The following examples of abusive return preparer investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Dallas Tax Preparers Receive Lengthy Federal Prison Sentences for Roles in Conspiracy

On September 30, 2009, in Dallas, Texas, Dallas resident Fabian Muyaba was sentenced to ten years in federal prison following his conviction in June for conspiracy to aid and assist in the preparation and presentation of false and fraudulent income tax returns. Also sentenced was Joseph Mudekunye, a part-time Dallas resident, and Como, Texas resident Nichelle Henson. Mudekunye was sentenced to 97 months in prison and ordered to pay $422,000 in restitution and Henson was sentenced to 48 months in prison.  In addition to stating their residences, the indictment states that Mudekunye and Muyaba are citizens of Zimbabwe. The government presented evidence at trial that the defendants, who worked as tax preparers at Reliable Express Tax Service and Reliable Professional Tax Service, at 9203 Skillman Street in Dallas, and two of whom also worked at Efficient Tax Service and/or Proficient Tax Services LLC, conspired together to prepare and file IRS Individual Tax Returns, Forms 1040 and 1040A, which were false and fraudulent. In addition, the defendants profited from these fraudulent filings. The government presented further evidence that the defendants willfully and fraudulently reduced the amount of tax that was due to the IRS for their clients by falsely claiming: head of household status, dependents, business expenses, education credits, earned income credit and federal telephone excise tax credits. In some instances, Mudekunye unlawfully used the name and Social Security Number of another person to falsely claim those individuals as dependents of some tax payers. For their services, the defendants collected substantial cash payments from clients for the return preparation, some clients paying up to $1,900 for the preparation of a simple Form 1040 or 1040A. The defendants concealed the fact from their clients that they deducted substantial fees from the clients’ Refund Anticipation Loan checks. In addition, the government presented evidence that the defendants submitted returns using others’ electronic filer identification numbers, rather than their own, to prevent the conspiracy from being discovered.

Teacher Sentenced For Preparing Fraudulent Tax Returns

On September 29, 2009, in Miami, Fla., Georgia Gaines of Lake Worth, Florida was sentenced to one year and a day in prison, one year of supervised release, and ordered to pay nearly $249,000 in restitution to the IRS.  According to court documents, Gaines pleaded guilty to five counts of assisting and preparing fraudulent tax returns for others and five counts of filing fraudulent personal tax returns.  Gaines, while employed as a school teacher in Palm Beach County, prepared Individual Tax Returns claiming tax refunds for herself, and on behalf of various taxpayers, claiming hugely inflated itemized deductions or large business losses.  Gaines’ tax fraud scheme resulted in fraudulent deductions or business loss claims of more than $1.1 million on the returns she prepared for others.   On her own tax returns, Gaines failed to report income totaling more than $200,000, which she earned between 2002 and 2006 by preparing tax returns for others, according to the Indictment and court statements.

Bismark Man Sentenced For Tax Evasion

On September 29, 2009, in Bismark, N.D., Donald Glasser, was sentenced to four years and three months in prison, to be followed by two years of supervised release, for tax evasion.  According to court documents, Glasser served as the business manager/controller of Westcon, Inc., and Power Industries, Inc. from 2003 through 2006.  As controller, Glasser had sole access to the accounting books and records of these businesses and would bill Westcon, Inc., for salaries and other expenses associated with Power Industries, Inc.   Glasser would inflate the invoices by a few thousand dollars and pocket the excess money. Glasser also cut company checks to a bogus business that he created, Properties, LLC, and deposited the funds to its bank account. Glasser used the funds for personal investments in real estate and vehicles, including purchasing properties in Bismarck and Oskaloosa, Iowa, and investing in ethanol ventures in Wyoming and Richardton, North Dakota. Glasser also reimbursed himself from the company’s account for personal expenses that he charged off as business expenses. Glasser admitted to embezzling $1,223,000 in 2003; $478,000 in 2004; $328,000 in 2005; and more than $2 million in 2006.  None of the embezzled funds were reported on Glasser’s income tax returns from 2003 through 2006.

Nebraska Tax Return Preparer Sentenced for Preparing False Returns

On September 21, 2009, in Omaha, Neb., Siyad Warsame Ali, a citizen of Somalia, was sentenced to 33 months in prison for aiding in the preparation of false tax returns.  If he is not deported, Ali will serve one year of supervised release upon the completion of his imprisonment.  According to court documents, Ali prepared a large number of tax returns under the business name Cedar Tax Services for Sudanese immigrants. In preparing the returns, Ali either provided the clients with fraudulent dependent information to include the name of a foster child and his/her social security number, or in other instances, offered to use the clients’ relatives as dependents without determining whether they qualified.  By falsely claiming dependency exemptions, earned income, child care and fuel tax credits, the taxpayers were able to significantly increase the amount of their tax refunds.  The false returns prepared by Ali typically requested a Refund Anticipation Loan.  Frequently, a false return would claim a tax refund of up to $5,000 and Ali would take anywhere from $500 to $3,000 per refund check. The investigation identified at least 30 tax returns involving 23 individuals whose tax returns were fraudulently prepared by Ali.  Those individual taxpayers were audited by the Internal Revenue Service and have either repaid or are in the process of repaying the fraudulent amount of their 2003 and 2004 returns.

New York Tax Return Preparer Filed Fraudulent Tax Returns in the Name of Deceased Taxpayers

On September 18, 2009, in Manhattan, N.Y., Adolphus Quaye was sentenced to 18 months in prison, to be followed by three years of supervised release, and ordered to pay $370,241 in restitution to the Internal Revenue Service (IRS). Quaye pleaded guilty in January 2009 to five counts of making false claims against the United States. Quaye owned and controlled Capital First Management, a tax-preparation service in Yonkers, New York. According to court documents, in 2002, Quaye prepared and filed with the IRS numerous fraudulent tax returns where the names he listed as the taxpayers and their purported minor dependents were names of deceased individuals, and the numbers he used on the returns were just numbers that resulted in the IRS paying out a tax refund. 

Guam Tax Preparer Sentenced to 18 Months in Prison

On September 9, 2009, in Saipan, Guam, Luciano L. Dereas, aka Julius Dereas, was sentenced to 18 months in prison, to be followed by three years of supervised release, and ordered to pay a $100 special assessment fee.  Dereas pleaded guilty in June 2009 to aiding and assisting the preparation of false tax returns. According to the plea agreement, Dereas prepared ninety federal tax returns for Commonwealth of the Northern Mariana Islands (CNMI) residents for the 2004 and 2006 tax years. Dereas falsely stated on the tax returns that the CNMI residents resided in the continental United States and falsely claimed the Earned Income Tax credits which entitled the taxpayers to refunds.

Georgia Man Sentenced for False Claims Against the Government

On September 9, 2009, in Macon, Ga., Derrick Jackson was sentenced to 42 months in prison, three years of supervised release and ordered to pay restitution of nearly $78,000.  According to information presented in court, Jackson represented himself as a tax preparer under different company names in different locations and falsified taxpayer claims to the IRS, including fictitious employment data.  Jackson filed 15 fraudulent tax returns with claims totaling more than $106,000.

Louisiana Tax Preparer Sentenced for Tax Fraud

On September 2, 2009, in New Orleans, La., Anthony Batiste was sentenced to 21 months in prison, one year of supervised release, and ordered to pay more than $80,000 in restitution for falsifying tax returns.  Batiste pleaded guilty on May 27, 2009, to aiding and assisting in the preparation and presentation of false and fraudulent tax returns.   According to court records, Batiste provided customers of AJ’s Tax Service with names and social security numbers so that clients with no children could claim child exemptions.

Chicago Tax Preparer Sentenced on Tax Fraud, Identity Theft, and Mail Fraud Charges

On August 27, 2009, in Chicago, Ill., Nga Nguyen was sentenced to 46 months in prison and ordered to pay $827,582 in restitution to her victims and the IRS. Nguyen pleaded guilty in June 2009 to mail fraud, filing false refund claims with the IRS, and identity theft. According to her plea declaration, from 2001 to 2004, Nguyen operated a tax return business from her residence.  During those four years she filed 935 false tax returns, in the names of 455 clients.  The returns were false and fraudulently claimed refunds that her clients were not entitled to receive. When Nguyen mailed the tax returns to the IRS, she directed the IRS to change clients’ addresses to her home address.  She forged her clients’ signatures on the tax returns without their consent or knowledge.  Nguyen also forged her clients’ signatures on the IRS refund checks and then deposited them into either her bank account or her husband’s business bank account.

