Former trucking company owner Michael Chaves was sentenced on Wednesday to 30 months in federal prison after pleading guilty last year to falsifying government records, aggravated identity theft, bank and wire fraud, and tax evasion.
The U.S. District Court for the District of Rhode Island also ordered Chaves, 41, who had owned CAT Inc., an East Providence, Rhode Island, vehicle-transport carrier, to pay restitution to Amazon [NASDAQ: AMZN] for an alleged package return scam that bilked the company out of more than $640,000. The refund scam was discovered during the investigation of his trucking company.
Chaves used another person’s personal identifying information to continue to illegally operate a fleet of trucks after the Federal Motor Carrier Safety Administration ordered the business shutdown. He had been cited for allowing drivers to operate without a current or properly classified license; failing to maintain certifications that drivers were medically able to drive; failing to implement a driver alcohol or controlled substances testing program; and allowing drivers to exceed the maximum number of hours of driving allowed under the law, according to the indictment.
“Additionally, Chaves fraudulently obtained more than $400,000 from various financial institutions by employing schemes during which he obtained $332,000 in loans and funds from several banks and credit unions by providing fraudulent earning statements, tax returns, motor vehicle purchase contracts and Department of Motor Vehicle documents; caused the fraudulent wire transfer between financial institutions of $72,864.28; and executed a scheme by submitting 15 fraudulent checks he created to an automobile seller’s bank account from which he obtained $64,453,” prosecutors stated.
Chaves also attempted to evade paying income taxes, prosecutors noted, by commingling business and personal expenses; creating fraudulent third-party checks and cashing them using a check casher rather than a bank; and maintaining approximately 15 different bank accounts using at least five different company names.
The Amazon return scam involved ordering products and then replacing the return with lesser-value items than the ones originally ordered.
In some cases, according to court documents, he would replace original items with those of similar weight, including a commercial truck tire. Instead of returning the tire, he sent back two pieces of wood in the Amazon box. Other examples include ordering a vehicle suspension ball joint and returning an oil filter wrench and a stabilizer bar link kit with dog treats.
He also ordered new parts — like ceramic brake pads and a fuel injector — but returned the heavily used parts instead, prosecutors said.
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