Approved JASON P.W. HALPERIN Assistant United States Attorney Before HONORABLE GEORGE A. YANTHIS United States Magistrate Judge Southern District of New York - - - - - - - - - - - - - - - -x UNITED STATES OF AMERICA - v. - RANDAL L. KASE, Defendant. - - - - - - - - - - - - - - - -x SOUTHERN DISTRICT OF NEW YORK, ss. SEALED COMPLAINT Violations of 18 U.S.C. 510, 1341 County of Offense Westchester MILAGROS MCMASTER, being duly sworn, deposes and says that she is a Special Agent with the United States Secret Service, and charges as follows COUNT ONE From in or about June 2002 through in or about November 2008, in the Southern District of New York and elsewhere, RANDAL L. KASE, the defendant, unlawfully, willfully, and knowingly, and with intent to defraud, falsely made and forged an endorsement and signature on a Treasury check, bond, and security of the United States, and passed, uttered, and published, and attempted to pass, utter, and publish a Treasury check, bond, and security of the United States bearing a falsely made and forged endorsement and signature, to wit, KASE, a certified public accountant, diverted to himself clients tax refund checks, placed false endorsements on the checks, and passed the checks. Courthouse News Service (Title 18, United States Code, Section 510). COUNT TWO From in or about June 2002 through in or about November 2008, in the Southern District of New York and elsewhere, RANDAL L. KASE, the defendant, unlawfully, willfully, and knowingly, having devised and intending to devise a scheme and artifice to
defraud, and for obtaining money and property by means of false and fraudulent pretenses, representations and promises, for the purpose of executing such scheme and artifice and attempting so to do, did place in a post office and authorized depository for mail matter, a matter and thing to be sent and delivered by the Postal Service, and did deposit and cause to be deposited a matter and thing to be sent and delivered by a private and commercial interstate carrier, and did take and receive therefrom, such matter and thing, and did knowingly cause to be delivered by mail and such carrier according to the direction thereon, and at the place at which it was directed to be delivered by the person to whom it was addressed, such matter and thing, to wit, KASE, a certified public accountant, had clients tax refund checks mailed to him without their knowledge, forged the clients signatures on the backs of the checks, and falsely represented that the clients had signed the checks over to him. (Title 18, United States Code, Section 1341). The bases for my knowledge and for the foregoing charges are, in part, as follows 1. I have been a Special Agent with the United States Secret Service for approximately four years and I have personally participated in the investigation of this matter. This affidavit is based on my conversations with other law enforcement agents and persons, and my examination of reports, records and documents. Because this affidavit is being submitted for the limited purpose of establishing probable cause, it does not include all the facts that I have learned during the course of my investigation. Where the contents of documents and the actions, statements, and conversations of others are reported herein, they are reported in substance and in part, except where otherwise indicated. 2. Based on my investigation, which has included reviewing documents, interviewing witnesses, and discussing this matter with other law enforcement officers, I have learned the following, among other things. 3. Based on a New York State database, I have learned that RANDAL L. KASE, the defendant, is a certified public accountant ( CPA ) and tax preparer who is licensed in New York State. 4. According to an official at Wachovia Bank ( the Banker ), Wachovia Bank received a reclamation form from the IRS, indicating that a taxpayer had submitted a claim that the 2
taxpayer ( V-3") had never received his tax refund check in the amount of $25,431.73. The Banker informed me that, according to bank records, the $25,431.73 check had been deposited into a Wachovia account under the name of RANDAL L. KASE, the defendant, at an address in Chappaqua, New York ( the Chappaqua Address ). The Banker also explained that the IRS had informed her that Wachovia was liable for accepting the deposit, and thus that the bank was required to reimburse the IRS for the $25,431.73 immediately. Wachovia has done so, and has now suffered a loss in approximately that amount. 5. Thereafter, I interviewed V-3, who informed me that RANDAL L. KASE, the defendant, was V-3's tax preparer. V-3 said V-3 never received the $25,431.73 check, did not endorse the check, and never authorized KASE or anyone else to deposit the check into KASE s bank account. I have looked at a copy of the $25,431.73 check and on the back of the check there appears to be an endorsement in V-3's name and underneath that endorsement, a second signature in the name R Kase. Although I am not a handwriting expert, based on other documents I have reviewed that contain KASE s signature, I believe that the signature in the name of R Kase on the back of this check is KASE s signature. 