Examples of Abusive Return Preparer Investigations - Fiscal Year 2015

 

The following examples of Abusive Return Preparer investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted. 

Massachusetts Tax Preparer Sentenced for Fraud

On Sept. 28, 2015, in Boston, Massachusetts, Barry Ginsberg, a Peabody tax preparer, was sentenced to 21 months in prison, six months of home confinement and ordered to pay restitution. In June 2015, Ginsberg pleaded guilty to multiple counts of mail and wire fraud, preparing false tax returns, and obstructing the IRS in connection with defrauding small-business clients out of nearly $900,000 that his clients had given him to pay their federal payroll taxes. Ginsberg owned and operated a payroll tax business that had a number of so-called “escrow” clients. Ginsberg not only prepared their payroll tax returns, but these clients also sent him money on a regular basis for the purpose of paying their payroll taxes to the IRS. Instead of doing so, however, Ginsberg took the money and used it for other business or personal reasons. As a result, the defendant’s clients, some of whom had trusted him for years, became significantly indebted to the IRS over time. To cover up his scheme, Ginsberg falsified his clients’ tax returns, which he was hired to prepare, indicating that the clients’ payroll taxes had been paid in full, when they had not. When asked by clients about their mysterious IRS debts, Ginsberg gave them a litany of false excuses, including blaming the IRS and his own staff.  

Tax Preparer Sentenced on Charges Involving Filing False Tax Returns

On Sept. 21, 2015, in St. Louis, Missouri, Angel Bailey-Dyson, a tax preparer, was sentenced to 12 months and one day in prison and ordered to pay $28,694 in restitution to the IRS. Bailey-Dyson pleaded guilty in June 2015 to four counts of filing false tax returns. Bailey-Dyson worked for Tax King, a local tax preparation business. The false returns were prepared for customers for the tax years 2011 and 2012. The false returns minimized the customers’ liability and thereby maximized the customers’ tax refunds.

Wisconsin Tax Preparer Sentenced for Filing False Tax Returns

On Aug. 12, 2015, in Madison, Wisconsin, Brenda Miller, of Sun Prairie, was sentenced to 12 months and a day in prison, two years of supervised release and ordered to pay $291,245 in restitution. Miller prepared more than 40 fraudulent tax returns designed to maximize the filer’s refund. Some of the returns improperly claimed that the filer had household help income and some claimed an improper number of dependents.

Tax Return Preparers Sentenced for Hiding Offshore Account and Assisting Wealthy Clients to Hide Millions in Secret Accounts          

On Aug. 10, 2015, in Los Angeles, California, David Kalai was sentenced to 36 months in prison, three years of supervised release, with a condition of home confinement to last the entire term of release, and ordered to pay a $286,000 fine. Nadav Kalai, David Kalai’s son, was sentenced to 50 months in prison, three years of supervised release, and ordered to pay a $10,000 fine. The Kalais were principals of United Revenue Service Inc. (URS), a tax return preparation business with 12 offices located throughout the United States. On Dec. 19, 2014, a federal jury convicted the Kalais of one count of conspiracy to defraud the Internal Revenue Service (IRS).  The Kalais were also each convicted of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR). The Kalais advised and assisted their wealthy clients in concealing millions of dollars of assets and income in secret foreign bank accounts and filing false federal income tax returns. The defendants also maintained a secret offshore account of their own at Bank Leumi in Luxembourg in the name of a foreign sham corporation and failed to disclose the account to the IRS or the U.S. Treasury. The Kalais prepared false individual income tax returns for their URS clients that did not disclose the clients’ foreign financial accounts nor report the income earned from those accounts. In order to conceal the clients’ income, ownership and control of assets from the IRS, the co-conspirators incorporated offshore companies in Belize and elsewhere and helped clients open secret bank accounts at the Luxembourg locations of two Israeli banks, Bank Leumi and Bank B. Three URS clients who testified at the Kalais’ trial have pleaded guilty to tax felonies arising from their participation in the scheme. The Kalais each failed to file an FBAR for calendar years 2008 and 2009 with respect to a foreign account held at Bank Leumi in Luxembourg.  

Florida Tax Preparers Sentenced for Preparing False Tax Returns

On Aug. 7, 2015, in Fort Lauderdale, Florida, Hugo Jean Joseph, of Coral Springs, was sentenced to 33 months in prison, one year of supervised release and ordered to pay restitution in the amount of $58,626. Joseph, a Broward County tax preparer, was previously convicted at trial of preparing false tax returns for his clients. Jean Joseph and co-defendant Guencia Piard, a/k/a Guencia Toussaint, operated Lakay Multi Services (LMS), a tax return service. Piard was sentenced on Aug. 7, 2014 to 24 months in prison and ordered to pay restitution of $283,834. Jean Joseph and Piard prepared and filed 76 false tax returns for 21 sets of clients for tax years 2006, 2007, and 2008. By inflating their clients' deductions, expenses, education credits, and fuel tax credits, Jean Joseph and Piard attained higher tax refunds for their clients which attracted a greater volume of clients. Jean Joseph and Piard kept a portion of the fraudulently inflated tax refunds as payment for their services. The total tax loss to the IRS was $283,834.

Connecticut Tax Preparer Sentenced for Preparing and Filing False Tax Returns

On Aug. 3, 2015, in Bridgeport, Connecticut, Bellarmin Namegabe, of Shelton, was sentenced to 36 months in prison and one year of supervised release. On Dec. 4, 2014, Namegabe pleaded guilty to aiding and assisting the filing of a false tax return. Namegabe, while operating a tax preparation business based in Shelton, falsely reported expenses, deductions and credits on numerous clients’ tax returns without his clients’ knowledge or consent. In interviews, 11 of Namegabe’s clients stated that Namegabe had falsified their returns. In addition, as part of an undercover operation, an agent simply dropped off his Form W-2 at Namegabe’s business, provided his name and some identifying information, such as his social security number, and left. With the information provided, the undercover agent was only entitled to a refund of $632; however, the return was prepared falsely and generated a refund of $3,235. Namegabe is required to pay back taxes, penalties and interest related to the false tax returns he prepared during the 2007 through 2011 tax years for the 11 individuals who were interviewed as part of the investigation. The tax loss attributed to those false returns is approximately $240,196.

California Tax Return Preparer Sentenced for Tax Fraud

On July 31, 2015, in Oakland, California, Runnveer Singh, of Hayward, was sentenced to 24 months in prison, one year of supervised release and ordered to pay $124,528 in restitution to the IRS. Singh pleaded guilty to aiding and assisting in the preparation of false tax returns. For tax years 2009 through 2011, Singh prepared false tax returns claiming both false and ineligible deductions and credits for clients. By including these items on his clients’ tax returns, he caused the IRS to issue inflated tax refunds of at least $130,435. On Nov. 14, 2012, during a search warrant at Singh’s residence, he told IRS Special Agents that he knowingly prepared false tax returns in order to obtain returning customers. Following the execution of the search warrant and his statement to IRS-CI Special Agents, Singh instructed one of his clients to submit both false and ineligible information to an IRS Revenue Agent during the audit of his 2010 income tax return, in order to justify the false and ineligible business expenses Singh reported on the client’s 2010 tax return.

Philadelphia Tax Preparer Sentenced for Preparing False Tax Returns

On July 30, 2015, in Philadelphia, Pennsylvania, David Nixon was sentenced to 15 months in prison and one year of supervised release for preparing fraudulent income tax returns. Nixon, as the owner of Economy Tax Services, prepared materially false federal income tax returns for his clients for tax years 2007 through 2009. As a result of the false and fraudulent income tax returns prepared by Nixon, the IRS was defrauded of more than $200,000 in fraudulently obtained refunds.

Louisiana Tax Preparer Sentenced for Tax Fraud

On July 28, 2015, in Shreveport, Louisiana, Karen Cartagena, of Bossier City, was sentenced to 21 months in prison, three years of supervised release and ordered to pay $84,147 in restitution. Cartagena pleaded guilty on March 19, 2015, to making and filing a false tax return., Cartagena prepared and filed a fraudulent tax return on or about Jan. 24, 2012 by adding education credits to which she was not entitled.

