Examples of Abusive Return Preparer Investigations - Fiscal Year 2013
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.
Tennessee Tax Preparer Sentenced for Conspiracy to File False Tax Returns
On April 17, 2013, in Memphis, Tenn., Terry Roberts was sentenced to 27 months in prison, three years of supervised release and ordered to pay $100,000 in restitution the IRS. On January 15, 2013, Roberts pleaded guilty to conspiring to file false tax returns. According to court documents, Roberts was employed at a Memphis tax preparation company and conspired with others to assist in the preparation of false tax returns for clients. The false returns claimed false tax credits, such as First Time Homebuyers Credit, Earned Income Credit and Education Credit, and reported false income figures, resulting in tax refunds being generated for which the individuals were not entitled. Roberts and the other conspirators would then split the refunds generated by the false tax returns.
Street Gang Tax Preparer Sentenced
On April 16, 2013, in Columbia, S.C., Daion Ali Bowers was sentenced to 63 months in prison, three years of supervised release and ordered to repay over $1.2 million in restitution to the federal government. Bowers pleaded guilty in January 2013 to conspiracy to commit wire fraud. According to court documents, Bowers recruited several co-conspirators to provide him with names and identifiers so that he could file fraudulent tax returns. Bowers recruited Tashanda “Big Momma Blood” Parker to obtain identifiers from individuals, including Bloods gang members, who were seeking to have fraudulent tax returns filed. Parker obtained identification information for several gang members and Bowers ultimately filed fraudulent electronic tax returns for them. Bowers and others working on his behalf filed over 600 fraudulent returns in 2011 which requested over $2.5 million in fraudulent refunds. Parker pleaded guilty earlier this year to wire fraud conspiracy and racketeering conspiracy. She is awaiting sentencing.
Maryland Tax Preparer Sentenced in Tax and Identity Theft Scheme
On April 16, 2013, in Baltimore, Md., Alexis Brett Travers was sentenced to 36 months in prison and three years of supervised release for two counts of aiding in the preparation of false tax returns and aggravated identity theft. Travers was also ordered to pay $98,189 in restitution to the IRS for three years of personal taxes that she failed to pay, plus interest. According to court documents, Travers owned ATB Tax Prep and Consulting Service, which she operated out of her homes in Gwynn Oak, Md., and most recently, Baltimore. From 2006 to 2009, Travers concealed her identity as the paid tax preparer by not listing herself or her company’s name on the federal income tax forms she filed, and by filing the forms electronically without obtaining a provider’s electronic filing identification number. Travers filed at least 26 tax returns containing false business losses for taxpayers who did not operate a business, resulting in a tax loss of $137,406. Travers obtained a fee for her services from the tax refund deposited by the IRS into a bank account she controlled. Her fee was sometimes as high as $1,000 per taxpayer. Travers failed to report the fees on her 2006, 2007 and 2008 tax returns, resulting in an additional tax loss of at least $87,000 for those three years. Additionally, the tax return filed by Travers for one client, for tax year 2008, contained a false claim for the earned income credit. Travers stole personal identifying information from another client to use on a different tax return in order to obtain a greater tax refund.
Tax Preparer Sentenced for Creating False Tax Returns
On April 11, 2013, in Spartanburg, S.C., Sandra Burton, of Abbeville, S.C., was sentenced to 21 months in prison, one year of supervised release and ordered to pay $355,529 in restitution to the IRS. On December 13, 2012, Burton pleaded guilty to ten counts of preparing materially false federal income tax returns. According to court documents, during the years 2006 through 2008, Burton operated a tax return preparation service in Abbeville. The majority of her clients were W-2 wage earners. As a result of an unusually large number of returns prepared by Burton claiming educational credits and IRA contributions, in 2008, an IRS undercover agent sought to have a return prepared based solely on a W-2. The return prepared by Burton for the undercover agent included an IRA deduction and an education credit thus giving the undercover taxpayer a refund to which the agent otherwise would not have been entitled to receive. Thereafter, a search warrant was issued for Burton’s tax service. Burton admitted that she had given taxpayers deductions to which they were not entitled.
North Carolina Woman Sentenced for Tax Refund Fraud Scheme
On April 9, 2013, in Charlotte, N.C., Leeora Anderson, aka Leeora Robinson and Lou Robinson, was sentenced to 21 months in prison, three years of supervised release, and ordered to pay $202,577 in restitution to the IRS. In February 2012, Anderson pleaded guilty to one count of false claims conspiracy. According to court documents, from in or about 2005 through in or about 2009, Anderson participated in a false tax refund conspiracy by obtaining, or helping others obtain, fraudulent tax refunds from IRS based upon false tax returns. Anderson recruited individuals to file fraudulent federal income tax returns using their own names and social security numbers. To perpetrate the fraud, Anderson created fictitious W-2 forms for the recruited individuals. Anderson then caused legitimate tax preparers to prepare and file false tax returns based on the fraudulent information on behalf of the individuals recruited by the defendant. Anderson’s scheme resulted in the filing of 57 false tax returns, falsely claiming approximately $331,949 in refunds.