Fraudulent Tax Return Preparer Sentenced to 33 Months in Prison

On September 2, 2009, in Greenbelt, Md., Lawrence Sperling was sentenced to 33 months in prison for preparing false tax returns for clients.  Sperling pleaded guilty in April 2009 to one count of aiding and assisting in the preparation and presentation of a false tax return.  According to the plea agreement and court records, Sperling is a former attorney (now disbarred), who owned and operated a tax preparation business in Silver Spring, Md., that operated under several names, including American Tax Service, American Tax Institute, JAMAR LLC and American Tax Professional Associates Inc.  According to court records, from approximately January 2002 through at least May 2003, Sperling prepared tax returns for his clients that contained false items including medical expenses, charitable contributions, miscellaneous employment-related expenses, and child care credits.  Sperling conceded that his practice of preparing false tax returns resulted in a tax loss to the United States of $804,335. In addition, Sperling admitted in his plea agreement that he impeded the Internal Revenue Service (IRS) with respect to his individual taxes.  Beginning in 1988, Sperling failed to file tax returns for eleven years.  In 2001, the IRS penalized Sperling and fined him $10,000 for “willful or reckless understatement of taxpayer’s tax liability” with respect to his tax preparation business.  The IRS sent him more than two dozen notices of taxes and penalties due and other warning letters.  Beginning in at least 1998, Sperling used a nominee to file the tax returns for his clients and to collect his preparation fees.  The nominee held these funds and made disbursements to Sperling or others at Sperling’s request.  Sperling never reported or paid taxes on these funds, although he used a portion of them to pay business expenses.  As a result, Sperling caused a tax loss of $130,847.  The total tax loss related to all of his conduct is $935,183.

California Tax Preparer Sentenced to 18 Months for Filing False Tax Returns

On August 24, 2009, in Los Angeles, Calif., Maria Ophelia Pinzon-Virula was sentenced to 18 months in prison to be followed by one year of supervised release, and ordered to pay approximately $223,709 in restitution. Pinzon-Virula pleaded guilty to preparing and filing false income tax returns with the Internal Revenue Service (IRS). According to the plea agreement, during the years 2002 through 2006, Pinzon-Virula operated a tax preparation business named Public Assistant Income Tax, located in Long Beach, California.  From April 15, 2003 to April 15, 2007, Pinzon-Virula prepared at least 103 tax returns which contained false information such as false deductions, false credits, false expenses, false claims for refunds, and false claims for Earned Income Credits, resulting in false claims for refunds, each ranging from $1,797 to $4,085.  Pinzon-Virula knew that her clients were not entitled to these refund amounts.

Florida Return Preparer Sentenced in Tax Preparation Fraud Scheme

On August 19, 2009, in Miami, Fla., Beaudelaire Telfort was sentenced to18 months in prison, to be followed by one year of supervised release, and ordered to pay $67,524 in restitution. Telfort pleaded guilty in June 2009 to one count of aiding and assisting in the filing of a false tax return. According to court documents, Telfort managed his own business, Nation Tax 1, in Miami, where he prepared tax returns for other individuals and filed them electronically with the Internal Revenue Service (IRS).  Telfort received fees for the preparation and filing of those returns. On April 24, 2009, a twenty-six count indictment was unsealed against the defendant, charging him with tax fraud in connection with the preparation of false Forms 1040 for numerous individuals during calendar tax years 2002 and 2003.  The tax returns contained false information regarding wages, income and withholding amounts. In total, the fraudulent tax filings claimed more than $80,061 in fraudulent tax refunds. During his plea hearing, Telfort admitted to preparing and filing a tax return for a client in which he misrepresented the client’s wages and income, and the amount of federal taxes withheld.  Telfort also admitted to filing a fictitious W-2 form, which suggested that the client had worked for a second employer and earned a salary working for that employer. The material misrepresentations resulted in a claimed tax refund that was significantly greater than what the client was legitimately entitled to receive. 

Florida Tax Preparer Sentenced to 30 Months for Tax Fraud

On August 6, 2009, in Orlando, Fla., Jean Marie Boursiquot was sentenced to 30 months in prison and ordered to pay $149,456 in restitution.  Boursiquot pleaded guilty on May 21, 2009 to his role in a conspiracy to defraud the Internal Revenue Service (IRS). According to court documents, Boursiquot ran his own tax preparation company and prepared tax returns and amended tax returns for transient Haitian immigrants in Florida. Boursiquot had the IRS mail him the refund checks directly and deposited the checks into his business account. In 2002, Boursiquot received nearly $400,000 from the IRS and pocketed more than $250,000 of the money that was intended for his clients. In 2003, Boursiquot received more than $500,000 from the IRS and kept more than $400,000 of his client's money. Boursiquot did not file a tax return for the 2002 tax year and on his 2003 tax return he only claimed $41,341 in income. Before bringing criminal charges against Boursiquot, the United States sought an injunction against Boursiquot to keep him from acting as a tax preparer. The Court in the Southern District of Florida entered an order finding that Boursiquot had defrauded the United States and directed Boursiquot to pay the United States more than $850,000 for filing false tax claims on behalf of unwilling clients. The Court concluded that Boursiquot had forged his clients' signatures on the tax returns that he prepared. The Court further directed that Boursiquot not act as a tax preparer.

Two Alabama Women Sentenced On Federal Tax Fraud Charges

On July 22, 2009, in Montgomery, Ala., Kwantrice M. Thornton, of Montgomery, was sentenced to 24 months imprisonment after pleading guilty on February 4, 2008, to a one-count felony information charging her with conspiracy to defraud the United States. Felicia S. Jackson, also of Montgomery, was sentenced, to 46 months imprisonment following her February 13, 2009, guilty plea to a two-count felony information charging her with conspiracy to defraud the United States and with conspiring to defraud the United States while on release pending sentencing on the first charge.  According to the plea agreement and information, in July 2006, Kwantrice M. Thornton stole from her employer, Electronic Data Systems, Inc. ("EDS"), in Montgomery, Alabama, social security numbers and dates of birth (the "identifiers") of Medicaid beneficiaries. Between August 2006 and October 2006, Thornton sold approximately 50 identifiers to a co conspirator identified in court filings as "OM" in exchange for a total of $1,000.  In addition to these identifiers, between July 2006 and January 2007, Thornton received non EDS related identifiers and bank account information from other individuals and passed this information on to OM.  OM provided these identifiers to other individuals, who caused the identifiers to be used to file federal income tax returns that fraudulently claimed refunds in the approximate amounts of $6,000 to $9,000, which were directly deposited into the bank accounts that Thornton had identified to OM.  Thornton arranged for a portion of the refunds to be withdrawn from the bank accounts and provided $2,000 to OM.  Thornton originally did not charge OM for engaging in this conduct; however, Thornton subsequently required a fee of $500 per refund paid, which she later increased to $1,000.  According to the plea agreement and information, from January to April 2005, Felicia S. Jackson was employed by Tax Tyme, loosely described as a tax preparation business operated by a Montgomery man by the name of Tommy Jordan.  Jordan was convicted at trial in January 2009, and is awaiting sentencing.  Jackson testified against Jordan at that trial. Following Jordan’s instructions, Jackson and another woman, Tumekia Sanders (who has also pled guilty and was previously sentenced), caused numerous federal income tax returns to be filed that claimed refunds that substantially exceeded the actual refund, if any, that the taxpayers were entitled to.  This was done by manipulating the earned income credit amounts to maximize the refund associated with those returns.  Jordan paid Jackson between $400-450 for each return she prepared that was filed. After Jackson pleaded guilty and was released on bond, she again participated with others in the filing of more false federal income tax returns.  Because Jackson committed this criminal activity while on bond for federal criminal charges, her sentence on the second conspiracy count was enhanced.