Former Washington DC Tax Return Preparers Sentenced for Tax Fraud

On July 16, 2015, in Washington DC, Sherri Davis, a former District of Columbia public school teacher and tax return preparer, along with her son, Andre Davis, a District of Columbia public school teacher and former tax return preparer, were sentenced for conspiracy to defraud the United States. Sherri Davis received 48 months in prison, three years of supervised release and will pay $642,103 in restitution to the IRS and a $2,900 special assessment. Andre Davis will serve six months of home detention as part of five years of supervised release and pay $37,537 in restitution to the IRS and a $200 special assessment. Both defendants were convicted by a federal jury on Jan. 29, 2015 of one count of conspiracy to defraud the United States. Sherri Davis was also convicted of aiding and assisting in the preparation and filing of false federal individual income tax returns and filing her own false tax returns. Andre Davis was also convicted of aiding and assisting in the preparation and filing of a false tax return. From 2003 through 2012, Sherri Davis was the owner and operator of a tax return business, 2FT Fast Facts Tax Service. In 2012, Sherri Davis changed the name to Davis Financial Services and designated Andre Davis as the owner and operator. Sherri and Andre Davis prepared and filed false tax returns for clients that included various false and fraudulent deductions, expenses and credits intended to reduce the amount of taxes owed and obtain refunds for their clients that were larger than the clients were entitled to receive. Additionally, for calendar years 2007 through 2009, Sherri Davis filed her own false income tax returns on which she failed to report more than $300,000 in tax preparation fees that she received from her business.

Florida Tax Return Preparer Sentenced for Fraudulent Tax Returns

On July 14, 2015, in Jacksonville, Florida, Thomas Bandzul was sentenced to 18 months in prison and ordered to pay $311,824 in restitution to the IRS. Bandzul pleaded guilty in September 2014 to wire fraud. From January 2008 through May 2011, Bandzul was a tax return preparer in Duval and St. Johns counties. He knowingly and willfully made false claims for deductions and credits on 32 tax returns on behalf of his clients, which resulted in additional IRS tax refunds. As part of a scheme to defraud, Bandzul would prepare and furnish one tax return to his taxpayer clients, but would then make separate false and fraudulent claims that he actually filed electronically with the IRS. By prearranged agreement with his clients, Bandzul was to be paid a specified fee out of the anticipated IRS refunds. In many cases, Bandzul caused the additional higher tax refunds to be paid to him without his clients’ knowledge or consent.  In addition, Bandzul also committed tax fraud on his individual federal tax returns for 2008 and 2009.

Former Florida Tax Preparer Sentenced for Tax Fraud

On July 6, 2015, in Tampa, Florida, Guy R. Paul was sentenced to 36 months in prison and ordered to pay $217,246 in restitution to the IRS for engaging in the preparation of false tax returns and for failing to report income he had earned from his tax preparation business. He is also permanently barred from preparing tax returns for others. Paul pleaded guilty on April 14, 2015. Between 2008 and April 2013, Paul owned and operated G7 Financial Enterprises, a tax preparation company located in Bradenton. The company also provided additional services, including check cashing, money transfers, and real estate sales. At G7, Paul prepared and filed false and fraudulent tax returns for others. He added false information to his client’s tax returns in order to fraudulently increase the amount of the tax refund. In exchange for his tax preparation services, he charged and collected tax preparation fees. Paul then failed to report the income he had earned on his personal tax returns.  

Georgia Tax Return Preparer Sentenced for Filing Fraudulent Tax Returns

On June 29, 2015, in Atlanta, Georgia, Joan Leger, of Stone Mountain, was sentenced to 24 months in prison, one year of supervised release and ordered to pay restitution in the amount of $134,961. Leger was convicted on March 12, 2015, after she pleaded guilty to filing false tax returns that claimed over $4 million in fraudulent refunds for refugees who were unaware of the fraud. Between 2008 and 2012, Leger operated two tax preparation businesses in Stone Mountain; “J & Company Tax Service” and “1804 Tax Group, Inc.” While operating these businesses, she filed thousands of federal income tax returns that claimed fraudulent deductions, expenses, and credits, which resulted in her clients receiving fraudulent refunds. Leger’s scheme primarily targeted Bosnian refugees who spoke little or no English and had a limited understanding of tax laws. In particular, Leger included false income and created phony businesses, faking both income and expenses for those businesses. Leger received monetary fees from the fraudulent refunds.

Texas Businesswoman Sentenced for Filing Fraudulent Tax Return

On June 29, 2015, in Austin, Texas, Adela Perez was sentenced to 28 months in prison, one year of supervised release and ordered to pay $99,271 in restitution to the IRS. On March 24, 2015, Perez pleaded guilty filing a fraudulent tax return. From 2008 to 2012, Perez filed 34 tax returns on behalf of her clients that included fraudulent business expenses in order for her clients to reduce their taxable income and receive higher refunds.

Former Arkansas Tax Preparer Sentenced for Preparing Fraudulent Tax Returns

On June 18, 2015, in Little Rock, Arkansas, Christopher T. Craig was sentenced to 46 months in prison, one year of supervised release and ordered to pay $1,092,177 in restitution to the IRS. On Aug. 25, 2014, Craig pleaded guilty to aiding and assisting in the preparation of fraudulent income tax returns. Craig, in his capacity as a paid return preparer, prepared false employment tax returns on behalf of other taxpayers for tax years 2010 and 2011. Unknown to the taxpayers, Craig filed the returns in a way that reduced the amount of taxes owed to the IRS by the taxpayers. Craig collected tax payments from the taxpayers for the correct amount of taxes and diverted the difference to between the correct amount owed and the amount paid to the IRS. As a result of Craig’s fraudulent conduct, which affected more than 50 victims, the total loss to the government was $1,092,177.

Louisiana Tax Preparer Sentenced for Filing False Returns

On June 15, 2015, in Monroe, Louisiana, Stella Marie Dunlap, of Bastrop, Louisiana, was sentenced to 21 months in prison, one year of supervised release and ordered to pay $104,410 in restitution. Dunlap pleaded guilty in March 2015 to aiding and assisting in making and subscribing a false tax return. Dunlap filed fraudulent Forms 1040 during the 2010 and 2011 tax filing seasons while employed as a tax preparer at Faster Tax Services in Bastrop. The returns contained fraudulent W-2 income information from fictitious companies, and the information was used to file Earned Income Tax Credit withholdings. As a result of the fraud, the IRS issued $104,410 in refunds to which taxpayers where not entitled. Dunlap received kickbacks from some of the customers as part of the scheme.

Missouri Woman Sentenced For Orchestrating Tax Scheme to Obtain “Free Money”

On June 12, 2015, in East St. Louis, Illinois, Tanya Nichols, of St. Louis, Missouri, was sentenced to 57 months in prison, three years of supervised release and ordered to pay $603,898 in restitution. Nichols pleaded guilty on March 5, 2015, to conspiracy to obstruct or impair the IRS in the lawful assessment and collection of income taxes and distribution of tax refunds, mail fraud and theft of government property. Nichols prepared fraudulent income tax returns for individual tax filers in order to generate "refundable tax credits," such as the earned income tax credit and the child tax credit. The false tax returns generated a larger tax refund than the filer was entitled to receive. Nichols shared the proceeds generated from the fraudulent returns with the tax filers, while collecting a fee in excess of that typically charged by legitimate tax preparers. Nichols also paid finders’ fees to those who recruited tax filers to participate in the scheme. Nichols and her co-conspirators solicited low-income individuals residing in St. Louis and East St. Louis to participate in this refund scheme by promising IRS tax refunds, sometimes marketed as "free money." Nichols’ half-brother Justin Durley, of Hazelwood, Missouri, was charged with theft of government property and was separately sentenced to three months in prison for stealing more than $3,000.