Georgia Tax Return Preparer Sentenced
On March 18, 2013 in Atlanta, Ga., Tyrone Thompson was sentenced to 137 months in prison and ordered to pay $516,363 in restitution. Thompson, along with four previously sentenced co-conspirators, pleaded guilty to filing false claims for tax refunds. In addition, Thompson pleaded guilty to conspiracy to file false claims for tax refunds. According to court documents, Thompson organized a scheme to prepare and file false federal income tax returns using the names of other individuals. He included with the returns false Schedules C reporting business income and losses. In addition, the returns claimed false first-time homebuyer credits, which he and his co-defendants were not entitled. He directed fraudulently-obtained refunds to be deposited to his co-defendants’ bank accounts.
Owner of Tax Preparation Business Sentenced for Tax Fraud Scheme
On March 13, 2013, in Montgomery, Ala., Bruce King, the founder and operator of Premier Tax, was sentenced to 70 months in prison and ordered to pay $781,305 in restitution to the IRS. King had previously pleaded guilty to charges of conspiring to defraud the United States and filing false tax returns. According to court documents, Premier Tax was a tax preparation business operated by King that had several locations in Alabama and Georgia. King held training sessions in which he taught preparers how to falsify tax returns to fraudulently increase clients’ tax refunds. Those he taught went on to work at Premier Tax and filed numerous false tax returns, resulting in a tax loss exceeding $1 million. To date, seven return preparers trained by King have been sentenced.
Connecticut Tax Preparer Sentenced for Tax Fraud
On March 12, 2013, in Hartford, Conn., Thomas Thorndike, of Woodbury, Conn., was sentenced to 72 months in prison, one year of supervised release and ordered to pay $64,026 in back taxes, penalties and interest. According to court documents, Thorndike was the founder and owner of Cornerstone Financial Services of Woodbury, LLC, a tax preparation and financial services business. In the course of preparing many of his clients’ tax returns, Thorndike improperly reduced the amount of tax due in a variety of ways, including falsely claiming deductions for charitable contributions and falsely claiming deductions for job expenses. Thorndike also offered clients an opportunity to purchase audit insurance. If clients were audited by the IRS, Thorndike would provide them with blank Goodwill receipts, as well as instructions as to how they should create a list of charitable donations that would correspond with the donation value Thorndike had entered on their returns. The IRS has estimated that Thorndike’s clients received in excess of $1 million in tax refunds to which they were not entitled. In addition, Thorndike prepared tax returns for his two sons that improperly identified cash payments from him to his children as wages. He also claimed hundreds of thousands of dollars in improper business deductions, including, but not limited to, wage expenses for his children, which actually were personal payments to them.
Texas Tax Preparer Sentenced for Submitting Hundreds of False Tax Returns
On March 4, 2013, in Dallas, Texas, Cora Latrice Hopkins, of Garland, Texas, was sentenced to 37 months in prison and ordered to pay $1,665,000 in restitution. Hopkins pleaded guilty in November 2012 to filing a false claim with an agency of the United States. According to court documents, from December 2008 through March 2009, Hopkins was employed as the manager of a tax preparation office. She was responsible for preparing and filing tax returns for clients. The returns were filed electronically with the IRS, using an identification number assigned to the office. Between January 1, 2009 and March 12, 2009, Hopkins prepared and filed 403 tax returns, for tax year 2008, with the IRS. Of these 403 tax returns, 316 falsely claimed the First Time Home Buyer Credit. Hopkins admitted that she knew that the false credits claimed on the tax returns would reduce the taxpayer’s tax liability or increase the amount of any refund due to the taxpayers.
Florida Tax Return Preparer Sentenced for Preparing False Income Tax Returns
On February 25, 2013, in Miami, Fla., Mary Ann Richard, of Ft. Pierce, Fla., was sentenced to 42 months in prison and two years of supervised release for assisting and advising in the preparation and presentation of 16 fraudulent income tax returns to the IRS and two counts of filing false personal income tax returns. Richard was also ordered to pay $183,026 in restitution to the United States. According to court documents, from about January 2010 through April 2010, Richard was employed by a tax return preparation business. Then, from July 2010 through March 2011, Richard owned and operated M2 Financial Services, a tax return preparation business located in Fort Pierce, Fla. Richard filed false tax returns for others that included false information regarding wages, business losses, dependents, education credits and childcare expenses. Richard also filed false personal tax returns for tax years 2009 and 2010 that included false information regarding employer, wages, business expenses and personal deductions.