Colorado Tax Return Preparers Sentenced To Federal Prison for Preparing Over 400 False Tax Returns

On July 9, 2009, in  Denver, Colo., Loren Smith, of Broomfield, Colorado, and Curtis Duff, of Golden, Colorado, were sentenced to 24 months in prison and 23 months in prison, respectively.  Each defendant was ordered to serve three years of supervised release.  A hearing to determine the amount of restitution the two must pay will be in September 2009.  Smith and Duff pleaded guilty in March 2009 to mail fraud and aiding and abetting in the preparation and filing of false tax returns. According to court documents, Duff and a co-conspirator owed and operated a Colorado Corporation named Windfall Tax and Financial Services (Windfall), located in Wheat Ridge, Colorado, whose primary business was to prepare and file amended, individual tax returns with the Internal Revenue Service (IRS) and the Colorado Department of Revenue (CDR). Smith and Duff filed or assisted in the preparation and filing of over 400 amended tax returns with the IRS containing falsified information. The defendants also filed or assisted in the preparation and filing of over 300 amended returns with the Colorado Department of Revenue (CDR) containing falsified information. As a general practice, the defendants charged customers from 40 to 50 percentage of the IRS and CDR refund payments. As part of the scheme, the returns prepared by the defendants typically falsified the amount of the customers’ charitable contributions, business expenses, and business losses for a given tax year. On numerous returns, Windfall listed fictitious businesses for the taxpayers and claimed large business losses or expenses for such taxpayers as a way to generate a larger refund. After the fraudulent amended returns were created, the defendants would obtain a customer's signature on the returns without fully explaining or noting the various false entries and inflated numbers added to such returns. In a number of instances where customers questioned the legitimacy of certain figures on amended returns, the defendants misinformed such customers that the claimed deductions were legitimate and properly allowed for by IRS rules and regulations.

Return Preparer Sentenced to 51 Months for Filing Fraudulent Tax Returns

On July 6, 2009, in Louisville, Ky., Timothy J. Mitts, of Nanuet, New York, was sentenced to 51 months in prison, to be followed by one year of supervised release for preparing false tax returns.  Mitts was convicted by a federal jury in June 2008 on 18 counts of aiding in the preparation of false federal income tax returns.  According to the evidence presented at trial, Mitts prepared well over 100 fraudulent tax returns for the tax years 1997 through 2004. The returns fraudulently prepared by Mitts under reported taxes by at least $500,000.  Many of the returns were amended returns that requested refunds for taxpayers for businesses that did not exist.  According to his clients, they had no idea that their returns were fraudulent.  Mitts simply made up expenses, deductions, business losses, etc., in order to create a refund or avoid tax liability.  All of his clients stated that they relied on Mitts and simply signed the return without double checking or reviewing Mitt’s work. At trial, several witnesses testified that Mitts told them he was a CPA and a former IRS fraud examiner.  Mitts denied ever stating this to clients.  However, trial evidence included a classified advertisement for “Timothy Mitts, CPA.”

Tax Preparers Sentenced to Prison for Filing False Returns

On June 23, 2009, in Riverside, Calif., Matthew Carl Berry, of Rialto, California, was sentenced to nine years in prison after having been previously convicted on charges that he conspired with others to defraud the Internal Revenue Service and filed false personal income tax returns for the years 2001, 2002, and 2004. In addition to prison, Berry was ordered to pay $15,418,393 in restitution to the Internal Revenue Service and to spend three years on supervised release following his release from prison.  Matthew Berry was found guilty late last year of conspiring with his daughters, Karen Denise Berry of San Bernardino and Carla Denine Berry of Rialto, as well as with Ivan Taylor Johnson of San Bernardino and Valerie Madel Dixon of Rialto, to impede and obstruct the lawful functions of the Internal Revenue Service.  In addition to the conspiracy charges, the jury found Berry guilty of willfully filing false income tax returns with the IRS for the 2001, 2002, and 2004 tax years.  According to court papers, Berry operated a tax business out of his residence in Rialto from as early as 1995 through 2003.  Beginning in early 2000, his daughters, Karen and Carla Berry, began preparing false income tax returns at the tax business.  In 2002, both Johnson and Dixon began preparing false income tax returns at the business as well.  In 2004, the business relocated to a commercial building in Rialto and Matthew Berry, along with his daughters Karen and Carla Berry, formed N.C.K. Services, Inc., to operate the tax business. The false returns Berry and the other defendants prepared for clients caused losses of more than $45,000,000 in tax revenue to the IRS. Previously, Karen and Carla Berry pleaded guilty before trial to various charges including conspiracy to defraud the IRS, aiding and assisting in the preparation of false tax returns, and subscribing to a false tax return.  Additionally, Johnson and Dixon previously pleaded guilty to charges contained in the indictment.  Both Karen and Carla Berry are scheduled to be sentenced on August 31, 2009.  Johnson was previously sentenced to 35 months imprisonment, to be followed by three years of supervised release, and ordered to pay restitution to the IRS in the amount of $19,034,901.  Valerie Dixon was sentenced to five years probation, including 10 months home detention, and ordered to pay restitution to the IRS of $19,034,901. 

Illinois Tax Preparer Sentenced To Prison

On May 21, 2009, in Chicago, Ill., DeWayne Preacely was sentenced to 18 months in prison, to be followed by three years of supervised release, for aiding in the preparation and filing of a false tax return. In January 2009, Preacely was charged by Information with preparing false tax returns for his clients.  Preacely owned and operated Personal Tax, a tax preparation service with offices in Harvey, Waukegan, and Chicago Heights, Illinois.  According to the Information, from 2003 through 2006, Preacely caused at least 67 false client tax returns to be filed with the Internal Revenue Service (IRS) claiming refunds totaling $418,060, of which $166,022 resulted from the false information that was on his clients' tax returns.  The returns contained false deductions, business losses, dependents and child care expenses, which allowed Preacely's clients to claim tax refunds to which they were not entitled or in greater amounts than they were entitled to receive from the IRS.  The court ordered Preacely to make immediate full restitution to the IRS.  As conditions of his three year supervised release, the court ordered that Preacely not prepare tax returns for anyone other than his own family and that he not have any ownership of a tax preparation business.

Manager of Local Jackson-Hewett Tax Preparation Firm Sentenced to Prison for Filing Fraudulent Tax Returns

On May 11, 2009, in Houston, Texas, Lee L. Funderburgh Jr., the manager of a local franchise of Jackson-Hewitt, was sentenced to 30 months in prison without parole on each of 13 counts of preparing false U.S. income tax returns.  In addition, the court ordered Funderburgh to serve a one-year-term of supervised release during which he must pay $39,191 in restitution to the United States.  In December 2008, a federal jury convicted Funderburgh of 13 counts of willfully preparing false U.S. income tax returns. Evidence at trial proved that while managing a local franchise of Jackson-Hewitt, Funderburgh aided, abetted and assisted in the preparation of 13 false returns which included falsified information on Form 1040 Schedule A (Itemized Deductions) and/or Form 1040 Schedule C (Profit or Loss from Business) which reduced the reported adjusted gross income of the taxpayers with a concomitant reduction in taxes owed by the tax payers and a loss of $39,191 in revenue to the United States.  

Maryland Tax Preparer Sentenced for Preparing Fraudulent Tax Returns Claiming Fuel Tax Refunds

On May 11, 2009, in Greenbelt, Md., Cynthia Poakwa, aka Cynthia Barbour, of Silver Spring, Maryland, was sentenced to 33 months in prison to be followed by one year of supervised release for assisting in the filing of false tax returns.  According to the plea agreement, Poakwa owned Elite Tax Consultants, Inc., located in Adelphi, Maryland. From at least 1999 to 2004, Poakwa prepared false tax returns for four trucking companies by fraudulently claiming $194,245 in fuel tax credits, which she knew the companies were not qualified to receive.

Woman Sentenced For False Tax Return Scheme

On May 4, 2009, in Minneapolis, Minn., Paulina Alice Mohn, of Gary, Ind., was sentenced to 38 months in prison and three years of supervised release. Mohn, who was also ordered to pay $302,223 in restitution, pleaded guilty on September 10, 2008, to six counts of filing false claims against the United States and one count of aggravated identity theft. According to Mohn’s plea agreement, she admitted preparing approximately 125 federal individual income tax returns on behalf of others for tax years 2005 and 2006 that were fraudulent and contained false claims for refund. These tax returns account for more than $600,000 in false federal claims, and Mohn also admitted preparing and filing at least 115 false State of Minnesota income tax returns containing at least $149,000 in false state claims for refund. As a result of this scheme, more than $230,000 of false refund payments were made by the Internal Revenue Service and more than $60,000 in false refund payments were made by the Minnesota Department of Revenue. From January 1, 2006, to May 2007, Mohn worked as a branch manager and tax preparer for an H&R Block Tax office in Brooklyn Park, and her work included preparing and filing income tax returns on behalf of clients. Mohn admitted the fraudulent tax forms would contain false statements of income, tax withholdings and the addition of fictitious dependents to the return, all of which falsely inflated the claimed refund. All of the returns were electronically filed. Mohn also admitted using, without lawful authority, the Social Security number of individuals in relation to the filing of false claims.