Georgia Sisters-in-Law, Former Tax Return Preparers, Sentenced for Conspiring to Defraud the United States

On June 10, 2015, in Macon, Georgia, Angela Miller, of Milledgeville, and her sister-in-law Lee Lynwood, of Eatonton, were each sentenced to serve 12 months and one day in prison to be followed by one year of supervised release, and ordered to pay restitution in the amount of $44,214. On Feb. 10, Miller and Lynwood pleaded guilty to conspiracy to defraud the United States. From at least January 2008 through at least March 2010, Miller and Lynwood operated a tax return preparation business and conspired to inflate their clients’ federal tax refunds by manipulating the tax returns to reflect false business income or loss amounts and to claim deductions and credits, such as the First-Time Homebuyer Credit, that the clients were not entitled to receive. Miller and Lynwood also took steps to continue their scheme by impeding the Internal Revenue Service’s (IRS) efforts to shut down their ability to electronically file tax returns. In May 2008, the IRS notified Miller and Lynwood that their Electronic Filing Number (EFIN) for filing electronic returns at their tax preparation business, A&L Tax Services, was being revoked. Miller and Lynwood then had an acquaintance apply for an EFIN in her name, which Miller and Lynwood used to continue to file fraudulent tax returns and conceal their preparation from the IRS. Further, Miller and Lynwood changed the name of their business to B&F Tax Services and caused a bank account for the B&F Tax Services to be opened in the acquaintance’s name as a nominee.

Houston Tax Return Preparer Sentenced for Filing False Tax Returns

On June 1, 2015, in Houston, Texas, Diane Caldwell Larry was sentenced to 12 months and one day in prison, one year of supervised release and ordered to pay $168,792 in restitution. Larry pleaded guilty July 7, 2014 to falsifying client tax returns. At the hearing, Larry promised never again to involve herself in the preparation of tax returns other than her own. While operating a tax return preparation service under the name Paradise South Tax Services, Larry prepared 33 materially false client tax returns for tax years 2007 through 2010. Those returns generated excessive refunds and caused aggregate losses to the IRS totaling approximately $168,792. Larry included in these client tax returns fraudulent “side business” losses and false and excessive itemized deductions and credits in order to generate larger refunds. When some of these tax returns were audited, Larry made up false documents to create an illusion of legitimacy for some of the false and excessive itemized deductions and credits.

Texas Tax Return Preparer Sentenced for False Returns

On May 22, 2015, in Houston, Texas, Doyle J. Blevins Jr. was sentenced to 24 months in prison, one year of supervised release and ordered to pay $285,147 in restitution. Blevins pleaded guilty in February 2015 to preparing false tax returns. Blevins owned and operated Total Refund Tax Service in Willis until 2012. Blevins included false deductions in at least 71 tax returns for tax years 2008 through 2010 without his clients’ knowledge or consent, which fraudulently increased their refunds. The most egregious fraudulent refund was obtained in a 2009 tax return that included a $23,248 loss for a non-existent family counseling business.

Indiana Man Sentenced for Filing False Tax Returns and Identity Theft

On May 19, 2015, in Hammond, Indiana, Michael Nash, of Gary, was sentenced to 72 months in prison, three years of supervised release and ordered to pay $739,305 in restitution. Nash was charged with conspiracy to defraud the United States in respect to filing false federal tax returns and aggravated identity theft. Nash filed almost 200 false tax returns for the year 2009 by claiming a larger earned income credit for his clients. This caused the IRS to issue larger refunds than should have been paid. Nash then prepared 87 tax returns for the year 2008 using many of his clients’ personal information without their knowledge. Nash defrauded the IRS in the total amount of $739,305.

Texas Tax Return Preparers Sentenced for Tax Convictions

On May 13, 2015, in Fort Worth, Texas, Ramona C. Johnson and her daughter-in-law, Nekia N. Everson, both tax preparers, were sentenced to 170 months and 95 months in prison, respectively. Both women were convicted at trial in November 2014. Johnson and Everson were each convicted on one count of conspiracy to aid and assist in the preparation and presentation of a false tax return. Johnson was also convicted on 26 counts of aiding and assisting in the preparation of a false tax return and two counts of filing false tax returns. Everson was also convicted on five counts of aiding and assisting in the preparation and presentation of a false tax return. Johnson managed/operated a tax preparation business in Fort Worth that was known, among other names, as Tax Office One. Johnson’s daughter-in-law, Everson, was a return preparer for the business. Johnson and Everson, and those working with them, prepared and filed false and fraudulent tax returns that included various false and fraudulent schedules, deductions, exemptions, and credits with the goal of reducing the amount of taxes owed by the taxpayers and obtaining larger refunds for the taxpayers than they were entitled to receive. As a result of the larger refunds, Johnson and Everson were able to charge higher fees for preparing returns, build client loyalty, and increase business through client referrals. For calendar years 2009 and 2010, Johnson filed tax returns in which she reported total income of $2,850 and $16,906, respectively, when she well knew that the income amount was understated in that it did not include income she received for her work preparing tax returns. Between January 2008 and October 2011 Johnson’s tax preparation business collected more than $1.9 million in tax preparation fees from clients.

Illinois Woman Sentenced For Making False Claims in Operating Tax Preparation Business

On May 11, 2015, in East St. Louis, Illinois, Dorresa Braggs, of Belleville, was sentenced to 70 months in prison and three years of supervised release. Braggs was previously convicted on 10 counts of making false claims against the United States and one count of aggravated identity theft. Braggs filed 152 fraudulent tax returns for the tax year 2010 and 49 fraudulent tax returns for the tax year 2011. The returns included fraudulent or falsified W-2, false Schedule C, false education credits, and falsified dependents. Braggs submitted the claims via the Internet and refunds were issued in check and direct deposit form. The direct deposit refunds were typically issued to prepaid debit cards, which Braggs purchased and used to receive and disperse the fraudulent tax refunds. Braggs’ tax preparation fee ranged from $500 to $1,000, and her fees were based on the amount of refund the client received.

Florida Tax Preparer Sentenced for Tax Fraud

On May 11, 2015, in Orlando, Florida, Aaron Valley was sentenced to 30 months in prison and ordered to pay $265,000 in restitution to the IRS. Valley pleaded guilty on Feb. 19, 2015 to aiding in the preparation of false tax returns. According to his plea agreement, Valley prepared tax returns from his home for clients for tax years 2009 and 2010. As part of his scheme, Valley did not identify himself as the paid preparer on any of the tax returns. He was able to generate large refunds for his clients by preparing tax returns that claimed false filing status, fraudulent W-2 earnings, false Schedule C business expenses, and losses to maximize the earned income tax credit allowed to certain taxpayers. He charged up to $1,000 to prepare the tax returns. To ensure that he could collect his fees, Valley had the refunds deposited into a number of different bank accounts that he controlled or was able to access.

Illinois Tax Preparer Sentenced for Filing False Income Tax Returns

On May 4, 2015, in Peoria, Illinois, Robert J. DeAngelo, of Bourbonnais, was sentenced to 24 months in prison and one year of supervised release. DeAngelo was also ordered to pay restitution of $62,947 to the IRS and $5,962 to the United States as the cost of prosecution. On Dec. 10, 2014, a jury convicted DeAngelo of 12 counts of filing false income tax returns. From 2007 to 2010, DeAngelo provided tax services from his home office that included the preparation and filing of tax returns for hundreds of clients. For tax years 2008, 2009, and 2010, DeAngelo falsely underreported his tax business’s gross receipts and inflated its expenses. Despite receiving tens of thousands of dollars in income during this time, DeAngelo paid no federal income tax for those years, and in fact, claimed an earned income credit. DeAngelo also failed to pay more than $30,000 in federal income taxes that were due and owing. During this time period, DeAngelo also created false employee business expense deductions for his tax return clients, without their knowledge. The false income tax returns provided larger refunds for DeAngelo’s clients and resulted in an overall tax loss of more than $50,000.

Texas Tax Preparer Sentenced for Tax Fraud

On April 24, 2015, Laredo, Texas, Michelle A. Morin was sentenced to 30 months in prison, one year of supervised release and ordered to pay $20,146 in restitution. Morin pleaded guilty on June 10, 2014 to aiding and assisting in the preparation of false and fraudulent income tax returns which caused a tax loss of more than $228,000. Morin owned and operated Discount Tax Service, a Laredo-based tax preparation business.  Between tax years 2007-2010, Morin willfully placed false items on tax returns she prepared for clients knowing they were not entitled to claim them. Such claims included false Schedule A itemized deductions, false Schedule C business losses and false Form 5695 residential energy credits in addition to gifts to charity, job expenses and miscellaneous deductions. Morin also, in certain instances, improperly directed portions of taxpayer tax refunds into her personal bank account.