Return Preparer Sentenced for Preparing False Income Tax Returns
On February 14, 2013, in Bowling Green, Ky., Greg Denham, former owner and operator of Accounting and Tax Professionals in Glasgow, Ky., was sentenced to 18 months in prison and one year of supervised release. On November 19, 2012, Denham pleaded guilty to a 35-count indictment, admitting that between February 2006 and May 2009, he knowingly prepared individual income tax returns that misrepresented expenses and under-reported taxes owed by taxpayers. The returns were prepared for tax years 2005 through 2008 and claimed business expenses that Denham knew the taxpayers did not incur, or that were not actual business expenses.
Former South Carolina Municipal Judge Sentenced for Tax Fraud
On February 13, 2013, in Columbia, S.C., Janet H. Reese, of Central, South Carolina, was sentenced to 24 months in prison and ordered to pay $472,000 in restitution. Reese pleaded guilty to filing false tax claims. According to court documents, Reese, who is a former municipal judge, operated her own tax preparation business. For tax year 2008, Reese prepared and filed multiple returns for individuals and claimed the First Time Homebuyer Credit on the returns. The taxpayers had never informed Reese that they had purchased a home and, in fact, had not purchased a home. Reese had the refunds from the First Time Homebuyer Credits electronically deposited into an account she controlled. This prevented the taxpayers from discovering that Reese had included false information on their returns.
Ohio Income Tax Return Preparer Sentenced For Income Tax Refund Fraud
On February 12, 2013, in Cincinnati, Ohio, Tiffany Parish was sentenced to 21 months in prison, three years of supervised release and ordered to pay $1,985,136 in restitution to the IRS. Parish pleaded guilty on October 31, 2012 to filing false income taxes. According to court documents, beginning in 2008, Parish worked as a return preparer where she was trained how to prepare false federal income tax returns so that her clients could receive the largest income tax refund possible. Parish admitted to preparing false claims for income tax refunds because she made deals to receive part of her client’s income tax refunds. In December 2008, Parish agreed to work for one of the individuals who trained her and she began working at Flash Tax Service in Cincinnati. In addition, she claimed false items on her individual income tax returns for tax years 2007 through 2010. By claiming false self-employment income, Parish and her clients qualified for the Earned Income Tax Credit and the Additional Child Tax Credit and they were exempt from being subject to self-employment taxes. During the 2008 and 2009 income tax years, Parish prepared at least 365 false income tax returns. The total tax loss to the IRS based on the fraudulent income tax returns Parish prepared for her clients and herself was $1,985,136.
Woman Sentenced for Preparing a False Income Tax Return
On February 7, 2013, in Houston, Texas, Miranda Gore was sentenced to 30 months in prison and one year of supervised release for willfully aiding and assisting in the preparation and presentation of a false U.S. Individual Income Tax Return. Gore was also ordered to pay restitution of $280,150, which includes the tax losses from the false income tax returns she prepared for a client and the tax loss from her own 2008 and 2009 U.S. Individual Income Tax Returns. According to court documents, Gore admitted that she prepared a return for a client willfully claiming a false loss relating to a business the taxpayer never had and a false claim for a First Time Homebuyer’s Credit that the taxpayer was not entitled to claim. The tax loss to the United States on this false return was $9,352. Gore further acknowledged she gave the taxpayer client a purported copy of the tax return she prepared differing from the return Gore electronically filed for the taxpayer with the IRS. The return filed with the IRS claimed a tax refund of $9,554, whereas the one given the taxpayer claimed a tax refund of only $2,054. Gore admitted she arranged for the tax refund claimed from the IRS to be put on a cash card. Gore then gave the taxpayer a check for $4,180 for the refund and kept the remainder of the funds on the cash card for herself.
Tax Preparer Sentenced for Preparing False Tax Returns and Making False Statements
On February 6, 2013, in Newport News, Va., Robert E. Herring, of Newport News, Va., was sentenced to 36 months in prison and one year of supervised release. Herring pleaded guilty on May 5, 2012, to aiding in the preparation of false tax returns and making a false statement to HUD/FHA. According to court documents, Herring operated Have Taxes Financial Service and GL&JS Tax Service, both of which performed tax preparation services. From 2006 through 2009, Herring would file returns, in many instances without the client’s knowledge or consent, that understated income and overstated expenses for a client’s federal tax return. He then filed an amended return reporting increased income for certain clients who needed to obtain real estate financing. He prepared at least 19 false returns with a resulting tax loss of $174,845, and he deposited certain tax refunds into his own account without providing them to the taxpayer to whom the refund was owed. His mortgage fraud resulted in losses to the mortgage lender of $917,287.