Arizona Man Sentenced to Prison for Preparing Fraudulent Tax Returns

On April 13, 2009, in Phoenix, Ariz., Huy Phuoc Nguyen, of Glendale, Ariz., was sentenced to 21 months in prison. Nguyen pleaded guilty on November 17, 2008, to one count of aiding and assisting in the presentation of false and fraudulent income tax returns. According to court documents, beginning as early as 2001 to 2005, Nguyen owned and operated Lucky Immigration and Income Tax Service in Phoenix. While operating his business, Nguyen personally prepared tax returns for members of the Vietnamese community. On nearly three dozen tax returns, Nguyen fraudulently represented the taxpayers’ deductions and expenses and understated the taxpayers’ income. Some of these fraudulent representations provided tax credits for education, children and earned income to which the clients were not entitled to receive. Nguyen attempted to conceal his fraudulent practice by listing his ex-wife as the tax preparer for the return. The fraudulent tax returns from Nguyen resulted in a tax loss of over $90,000 to the United States.

Maryland Tax Preparer Sentenced for Filing False Tax Returns

On April 1, 2009 in Greenbelt, Md., Raymond Ekpedeme was sentenced to 16 months in prison, to be followed by one year of supervised release, and ordered to pay $152,440 in restitution. From 2002 to 2006, Ekpedeme operated Erickson Tax Service, located in Hyattsville, Maryland.  He pleaded guilty in October 2008 to various tax charges.  According to his plea agreement, for the tax years 2001-2005, Ekpedeme prepared and electronically filed with the Internal Revenue Service (IRS) fraudulent tax returns that included: inflated charitable contributions or employee business expenses, inflated education credits and false child and dependent care expenses. This scheme resulted in losses of $270,448.  In addition, Ekpedeme filed false personal tax returns for tax years 2001 to 2004, resulting in a the total loss $152,440 from his personal false tax returns.

Michigan Tax Preparer Sentenced to Federal Prison

On April 3, 2009, in Detroit, Mich., Sally Scheall, of Standish, Michigan, was sentenced to 27 months in prison followed by one year of supervised release for willfully aiding and assisting in the preparation of false and fraudulent tax returns.  Schaell was also ordered to pay restitution in the amount of $76,459 which represents the penalties and interest that the taxpayers would have to pay to the Internal Revenue Service (IRS) for the fraudulent tax returns that were filed.  In addition, Scheal was also prohibited from preparing or assisting in the preparation of any tax returns, except her own, while under the supervision of the court. According to court records, during 2004 through 2006, Scheall willfully prepared 123 tax returns claiming Schedule "A" deductions in amounts that she knew were materially false and that the taxpayers were not entitled to claim.  The resulting tax losses to the IRS totaled over $230,000.  All of these false and fraudulent tax returns were electronically filed with the IRS by Scheall.  By filing these fraudulent tax returns, Scheall caused the IRS to issue inflated refunds to the taxpayers.

Louisiana Tax Preparers Sentenced for Preparing and Filing False Tax Returns

On March 24, 2009, in Monroe, La., Freddie Oliver Cooper and Ronald Latron Jones, former tax preparers for B12 Income Tax Service in Monroe, Louisiana, were sentenced for preparing and filing false tax returns. Cooper was sentenced to 21 months in prison and ordered to pay $56,168 in restitution. Jones was sentenced to 33 months in prison and was ordered to pay $89,586 in restitution.  Both defendants pleaded guilty on October 6, 2008, to one count of conspiracy to commit tax fraud and one count of aiding and assisting in making and subscribing a false return. According to their plea agreements, Cooper and Jones admitted to inflating the amount of tax refund owing to customers and charging customers inflated prices to prepare false tax returns. According to court documents, they fraudulently created Schedule C business income, inaccurate calculations for the Earned Income Tax Credit, fraudulent dependent exemptions, and fraudulent Forms 1099. The IRS identified approximately 22 taxpayers who had received refunds based on false tax returns prepared by Cooper and Jones from 2003 to 2005, with a resulting tax loss of approximately $109,740.

South Carolina Woman Sentenced for Filing False Tax Returns

On March 18 2009, in Columbia, S.C., Wendy Diane Shaw was sentenced to 24 months in prison, to be followed by one year of supervised release, and ordered to pay $160,632 in restitution.  Shaw was indicted in July 2008 on 51-counts of aiding in the preparation of false tax returns for tax years 2002 through 2005.  She pleaded guilty in September 2008 to all 51 counts.  According to court documents, Shaw falsely claimed Schedule C business deductions and tax credits, including the Earned Income, Additional Child, Child/Dependant Care, and Education credits, in order to claim larger refunds for her clients.  She also falisified Schedule A deductions and filing status.

Two Tennessee Women Sentenced on Tax Fraud Charges

On March 13, 2009, in Memphis, Tenn., Sherry Hobson and Betty Sisson were sentenced to 24 months in prison and to 13 months in prison, respectively. Both Hobson and Sisson were also ordered to pay $28,605 in restitution to the Internal Revenue Service (IRS). Hobson pleaded guilty in November 2008 to conspiracy to defraud the United States and filing false claims. Sisson pleaded guilty in October 2008 to conspiracy to defraud the United States, filing false claims, and assisting in the preparation of a false tax return. According to court documents, Hobson and Sisson admitted that they devised a scheme to obtain payment of false claims for refunds from the IRS. They filed and caused to be filed false federal income tax returns containing false and fictitious wages and withholding amounts, thus generating tax refunds for other individuals that they were not entitled to receive. The returns named in the indictment pertain to 2003 and 2004 federal tax returns for Sisson and other individuals.

Georgia Tax Preparer Sentenced on Charges of Preparing Fraudulent Tax Returns

On March 10, 2009, in Atlanta, Ga., Felicia Flanagan Davis was sentenced to 12 months and one day in prison, to be followed by one year of supervised release, and ordered to pay $81,685 in restitution to the Internal Revenue Service (IRS) and to pay $28,950 in restitution to the Georgia Department of Revenue. According to court documents, on or about February 4, 2006, Davis willfully aided and assisted in the preparation of false and fraudulent returns. Davis pleaded guilty in October 2008 to one count of assisting in the preparation of false tax returns. As stated in the Information, the fraudulent return Davis prepared contained false trade or business losses and itemized deductions which the client was not entitled to receive.

Alabama Tax Preparer Sentenced for Filing Fraudulent Federal Income Tax Returns

On February 26, 2009, in Montgomery, Ala., Keshia Brayboy was sentenced to 30 months in prison, to be followed by three years of supervised release, and ordered to pay $148,000 in restitution to the Internal Revenue Service (IRS). Brayboy pleaded guilty in October 2008 to a charge of filing a false claim against the United States related to her filing of fraudulent income tax returns.  Brayboy was previously indicted on 20 counts of filing false claims with the United States and 10 counts of identity theft related to filing the fraudulent returns using the social security numbers of taxpayers without their permission. The allegations in the indictment occurred in 2007 and 2008 when Brayboy was operating a tax preparation business called KTS Financial Services in Millbrook. 