Operator of Tax Preparation Business Sentenced for Preparing and Submitting False Tax Returns

On April 17, 2015, in Chicago, Illinois, Aisha Wright, of Alton, was sentenced to 46 months in prison, three years of supervised release and ordered to pay $1,052,302 in restitution. Wright was previously convicted for making false claims against the United States. Wright operated A W Mobile Taxes, in Alton, Illinois. Wright systematically prepared false returns for taxpayers that falsified Schedule A deductions, Schedule C self-employment income and education expenses for receipt of the education tax credit. Over a three year period, Wright filed 492 federal income tax returns that resulted in a loss of over $1 million to the United States.

Five Sentenced In Tax Fraud Scheme

On April 16, 2015 in, Pensacola, Florida, five individuals were sentenced for conspiring to commit tax fraud. John David Castleberry was sentenced to 126 months in prison and ordered to pay $328,143 in restitution to the IRS. Christopher Stephen Baum, Mark Douglas Stokes and Melinda K. Stokes were sentenced to 51 months, 24 months, and 12 months and one day in prison, respectively. They were also each ordered to pay $162,608 in restitution to the IRS. Teresa Haggerty was sentenced to 18 months in prison and ordered to pay $129,762 in restitution to the IRS. The defendants were convicted on Jan. 22, 2015, by jury trial. In addition to conspiracy, Castleberry and Haggerty were also convicted for assisting in the preparation and filing of fraudulent tax returns, and Castleberry was convicted for filing his own false federal income tax return. Between 2008 and 2010, the defendants participated in a scheme to prepare and file fraudulent tax returns seeking more than $9 million in refunds. The group used an obscure IRS Form 1099-OID to falsely report that they and/or their clients’ creditors had withheld large amounts of federal income taxes and had paid this money over to the IRS. As a result of the fraudulently-overstated income tax withholding, the tax returns claimed large refunds to which the defendants and their clients were not entitled.

Alabama Tax Preparer Sentenced for Filing False Returns

On April 16, 2015, in Birmingham, Alabama, Kristie E. Sykes, of Birmingham, was sentenced to 12 months in prison, one year of supervised release and ordered to repay $44,080 to the IRS. Among special conditions of her supervised release, Sykes is to refrain from assisting or aiding others in the preparation of taxes. Sykes pleaded guilty to two counts of aiding in the preparation of a false tax return in September. Sykes worked at the now-defunct tax preparation business, VIP Tax Services, in Birmingham. According to court records, Sykes orchestrated a tax refund scheme through VIP Tax Services. Sykes admitted to causing 11 false U.S. tax returns for 10 of her clients to be filed with the IRS for the tax years 2007-2009. Those returns contained fictitious dependents, inflated deductions, false income and expenses, false education credits, and First-Time Homebuyer Credits or Residential Energy credits. Some of the false deductions and credits also enabled the defendant’s clients to falsely claim the Earned Income Credit, the Additional Child Tax Credit, and the Making Work Pay Credit. The total loss to the government was $49,411. In a related case, Janice Foy, of Snellville, Georgia, who owned and operated VIP, was sentenced in September 2014 to seven months in prison after pleading guilty to an indictment charging her with subscribing to a false federal tax return and aiding in the preparation of a false return.

Operator of Tax Preparation Businesses Sentenced for Identity Theft Tax Fraud Scheme

On March 27, 2015, in Miami, Florida, Julio Lugo, of Broward County, Florida, was sentenced to 70 months in prison, three years of supervised release and ordered to pay $279,903 in restitution. Lugo previously pleaded guilty to conspiracy to defraud the government with respect to claims and aggravated identity theft. Lugo operated various tax preparation businesses, including Light House Refund. Light House Refund obtained an Electronic Filing Identification Number (EFIN) from the IRS to electronically file clients' income tax returns. Lugo used the EFIN for Light House Refund to file 48 fraudulent tax returns using stolen identities and obtained tax refunds to which he was not entitled. Lugo’s co-defendant, Jamar James, was sentenced to two years of probation. James previously pleaded guilty to making a false statement to a federal agency.

North Carolina Tax Preparer Sentenced for Tax Evasion and Filing False Tax Returns

On March 25, 2015, in Charlotte, North Carolina, Jessica Ordonez, of Belmont, was sentenced to 24 months in prison, one year under court supervision and ordered to pay $288,302 in restitution. Ordonez pleaded guilty in April 2014 to tax evasion and aiding and assisting in the preparation and presentation of a false tax return. Ordonez was the owner of Tax Pros (a/k/a “Ordonez Tax Services”), which provided tax preparation and other services and had offices in Gastonia and Morganton, North Carolina. Between 2004 and 2012, Ordonez prepared at least 100 false tax returns for 23 taxpayers, using fraudulent Individual Taxpayer Identification Numbers. Ordonez used false Additional Child Tax Credit and other false information to prepare the fraudulent returns, which entitled her clients to large fraudulent tax refunds. The tax loss associated with the fraudulent returns was approximately $202,217. In addition to filing the false returns, court records indicate that Ordonez failed to report her own income on her individual tax returns for tax years 2009 to 2011, with a corresponding tax loss of $86,085.

Texas Woman Sentenced for Preparing False Income Tax Return  

On March 24, 2015, in Houston, Texas, Nina Thompson, a/k/a Nina Thompson Price, was sentenced to 24 months in prison, one year of supervised release and ordered to pay $226,884 in restitution to the IRS. Thompson pleaded guilty on Dec. 29, 2014 to willfully aiding and assisting in the preparation and presentation of a false U.S. Individual Income Tax Return. Thompson was in the business of preparing income tax returns and operated under the name N.M. & T. Tax Service located in Houston. Thompson willfully placed numerous false items on her clients’ income tax returns in an attempt to lower their income tax liabilities. As a result of her actions, the total relevant tax loss for sentencing purposes is $226,884.

Tennessee Tax Preparer Sentenced for Filing Falsified Income Tax Returns

On March 19, 2015, in Memphis, Tennessee, Tara L. Mitchell, of Cordova, was sentenced to 18 months in prison, three years of supervised release and ordered to pay nearly $113,227, as restitution to the IRS. Mitchell pleaded guilty on Oct. 8, 2014, to conspiring to defraud the United States. Mitchell owned and operated a tax return preparation business, Tara’s Tax Preparation Service, in Memphis in 2009. Mitchell prepared approximately 13 false tax returns for the 2009 tax year that contained a combination of false, misleading and inaccurate statements in order to generate a larger income tax refund. Co-defendant Derrick M. Evans, of Marion, Arkansas, who was sentenced in January 2015, would recruit taxpayers for Mitchell and, on two separate occasions, provided identity information that was used by Mitchell to prepare false income tax returns. Once the tax return was completed and filed by Mitchell, a check for a Refund Anticipation Loan would be printed. Evans would then transport the taxpayer to Memphis to sign the Refund Anticipation Loan check and Mitchell would pay that individual a portion of the proceeds in cash and deposit the remainder of the tax refund in a bank account she controlled.

Oklahoma Man Sentenced for Filing False Tax Returns

On March 19, 2015, in Oklahoma City, Oklahoma, William David Green, of Yukon, Oklahoma, was sentenced to 24 months in prison, one year of supervised release and ordered to pay restitution of $26,373 to victims of his crime and $144,989 to the IRS. On Aug. 18, 2014, Green pleaded guilty to aiding and assisting in the preparation of a false tax return and endeavoring to obstruct or impede the administration of the IRS. Around  Aug. 31, 2009, Green filed a false tax return for 2008 that claimed the First Time Homebuyer’s Credit knowing that the client had not purchased a home and did not qualify for the credit. In addition, from about January 2012 until about Jan. 17, 2013, Green prepared a 2010 tax return for a client that reflected a balance due to the IRS. Green collected a check from the client payable to the IRS. However, instead of sending the funds to the IRS, Green altered the payee line of the check, endorsed it and deposited it into his own business account.

Maryland Tax Preparation Business Owner Sentenced for Tax Fraud

On March 20, 2015, in Baltimore, Maryland, Jennifer Rodriguez, of Hyattsville, Maryland, was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay restitution of $983,382 to the IRS for a fraud conspiracy. Rodriguez owned Latin Multi Services, a tax preparation service located in Silver Spring, Maryland. From October or November 2010 to January 2012, Rodriguez filed false income tax returns using the stolen identities of Puerto Rico residents. The stolen identities of families, including minor children, were obtained from a co-conspirator residing in Puerto Rico. Rodriguez falsely listed the tax payers’ home addresses as her own home address in Maryland, or variations of her business address. These tax returns also included fabricated income and deductions.  All of the fraudulent returns requested refunds to be deposited in bank accounts that Rodriguez or a co-conspirator controlled. Over the course of the scheme, Rodriguez filed 283 false tax returns which caused IRS to pay $983,382 in fraudulent refunds.

