One Friday morning about a month before the tax-filing deadline, IRS Special Agent Rob Erickson and his team of special agents stood a few doors down from the Returns ‘R’ Us office of accountant “BK.” After going over their plan of action, the special agents suddenly opened BK’s office door, interrupting his meeting with a client.
Immediately, BK put his hands up, asking what was going on. The special agents told BK they had a few questions regarding some discrepancies on his client Anderson Young’s tax returns. “I have a client. Give me 10 minutes,” said BK, his voice edgy.
“Maybe you can give me 10 minutes,” one of the special agents replied calmly. Then the special agents began asking BK about Anderson Young, executive director of Ransom, an international relief organization.
“You’re a CPA, and you forgot to sign a form,” Special Agent Timothy McMillan said incredulously.
A few minutes later, BK’s client returns and pours coffee on one of the returns in front of Special Agent Christine Hogan. Observing the scene from the doorway, Erickson motions for two special agents to escort the client out the office. Meanwhile, the remaining special agents continue to question BK about his relationship with Regis Stone, who worked for an organization that appeared to be involved with suspicious transactions with Ransom.
“Regis Stone? Sounds familiar. Like I said, I have a lot of clients – especially this time of year,” BK said. After a few more questions, BK continued. “I don’t keep copies of my client’s tax returns. It’s not my property.”
If anyone should know Young and his finances, it should be his accountant, but BK was not divulging any information. His rashness might have infuriated the team, but they kept their cool. After all, the one thing they had learned from Erickson was to keep control of the conversation.
This isn’t a scene from a John Grisham thriller. It was all part of the Internal Revenue Service’s Adrian Project, an interactive learning experience developed by the Criminal Investigation Division, where 20 Rider students worked alongside IRS special agents to crack a white collar crime using forensic accounting techniques. Rider University was selected as the New Jersey representative to participate in the daylong mock investigation, staged on March 26 on the Lawrenceville campus.
“We were selected because of our forensic concentration program offered through our Center for Business Forensics,” said Dr. Margaret O’Reilly-Allen, chair of the Department of Accounting, adding that the event tied together various skills that the students have learned in their courses, including Fraud Examination, Evidence Management and Presentation, and Internal Auditing.
Throughout the mock investigation, facilitated by Special Agent Rob Glantz, the four teams of students and special agents investigated various characters and organizations, which all seemed to be connected in a terrorist finance scheme. Actors, usually IRS agents, role-played as suspects, informants, unscrupulous accountants, and witnesses during the simulation. Meanwhile, the students learned how to interview witnesses, surveillance techniques, defensive tactics, analysis of documents, writing affidavits for search and arrest warrants and being part of an undercover team.
The students had eight hours to work on a case that can normally take up to two years to solve. They arrived on Friday at 7 a.m. for their group assignments and a case synopsis, and just before 8 a.m., they were sworn in as honorary special agents by William Offord, Special Agent in Charge of the IRS. Minutes later, the honorary special agents were interviewing informant, “Drew Nash,” an ex-convict, who had recently attended an orientation meeting at the After Start After Prison (ASAP) program. Nash told the special agents about the questionable behavior of a group of immigrants from Maracia, Honduras who had attended the ASAP meeting. He alluded to the idea that the group might be involved in a scheme.
“Why should we believe you? You’re a convicted felon,” a special agent asked. Nash assured him that he was telling the truth. After all, he was working on getting a letter to get his probation time reduced.
After Nash left, Glantz told the teams of special agents that informants can be great sources of information, but IRS special agents have to ask themselves why an informant is coming forward.
“Is the informant telling the truth?” Glantz asked. “We have an allegation, but we don’t necessarily have a case. The next step is to corroborate the information.”
Not only is the Adrian Project educational, but it serves a recruiting function for the IRS as well, with a number of Rider alumni returning to campus for the event. Special Agent Rob Erickson ’88 advised Accounting majors Christine Hogan ’10, Brittany Holowka ’12, Steven Locilento ’10, Timothy McMillan ’12; and Kevin Van Loan ’11, as they poured over countless documents regarding Anderson Young’s property deed, bank statements and tax returns.
“How can he afford his lifestyle?” Erickson asked. “It’s important to look at someone’s lifestyle and use financial skills to peel back layers. Your job is to follow the money.”
From the documents, the special agents were able to determine Young’s marital status, salary and property value. They noted that huge sums of cash were being deposited and taken out. They also determined that money was being suspiciously exchanged between Ransom and ASAP, and discrepancies on Young’s tax returns, which they later asked Young’s accountant, BK, about.
“I’m sure everyone went in thinking, ‘I got the entire case solved,’” said Glantz, after the students shared their encounters with their accountants. “It never goes the way you think it’s going to go.”
The students then moved out of the “CI headquarters,” and headed to the SRC Seminar Room for an informative, defensive-tactics training session. There, with the assistance of IRS special agents, the students, wearing bulletproof vests, learned how to holster a firearm, make an arrest and move into a scene. While they each carried a mock firearm, the students learned the most effective defensive tactic when entering a room was verbal communication.
The day continued with a witness interview with Regis Stone from ASAP, surveillance and more subject interviews. By 3 p.m., the students prepare their evidence to present to the “U.S. Magistrate judge” to seek search-and-arrest warrants. All four teams of special agents presented compelling arguments for why they should be able to search and arrest their alleged subjects. As each team made their case, the “judge” listened to their evidence, before granting all four groups arrest warrants.
With an arrest warrant, Erickson reminded his team of special agents to secure the area and to control the room with verbal communication. Minutes later, Hogan, Holowka, Locilento, McMillan, and Van Loan were stacked up outside of Young’s door and knocked, declaring: “Federal agents with an arrest warrant.”
All four teams were able to successfully secure their areas and arrest their alleged suspects. When they return to headquarters to discuss their encounters, receive their certificates and hear about career opportunities with the IRS, one student asked who was guilty.
“To be continued,” Glantz said.
Van Loan said the Adrian Project enabled him to apply the skills he has to learn in the classroom and he is considering a career with the IRS Criminal Investigation unit
“One reason I’m interested in the field is because it’s a good culmination of my interests, which are interviewing, accounting and researching and problem solving,” he said.
The rest of the IRS Adrian participants from Rider included Angelika Dybka, a sophomore Accounting major; Brian Lubing, a sophomore Accounting major; Chelsea Hinkle, a junior Global Business major; Edward Collins, a junior Accounting major; Gwendolyn Waranis, a Master of Accountancy student; Iram Khan, a sophomore Accounting student; Jason Sterling, a Master of Accountancy student; Jeanette Santizo, a Master of Accountancy student; Jimmy Lo, a senior Accounting major; Kyle Graser, a Master of Accountancy student; Lindsay Rajeski, a junior Psychology major; Lu Lin, a sophomore Accounting major; Mallory Garbaravage, a junior Accounting major; Matthew Henderson, a senior Accounting major; Patrick McDowell, a junior Accounting major; Ryan Mataya, a Master of Accountancy student; Ryan Saja, a junior Accounting major; and Stefanie Cupo, a junior Accounting major.