Tax Preparer Receives Over 5 Years in Federal Prison for Preparing False Tax Returns

On February 25, 2009, in Cedar Rapids, Iowa, tax preparer Angelique Tinder, also known as Angelique Howen, was sentenced to 63 months in prison and ordered to pay $1,085 in restitution to 12 victim clients for preparing false amended income tax returns. A jury convicted Tinder in August 2008. She operated a Rockford, Illinois tax preparation business known as “Your Tax Master.” Trial evidence showed that Tinder developed a business preparing amended tax returns, mostly for Bosnian immigrants. In tax returns she prepared in 2003, Tinder falsely claimed deductions for medical expenses, charitable contributions, and unreimbursed employee expenses for her clients. The amounts she listed were either fraudulently overinflated or completely fabricated. For clients who sent money to family members overseas, she listed these amounts or fraudulently overinflated amounts as charitable contributions. In addition, Tinder claimed fraudulent college education credits for children who were pre-school, elementary, and high school students. Tinder traveled to Waterloo, Iowa, in May 2003 and set up business in a hotel. She conducted cursory interviews of her clients’ originally filed tax returns for 2000, 2001, and 2002. She usually spent no more than 15 or 20 minutes for the preparation and signing of up to three amended returns for each client. She charged $35 or $40 for each return she prepared. She also advised her clients they could sign amended returns for other family members not present. She prepared and filed approximately 1,700 returns with the IRS. An additional 400 amended returns were seized in a search of a hotel conference room in Johnston, Iowa, where Tinder was conducting her business in June 2003. All of the more than 2,100 returns she prepared claimed an additional tax refund. At the sentencing hearing, the court found that Tinder intended to defraud the IRS out of more than $2.5 million in fraudulently claimed refunds.

Mother and Son Sentenced for Preparing False Income Tax Returns and Making False Statements to Federal Agents

On February 23, 2009, in Los Angeles, Calif., tax preparation business owner Alma J. Batson and her son Kelcee L. Batson, were sentenced to 12 months in prison and three years probation, respectively. Alma Batson was sentenced following her guilty plea of aiding and assisting in the preparation of false income tax returns. Her son also pleaded guilty and was sentenced for making a false statement. According to the nine count indictment, Alma Batson prepared and filed false income tax returns for the years 2002, 2003, and 2004. Both Alma and Kelcee Batson were also charged in the indictment with making false statements to IRS special agents when each stated that Alma Batson did not prepare tax returns at the tax preparation business. Between tax years 2001 and 2004, Alma Batson and her employees prepared almost 500 fraudulent tax returns. The falsely prepared returns claimed: inflated or completely false Schedule C business losses; deductions for charitable contributions; deductions for unreimbursed employee expenses, deductions for tuition and fees; tax credits for child and dependent care expenses; and hope and lifetime learning tax credits.

Maryland Tax Return Preparer Sentenced to Prison for Preparing False Tax Returns

On February 23, 2009, in Greenbelt, Md., Rodrick Williams, a former tax return preparer, was sentenced to 24 months in prison for preparing false tax returns for customers. Williams pleaded guilty in May 2008 to conspiracy to impede the IRS.  According to the case evidence, Williams and DaJuan Jackson, both currently of Atlanta, prepared tax returns at a branch office of American Tax Associates Inc. (ATA) located in a Run ’N Shoot gym in District Heights, Maryland. Williams and Jackson were the two main preparers in the branch office, which was responsible for preparing almost 1000 tax returns per year at the height of its business in 2004. Williams cooperated with the government, and at the trial of DaJuan Jackson, Williams testified that he and Jackson devised a scheme to place false information on the tax returns of ATA clients.  In particular, they falsified itemized deductions and business expenses so clients could fraudulently obtain bigger refunds. DaJuan Jackson was sentenced to 51 months in prison on February 19, 2009.

Maryland Tax Return Preparer Sentenced to Prison

On February 19, 2009, in Greenbelt, Md., DaJuan Jackson, a former tax return preparer, was sentenced to 51 months in prison for preparing false tax returns for customers. In November 2008, a jury convicted Jackson of eight counts of aiding and assisting in the preparation and presentation of false tax returns. Jackson’s co-defendant, Rodrick Williams, pled guilty to conspiracy to impede the IRS in May 2008.  According to the evidence introduced at trial, Jackson and Williams prepared tax returns at a branch office of American Tax Associates Inc. (ATA), located in a Run ’N Shoot gym in District Heights, Md. Jackson and Williams were the two main preparers in the branch office, which was responsible for preparing almost 1,000 tax returns per year at the height of its business in 2004. Williams cooperated with the government, and at trial, he testified that he and Jackson devised a scheme to place false information on the tax returns of ATA clients. In particular, Jackson and Williams falsified itemized deductions and business expenses so clients could fraudulently obtain bigger refunds. Williams is scheduled to be sentenced in late February 2009. 

Tax Preparer Sentenced for Tax Fraud

On February 18, 2009, in Memphis, Tenn., Linda Hendrieth was sentenced to 18 months in prison, to be followed by one year of supervised release, and ordered to pay $15,646 in restitution to the Internal Revenue Service (IRS). Hendrieth pleaded guilty to aiding and assisting in the preparation of false and fraudulent income tax returns on September 30, 2008. Hendrieth owned and operated Taxing Solutions Plus and used an EFIN number from the IRS to electronically prepare and file income tax returns.  Court documents show that IRS during a routine audit of return preparers noticed a high percentage of Schedule A deductions to the adjusted gross income on the returns which had been prepared and filed electronically by Taxing Solutions Plus for tax year 2001.  A sample of these returns were pulled and referred to IRS-CI for further examination and interviews of the taxpayers. The resulting audits and interviews with the taxpayers revealed that the taxpayers were unaware of amounts of certain line item deductions on their Schedule As. Specifically, a pattern showed medical payments, charitable contributions and un-reimbursed business expenses that were either false or materially inflated beyond what the taxpayers had told Hendrieth or provided to her with the documentation.

Atlantic City Tax Return Preparer Sentenced for Conspiracy to Defraud the Government

On February 17, 2009, in Camden, N.J., Eduardo Cortez, a resident of Mays Landing, N.J., was sentenced to 36 months in prison, to be followed by three years of supervised release. Cortez, who is also known as Eduardo Cortes, Edward Cortez, Eduardo Perez, and Eduardo Cottes, was ordered to pay $442,734 in restitution. In August 2008, Cortez pleaded guilty to tax evasion and conspiracy to defraud the IRS. According to his plea agreement, Cortez defrauded the IRS by preparing false tax returns for customers of his business, Peoples Multiple Services, located in Atlantic City. Peoples also operated under the names People Tax Services, Perez Income Tax Services, People Multiple Services Inc., Peoples Multi Level Services and Cormel Inc. Cortez and his employees knowingly prepared false and fraudulent tax returns for customers that included false and inflated deductions, credits and adjustments. Cortez entered into an agreement with the IRS in 2000 stating that he owed over $114,000 in taxes, exclusive of interest and penalties, for calendar years 1993 through 1995. The plea agreement states that Cortez evaded these assessed taxes by taking various steps to conceal his assets and income from the IRS. His conduct, according to the plea agreement, included submitting false documents to the IRS which misrepresented his ability to pay his taxes and understated his net worth. The plea agreement states that Cortez also used nominees to hide his income from the IRS. It further states that he had his business income paid to nominees and deposited into bank and brokerage accounts opened in the names of those nominees. Cortez also admitted in his plea agreement that he caused his personal expenses to be paid for by the nominees and caused tax returns to be filed in the names of nominees which falsely reported Cortez’s business income and assets.

Ohio Tax Preparer Sentenced for Preparing False Tax Returns

On February 9, 2009, in Cleveland, Ohio, Arthur Obleton was sentenced to 37 months in prison for money laundering and aiding and assisting in the preparation of false tax returns. Obleton pleaded guilty in September 2008 to the charges contained in a five count Information filed the previous month. According to his written plea agreement, Obleton operated a tax preparation business titled Obleton & Associates. He inflated or falsified income stated on Schedule C or W-2 forms of filed tax returns in order to maximize refunds for the subject taxpayers under the Earned Income Credit program.  Additionally, Obleton admitted to laundering what was purported to be monies derived from narcotics trafficking for an undercover federal agent on four separate occasions

California Tax Return Preparer Sentenced to Prison for Preparing a False Tax Return

On February 5, 2009, in San Francisco, Calif., Charles Edward Pullen was sentenced to 12 months and one day in prison for preparing a false tax return. Pullen pleaded guilty in July 2008 to one of 25 counts, admitting that he aided and assisted in preparing a false return for a client for the 2003 tax year. On this tax return, Pullen included false charitable deductions and business expenses. He also inflated the value of property donated to a charitable organization and included a false charitable deduction for this property on the tax return. The amount of the false claims nearly equaled this individual’s 2003 salary, and, according to statements during the hearing, Pullen included charitable deductions on each of the returns listed in the indictment that nearly equaled each person’s income for that year. According to court records, Pullen prepared tax returns for customers since the 1980's. For the 2002-2003 tax years, the IRS audited 64 of his customers. For 2002, all five of the examined returns required adjustments. Each of the 59 returns for 2003 required adjustments totaling $272,984. Following these audits, Pullen was assessed a penalty by the IRS for negligently understating his customers income. Pullen also failed to file individual tax returns for himself for the 2003 and 2004 tax years. 