Texas Tax Return Preparer Sentenced for Preparing False Tax Returns

On March 18, 2015, in Dallas, Texas, Kenny Iroegbu was sentenced to 36 months in prison and ordered to pay $323,046 in restitution to the IRS. Iroegbu pleaded guilty in December 2014 to aiding and assisting in the preparation of a false income tax return. Iroegbu operated his own tax return preparation business, doing business as Homequest Vision Tax Service and Homequest Tax Service. Prior to starting his business in 2005, Iroegbu worked as an intern at Lynks Tax Service in Greenville, Texas. Iroegbu would include a false Schedule on the client’s return and typically claim a loss if the client had Form W-2 wages or claim a net profit if the client did not have any Form W-2 wages. In addition, Iroegbu claimed false refundable fuel credits on IRS Form 4136, Credit for Federal Tax Paid on Fuels. Iroegbu prepared and electronically filed 66 returns for tax year 2006 and 59 returns for tax year 2007 claiming $1,294,749 in fuel credits of which $361,294 in false refunds was used by the IRS to offset any tax owed on the return. The remaining amount was paid to the taxpayers. Twenty-four fraudulent returns examined claimed refunds for Iroegbu’s clients totaling $237,996.

Texas Man Sentenced for Preparing and Submitting False Income Tax Returns

On March 18, 2015, in Dallas, Texas, Michael Lloyd Moody, of North Richland Hills, Texas, was sentenced to 36 months in prison, one year of supervised release and ordered to pay $50,000 in restitution to the IRS. Moody pleaded guilty in December 2013 to aiding and assisting in the preparation and presentation of false and fraudulent individual income tax returns. From 2009 through 2010, Moody prepared U.S. Individual Income Tax Returns, Forms 1040, along with supporting schedules, at his residence. After meeting his customers, Moody would deliver the completed returns to Universal Tax, located in Irving, Texas, to be electronically filed with the IRS. Universal Tax was assigned an Electronic Filing Identification Number by the IRS authorizing the electronic filing of tax returns. Moody admitted to inserting false or inflated deductions and credits to produce fraudulent refunds.  

Rhode Island Tax Preparer Sentenced for Stealing and Selling Identities of Minors

On March 13, 2015, in Providence, Rhode Island, Evelyn Nunez was sentenced to 30 months in prison, two years of supervised release and ordered to pay more than $1.4 million in restitution to the IRS and the State of Rhode Island. Nunez pleaded guilty on Dec. 12, 2014, to conspiracy to defraud the government and aggravated identity theft. Nunez participated in a scheme to steal the personal identifying information of minors named as dependents on legitimate tax returns prepared by her company, NBP Multiservices (NBP), a tax preparation business in Cranston and then sold the information to other tax filers for use on their tax returns in order to increase tax refunds. Two co-defendants in this matter have also pleaded guilty and are awaiting sentencing. The Scheme Development Center, a division of the IRS, conducted an analysis of tax returns prepared by individuals working at NBP and identified questionable use of children being claimed as dependents. Between January 2008 and February 2012, taxpayers purchased false dependents for approximately $600 - $700 per dependent. On numerous tax returns the defendants falsely claimed dozens of children as foster children, nieces and nephews of some of their clients. In reality, they had no relation to the taxpayer. The investigation revealed that the scheme defrauded the IRS of more than $1.34 million and defrauded the State of Rhode Island of more than $65,500.

California Woman Sentenced on Federal Tax Charge

On March 11, 2015, in Los Angeles, California, Tammy J. Ahumada, of Crestline, California, was sentenced to 41 months in prison and ordered to pay $1,414,167 in restitution to the IRS. Ahumada pleaded guilty in August 2014 to making false claims against the United States government. Ahumada defrauded the United States government of more than $1.4 million by creating more than 200 false tax returns that claimed tax refunds to which neither she nor the named taxpayer were entitled.  

Louisiana Tax Preparer Sentenced for Conspiracy to Defraud the United States

On March 4, 2015, in New Orleans, Louisiana, Lashanda Vinnett, of Destrehan, was sentenced to 18 months in prison, three years of supervised release and ordered to pay $1,092,681 in restitution. On Oct. 21, 2014, her co-defendant Cathy Vinnett, Lashanda's mother, was sentenced to 41 months in prison. Cathy Vinnett opened the D&C Tax Service in 2006, and in 2008, Cathy and Lashanda created River Parish Tax Professionals. The Vinnetts, through River Parish, filed approximately 310 tax returns that falsely claimed the First-Time Homebuyer Credit, the Earned Income Tax Credit, as well as the listing of false dependents, which resulted in approximately $1.845 million in fraudulent tax refunds. The Vinnetts utilized recruiters to locate potential clients. These recruiters advised potential clients that the federal government was giving out stimulus money and instructed the individuals to visit River Parish in order to obtain their money. The Vinnetts would interview clients to obtain their personal information including their name, address, and Social Security Number. The Vinnetts then used that personal information to file false tax returns. The clients had no knowledge that the Vinnetts were filing false returns in their names. Further, the Vinnetts specifically attempted to conceal and shield Cathy’s identity from the IRS, knowing that the IRS had previously suspended Cathy’s Electronic Filing Identification Number as a result of another fraudulent tax scheme involving D&C Tax Service.

California Tax Return Preparer Sentenced for Tax Fraud and Failing to Report Foreign Bank Accounts  

On March 3, 2015, in San Francisco, California, Efrain Arturo Jovel was sentenced to 18 months in prison, three years of supervised release and ordered to pay restitution of $175,023 and a $10,000 fine. Jovel pleaded guilty on Oct. 21, 2014, to willfully failing to report his financial interest in several foreign bank accounts and to knowingly signing his false 2009 and 2010 federal income tax returns. Jovel owned and operated a tax return preparation business for over 30 years. On average, Jovel prepared about 1,800 tax returns per year. Jovel admitted that for the tax years 2009 and 2010, he filed personal U.S. Individual Income tax returns that were false in that he did not disclose his foreign bank accounts at Banco HSBC Salvadoreno, S.A. and Banco Reformador, S.A. In addition, Jovel did not disclose interest income of $35,104 earned in 2009 and 2010 on the funds held in these foreign bank accounts. Jovel additionally admitted that he willfully underreported gross receipts from his tax preparation service of $244,120 and $307,846, respectively. This resulted in a tax loss of $175,023. Jovel further agreed to pay a penalty of $287,896 prior to sentencing.  

Two Tax Preparers and Client Sentenced in Fraudulent Refund Scheme

On Feb. 27, 2015, in Miami, Florida, three Miami residents were sentenced for their roles in a tax refund scheme. Sean Anthony Lopez was sentenced to 30 months in prison and ordered to pay $695,635 in restitution to the U.S. Treasury. Lopez’s co-defendants, Claudia Zuloaga and Sharon Elizabeth Angulo, operated a South Miami-Dade tax preparation business under the names Sterling Executive Associates Inc. and Sterling Executive, and assisted Lopez in the preparation of his fraudulent tax returns, as well as numerous other false tax returns. Angulo and Zuloaga were each previously sentenced to serve 60 months in prison and each ordered to pay $1,539,873 in restitution to the U.S. Treasury. Starting about September 2008 and continuing through September 2012, Zuloaga and Angulo recruited numerous clients, including Lopez, by falsely representing that they could eliminate a substantial portion of their debts by obtaining sizable tax refunds for them. This would be accomplished through false and fraudulent tax returns prepared by Zuloaga and Angulo in exchange for a fee, usually 30 percent of the fraudulently obtained tax refund. The defendants caused fictitious IRS Forms 1099-OID to be created, which set forth false interest and tax withholding amounts fraudulently reported upon their clients’ tax returns. Zuloaga and Angulo promoted a fictitious “redemption theory” to their clients as the purported justification for their fraudulent tax refund claims. Clients were falsely informed that the submission of tax returns in this manner allowed their clients to legitimately access large amounts of money allegedly contained in certain non-existent “straw man” accounts which the defendants claimed were being maintained by the U.S. Treasury for each individual who possessed a social security number. Zuloaga and Angulo were responsible for causing the submission of multiple fraudulent tax returns claiming refunds totaling in excess of $5.4 million and the IRS was fraudulently induced to issue refund checks in the aggregate amount of $2,305,081, a portion of which was disbursed to Lopez with respect to his fraudulent tax returns.