Family Members Sentenced in Stolen Identity Refund Fraud Scheme
On February 1, 2013, in Montgomery, Ala., several family members were sentenced for their involvement in a $1.9 million dollar stolen identity refund fraud scheme. Barbara Murry, Veronica Temple and Yolanda Moses were each sentenced to 57 months in prison and ordered to pay $1,908,659 in restitution. Douglas Murry was sentenced to 24 months in prison and ordered to pay $142,038 in restitution. Almetta Johnson was sentenced to eight months home detention. Lee Moses, Jeffrey Temple and Courtney Johnson were each sentenced to probation. According to court documents, between January 2006 and April 2012, the defendants and their co-conspirators directed over 900 false tax refunds claiming in excess of $1.9 million to several bank accounts they controlled. The conspiracy consisted of two parts. First, the defendants received false tax refunds into their bank accounts and provided a portion of the funds to the third-party preparers. In the second part of the conspiracy, Veronica Temple and her sister, Yolanda Moses, obtained stolen identities from multiple sources. Veronica Temple, Yolanda Moses and others filed false tax returns from their homes and B & B Tax Service which was owned and operated by Barbara Murry. They directed the tax refunds to numerous bank accounts controlled by the defendants and their co-conspirators. Veronica Temple, Yolanda Moses, and Barbara Murry recruited individuals, including Douglas Murry, to open bank accounts in furtherance of the scheme.
Kentucky Woman Sentenced for Filing False Income Tax Returns and Identity Theft
On January 29, 2013, in Bowling Green, Ky., Louisa A. Edmonds, of Elkton Kentucky, was sentenced to 41 months in prison, three years of supervised release and ordered to pay $37,139 in restitution to the IRS. Edmonds pleaded guilty on August 29, 2012 to five counts of filing a false income tax return with the IRS, fifteen counts of aiding and assisting in the preparation of false income tax returns filed with the IRS, and four counts of identity theft. According to court documents, Edmonds admitted that she filed false income tax returns for 2005 through 2009, for herself that contained various false deductions. Additionally, Edmonds admitted that she prepared false income tax returns for others that claimed deductions and credits that they were not entitled to receive. Finally, Edmonds admitted that she knowingly used the identification of another person without permission to make a false claim against the United States by filing a false income tax return with the IRS.
Kentucky Return Preparer Sentenced for Preparing False Income Tax Returns
On January 25, 2013, in Louisville, Ky., Stacey Elzy, a tax preparer, was sentenced to 27 months in prison and ordered to pay a $1,500 special penalty assessment. Elzy pleaded guilty to aiding and assisting in the preparation of false income tax returns that claimed over $430,000 in false deductions and expenses. According to court documents, Elzy admitted that beginning in April 2006 and continuing through April 2008, she prepared individual income and partnership tax returns for other individuals that misrepresented and under-reported taxes owed by these taxpayers. Elzy assured her clients that the false itemized deductions, false business losses and resulting inflated refunds were legitimate. The clients received large refunds and recommended Elzy to others, thus generating additional business.
Husband and Wife Sentenced for Fraud and Identity Theft
On January 30, 2013, in Roanoke, Va., Michelle A. Ferguson, of Roanoke, Va., was sentenced to 29 months in prison for conspiracy to commit fraud and stealing the identities of others. Her husband, William J. Ferguson Jr., was sentenced to 14 months in prison for his participation in the conspiracy to commit fraud. According to court documents, the Fergusons operated a tax return preparation business out of their Roanoke home and committed fraud in two specific manners. When meeting with clients face-to-face to prepare their taxes, the Fergusons would have their clients sign the return without reviewing its contents. The returns were set-up to have any refunds deposited directly into an account controlled by the Fergusons. To maximum refunds, the Ferguson, without the knowledge of their clients, included phony Schedule C's, Profit and Loss from Business, to the returns. Once the tax refund was received by the Fergusons, they would write a check to each client for a fraction of the total refund received. In addition, the defendants filed false tax returns using stolen social security numbers. The individuals who had their identity stolen did not receive any portion of the proceeds obtained through the false claim for refund.
