Illinois Couple Sentenced for Money Laundering

Michael McClellan and Tina McClellan, the owners of Paragon Restaurant in Schererville, IN, were sentenced in federal court Tuesday on charges of money laundering, mail fraud, and harboring illegal aliens. Michael McClellan, 40, was convicted of three counts of mail fraud, one count of money laundering, and one count of harboring illegal aliens.  He was sentenced to 51 months in federal prison and ordered to pay restitution in the amount of $203,804.  Tina McClellan, 38, was convicted of a single count of money laundering and received a one year home confinement sentence.  She is also jointly responsible for the restitution.

The couple is guilty of receiving reimbursements of at least $200,000 from the state of Illinois and the Healthy Start program by inflating the number of children that attended T&M Daycare in Calumet City, which they operated.  The grand jury found that they then laundered part of the money by using it to buy Paragon Restaurant in December of 2008.

Michael McClellan was convicted of wire fraud and harboring illegal aliens after the government uncovered that he hired illegal immigrants for his restaurant and housed them in a home next door.  He submitted false quarterly reports that did not account for the restaurant employees that he paid in cash.  The federal government successfully argued that this tactic was all part of a scheme to defraud the Indiana Department of Workforce Development out of unemployment insurance tax contributions.

This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Internal Revenue Service-Criminal Investigation Division, the US Department of Labor-Office of the Inspector General, the Social Security Administration-Office of the Inspector General, and the Indiana Department of Workforce Development.

Assistant United States Attorney Gary Bell was assigned, and led the prosecution.

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