Omaha Man Sentenced for Preparing False Tax Returns

On Feb. 27, 2015, in Omaha, Nebraska, Leslie Schulz, of Omaha, was sentenced to 24 months in prison, three years of supervised release and ordered to pay $440,924 in restitution for conspiracy to defraud the United States by filing false federal income tax returns for income tax refunds. Beginning around Dec. 1, 2008, and continuing through March 2010, Schulz, a tax preparer and financial advisor doing business as Schulz Accounting and Tax Service in Omaha, and another individual, conspired to defraud the IRS by filing false federal income tax returns which contained fraudulent claims for income tax refunds. The claims were based upon false claims of federal income tax withheld which were reported on falsified Forms 1099-OID. The Forms 1099-OID (Original Issue Discount) improperly claimed that the clients had income and corresponding federal income taxes withheld, which resulted in a refund due from the IRS.  Schulz and his co-conspirator caused nine false claims to be filed with the IRS, totaling $4,701,010.

Husband and Wife Tax Preparers Sentenced for Tax and Wire Fraud

On Feb. 20, 2015, in Fort Worth, Texas, Jacqueline Morrison and Gladstone Morrison were each sentenced to 187 months in prison and ordered to pay nearly $18 million in restitution. The married couple operated Jacqueline Morrison & Associates (JMA) in Arlington and Fort Worth, Texas. A federal jury convicted Jacqueline and Gladstone Morrison each on one count of conspiracy to aid and assist in the preparation and presentation of false and fraudulent tax returns in October 2014. In addition, they were both convicted of aiding and assisting in the preparation, the presentation of false and fraudulent tax returns and wire fraud. The Morrisons were responsible for filing numerous tax returns that were false and fraudulent to increase client refunds, such as claiming Schedule C business losses from income for which the Morrisons knew the taxpayers were not entitled. The Morrisons and JMA tax return preparers, who the Morrisons trained, used the substantial losses reported on the false Schedules C to offset wage income, resulting in clients recovering all or most of their tax withholding. As part of the conspiracy, the Morrisons developed a series of forms for the client to sign at the time the return was prepared. These forms were intended to protect the Morrisons by placing all the responsibility for any false information on the client. The Morrisons also attempted to profit by using JMA’s fraud to build a large client list, which they then leveraged into a franchise agreement with Express Tax Services. However, after they entered the franchise agreement, the IRS terminated the Morrisons’ Electronic Filing Identification Numbers (EFINs) because of their fraudulent activities. To conceal that fact, and perpetuate the continuation of the franchise agreement, the Morrisons provided Express Tax Services EFINs that belonged to a business associate. The franchise agreement included wiring a payment of $750,000 from Express Tax to the Morrisons. In addition, the Morrisons entered into a separate agreement to sell JMA. Gladstone Morrison misled the buyer about the true nature of JMA’s relationship with Express Tax by telling the buyer that the arrangement was nothing more than a “co-branding” or “co-marketing” agreement. By entering into parallel agreements with separate entities — Express Tax and an individual buyer, the Morrisons received payments from both entities for the same asset. When the Morrison’s agreements with both Express Tax and the buyer fell apart, they again tried to profit by selling JMA to RealTex Ventures LLC for $425,000.  

Income Tax Preparer Sentenced in Income Tax Refund Fraud Conspiracy

On Jan. 30, 2015, in Columbus, Ohio, Shacretta Williams, of Cincinnati, was sentenced to 24 months in prison, three years of supervised release and ordered to pay $748,843 in restitution to the IRS. On Sept. 30, 2014, Williams pleaded guilty to conspiring to file false claims for income tax refunds with the IRS. According to court documents, between January and March 2011, Williams conspired with Ruth Benton and others to file false income tax returns for the 2010 tax year. Williams prepared false federal income tax returns which resulted in the issuance of income tax refunds that she knew were greater than which her clients were entitled. After an income tax return had been accepted by the IRS and the income tax refund was issued, Williams called her clients to come into the office to pick up their income tax refund checks. When the clients arrived, they were escorted to a local check cashing business.  After the income tax refund check was cashed, Williams or an employee would take a portion of the client’s income tax refund in cash, even though the $310 return preparation fee had already been deducted from the client's income tax refund check. The remaining amount of the income tax refund was then given to the clients. As part of the conspiracy for the 2010 tax year, Williams, Benton and others prepared and filed at least 260 false claims for income tax refunds with the IRS. On Oct. 7, 2014 Ruth Benton, of Cincinnati, was sentenced to 27 months in prison, three years of supervised release and ordered to pay $748,843 in restitution to the IRS for conspiring to submit false claims for federal income tax refunds with IRS.

North CarolinaTax Service Owner Sentenced For Tax Fraud

On Jan. 28, 2015, in Raleigh, North Carolina, Tina Luretha Tyree Johnson, of Rocky Mount, was sentenced to 30 months in prison and three years of supervised release. On July 18, 2013, Johnson pleaded guilty to tax fraud and aiding and abetting. Beginning around January 2008 and continuing until about June 2008, Johnson prepared false federal income tax returns for individuals totaling approximately $40,867. Johnson’s sentence was based on all relevant tax fraud conduct, which totaled over $400,000 in actual loss and $1 million in intended loss to the IRS.

Missouri Woman Sentenced for Tax Fraud Scheme, Stealing Clients' Refunds

On Jan. 27, 2015, in Kansas City, Missouri, Dinette Kay Cadenhead, aka Kay Taylor, of Kansas City, was sentenced to 18 months in prison and ordered to pay $14,082 in restitution to the IRS. On July 16, 2014, Cadenhead pleaded guilty to the theft of public money. Cadenhead prepared federal income tax returns for clients containing materially false and fraudulent claims. She assisted at least 12 individuals to file at least 29 false and fraudulent income tax returns for the tax years 2008 through 2010. The tax loss associated with those false returns is $109,627. The aggregate tax loss, including relevant conduct is $134,237. Cadenhead utilized false deductions to increase her clients’ refunds. Cadenhead charged her clients a return preparation fee of between $65 and $600 per return. However, without the knowledge of nine of her clients, Cadenhead diverted a portion of the fraudulent refund into her own bank account, which increased the amount she actually received for each return. Cadenhead admitted that she stole portions of her clients’ inflated tax refunds, totaling $14,082, between Feb. 12, 2010, and March 14, 2012.

Florida Tax Preparer Sentenced for Preparing False Tax Returns and Identity Theft

On Jan. 26, 2015, in Miami, Florida, Rony Maurival, a Fort Pierce tax preparer, was sentenced to 81 months in prison, three years of supervised release and ordered to pay $349,992 in restitution to the IRS. On Nov. 17, 2014, Maurival pleaded guilty to filing  false tax returns, theft of government funds, and aggravated identity theft. From July 2008 to March 2012, Maurival owned and operated “RJ’s Tax & Services,” a tax return preparation business. Maurival admitted to adding false wage and income information to his client’s tax returns in order to illegally maximize the earned income tax credit (EITC) claimed on their tax returns. Maurival admitted that his actions resulted in a tax loss to the IRS of between $1 million and $2.5 million. Maurival also admitted to filing his own false tax returns for years 2009 and 2010. Specifically, Maurival admitted to not reporting more than $250,000 in tax preparation fee income earned through his business in those years. Maurival further admitted to using stolen identity information to file false tax returns with the IRS in order to steal money from the United States. In doing so, he would direct the false tax refunds to bank accounts that he controlled.

Texas Man Sentenced for Preparing False Income Tax Return

On Jan. 23, 2015, in Houston, Texas, Simon Makangula, an income tax return preparer, was sentenced to 18 months in prison and ordered to pay $51,645 in restitution to the IRS. Makangula pleaded guilty on Oct. 15, 2014 to willfully aiding and assisting in the preparation of a false income tax return for a client. Makangula admitted that the return contained two false dependents, a false refundable education credit, a false earned income credit and a false Schedule C loss from a sole proprietorship that the taxpayer did not have. Makangula admitted that the tax loss on the return in question was approximately $9,731.

