announcement was made by U.S. Attorney Jeanine Ferris Pirro, Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division, and Special Agent in Charge Kareem A. Carter with IRS-Criminal Investigation (IRS-CI) Washington, D.C. Field Office.
Edelman pleaded guilty to ten felony counts including conspiracy to defraud the United States, seven counts of tax evasion, and two counts of making false statements. U.S. District Court Judge Colleen Kollar-Kotelly has scheduled a hearing regarding sentencing issues for November 17, 2026.
Court documents reveal that Edelman founded Mina Corp. and Red Star Enterprises (Mina/Red Star), holding a 50% ownership stake in these companies which received over $7 billion from U.S. Department of Defense contracts post-9/11 for jet fuel supply in Afghanistan and the Middle East.
Edelman's scheme involved hiding profits from Mina/Red Star to avoid paying U.S. taxes by using undisclosed foreign bank accounts and creating false documents. He falsely claimed that a French citizen co-founded and owned Mina/Red Star without U.S. tax obligations.
In 2005, when the company became profitable, Edelman deposited distributions into Swiss bank accounts under other company names he owned. When Credit Suisse required disclosure or closure of these accounts in 2008, he transferred funds to Bank Julius Baer in Singapore under a nominee entity linked to his daughters.
In 2010, an investigation by the U.S. House Committee on Oversight and Government Reform's Subcommittee on National Security looked into allegations concerning Mina/Red Star's defense contracts' corruption links. During this time, Edelman had not reported or paid taxes on millions earned from these companies.
To maintain secrecy about his ownership role, Edelman's attorneys misled Congress with claims involving a French co-conspirator who allegedly co-owned Mina/Red Star with another individual without U.S obligations—supported by falsified paperwork created by Edelman and others.
Edelman's falsehoods extended beyond Congress; they reached other government entities such as the Department of Defense during contract negotiations between 2010-2011; IRS through a Voluntary Disclosure Program application in 2016; and even Justice Department presentations later that year—all while continuing non-disclosure practices regarding substantial earnings via falsified returns listing only gifts or consulting payments instead reporting true income figures including separate business gains at Kandahar Air Base internet service provision project sites across Afghanistan too were hidden away thus avoiding rightful taxation dues owed towards government coffers altogether instead funding lavish lifestyle pursuits investments ranging far wide places spanning Eastern Europe music television franchise land ventures Tulum Mexico farm Kenya property acquisitions Ibiza Spain townhouse London among others!
Facing potential maximum penalties five years imprisonment per count pled alongside supervised release restitution monetary fines federal district court judge will determine final sentence considering applicable guidelines statutory factors therein...
Investigations led IRS-CI International Tax & Financial Crimes specialty group based Washington D.C., aided Special Inspector General Afghanistan Reconstruction alongside His Majesty’s Revenue Customs UK Joint Chiefs Global Tax Enforcement J5 Australia Canada Netherlands Spain Guardia Civil arrest assistance all coordinated effort successfully prosecuting case now handled Assistant US Attorney Joshua Gold District Columbia Chief Sarah Ranney Trial Attorney Ezra Spiro Tax Division accordingly