Alabama Women Sentenced for Filing False Tax Returns

On February 2, 2009, in Birmingham, Ala., Sharon Brown-Acklin, of Hamilton, Alabama, was sentenced to 12 months and one day in prison, followed by one year of supervised release and ordered to pay $79,832 in restitution to the Internal Revenue Service (IRS).  Brown-Acklin, a tax preparer, pleaded guilty in October 2008 to 27 counts of preparing false tax returns. She used false information, including filing status, inflated deductions and credits, which resulted in $252,123 in improperly claimed deductions and exemptions. 

Tax Preparer Sentenced to Federal Prison for Preparing Fraudulent Tax Returns

On January 29, 2009, in Kansas City, Kan., Gene Franklin, a tax preparation business owner, was sentenced to 30 months in prison following his March 2008 conviction for preparing false tax returns. He owned Franklin & Company, Inc., an income tax preparation business with offices in Kansas City, Butler, Mo., and Overland Park, Kan. Evidence presented at trial showed Franklin advised clients and prepared tax returns fraudulently reporting business expenses in a manner promoted by Renaissance, The Tax People in literature, sales presentations and videos. Franklin joined Renaissance as an “Independent Marketing Associate,” drawing revenue by bringing other members into the network. Additionally, Franklin was an “Affiliated Tax Professional” with Renaissance, which enabled him to promote his tax preparation business at Renaissance meetings. Through the affiliation with Renaissance, the gross receipts for Franklin & Company increased almost 50 percent due to the large number of new clients. Renaissance, The Tax People founder, Michael Craig Cooper, was convicted in February 2008 on more than 70 counts of mail fraud, wire fraud, money laundering and conspiracy.

Georgia Tax Preparer Sentenced on Federal Income Tax Evasion Conviction

On January 27, 2009, in Augusta, Ga., Jose R. Cruzastol was sentenced to 12 months in prison, followed by three years of supervised release, and ordered to pay $57,753 in restitution. Cruzastol pleaded guilty in January 2008 to one count of evading his personal income taxes. Cruzastol owned J.R. Tax Service, a tax preparation business.

Four Employees of Independent Tax Service Sentenced for Tax Fraud

On January 7, 2009, in Wilmington, N.C., four defendants was sentenced for their roles in a tax fraud scheme. Pamela D. Evans was sentenced to 15 months in prison and ordered to pay $40,041 in restitution; Bertha Battle was sentenced to 15 months in prison and ordered to pay $19,019 in restitution; Tasha Battle received 180 days home confinement with electronic monitoring and ordered to pay $1,883 in restitution; and Gwendolyn P. Evans was sentenced to one month in prison with up to 150 days home confinement with electronic monitoring and ordered to pay $7,549 in restitution.  All defendants were ordered to serve three years of supervised release.  According to court documents, from January 2004 to April 15, 2004, the defendants, while employees of Independent Tax Service located in Rocky Mount, North Carolina, conspired to make, and did make, false claims for refunds from the Internal Revenue Service (IRS) by filing or causing others to file false 2003 federal income tax returns. The defendants inflated wages and/or withholdings and listed false dependants and/or false dependant information to qualify clients for the earned income credit.  In addition, the defendants sold fraudulent dependent information to some clients so they would qualify for a larger refund and claimed education credits their clients were not entitled to claim.

Ohio Accountant Sentenced to 120 Months on Tax Fraud and Other Federal Charges

On January 6, 2009, in Columbus, Ohio, Dennis G. Sartain was sentenced to 120 months in prison. Sartain pleaded guilty in February 2008 to conspiracy to defraud the United States, aiding in the filing of false tax returns, aiding and abetting credit and loan application fraud, and aiding and abetting money laundering.  The judge found the tax loss to be more than $1 million and the fraud loss to be nearly $3.7 million.  Sartain was the accountant for two Columbus, Ohio, businesses involved in home building and real estate brokerage services.  According to a superceding indictment, Sartain conspired with others to pay the Realtors and others who worked for these two companies "under the table."  Court documents asserted that Sartain either prepared false Forms 1099 that underreported the amount of compensation paid to the individuals working for the companies, or he did not prepare and file any Forms 1099 with the IRS reporting any compensation paid. In addition, the indictment alleged that Sartain prepared or helped prepare false individual income tax returns that underreported the income earned and taxes owed by the individuals who had received payments from these companies. Finally, the indictment claimed that Sartain and others shredded and discarded documents and business records and concealed electronic records maintained on computers and memory sticks that were relevant to the investigation.  Sartain also pleaded guilty to filing false individual income tax returns on behalf of himself and his wife. He did not report all of the income he was paid by one of these companies in the years 2001 through 2004.  According to the superseding indictment, in two of those four years, Sartain listed his occupation as “unemployed.”  Additionally, Sartain admitted aiding in the submission of a false loan application by helping submit false payroll check stubs to a mortgage company. The false payroll stubs misrepresented the loan applicant’s position and salary for the purpose of fraudulently obtaining a mortgage.  Finally, Sartain aided and abetted money laundering by engaging in conduct that contributed to a $54,295 payment to the buyer of a home sold by a local real estate business, according to court documents. That payment represented excess fraudulently obtained loan proceeds derived from the credit and loan application fraud.

Former Tax Preparer is Sentenced for Fraud

On January 6, 2009, in Tulsa, Okla., Cynthia J. Williams, a former tax preparer, was sentenced to 12 months and one day in prison to be followed by one year of supervised release for preparing a false federal income tax return while she operated a tax preparation business in Sapulpa, Okla. U.S. District Judge Terence Kern also ordered her to pay $45,877 in restitution to the IRS and a special monetary assessment of $100. Williams pleaded guilty to the charge in August 2008.  According to court documents, Williams owned a tax preparation business, Tax and Accounting Solutions, Inc. Williams would prepare one version of an income tax return using clients’ information while they were in her office. Unbeknownst to her clients, she would electronically file a different version of the same return with the Internal Revenue Service with increased itemized deductions or expenses listed on Schedules A and/or C of the return that falsely inflated the refund amounts. In addition, without the knowledge or permission of her clients, Williams would apply for a Refund Anticipation Loan (RAL) in the name of her clients.  This would cause the improperly inflated refund amount to be paid into a RAL bank account to which only Williams had access. Williams would only pass on the original (smaller) refund to her clients and keep the remainder of the false refund for herself.

Detroit Return Preparer Gets More Jail Time on Tax Charges

On December 22, 2008, in Detroit, Mich., Shawn Gibson, a return preparer, was sentenced to 30 months imprisonment, followed by one year of supervised release, and ordered to pay $57,780 in restitution to the Internal Revenue Service (IRS). The judge also made it clear that Gibson is not to advise, prepare, or teach anyone as it relates to income taxes.  This sentence was the result of a guilty plea to aiding and assisting in the preparation of a false tax return. Gibson is currently serving a sentence of 34 months imprisonment as the result of November 2006 plea guilty to conspiracy to defraud the IRS.  According to court records, in 2006 and 2007, Gibson knowingly prepared three false tax returns, which included false dependents, itemized deductions, and false Schedule C losses, causing a total loss to the IRS of $57,780. This is the second time Gibson has been convicted of tax charges.  The earlier violation of conspiracy to defraud the IRS happened during 2004, 2005 and 2006, when Gibson owned several tax preparation services including Shawn Gibson & Co., New Detroit Tax Services, and Metro Verse Tax Service. Gibson filed income tax returns on his client’s behalf, adding false dependents, businesses deductions, losses, charitable contributions, and tax credits, in order to increase the tax refund due. The fraudulent tax refunds totaled over $260,000.