Arizona Tax Preparer Sentenced for Preparing Fraudulent Tax Returns

On Jan. 23, 2015, in Phoenix, Arizona, Margaret Nicole Hall was sentenced to 12 months and one day in prison and ordered to pay $92,937 in restitution to the IRS. On Oct. 20, 2014, Hall pleaded guilty to obstructing or impeding the administration of Internal Revenue laws and aiding or assisting preparation or presentment of a fraudulent or false return. Hall owned and operated a tax return preparation service known as “Taxes R Us” located in Phoenix. During an IRS civil audit proceeding, Hall falsely represented that a client received income from self-employment and that the client received tip income. Hall also knowingly provided fabricated lease documents and fabricated rental receipts to the IRS as purported substantiation for items claimed in the false tax returns that Hall had prepared for her client. Additionally, Hall prepared a Federal income tax return that fraudulently stated the taxpayer's purported wages, purported business income, and tips.

New Jersey Tax Preparer Sentenced for Preparing Fraudulent Tax Returns for Clients

On Jan. 20, 2015, in Trenton, New Jersey, Sharif Mahfouz, of Brick, New Jersey, was sentenced to 24 months in prison, one year of supervised release and ordered to pay $1,152,253 in restitution to the IRS. On Sept. 4, 2014, Mahfouz pleaded guilty to aiding and assisting in the preparation of false tax returns. Mahfouz was the sole owner and operator of Expat Focus Consulting (EFC), a tax preparation business that he operated out of his personal residence. EFC clients were primarily expatriated individuals. For tax years 2007 through 2012, Mahfouz prepared false tax returns for certain clients by reporting fabricated or inflated foreign earned income exclusion amounts and foreign tax credits. By falsifying this information, Mahfouz was able to obtain tax refunds for his clients greater than those they were lawfully entitled to receive. Mahfouz did not tell his clients these refunds were being generated and kept the refunds for his own personal use.

Pennsylvania Tax Preparer Sentenced For Fraud Scheme

On Jan. 12, 2015, in Philadelphia, Pennsylvania, Crystal Graham was sentenced to 12 months in prison and ordered to pay restitution of $266,243 to the IRS. Graham pleaded guilty on Sept. 22, 2014, to filing false claims with the United States through federal income tax returns she prepared. Graham created bogus wage statements and other false financial information that she placed on tax returns that she prepared for individuals for the purpose of obtaining tax refunds in the names of the filers. The fraudulent returns sought refunds of $354,000 based on bogus expense deductions and refundable credits, such as a filer’s entitlement to the First Time Home Buyer’s Credit and the Earned Income Tax Credit when the filer had little, if any, taxes withheld from income in that year. Graham also had her clients sign statements giving her the authority to deposit the clients’ refund checks into her savings account, or to have the refund checks placed on prepaid access devices. This gave Graham the ability to take a substantial portion of the fraudulent refunds before giving her clients the remainder.

Maryland Tax Preparer Sentenced for Filing False Returns

On Jan. 9, 2015, in Baltimore, Maryland, Judianne Horn, of Owings Mills, Maryland, was sentenced to 33 months in prison and one year of supervised release for aiding in the preparation of false tax returns. From 2007 to at least 2010, Horn prepared approximately 3,000 tax returns for clients. Horn was self-employed and operated a tax preparation business out of her home in 2007 and again in 2010. In 2008 to 2009, Horn was employed at two other tax preparation businesses. For these years, Horn filed federal tax returns that she knew included false deductions or false business losses, generating a larger tax refund than the client was otherwise lawfully entitled. Horn admitted that 42 of these tax returns were false and that the total tax loss generated by the fraudulent tax returns is $281,764. Horn also filed numerous false tax returns that claimed the client was entitled to the First Time Home Buyer credit. On at least five tax returns, Horn claimed that the taxpayer qualified for this credit, when, in fact, the taxpayer had not purchased a home at all. Horn directed the full $8,000 credit to a bank account she controlled.   

Maryland Tax Preparer Sentenced for Scheme to Obtain Fraudulent Refunds for Temporary Workers

On Jan. 5, 2015, in Greenbelt, Maryland, Julius Valentine Williams, of College Park, Maryland, was sentenced to 60 months in prison, three years of supervised release and ordered to pay $1 million in restitution. Williams pleaded guilty to aiding and assisting in filing false tax returns, filing false tax returns, wire fraud and aggravated identity theft. Williams was a tax return preparer who owned and operated Julius Williams Tax Service out of his home in College Park. During tax years 2007 through 2010, William prepared and submitted to the IRS more than 5,000 client individual tax returns. Many of clients were from Jamaica and resided in the United States under a temporary worker program. When preparing tax returns for these clients, Williams added false items, such as Schedule C businesses, deductions, Earned Income tax credits, and education credits in order to inflate the refund to the client. In addition, Williams kept detailed lists of information of former clients who had returned to their home countries, including names, social security numbers and dates of birth. Williams then used that identification information, without the former clients’ knowledge or permission, to claim them as dependents on the income tax returns of current clients, in order to fraudulently increase the refunds on those returns. Williams also filed false personal tax returns for tax years 2007 through 2010, in which he underreported his income from his tax business by a total of more than $1 million. As a result, the tax loss to the government was approximately $411,056. Williams also used the personal identification information of his former clients to fraudulently claim them as dependents, which increased his refund and resulted in additional taxes owed to the government. As a result of the fraudulent tax returns prepared by Williams, the total tax loss to the government is at least $1 million.

Louisiana Tax Preparer Sentenced for Preparing False Returns, Wire Fraud and Identity Theft

On Jan. 5, 2015, in Monroe, Louisiana, Claudia Marie Mays, of Bastrop, Louisiana, was sentenced to 39 months in prison for aiding and assisting in making and subscribing a false tax return, wire fraud and identity theft. She was also ordered to pay $94,043 restitution and was sentenced to three years of supervised release. Mays prepared and filed 15 fraudulent tax returns using stolen identities and false information from January 2011 to April 2011. The IRS issued $94,043 in fraudulent refunds because of the scheme. Co-conspirator Carla Inzina, also of Bastrop, assisted Mays in filing one of the fraudulent returns by obtaining another person’s personal information and using it to file a false return without the person’s permission. Inzina was sentenced to three years of probation for one count of aiding and assisting in making and subscribing a false return.

Owner of Financial Services Company Sentenced for Securities and Tax Fraud Schemes

On Dec. 22, 2014, in Boston, Massachusetts, Robert Burton, of Lawrence, Massachusetts, was sentenced to 48 months in prison, three years of supervised release and ordered to pay $159,500 in restitution to the fraud victims, as well as $271,640 to the Internal Revenue Service. In August 2014, Burton pleaded guilty to securities fraud, procuring false tax returns and subscribing false tax returns. Burton was the former Managing Director of Pinnacle Financial Consulting LLC, Pinnacle Strategic Investments LLC, and Pinnacle Asset and Capital Management Group LLC. Burton acted as an investment advisor to at least some of his clients and promised to invest their money in various securities allegedly managed by Pinnacle. In some instances, he promised to return the principal invested within approximately 30 days, along with an interest payment equal to 100% of the amount invested. Burton did not invest the money as promised, did not make the promised payments and, in some instances, provided investors with checks that ultimately bounced. Through Pinnacle, Burton also provided tax preparation services and, in at least two instances, prepared, and filed, false tax returns on behalf of his clients. Finally, although Burton derived substantial income through the operation of Pinnacle, he failed to identify that income on his own tax returns and admitted to filing false tax returns for the 2008 through 2011 tax years.

Return Preparer Sentenced for Filing False Tax Returns

On Dec. 19, 2014, in Houston, Texas, Blanca Alicia Gamez was sentenced to 24 months in prison, one year of supervised release and ordered to pay $153,982 in restitution to the U.S. Treasury. Gamez pleaded guilty on Sept. 24, 2014 to assisting in the filing of false tax returns. According to court documents, Gamez owned and operated a tax return preparation business known as Gamez Income Tax in Pasadena, Texas. In or about April 2009, Gamez prepared a false tax return for one of her clients. In the return, Gamez included more than $19,000 in false deductions on the taxpayer’s Schedule A and nearly $2,500 in fraudulent education credits, all of which resulted in a tax refund of more than $6,000. Gamez admitted to IRS investigators that she knowingly put false education credits on client tax returns in order to raise the amount of the refund. She falsified the numbers in order to get larger refunds so more clients would let her prepare their returns.