Tax Preparer Sentenced for Identity Theft and Tax Fraud
On January 29, 2013, in Boston, Mass., Rosa Ivette Colon, of Milford, Mass., was sentenced to 61 months in prison and three years of supervised release for filing hundreds of false income tax returns for her clients and identity theft. She was also ordered to pay $400,000 in restitution to the IRS. In August 2012, Colon pleaded guilty to a 32-count indictment charging her with aggravated identity theft, filing false claims with the IRS, and forging endorsements on United States Treasury checks. Colon operated a business called X-Press Taxes in Somerville, Mass. During the tax years 2004 through 2010, she prepared hundreds of false income tax returns for her clients. On numerous occasions, when preparing income tax returns for clients, Colon prepared two different versions of the return. Colon gave one version of the return to the client, but filed another version seeking a larger refund with the IRS, and kept the additional fraudulent amount for herself. In addition, Colon submitted false personal income tax returns to the IRS on her own behalf. Colon also unlawfully used the identities of three individuals in connection with her fraudulent tax refund scheme.
Former CPA Sentenced for Filing False Tax Returns
On January 11, 2013, in Nashville, Tenn., Macon J. Dew, of Mt. Juliet, Tenn., was sentenced to 12 months and one day in prison and ordered to pay $205,535 in restitution. Dew pleaded guilty on July 18, 2012 to two counts of aiding and assisting in the preparation of false tax returns. According to court documents, Dew was a Certified Public Accountant until 2008 and operated a tax return preparation business in Mt. Juliet and Old Hickory, Tenn. From 2001 to 2004, he prepared at least 33 false income tax returns that included false W-2 forms, false Schedule C businesses, and fraudulent education credits. In addition, for the 2006 tax year, Dew prepared returns and schedules for two individuals who formed a corporation that falsely reported a loss of $751,300 each.
Alabama Woman Sentenced for Identity Theft Conspiracy
On January 2, 2013, in Montgomery, Ala., Nakesha Donaldson was sentenced to 57 months in prison, three years of supervised release, and ordered to pay $781,305 in restitution to the IRS. Donaldson pleaded guilty on September 20, 2012 to conspiracy to defraud the United States, wire fraud and aggravated identity theft. According to court documents, Donaldson worked at a tax preparation office located in Montgomery, Alabama. From approximately July 2007 through October 2010, Donaldson and the other conspirators prepared tax returns containing false dependents, income and expenses and claims for false tax refunds. Additionally, Donaldson possessed and used stolen identities to electronically file false tax returns and claim false refunds.
Massachusetts Tax Preparer Sentenced for Filing False Tax Returns
On January 7, 2013, in Springfield, Mass., Yolanda Mercedes Perez Lopez, of Springfield, Mass., was sentenced to 18 months in prison, three years of supervised released and ordered to pay $46,300 in restitution. In November 2012, Perez Lopez pleaded guilty to aiding and assisting in the preparation of false tax returns, false statements to a federally insured financial institution, endeavoring to interfere with the administration of the Internal Revenue laws, false representation of United States citizenship, and false representation of a Social Security Number with intent to deceive. According to court documents, between February 2007 and April 2008, Perez Lopez prepared numerous tax returns that she knew were fraudulent. Perez Lopez also corruptly endeavored to obstruct and impede the due administration of the Internal Revenue laws by making materially false statements to representatives of the IRS; providing false documentation for her customers to submit to the Massachusetts Department of Revenue; and counseling her customers to lie to representatives of the IRS. In addition, in April 2009, Perez Lopez provided false and fraudulent financial information to a loan officer at National City Mortgage in connection with a residential mortgage application for a property located in Agawam, Mass. This information included a 2007 and 2008 tax return that stated substantially more income than the tax returns that she had previously filed with the IRS. Further, in June 2009, Perez Lopez prepared an amended 2008 tax return that she knew was fraudulent, in that the tax return claimed a first-time homebuyer credit for the property in Agawam, despite the fact that Perez Lopez knew that the individual had already purchased a home which he continued to own and occupy as his primary residence.
Texas Man Sentenced for Preparing a False Tax Return
On January 4, 2012, in Houston, Texas, Kermit Woods was sentenced to 24 months in prison, one year of supervised release and ordered to pay $362,340 in restitution. Woods pleaded guilty on March 30, 2012 to willfully aiding and assisting in the preparation and presentation of a filing false tax return. According to court documents, Woods owned and operated L&L Finance, a tax preparation service in Houston. From 2004 through 2008, Woods prepared false tax returns for clients and did not accurately report and pay his own income tax from 2005 through 2008. To conceal his income and assets from the IRS, Woods placed items he purchased in other’s names, including his home, car, boat, real estate investments and even his business.
