Two high-ranking former executives of Philadelphia-based Universal Companies have been convicted of a scheme defrauding taxpayers and lining their own pockets, the Department of Justice reported. Abdur Rahim Islam, the former CEO, and Shahied Dawan, the former CFO, were found guilty on charges of conspiracy and other fraudulent activities after a trial that exposed their attempts to cheat the government.
Islam, 66, and Dawan, 72, were entrenched in a conspiracy aimed at fooling the Internal Revenue Service to maintain their company's tax-exempt status while surreptitiously enriching themselves with unapproved bonuses and personal expense reimbursements, the elaborate plot running from at least 2011 until 2018, during which the two concealed taxable income and falsely represented the financial state of Universal. This fraudulent operation ensured Universal could solicit tax-deductible donations under false pretenses because its tax-exempt status was not only preserved but exploited, resulting in incorrect tax returns.
In a grave breach of public trust, Islam was further convicted of honest services wire fraud, for bribing then-Milwaukee Public Schools Board President Michael Bonds with $18,000 to advance Universal's interests in charter school expansions and favorable lease terms. The Justice Department reported that this bribe is emblematic of Islam's exploitation of his role for personal gain, at the expense of the Milwaukee community who trusted their officials to act in their best interest, not that of a Philadelphia CEO.
Islam, having masterminded the wire fraud gambit as well, pocketed at least $491,000 from Universal—a company already experiencing financial turmoil from their floundering charter school expansion in Milwaukee; the ex-CEO's loot included unapproved bonuses totaling $280,000 and over $200,000 in falsified expense reimbursements, specifics provided by witnesses told the court Islam treated the tax-exempt Universal as his own ATM, which U.S. Attorney Jacqueline C. Romero condemned, saying, "He treated Universal like a virtual ATM, shortchanging its charter schools’ students, and the community, in the process."
The former CEO didn't just stop at defrauding his company and corrupting public officials; he was also convicted of filing false tax returns for six consecutive years, skimping out on nearly $200,000 in taxes due. The trial's outcome has been attributed to the "dedicated efforts of IRS Criminal Investigation special agents and our law enforcement partners," Yury Kruty, Special Agent in Charge of IRS-Criminal Investigation, highlighted their commitment to rooting out white-collar crimes, with Wayne A. Jacobs, FBI Philadelphia's Special Agent in Charge, reinforcing the agency’s steadfast dedication to combating any level of public corruption.
