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Five years in the slammer for fraudster, tax cheat, and money launderer

Department of Justice

U.S. Attorney’s Office

Central District of Illinois


FOR IMMEDIATE RELEASE

Friday, April 29, 2022

Former Morton, Illinois Man Sentenced to Over Five Years in Prison for Wire Fraud, Money Laundering, and Making a False Tax Return

PEORIA, Ill. – A Tampa, Florida man, Steven Racich, 49, formerly of the 100 block of West Jefferson, in Morton, Illinois, was sentenced on April 27, 2022, to 68 months in prison for wire fraud, money laundering, and making and subscribing a false return. He also was ordered to serve three years of supervised release. And his sentence included paying $1,912,692.75 in restitution to Apria Healthcare and the Internal Revenue Service.

At the sentencing hearing, the government presented evidence that Racich was an employee of Apria Healthcare, a national business with a branch in Peoria, Illinois. Apria offers clinical services and sells at-home medical equipment, including CPAP machines. Racich worked at Apria from 2008 to 2017, and served as the branch manager.  During an internal audit in December 2017, Apria officials discovered the Peoria office was incurring unexplained and excessive shipping costs. The investigation established that Racich was stealing CPAP machines from Apria and selling them to third parties for his own profit, using Apria’s accounts to ship the machines.  It was discovered that Racich created a business and used an alias to communicate with customers, paying himself through a PayPal account under the alias name. The embezzlement occurred from as early as 2013 until Racich was terminated in December 2017. The fraud netted Racich over $1.4 million in profit. Racich used the unlawful funds to support his lifestyle, spending it on airfare, vehicle payments, and weekend trips. The Internal Revenue Service investigation also uncovered evidence that Racich failed to report the income on his taxes, leading to the false tax return charges.

Also at the hearing, U.S. District Judge James Shadid found that Racich was eligible for an enhanced sentence because his position as branch manager enabled him to abuse a position of private trust with Apria, which facilitated the commission and concealment of the offense.

Racich was indicted in July 2020 and pleaded guilty in November 2021. Racich has been on pretrial release since his indictment.

The statutory penalties for wire fraud are up to 20 years imprisonment, up to a $250,000 fine, and up to three years of supervised release. The penalties for money laundering are up to 20 years imprisonment, up to three years of supervised release, and up to a $500,000 fine or two times the property value involved. The penalties for making and subscribing a false return are up to three years imprisonment, up to a $250,000 fine, and one year of supervised release.

“Every year, the people of the Central District of Illinois fulfill their civic obligation to fund our governmental system through paying taxes,” stated Assistant U.S. Attorney Katherine G. Legge. “Unfortunately, a few shirk that duty or worse, attempt to profit at the expense of their fellow citizens. Such behavior is not only illegal but unjust. It is our responsibility to hold accountable those who embezzle from employers and attempt to cheat the system for personal gain.”

“Honest and law-abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with ill-gotten money as well as skirt their tax obligations,”   said Justin Campbell, IRS Criminal Investigation, Special Agent in Charge,  Chicago Field Office. “Mr. Racich’s actions not only caused negative financial harm to his employer but also the honest taxpayer when he committed significant tax fraud violations, in not paying taxes on over $1.4 million.”

The Internal Revenue Service and Federal Bureau of Investigations investigated the case. Assistant U.S. Attorney Katherine G. Legge represented the government in the prosecution.

Link:

DOJ Press Release

Categories: Anti-Money Laundering Fraud Enforcement Actions Department of Justice (DOJ) Updates Pleas and Verdicts Wire Fraud Tax Evasion

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