Arkansas Tax Preparer Sentenced to 18 Months in Prison

On December 18, 2008, in Little Rock, Ark., Melba Nelia Lopez was sentenced to 18 months in prison, to be followed by one year of supervised release, and ordered to pay $95,428 in restitution to the Internal Revenue Service (IRS).  Lopez pleaded guilty in June 2008 to two counts of assisting in the preparation of fraudulent income tax returns. During her court appearance, Lopez acknowledged that she was the owner and operator of Melba’s Tax Office, a tax preparation business in Batesville, Arkansas. Lopez further admitted that on February 14, 2005, she prepared a 2004 federal income tax return for a client that contained materially false items, which generated a larger refund than the client was actually entitled to receive. Additionally, Lopez admitted that in January 2006, she prepared a 2005 federal income tax return for another client that resulted in an overpayment to that client. Lopez admitted that, as a result of her fraudulent conduct, the tax loss to the government was approximately $95,428.

Georgia Tax Return Preparer Sentenced to 21 Months in Prison

On December 18, 2008, in Columbus, Ga., Valorie Lynn Renfroe was sentenced to 21 months in prison, to be followed by three years of supervised release, and ordered to pay $46,004 in restitution.  According to a February 2008 indictment, Renfroe prepared client tax returns and filed returns with the Internal Revenue Service (IRS).  In excharge for preparing the tax returns, clients paid Renfroe a percentage of the refunds.  Co-defendant, Fredric Leon Holland, was employed by a funeral home and had access to personal identifying information of deceased persons.  The indictment states that Holland provided this personal information, which included  names, dates of birth and social security numbers, to Renfroe.  According to court documents, Renfroe used the identities of the deceased persons to prepare fraudulent tax returns in order to obtain false refunds.

Former Bridgeport, Conn., Tax Preparer Sentenced to 18 Months in Prison

On December 16, 2008, in New Haven, Conn., James R. Mullen, of Norfolk, Virginia, was sentenced to 18 months in prison, followed by three years of supervised release, and ordered to pay $23,922 in restitution.  Mullen pleaded guilty in September 2008 to one count of filing false claims with the Internal Revenue Service (IRS) and one count of accessing a protected computer to commit the fraud.  According to documents filed with the court and statements made in court, from 2004 through 2006, Mullen worked as a tax preparer at several entities in the Bridgeport area, including a national tax preparation firm.  As part of a scheme to defraud the Government, on eight occasions Mullen added false dependent information to the tax returns of various taxpayers in order to inflate the amount of refund owed to the taxpayers.  Mullen then electronically filed the fraudulent returns with the IRS.  In some instances, Mullen included false bank account information on the returns as a method for diverting the proceeds of the taxpayer’s inflated refunds to a bank account controlled by persons acting at Mullen’s instruction, later claiming some or all of the proceeds for him. 

Texas Return Preparer Sentenced for Tax Fraud

On December 16, 2008, in Houston, Texas, Madison Lee Oden, a former executive with Sterling McCall Automotive Group, and Richard Duane Davis, former owner of Skydive Houston in Waller, Texas, were sentenced to 15 months and 36 months in prison, respectively.  In June 2008, following a bench trial, Oden was convicted of filing false tax returns for years 2000 through 2002 and Davis was convicted of aiding or assisting in the preparation of these same false returns. According to the evidence presented by the government at sentencing, Oden underpaid his income taxes for years 1993 through 2003 by approximately $1.7 million. The tax loss for years 2000 through 2002 was approximately $800,000.  According to the evidence presented at trial, Davis purported to run his skydiving business through various partnerships.  Davis prepared tax returns and provided financial services under various business names, including R. D. Davis & Associates, R. D. Davis Investments and Financial Management Services.  Oden had his tax returns prepared by Davis since at least 1991. The evidence further demonstrated that Oden purchased tax write-offs from Davis as purported partnership “investments.” Evidence showed that at least two tax returns prepared for Oden by Davis were audited, resulting in disallowance of items and tax due and owing. Oden refused to cooperate during the IRS’s audit of his 1993 tax return, which Davis had prepared; instead, he sent frivolous correspondence to the IRS. Evidence at trial demonstrated that this audit resulted in a tax liability of $73,000, which Oden paid in 1997.  In addition to the fraudulent skydiving partnership losses reported on Oden’s returns, Oden also offset his income with losses from a fictitious auto finance sole proprietorship and false losses related to Oden Family Limited Partnership, which Davis set up and through which Oden purported to manage property and assets.

Maryland Tax Preparer Sentenced for Assisting in the Preparation of Fraudulent Tax Returns

On December 15, 2008, in Greenbelt, Md., Eric B. Morton, of Beltsville, Maryland, was sentenced to 18 months in prison, to be followed by three years of supervised release, and ordered to pay $29,256 in restitution to the Internal Revenue Service (IRS).   According to his guilty plea, Morton prepared and electronically filed with the IRS more than 30 false federal individual income tax returns for more than a dozen taxpayers, for tax years 2001 through 2004.  These tax returns claimed withholdings, credits, and deductions to which the taxpayers were not entitled, including:  the withholding of federal income taxes that were never withheld; deductions for mortgage interest payments that were never made; deductions for gifts to charity that were never made; deductions for employee business expenses that were never incurred; deductions for business losses that were never incurred; and credits and deductions for education expenses that were never incurred.  Morton also admitted that he claimed fraudulent tax refunds on his own individual income tax returns for tax years 2001 through 2004.

Louisiana Tax Preparer Sentenced for Preparing False Tax Returns

December 11, 2008, in Shreveport, La., Clementine Rainey, a former tax preparer for Quick Tax in Shreveport, was sentenced to 21 months in prison and ordered to pay $111,000 in restitution for preparing false tax returns.  Rainey pleaded guilty August 22, 2008, to one count of aiding the preparation of false returns.  According to court documents, she admitted to preparing and filing false individual income tax returns for taxpayers for the years 2005 through 2007 by submitting fictitious W-2 employer and wage information.  The W-2s claimed the taxpayers earned wages from two local companies when in fact none of the taxpayers were ever employed at these companies. The IRS identified approximately 24 taxpayers who had received refunds based on false tax returns prepared by Rainey, resulting in a tax loss of approximately $128,576.

Virginia Certified Public Accountant (CPA) Sentenced for Tax Fraud

On November 21, 2008, in Alexandria, Va., Henry Omozee, of Woodbridge, Virginia, was sentenced to 27 months in prison, followed by one year of supervised release, and ordered to pay $82,430 in restitution.  Omozee was a CPA licensed by the Commonwealth of Virginia and the owner of HO Tax Services and Tax and Accounting Services, a company in Woodbridge that offered tax preparation services. Omozee was found guilty of tax fraud in August 2008.  According to court documents, Omozee failed to report over $230,000 worth of income he earned from his tax preparation business on his 2001, 2002 and 2003 tax returns. The total tax loss to the government was in excess of $80,000. In addition, Omozee prepared tax returns for thousands of clients during the same time period and falsified a significant number of those returns by claiming deductions and losses for items and in amounts that Omozee knew his clients were not entitled to claim.

Two Kenyan Women Sentenced for $15 Million Tax Fraud Conspiracy

On November 13, 2008, in Kansas City, Mo., Loretta Wavinya and her sister, Lillian Nzongi, were sentenced to prison terms of 168 months and 70 months, respectively, for their roles in a multi-million dollar conspiracy to defraud the IRS. The Kenyan nationals lived in the Kansas City area and were involved in a wire fraud scheme that involved stealing the identities of hundreds of victims, primarily nursing home residents, which were used to seek more than $15 million in fraudulent federal tax refunds. Wavinya, a tax preparer and radiology technician who visited patients on-site at multiple nursing homes, pleaded guilty in June 2008 to using stolen identities to file more than 540 fraudulent federal tax returns using the names of more than 500 identity theft victims. The conspirators filed up to six state tax returns simultaneously with each federal return, causing a loss to at least 27 states. In addition to the conspiracy, Wavinya pleaded guilty to wire fraud and aggravated identity theft. Wavinya was the largest single filer and received the largest share of the proceeds, much of which was invested in assets outside the United States. In total, the IRS believes that Wavinya was responsible for at least $9.6 million in fraudulent filings. Wavinya sent her proceeds overseas and maintained passports and thousands of dollars in a bank box. She also taught other conspirators how to file fraudulent tax returns. In order to conceal their true identities, Wavinya and other conspirators electronically filed fraudulent tax returns through public Internet “hot spots,” such as coffee shops or restaurants, and through unsecured private wireless networks maintained by unwitting individuals with no connection to the conspiracy. Law enforcement officers discovered evidence that Wavinya used her neighbor's unsecured wireless network to connect to the Internet. The false tax information was used to generate federal refund claims in the range of $4,000 to $47,000 each. Mail related to the returns and credit cards was sent to commercial mailboxes across Kansas City, and Wavinya and other conspirators often used “runners” to pick up this mail in order to conceal their own identities. Nzongi pleaded guilty on July 23, 2008, admitting to her role as one of those runners. Wavinya and other conspirators opened numerous bank accounts in Kansas City and elsewhere to receiving electronic fund transfers of tax refunds. Shortly after a refund payment was wired into an account, conspirators used runners to help them withdraw the money. The conspirators wrote checks to the runners in amounts less than $10,000 and drove the runners from bank to bank to cash the checks until the accounts were depleted, or the bank, or the IRS detected the fraud and froze the account. The runners provided the withdrawn funds back to Wavinya and others and received a small payment for their services. Some of the money obtained by the conspiracy was wired to banks in Kenya, where refund money was sometimes withdrawn directly from accounts through automated teller machine (ATM) withdrawals occurring in Kenya.

