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Daily Court Reporter - News Grand jury returns tax charges against celebrity manager in relation to OXYwater case

 

Grand jury returns tax charges against celebrity manager in relation to OXYwater case

A federal grand jury has charged Kevin R. Foster, 42, of Montclair, N.J. with charges related to a fraud scheme in a second superseding indictment returned recently.

Foster was charged in an original, seven-count indictment in July 2016. A superseding indictment containing 10 counts – including additional wire fraud, money laundering and bankruptcy fraud charges – as well as a second victim, was returned in November 2017. Today’s second superseding indictment adds six more charges – two counts of tax evasion and four counts of filing a false tax return.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Richard E. Zuckerman, Principal Deputy Assistant Attorney General, Tax Division, Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the new charges.

This case stems from the prior prosecution of Thomas E. Jackson and Preston J. Harrison, who collected approximately $9 million from investors under false pretenses to start and market the sports beverage “OXYwater” through their company, Imperial Integrative Health Research and Development (“Imperial”). The two were convicted by a federal jury in March 2015 of multiple wire fraud, money laundering and tax fraud charges.

The original charges against Foster allege that he, as the principal of his management/accounting firm, Foster & Firm, Inc., and as business manager for Shaffer Smith (“Ne-Yo”), induced Smith to invest $2 million into OXYwater under false representations. Unbeknownst to Smith, Foster allegedly invested an additional $1.5 million of Smith’s money into the product without his consent and fraudulently took out $1.4 million in lines of credit under Smith’s name by forging his signature.

The superseding indictment also alleges that Foster defrauded a second celebrity client, Brian McKnight, as a way to secure money to help keep Imperial solvent.

McKnight agreed to invest in the company, not knowing that Foster served as an officer/controller of Imperial. Foster allegedly withdrew more money from McKnight’s account than he had authorized, and transferred some of it to one of Imperial’s business associates in order to help keep Imperial afloat.

The latest indictment alleges that Foster failed to report on his 2012 and 2013 tax returns the millions of dollars that he stole from Ne-Yo and McKnight. Foster also allegedly claimed millions of dollars in bogus deductions in order to further reduce his tax liability.

U.S. Attorney Glassman and Principal Deputy Assistant Attorney General Zuckerman commended the investigation of this case by the IRS Criminal Investigation and FBI, and Assistant United States Attorney Jessica H. Kim and Department of Justice Tax Division Trial Attorney Jason M. Scheff, who are prosecuting the case.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

About the United States Attorney's Office for the Southern District of Ohio

Our Mission

Our mission is to protect and serve the citizens of the Southern District of Ohio through the ethical, vigorous and impartial enforcement of the laws of the United States, and in so doing to defend the national security, improve the safety and quality of life in our communities, protect the public funds and financial assets of the United States, maintain a courteous and professional working environment, and, with skill and integrity, seek to do justice in every matter

Who We Are

We are the United States Attorney’s Office for the Southern District of Ohio, one of 94 United States Attorney’s Offices in the country. We are a part of the Department of Justice. Our District is comprised of 48 counties in the southern half of the state.

What We Do

We represent the interests of the United States, both criminal and civil, in federal court. It is our responsibility to enforce federal criminal laws. We work to prevent terrorism and promote the nation’s security. We are committed to preventing crime, enforcing federal laws, and representing the rights and interests of the American people. We strive to ensure the fair and efficient administration of justice for all Americans.

We prosecute those individuals and organizations that violate federal criminal statutes. We work with a multitude of federal, state, and local agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Drug Enforcement Administration (DEA), the Federal Bureau of Investigation (FBI), the Bureau of Immigration and Customs Enforcement (ICE), the Internal Revenue Service (IRS), the U.S. Forest Service, the U.S. Park Service, the U.S. Marshal’s Service, the U.S. Postal Inspection Service, the U.S. Secret Service, The Ohio Highway Patrol, and multitude of local law enforcement agencies. We prosecute a wide-variety of offenses including domestic and foreign terrorism; child pornography and exploitation; civil rights violations; bank robbery and other violent crimes; firearms offenses; drug trafficking; health care fraud; immigration violations; public corruption; tax evasion; mail, bank and wire fraud; environmental offenses; and identity theft.

We also represent the United States in civil litigation, affirmative and defensive. As such, we sue individuals or entities who have violated federal civil laws. We also defend the interests of the United States when it, or one of its departments, agencies, or employees is sued, and we defend federal programs and agency actions.

We collect monies owed to the United States from forfeiture, restitution, and fines imposed as a part of the judgment in federal cases. We also pursue collection of civil debts owed to the United States, including student, small business, housing, and farm loans. Finally, we represent the interests of federal agencies in bankruptcy court.

Our district covers the bottom half of the state of Ohio.

Our district contains three staffed offices in Columbus, Cincinnati, and Dayton. The Columbus office is the headquarters of our District and is the largest, followed by Cincinnati then Dayton.

Date Published: May 23, 2018

 

The United States Attorneys Office Southern District of Ohio

 

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