PROVIDENCE, R.I. — Michael Chaves, 41, owner of Rumford, Rhode Island-based CAT Inc., an auto transport company, was sentenced on March 10 by U.S. District Court Judge William Smith to 30 months in federal prison for falsifying U.S. Department of Transportation (DOT)/Federal Motor Carrier Safety Administration (FMCSA) records. Following 30 months in prison, Chaves is to be in federal supervised release for three years.
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.
He was found guilty of taking steps to avoid paying personal income taxes owed to the Internal Revenue Service (IRS) by mingling business and personal expenses, diverting third-party income using a check casher, and creating fraudulent third-party checks. He maintained approximately 15 different bank accounts using at least five different company names, according to information presented to the court.
Chaves also failed to implement a driver alcohol or controlled substances testing program and allowed drivers to exceed their hours of service.
Chaves committed fraud, using another person’s identity to continue to illegally operate his auto-hauling business after being ordered to shut down by the FMCSA.
On Aug. 22, 2020, Chaves pleaded guilty to 10 charges, including aggravated identity theft, five counts of bank fraud, two counts of wire fraud, and tax evasion.
A restitution order will be forthcoming from the court. In addition to restitution to be paid in the fraud schemes connected to the operation of his auto transport company, the order will include a payment by Chaves to Amazon.
Court documents alleged that Chaves defrauded Amazon through theft of inventory by falsely represented returns. According to the allegations, Chaves ordered products from Amazon and, at times, replaced the original products with lesser-value replacements — often items that were different than the ones he originally ordered — before returning the packages to Amazon for refunds. Chaves’ alleged Amazon refund scams were discovered during the investigation of CAT Inc. by the IRS Service Criminal Investigation and U.S. DOT Office of Inspector General.
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