White Collar Crime News

Father and Son Indicted on Federal Charges Relating to Operation of 4 Aces Bail Bonds March 18, 2010

A federal grand jury has indicted Milton Tillman, Jr., age 53, and his son, Milton Tillman, III, a/k/a “Moe,” age 35, both of Baltimore, Maryland, for conspiracy to defraud the Treasury Department, making false statements on tax returns, and unlawfully engaging in the business of insurance. Milton Tillman, Jr. is also charged with wire fraud in connection with a scheme to defraud Ports America Baltimore, Inc., where he worked as a member of the International Longshoremen’s Association AFL-CIO (ILA).

“The indictment alleges that Milton Tillman, Jr. and Milton “Moe” Tillman, III conspired to defraud the IRS and operate a bail bond business in violation of federal law, while Milton Tillman, Jr. collected pay for a no-show job at the Port of Baltimore,” said U.S. Attorney Rod J. Rosenstein. “Because the bail bond industry plays a major role in Maryland’s criminal justice system, the integrity of the system is jeopardized by corrupt bail bondsmen.”

According to the 28 count indictment, Moe and Milton Tillman operated 4 Aces Bail Bonds, Inc. (4 ACES) with offices at 2332 E. Monument Street in Baltimore and 1101 North Point Boulevard, Suite 121 in Baltimore. 4 ACES engaged in the bail bonding business, securing the release of individuals who were charged in the District and Circuit Courts of Maryland and elsewhere. Beginning on December 28, 2004, 4 ACES also did business as Global Surety, incorporated by Moe Tillman. In return for assuming the risk of an arrestee’s future appearances in court, 4 ACES collected a fee, usually a percentage of the bail amount set by the court. A percentage of each fee collected by 4 ACES was forwarded to the surety insurance company insuring the bond. 4 ACES’ share of the fees constituted virtually all of the company’s gross receipts. Between 2001 and 2006, the number of bail bonds written increased quickly, so that the company’s gross receipts reported to the IRS went from $188,337 in 2000, to $5,822,588 in 2006.

The indictment alleges that from 2001 through October 2007, Milton and Moe Tillman structured the ownership and business operations of 4 ACES in ways that concealed from the IRS Milton Tillman’s control of the company and the amount and disposition of the income Moe and Milton Tillman derived from the company. The indictment alleges that Moe and Milton Tillman failed to report to the IRS the use of 4 ACES funds to pay some of Milton Tillman’s personal expenses, such as payments on life insurance policies, car payments on his 2004 BMW, and payment of his personal income taxes. In addition, Milton and Moe Tillman allegedly transferred 4 ACES funds to themselves or corporations they controlled and used the funds for their personal gain. The Tillmans allegedly used the pretense that some of the transfers were non-taxable loans, then used the funds to invest in real estate through the payment of earnest money deposits, closing costs and monthly mortgage payments, as well as for other purposes.

Milton Tillman was also a member of the International Longshoremen’s Association AFL-CIO and was assigned to particular shifts to unload or load cargo vessels on behalf of Ports America Baltimore, Inc., a stevedoring company. The indictment alleges that in addition to misrepresenting to the IRS the extent to which he worked as a longshoreman, Milton Tillman allegedly defrauded Ports America, obtaining wages and fringe benefit payments for hours that he did not work at his job. The indictment alleges that Tillman obtained approximately 64 payroll checks that included payment for hours he did not work, including hourly wages and benefits he received while on vacation in Brazil, Spain and Las Vegas.

Specifically, the indictment charges that Milton Tillman filed false tax returns for 2002 through 2006, substantially underrreporting his total income, and that Moe Tillman did the same with his 2005 and 2006 tax returns. In addition, the indictment charges that Moe Tillman filed false corporate tax returns for 2004 through 2006. Furthermore, the indictment charges that Milton Tillman was prohibited from engaging in the business of insurance due to a previous conviction involving dishonesty and that Moe Tillman was aware that his father was prohibited from engaging in the business of insurance, but still permitted his father to participate in the bail bond business. Finally, Milton Tillman is charged with wire fraud in connection with the scheme to defraud Ports America.