Former Universal Companies executive sentenced to seven years in prison for conspiracy to defraud the U.S., fraud, and tax crimes

Date: June 16, 2024

Contact: [email protected]

PHILADELPHIA - United States Attorney Jacqueline C. Romero announced that Abdur Rahim Islam, the former chief executive officer of Universal Community Homes ("UCH") and Universal Education Companies ("UEC") was sentenced today to 84 months' imprisonment, followed by three years' supervised release, for his convictions on 18 fraud, corruption, and tax charges relating to his tenure at Universal.

United States District Court Judge Gerald A. McHugh also ordered Islam to forfeit $609,651.31, and to pay restitution to Universal in the amount of $609,651.31 plus attorneys' fees, and to pay restitution of $309,581.66 to the IRS. Judge McHugh also ordered Islam to pay an $1,800 special assessment.

On March 20, 2024, a federal jury convicted Islam on charges that he stole more than a half-million dollars from UCH and UEC, charities established by Philadelphia music legend Kenny Gamble and his wife Faatimah Gamble to develop affordable housing and manage charter schools in Philadelphia. The jury also convicted Islam on charges that he bribed the president of the Milwaukee public schools board of directors and cheated on six years of personal income taxes. The jury also convicted Islam and his co-defendant, former Universal Chief Financial Officer Shahied Dawan, on a charge that they conspired to defraud the federal government by impeding, impairing, obstructing, and defeating the lawful functions of the Internal Revenue Service.

The evidence at trial established that Islam and Dawan used their positions at Universal to pay themselves unauthorized bonuses and to pay Islam fraudulent "expense reimbursement" checks, which included payments for purely personal expenses, such as trips to Caribbean resorts with various women, family vacations, first-class travel upgrades, Broadway shows, personal gym memberships and cellphone bills, and countless meals at restaurants with friends and family members.

Islam and Dawan hid all of these illegal payments from the IRS, which enabled Islam to cheat on six years of personal income taxes. Islam also bribed Dr. Michael Bonds, the former president of the Milwaukee public schools board of directors, in return for political favors. Dr. Bonds has pleaded guilty to charges relating to the bribery scheme and is scheduled to be sentenced next month.

On July 10, 2024, Judge McHugh sentenced Dawan to 18 months' imprisonment, one year of supervised release, and a $15,000 fine for his role in the conspiracy. Judge McHugh also ordered Dawan to pay $196,952 in restitution to the IRS.

"Islam stole from charities founded to make disadvantaged Philadelphians' lives better, in order to enrich his own," said U.S. Attorney Romero. "That's far from his only crime, but it's certainly the most galling. We and our partners will continue to hold accountable anyone foolish enough to defraud their employer or cheat the government and taxpayers out of revenue - or, as in this case, both."

"The outcome today is due to the dedicated efforts of IRS Criminal Investigation special agents and our law enforcement partners," said Denise Leuenberger, Acting Special Agent in Charge of IRS Criminal Investigation. "Anyone contemplating cheating on their taxes should know that our largest enforcement program is directed at the portion of American taxpayers who willfully and intentionally violate their known legal duty of filing and paying their taxes."

"In his crimes, Islam not only sought to defraud the government, but U.S. taxpayers," said Wayne A. Jacobs, Special Agent in Charge of FBI Philadelphia. "Today's sentencing serves as yet another reminder of the consequences which come to those who commit acts of fraud and bribery against the United States. The FBI and our partners at the United States Attorney's Office and IRS Criminal Investigation Division remain steadfast in our commitment to combating corruption at any level."

The case was investigated by the IRS Criminal Investigation (IRS CI) and Federal Bureau of Investigation, with assistance from the Department of Education Office of Inspector General, and prosecuted by Assistant United States Attorneys Mark B. Dubnoff and Linwood C. Wright, Jr.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.

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