Denver Attorney Sentenced to Federal Prison for Tax Evasion

On November 7, 2008, in Denver, Colo., Kennedy Oduro was sentenced to 12 months and one day in federal prison and ordered to pay more than $21,000 in restitution to the IRS for aiding in the preparation of false tax returns. Oduro pleaded guilty in August 2008 following his October 2007 indictment by a federal grand jury on charges of preparing and filing false income tax returns during 2004 and 2005. He was arrested without incident on December 30, 2007 while re-entering the United States at Chicago’s O’Hare Airport. According to the indictment, Oduro made false entries on tax returns for business losses from Schedule C, itemized deductions from Schedule A, and education credits totaling over $283,000 and $342,000, respectively.

Income Tax Preparer to Sentenced for Falsifying Tax Return Deductions

On November 6, 2008, in St. Louis, Mo., tax return preparer Edward Whittington was sentenced to 36 months in prison and ordered to pay $79,000 in restitution for preparing false income tax returns. Whittington was convicted in May 2008 of nine counts of aiding in the preparation of false income tax returns. He claimed false deductions for his clients that fabricated and inflated deductions. The loss to taxpayers from 53 of his 666 prepared returns was $259,000. According to the U.S. Attorney, Whittington’s conduct was particularly egregious, because he had been convicted previously of committing the same type of crime and served nearly one year in prison.

Tennessee Tax Return Preparer Sentenced on Bank Fraud and Filing False Tax Return Charges

On November 5, 2008, in Knoxville, Tenn., Donna K. Blessing, aka Donna Bortz and Donna Rees, of Kingsport, Tennessee, was sentenced to 24 months in prison, to be followed by five years of supervised release, and ordered to pay $75,709 in restitution to Bank of Tennessee. Blessing pleaded guilty on June 17, 2008 to charges of bank fraud and aiding and assisting in the preparation of false income tax returns. In two separate indictments, Blessing was charged with assisting in the preparation of false tax returns in 2003 through 2005 and interfering with the administration of the Internal Revenue laws in 2006, as well as engaging in schemes to defraud Bank of Tennessee and Washington County Bank (now GreenBank) in early 2000. In her plea agreement, Blessing admitted to aiding and assisting in the preparation of fraudulent federal income tax returns for tax years 2003 and 2004 which falsely reduced her clients’ tax liability by making false entries for itemized deductions and for profits and losses from businesses. The bank fraud indictment charged Blessing with engaging in a scheme to defraud Washington County Bank and Bank of Tennessee. She opened a checking account at Bank of Tennessee in September 1999 along with a business partner. A line of credit was obtained from Washington County Bank in January 2000 in the partner’s name. The indictment charged that Blessing provided a false serial number for a manufactured home to Washington County Bank that was to be security on a loan. The false information caused Washington County Bank to issue a check for $119,900 made payable to the mobile home dealer from whom the manufactured home was purportedly being purchased and the business partner. In fact, no home had been ordered and the serial number was false.  

Texas Tax Return Preparer Sentenced For Falsifying Clients Income Tax Returns

On Tuesday, November 4, 2008, in Houston, Texas, Karey Bernard Statin was sentenced to 51 months in prison and ordered to serve 12 months of supervised release on the condition that he not prepare tax returns. A jury convicted Statin in January 2008 for preparing fraudulent tax returns for clients that resulted in approximately $150,000 in refunds during 2000-2002. Trial evidence proved that on his client’s tax returns, Statin claimed false itemized deductions and claimed earned income credits on self-employment earnings that were fictitious. Statin’s clients were often unaware of his manipulation of their tax returns. As part of his sentence, 50 percent of any earnings he makes while in prison will be applied to a fine and special assessments, with the remainder to be paid while on supervised release.

Arizona Tax Return Preparer Sentenced for Preparing False Tax Returns

On November 3, 2008, in Phoenix, Ariz., Maria Orona, a lawful permanent resident from Mexico was sentenced to 24 months prison and will be deported to Mexico after she completes her sentence. Orona pleaded guilty in August 2008 to one count of aiding and assisting in the presentation of false and fraudulent individual income tax returns indictment. She was indicted in April 2008 on 14 counts filing false tax returns. According to the U.S. Attorney, Orona owned and operated Esperanza Tax Service and prepared fraudulent returns from 2004 to 2006. Between March 21, 2006, and April 4, 2006, the Criminal Investigation unit of the Internal Revenue Service (IRS) conducted three separate undercover operations in which IRS agents posed as clients in order to have Orona prepare their federal tax returns. In each undercover contact, Orona prepared tax returns in which she falsely reduced the tax due. These undercover contacts resulted in false tax returns that claimed approximately $44,853 in false expenses and a reduced tax liability of approximately $3,406. IRS auditors then initiated audits on approximately 200 tax returns prepared by Orona. The IRS determined most of the returns contained overstated itemized deductions and other false items that reduced the tax liabilities resulting in an additional tax due and owing on 200 tax returns of approximately $283,242.

Florida Woman Sentenced for Tax Fraud

On October 24, 2008, in Ft. Lauderdale, Fla., Morgan Mayfaire was sentenced to 18 months in prison, followed by one year of supervised release, and ordered to pay $343,990 in restitution. According to court documents, Morgan Mayfaire, who in 2005 changed her name from “Mary Elizabeth Valido” to Morgan Taylor Mayfaire, prepared tax returns at her residence in Davie, FL, for several taxpayer clients. The clients paid tax return preparation fees to Mayfaire of 10 percent of the amount of the refund claimed on their federal tax return. Mayfaire prepared tax returns and amended tax returns on Forms 1040 and 1040X in which, on Schedule A, she reported false medical expenses, taxes, charitable contributions, and employee business expenses. Based on the false deductions she included on the clients’ tax returns, Mayfaire caused more than $300,000 in fraudulent refunds. Mayfaire represented to her taxpayer clients that she was an employee of the IRS and that, as an IRS employee, she had ways of increasing taxpayer deductions on tax returns that no other person would know, thereby inducing the taxpayers to hire her to prepare their tax returns.

Houston Tax Return Preparer Sentenced For Falsifying Clients’ Income Tax Returns

On October 21, 2008, in Houston, Texas, tax return preparer Paul M. Hirsch-Pels was sentenced to 21 months in prison for falsifying clients’ income tax returns. Hirsch-Pels pleaded guilty to preparing fraudulent returns for clients that included losses and deductions that the clients had not actually incurred. Those false tax claims created larger tax refunds for clients and justified higher preparation fees for Hirsch-Pels. His fraudulent refund claims totaled $145,075 from 2000 to 2004.

Bronx Tax Preparer Sentenced to 40 Months in Prison

On October 7, 2008, in Manhattan, N.Y., Joseph Owusu was sentenced to 40 months in prison, to be followed by three years of supervised release, and ordered to pay $991,051 in restitution to the Internal Revenue Service. Owusu pleaded guilty on July 2, 2008, to one count of making false claims, two counts of filing false claims for refunds, and eight counts of aiding and assisting in the preparation of false tax returns. According to the information filed in this case and statements made in court, from 2005 through 2007, Owusu included false items on tax returns he prepared for clients of his tax preparation business. The false items included tax exemption for non-existent dependents, non-reimbursed business expenses, and false claims to "head of household" status. Owusu admitted that he filed false claims for refunds in connection with two of his own individual income tax returns, and that as a result he received refunds he was not entitled to.

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