Franzie F. Colaco Sentenced to Nine Years for Wire Fraud, Brampton …

GRIMY TIMES EXCLUSIVE: Canadian tax con man Franzie F. Colaco, 54, from Brampton, Ontario, was today handed a nine-year sentence for conspiracy and three counts of wire fraud. His scheme, the ‘1099 OID’ fraud, conned unsuspecting Canadians out of millions.

Colaco’s plot was to dupe tax filers into claiming refunds using fraudulent 1099-OID forms, falsely reporting personal debt values. His relentless promotion in Canada led to over $6.2 million in restitution to the IRS. The sentence was imposed by U.S. District Judge John C. Coughenour, who highlighted the ‘audacious nature’ of Colaco’s scheme.

Acting U.S. Attorney Annette L. Hayes vowed, ‘This fraud – pure and simple – will not go unpunished.’ She noted that over half of the $14 million in refund claims were paid out before the IRS uncovered the deceit. About two-thirds of these refunds went to Canadians who had never filed taxes or owed money to the U.S. Treasury.

Colaco’s co-conspirator, Ronald L. Brekke, was sentenced to 12 years in prison in June 2012. Others, like Donald Mason and John Chung, also faced substantial sentences for their roles in the scheme. Special Agent Teri Alexander of IRS Criminal Investigation called it ‘one of the most egregious cases’ she had investigated.

The IRS has recovered just over half of the stolen $14 million, with Colaco and Brekke’s restitution figure totaling $6,206,998. The IRS urges taxpayers to remain vigilant against similar schemes, providing further information here: IRS Re releases the ‘Dirty Dozen’ Tax Scams.

The investigation was led by IRS-CI and the U.S. Secret Service, with prosecution handled by Assistant United States Attorneys Thomas Woods and Francis Franze-Nakamura.