6. I have examined other tax refund checks issued to V-3, which were also diverted to RANDAL L. KASE, the defendant. For example, on or about July 30, 2007, a tax refund check was issued to V-3 in the amount of $2,377 and addressed to V-3 and R Kase CPA, at the Chappaqua Address. Although the back of the refund check contains a signature in the name of V-3, V-3 has informed me that V-3 did not endorse the check. Moreover, on the back of the check appear the words Pay to Citi Cards. According to Citibank records, that check was used to pay a Citi Cards credit card account in the name of the wife of RANDAL L. KASE, the defendant, and listed at the Chappaqua Address. 7. I have also spoken with a second client of defendant RANDAL L. KASE s ( V-1"). V-1, who is a doctor residing in Westchester County, informed me that Kase has been V- 1's tax preparer for approximately 20 years. I showed V-1 approximately 25 refund checks that were made out to V-1 and contained endorsements on the backs of the checks in V-1's name. V-1 indicated that V-1 never received the refund checks, never endorsed the backs of the checks, never authorized KASE or anyone else to divert these checks from V-1 to KASE and/or to use the money. According to V-1, KASE repeatedly told V-1 that V-1 broke even, i.e., that V-1 would not be receiving a significant refund check. -3-
8. I have reviewed records relating to bank and credit card accounts in which these 25 refund checks made payable to V-1 were deposited and have learned that all the checks were deposited into accounts in the names of RANDAL L. KASE, the defendant, or his wife, at the Chappaqua Address. 9. According to V-1 and to a Treasury Department database, on several occasions, V-1 received relatively small refund checks that were sent through the mail to V-1's home in Westchester and correctly spelled V-1's name. For example, on or about February 7, 2007, V-1 received a refund check in the amount of $25.38, and on or about October 11, 2006, V-1 received a refund check in the amount of $745.36. 10. According to a Treasury Department database, however, at around the same time, the Treasury Department sent tax refund checks made payable to V-1 in much larger dollar amounts. These refund checks were addressed to V-1 and RANDAL L. KASE, the defendant, at the Chappaqua Address. For example, on or about February 27, 2007, the IRS mailed a refund check to V-1 c/o R Kase CPA at the Chappaqua Address in the amount of $4,301.53. V-1's supposed endorsement appears on the back of the check, and, according to American Express records, the check was used toward payment of an American Express card account in KASE s name. Similarly, on or about November 14, 2006, the IRS mailed a refund check to V-1 c/o R Kase CPA at the Chappaqua Address in the amount of $2,123.97. V-1's supposed endorsement again appears on the back of the refund check. According to a Countrywide Credit representative, the check was used toward payment of a Countrywide Credit line of credit account in KASE's name. V-1 told me that V-1 did not authorize the payment to either of KASE s accounts. 11. Based on information from the Treasury Department database, my review of bank and credit card records, and my interviews with V-1, of the 25 refund checks in V-1's name that were diverted to KASE, on 21 of these checks, V-1's eight-letter last name was misspelled in the exact same way. 12. In total, based on information we have obtained from a Treasury Department database, bank and credit card records, and interviews with V-1, KASE has diverted to himself tax refund checks, due to V-1, in amounts totaling more than $165,000. 13. I have also interviewed another victim ( V-2"), who confirmed that she and her husband had been and were clients of defendant RANDAL L. KASE s for more than 20 years. I showed -4-
V-2 approximately nine refund checks that were made out to V-2 and/or to V-2's husband and contained endorsements on the backs of the checks in the name of V-2 and/or V-2's husband. V-2 indicated that V-2 and V-2's husband never received the refund checks, never endorsed the backs of the checks, never authorized KASE or anyone else to divert these checks from V-2 and/or V-2's husband to KASE and/or to use the money. 14. Based on my review of Treasury checks, information in the Treasury Department database, bank records, and interviews with V-2, from in or about February 2004 through in or about June 2008, KASE obtained at least nine tax refund checks made payable to V-2 and/or V-2's husband in an amount totaling nearly $29,000, and deposited those checks into his bank and credit card accounts, using unauthorized endorsements in the name of V-2 and/or V-2's husband. 15. In total, the investigation to date has revealed that since in or about 2002, RANDAL L. KASE, the defendant, has diverted refund checks from V-1, V-2 and/or V-2's husband, and V- 3 without their knowledge, has forged their signatures, and has used refund checks made payable to V-1, V-2 and/or V-2's husband, and V-3 without their knowledge or permission on about 37 occasions, in the amount of more than $223,000. WHEREFORE, deponent prays that a warrant be issued for the arrest of RANDAL L. KASE, the defendant, and that he be arrested and imprisoned or bailed, as the case may be. Sworn to before me this day of January 2009 MILAGROS MCMASTER Special Agent United States Secret Service UNITED STATES MAGISTRATE JUDGE SOUTHERN DISTRICT OF NEW YORK -5-