Florida Tax Preparer Sentenced for Preparing False Returns
On December 13, 2012, in Orlando, Fla., William M. Gatlin, of Kissimmee, was sentenced to 36 months in prison and one year of supervised release. On September 24, 2012, Gatlin pleaded guilty to two counts of aiding and abetting the false preparation of tax returns. According to court documents, Gatlin was the president of Taxes By Mr. Bill, Inc., a tax preparation business in Orlando and Kissimmee. He aided and assisted in the preparation of fraudulent tax returns for his clients, causing false and inflated income tax refunds for the tax years 2006, 2007 and 2008. Gatlin fraudulently claimed a first-time home buyer credit. He also deducted student tuition, fees, and student loan interest on returns where individuals did not pay these costs. In addition, Gatlin prepared returns where he fraudulently listed deductions for Schedule C business losses when he knew that his clients did not own a business or have Schedule C losses. All of the deductions were done without his clients’ knowledge.
Tax Preparer Sentenced for Preparing False Returns
On December 3, 2012, in Omaha, Neb., Noah Maliko, a citizen of Zimbabwe, was sentenced to 18 months in prison, one year of supervised release, and ordered to pay $55,402 in restitution. Maliko pleaded guilty to 15 counts of preparing false individual income tax returns for the 2007 and 2008 tax years. According to court documents, Maliko prepared tax returns under the name Reliable Express Tax Services. Maliko prepared and electronically filed at least 26 fraudulent returns resulted in a tax loss to the United States of $90,277. On many occasions the taxpayers were unaware of the false returns electronically filed by Maliko.
California Woman Sentenced for Preparing and Filing False Returns
On November 26, 2012, in Riverside, Calif., Kelly Tezino, of Los Angeles, Calif., was sentenced to 21 months in prison, two years of supervised release, and ordered to pay $533,434 in restitution to the IRS. Tezino pleaded guilty in August 2012 to a one-count Information charging her with preparing and filing with the IRS a false 2006 income tax return for an individual reporting false wages and tax withholdings from an employer for which the individual never worked. According to court documents, from approximately March 2006 to February 2009, Tezino knowingly filed at least 76 fraudulent income tax returns, falsely claiming refunds of approximately $533,434. The income tax returns prepared and filed by Tezino often claimed refunds based on false Forms W-2 which completely fabricated the individual’s salary and withholdings. Additionally, Tezino used her personal, her children’s, and her associates’ personal bank accounts as the bank account reported on the false returns where the fraudulent direct deposits were to be deposited by the IRS.
New Jersey Tax Preparer Sentenced for Filing False Tax Returns
On November 20, 2012, in Newark, N.J., Alicia Barnes, of Irvington, N.J., was sentenced to 18 months in prison and one year of supervised release. Barnes, a former corrections officer for New Jersey and self-employed owner of a tax preparation business, pleaded guilty to one count of willfully aiding and assisting in the preparation and filing of false personal federal tax returns and one count of willfully subscribing to false personal federal income tax returns. According to court documents and statements in court, Barnes is the sole owner and operator of Just Taxes Unlimited LLC located in Orange, N.J. During tax years 2006 through 2008, Barnes filed 42 false tax returns on behalf of clients by taking deductions for charitable contributions and unreimbursed employee expenses without a basis for doing so. In addition, Barnes admitted that for tax years 2006 through 2008, she filed U.S. Individual Income Tax Returns in which she failed to report, or substantially under-reported, the income she earned through Just Taxes Unlimited.
Arkansas Woman Sentenced for Preparing False Returns for Clients
On November 16, 2012, in Fort Smith, Ark., Jennifer Siriphounsavath was sentenced to 18 months in prison and ordered to pay $144,382 in restitution to the IRS and a $3,500 special assessment. Siriphounsavath pleaded guilty in July 2012 to aiding and assisting in the preparation of false income tax returns. According to court documents, from around January 2008 through April 2010, Siriphounsavath falsely prepared tax returns for fourteen individuals by falsely claiming education and residential energy credits and inflating property tax and charitable contributions deductions. The fraudulent deductions totaled $144,382.
Texas Woman Sentenced for Tax Fraud
On November 8, 2012, in Beaumont, Texas, Sheila Phillips, of Lufkin, Texas, was sentenced to 30 months in prison and ordered to pay $124,217 in restitution. Phillips pleaded guilty in May 2012 to one count of making a false statement to the IRS. Phillips operated a tax preparation business, dba Sheila’s Tax Return and later as Ashley’s Tax Service. According to court documents, Phillips prepared a tax return falsely stating that a client was the head of household and had a foster child which qualified the individual for a larger deduction. This individual did not have any children or foster children that would have qualified for this deduction. In all, Phillips made false statements in 29 individual tax returns resulting in overpayments in the amount of $124,127.
