![]() ![]() ![]() Often these groups force legitimate businesses out of business using intimidation tactics through kidnaping, assaults, and bombings. Selling fuel below cost forces the legitimate operators out of business. These groups are pocketing up to 50 cents per gallon in federal and state taxes which enables them to sell the petroleum products below cost. ![]() By the time auditors and investigators unravel the series of transactions to determine the tax liability, the "burn" company has disappeared without a trace of records or assets. In the daisy chain, a "burn" company is created and exists only on paper. The daisy chain scheme starts with a string of companies created by Russian and Armenian organized crime groups and is designed to create a massive paper trail. ![]() The "daisy chain" scheme is the predominate method of fuel tax fraud. Selling lower grade fuel as a premium product. There are a variety of schemes involving the fuel fraud including falsifying state and federal tax forms, use of fictitious companies, known as a "burn" company, extending fuel by blending tax free additives such as transmix or alcohol, rigging fuel pumps, manipulating dyed fuels designated for off-road purposes, and The majority of the fuel frauds are committed by Russian and Armenian organized crime groups operating in Southern California. This group is believed to have extorted the Armenian community in the Los Angeles area for the last 13 years.įuel Frauds - Fuel frauds, mostly in Los Angeles and New York, cost both the federal and state governments approximately $2 billion annually in tax revenue. They forcibly detained and threatened victims and their families with great bodily harm unless they paid the suspects money. The following cases are examples of several different crime categories.Įxtortion - Five members of an Armenian organized crime group in Los Angeles were convicted in 1994 for extortion, kidnaping, and attempted murder. Russian organized crime in California is involved in extortion, narcotics, murder, auto theft, and loan sharking, as well as insurance, fuel, telecommunication, and credit card frauds. Russian Organized Criminal Activities in California ![]()
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