Georgia Man Sentenced for Tax Evasion
On November 7, 2012, in Albany, Ga., Kenneth Wayne Wright, of Dougherty County, Georgia, was sentenced to 12 months in prison, one year of supervised release and ordered to pay $193,000 in restitution to the IRS. On August 17, 2012, Wright pleaded guilty to one count of aiding and abetting the filing of a false tax return. According to court documents, Wright ran a tax preparation business in called Ken’s Fast E-File. According to his plea agreement, Wright filed 44 false tax returns for 13 different taxpayers during the period 2006 through 2008. Wright caused the taxpayers to receive a total of $193,000 in refunds to which they were not entitled.
Virginia Tax Preparer Sentenced for Preparing False Tax Returns
On November 5, 2012, in Norfolk, Va., Paul Zimmerman, Jr., of Virginia Beach, Va., was sentenced to 21 months in prison and one year of supervised release. Zimmerman pleaded guilty on July 11, 2012, to aiding and assisting in the preparation of false tax returns. According to court documents, Zimmerman owned and operated Paul’s Taxes and Services located in Norfolk. Zimmerman provided assistance with preparing federal income tax returns for his clients. Zimmerman, without his clients’ knowledge, would claim illegitimate rental properties, inflate expenses related to legitimate rental properties, inflate business expenses, and claim mortgage interest payments on properties without mortgages. This falsely reported information would result in lowering his clients’ tax liabilities or in generating refunds. Court documents state that Zimmerman aided and assisted in the preparation of 35 false tax returns for 17 different clients for tax years 2006 through 2009. The tax loss to the government was $102,704.
California Tax Preparer Sentenced for Filing False Tax Returns and Theft of Refund Checks
On November 5, 2012, in Santa Ana, Calif., Mark Joseph Jensen, a tax preparer, was sentenced to 18 months in prison and three years of supervised release. Restitution will be determined at a later date. Jensen pleaded guilty on October 20, 2011 to filing a false tax return and receiving a stolen refund check from IRS. According to the plea agreement, Jensen prepared and filed at least 24 tax returns falsely claiming the First-Time Homebuyer Credit. Jensen knew that his clients did not qualify for the credit because the taxpayers had not purchased a home in 2008. Jensen also did not tell his clients that he was fraudulently claiming the First-Time Homebuyer Credit on their tax returns. Jensen directed the portions of his clients’ refunds be deposited into bank accounts that he controlled. According to court documents, the amount of false credits claimed ranged from $1,612 to $8,000 per tax return. In a second scheme, Jensen stole some of his clients legitimate tax refunds by representing to his clients that they would not be receiving a refund or were receiving a refund less than their true refund. In furtherance of this scheme, Jensen used his address on his client’s tax return and provided his bank account number to receive the refund. He also concealed his fraud by not providing clients with copies of their tax returns. In total, Jensen diverted more than $13,000 in client’s legitimate tax refunds to his bank accounts.
Tax Return Preparer Sentenced
On November 1, 2012, in Chicago, Ill., Rimando Naig Dumdum was sentenced to 24 months in prison and ordered to pay $231,758 in restitution. According to court documents, beginning in 2002 and continuing through 2009, Dumdum operated an income tax return preparation service known as Richman Tax Solutions, Inc. For 2006 through 2008, Dumdum failed to file corporate income tax returns for Richman Tax Solutions resulting in a tax loss of approximately $120,859. In addition, Dumdum under-reported his income on his personal tax returns for the tax years 2006 through 2008 which resulted in a tax loss of approximately $93,794. Dumdum further acknowledged that he willfully prepared approximately 12 false income tax returns for clients for the tax years 2006 through 2009. The total tax loss associated with the false client tax returns is approximately $17,480.
District of Columbia Tax Return Preparer Sentenced for Preparing False Tax Returns
On November 1, 2012, in Washington, D.C. Enyinnaya Udo was sentenced to 24 months in prison and ordered to pay $262,966 in restitution to the IRS. Udo was convicted by a jury on 25 counts of aiding and assisting in the preparation of false tax returns. According to court documents, Udo operated a tax preparation business called Anic and Associates, CPAs PC located in Washington, D.C. Udo prepared false individual income tax returns for seven taxpayers from 2005 through 2008, falsely reporting that the taxpayers had unreimbursed employee expenses.
Minnesota Tax Return Preparer Sentenced for Preparing False Corporate Tax Return
On October 26, 2012, in Minneapolis, Minn., Michael James Murry, a certified public accountant and tax preparer, was sentenced to 18 months in prison, one year of supervised release, and fined $50,000. Murry pleaded guilty on May 3, 2012, to one count of preparing a false corporate tax return. In his plea agreement, Murry admitted that on September 15, 2006, he aided in the preparation and submission of a false corporate income tax return for The Wirth Companies (TWC), a commercial real estate development and management business. In addition, Murry admitted that on the 2005 corporate tax return, he reflected $0 in property distributions to Wirth and his then-wife, Holly Claire Damiani, even though he knew TWC had provided substantial monetary distributions to the pair.
Maryland Tax Preparer Sentenced for Filing False Tax Returns
On October 17, 2012, in Baltimore, Md., Obinna Felix Ukwu, of Perry Hall, Maryland, was sentenced to 51 months in prison, one year of supervised release, and ordered to pay $429,392 in restitution. Ukwu was convicted by a jury on July 16, 2012, on 12 counts of aiding in the filing of false tax returns. According to evidence presented at trial, for tax years 2006 through 2008, Ukwu prepared and filed false tax returns for three taxpayers, claiming fraudulent business losses totaling $388,247. Ukwu prepared and filed tax returns for another taxpayer, claiming a total of $115,552 in fraudulent business losses for tax years 2007 and 2008. In addition, he prepared and filed a tax return for a fifth taxpayer fraudulently claiming $52,560 in business losses for tax year 2008.
California Tax Return Preparer Sentenced for Filing Fraudulent Tax Returns
On October 15, 2012, in Los Angeles, Calif., Ernesto Jesus Suarez, of Orange, was sentenced to 60 months in prison, three years of supervised release and ordered to pay $753,477 in restitution. On June 11, 2012, Suarez pleaded guilty to preparing and filing hundreds of tax returns, including his own, that claimed inaccurate and false items. According to his plea agreement, Suarez would meet clients at their homes and prepare a largely accurate income tax return on his laptop. If the client was due a refund, Suarez would give the client a check from his personal checking account in the amount stated on the accurate return and misrepresent to the client that he would file the accurate return with the IRS. Later, Suarez would prepare a false tax return, including fictitious items such as false spouses, dependents, child or dependent care, and education expenses, to increase the refund amount. Suarez would forge the signature of the client and then mail the false tax return to the IRS. Suarez would direct the inflated refunds to be deposited into 29 different bank accounts that he controlled. Suarez admitted that he utilized a similar scheme for himself on his 2008 federal income tax return, claiming a fictitious spouse and dependent and failing to report his true income from his tax return business and the illegal refunds he received. In addition to his prison time, on June 19, 2012, a civil injunction order was signed, permanently barring Suarez from preparing tax returns for others. The order also prohibits Suarez from representing clients before the IRS and from aiding, advising, or assisting in the preparation of federal tax returns for life. As part of his plea agreement, Suarez agreed to publish the civil injunction to all of his current clients.
Ohio Woman Sentenced on Tax Conviction
On October 12, 2012, in Cleveland, Ohio, Aesha Johnson, of Beachwood, was sentenced to 21 months in prison, two years of supervised release and ordered to pay $84,244 in restitution. Johnson pleaded guilty in May 2012 to one count of filing false tax returns for the years 2005 through 2009. According to court documents, Johnson prepared clients’ returns that included false claims for refunds totaling approximately $84,244.
California Tax Return Preparer Sentenced for Filing False Tax Returns
On October 12, 2012, in Los Angeles, Calif., Juan Manuel Mendez, owner of Mendez Multi Services, was sentenced to 18 months in prison, one year of supervised release and ordered to pay $367,000 in restitution. On June 6, 2012, Mendez pleaded guilty to filing false income tax returns with the IRS. According to court documents, Mendez filed at least 17 false federal income tax returns claiming real estate deductions on Schedule A. Mendez also filed one false tax return for himself for calendar year 2007. He also failed to file tax returns for himself for calendar years 2006 and 2008. According to his plea agreement, Mendez agreed to a civil injunction, barring him for life from preparing federal income tax returns or representing anyone before the IRS other than himself and his legal spouse. Mendez also agreed to cooperate with the IRS and make full restitution for the losses he caused.
Alabama Woman Sentenced for Filing a False Tax Return
On October 4, 2012, in Mobile, Ala., Delois Warren of Greensboro, Alabama was sentenced to 12 months and one day in prison, one year of supervised release and ordered to pay $173,455 in restitution. She was also ordered not to prepare tax returns for others during the time. Warren pleaded guilty to filing a false 2008 tax return which reported gross receipts of $6,468 for her tax return preparation business. The true gross receipts was $264,594.