New Jersey Tax Return Preparer Sentenced for Filing Tax Returns Using a Dead Person's Identity

On Dec. 17, 2014, in Newark, New Jersey, Todd P. Halpern, of Essex County, was sentenced to 57 months in prison, five years of supervised release and ordered to pay restitution of $1.3 million. Halpern previously pleaded guilty to filing false claims and wire fraud. As part of his plea agreement, Halpern agreed to a consent judgment and order of forfeiture for $373,938 and a classic 1957 Chevy Bel Air. According to court documents, in late 2008, Halpern purchased a tax return preparation business from the wife of the prior owner, who had died in March 2008. Halpern was to obtain a new Electronic Filing Identification Number (EFIN) in his own name. However, from 2009 through 2010, he filed 657 tax returns using the former owner’s EFIN number because Halpern’s criminal record prevented him from obtaining an EFIN. Halpern prepared and filed some of these fraudulent tax returns without the knowledge and authorization of the taxpayers identified on the returns. Some of these tax returns contained fraudulent income and deduction amounts, which generated fraudulent refunds that were directly deposited into Halpern’s bank account. Halpern used the fraudulently obtained funds to support a lavish lifestyle. In addition, from January 2008 through May 2012, Halpern prepared false documents for himself and others for numerous fraudulent loans from financial institutions.

Tax Return Preparer Sentenced for Role in Fraudulent Income Tax Return Scheme

On Dec. 10, 2014, in Waco, Texas, Joshua Stifle was sentenced to 24 months in prison, three years of supervised release and ordered to pay $842,815 restitution to the IRS. Stifle was part of a conspiracy that included Patricia Hurst Foley, Cassandra Renee Egbert (aka Cassandra Renee Foley), and Lana Renee Catalena (aka Lana Rene Venable). According to court records, from January 2007 until April 15, 2010, the four defendants were involved in preparing and filing fraudulent income tax returns with the IRS in which they falsely claimed deductions and credits (i.e. head of household, first time home buyer) they knew the filer was not entitled to receive. Foley, Egbert and Catalena were all sentenced for their roles in the conspiracy on Oct. 15, 2014.

Nevada Woman Sentenced for Filing False Returns

On Dec. 8, 2014, in Las Vegas, Nevada, Maria Garcia, of Laughlin, was sentenced to 18 months in prison, one year of supervised release, and ordered to pay $9,602 in restitution to the IRS. Garcia pleaded guilty on Sept. 9, 2014, to filing false tax returns. According to the plea agreement, Garcia prepared a false return which claimed two nieces as dependents. Garcia knew the taxpayer did not provide the financial support required to claim the dependents in accordance with Internal Revenue laws. Garcia used Electronic Filing Identification Numbers (EFINs) and Preparer Tax Identification Numbers (PTINs) assigned to other tax preparers to file tax returns on behalf of clients after the IRS revoked her EFINs for filing multiple fraudulent tax returns on behalf of clients. She also offered to pay other tax preparers for the use of their EFINs and PTINs. Garcia filed with the IRS fraudulent Individual tax returns, Forms 1040, for the calendar years 2007 through 2011, which claimed tax refunds that her clients were not entitled to receive. Garcia was responsible for a tax loss of $109,906 as a result of the false and fraudulent tax returns.

Louisiana Tax Return Preparer, 12 Co-Defendants Sentenced For $10 Million Tax Fraud, Money Laundering Conspiracies

On Nov. 19, 2014, in New Orleans, Louisiana, Jacqueline J. Arias, a tax return preparer from Spruce Pine, Alabama, was sentenced to 97 months in prison, three years of supervised release and restitution of $10,589,326 for her role in filing false tax returns and money laundering. Arias was also ordered to forfeit nearly $400,000 in cash. On July 8, 2014, Arias pleaded guilty to conspiracy to defraud the United States, mail fraud and money laundering. According to court documents, Arias participated in a years-long scheme to defraud the United States by filing false income tax returns that fraudulently claimed large tax refunds. Arias, her husband, and 19 other individuals, all of whom were foreign nationals, as well as her tax preparation business were charged as part of the case. Sixteen defendants have pleaded guilty, four remain fugitives overseas, and one defendant, who was recently arrested in Panama, is scheduled for trial. The following defendants were already sentenced.
• Cesar Alejandro Soriano (42 Months);
• Oscar Armando Perdomo (42 Months);
• Yoni Perdomo (38 Months);
• Arnulfo Santos-Medrado (38 Months);
• Elsides Edgardo Alvarado-Canales (36 Months);
• Eliecer Obed Rodriguez (34 Months);
• Octavio Josue Perdomo (34 Months);
• Elber Mendoza-Lopez (34 Months);
• Aurelio Montiel-Martinez (24 Months);
• Miller Perdomo-Aceituno ( 24 Months);
• Santos Martin Hernandez (24 Months); and
• Susana Carillo Mendoza (19 Months)

Tax Preparer Sentenced on Fraud Charges

On Nov. 14, 2014, in St. Louis, Missouri, Ronald Shoniwa, of Florissant, was sentenced to 30 months in prison and ordered to pay restitution to the United States in the amount of the false returns. Shoniwa, a native of Zimbabwe, was also ordered to cooperate in deportation proceedings. Shoniwa was the owner and operator of a St. Louis County tax preparation service between 2009 and 2012. He pleaded guilty in July 2014 to theft of government funds. According to the plea agreement, Shoniwa filed 48 false tax returns. The returns contained false entries as to income and educational expenses so that tax credits would be improperly paid to the individual filer. On numerous occasions, Shoniwa admitted to identity theft by preparing these false returns without the knowledge or authorization of the individual listed on the return.

Arizona Tax Preparer Sentenced for Preparing Fraudulent Tax Returns

On Nov. 13, 2014, in Phoenix, Arizona, Latoya Nivea Morehead, of Glendale, was sentenced to 70 months in prison and ordered to pay $409,000 in restitution. On April 30, 2014, Morehead was found guilty of 5 counts of wire fraud, 26 counts of making false statements to the IRS and 3 counts of aggravated identity theft. According to court documents, Morehead worked as a tax return preparer for another tax-preparation business or did business as “Latoya’s Tax Service.” From 2006 through 2009, Morehead prepared and submitted over a hundred tax returns that contained false and fraudulent information. In some instances, she prepared returns using the identities of taxpayers without their knowledge or consent. In addition, Morehead failed to report business income on her own tax returns and lied about expenses associated with her businesses. This created a fictitious business loss, which was used to offset her reported tax earnings and thus reduce the amount of taxes she owed.

Tax Preparer Sentenced on Tax Fraud Charges

On Nov. 10, 2014, in Kansas City, Kansas, Cynthia M. Raymond, of Jackson, Missouri, was sentenced to 51 months in prison. Raymond, a tax preparer, pleaded guilty to five counts of filing false tax returns and one count of aggravated identity theft. According to her plea, Raymond submitted approximately 98 false tax returns under the names of 36 clients for the tax years 2007 through 2010. Raymond's clients were not aware that she prepared returns including false deductions for business losses, charitable contributions, unreimbursed business expenses, medical expenses and false tax credits including education and residential energy credits. She filed the returns electronically and provided her clients with different tax returns than she filed with the IRS. She routinely directed the IRS to deposit part of the refund to her clients’ accounts and to deposit the rest of the refund into her personal account.

New York Tax Preparer Sentenced on Fraud Charges

On Nov. 4, 2014, in Rochester, New York, Chauncee McFarland was sentenced to 30 months in prison and ordered to pay restitution of $408,651. McFarland was convicted of conspiring to defraud the United States by filing false tax returns and to defraud financing companies.  According to court documents, from 2010 to 2012, McFarland owned McFarland Tax Company, a tax return preparation business. McFarland conspired with an employee, Kenyatta Hubbard, to prepare false income tax returns for clients. McFarland and Hubbard reported fictitious employment in order to increase the Earned Income Tax Credit refunds claimed on behalf of the clients. Thereafter, from September 2012 to September 2013, acting on his own as a licensed insurance broker, McFarland devised a scheme to defraud premium finance companies. Premium finance companies engage in the business of lending money to finance insurance policy premiums for clients. McFarland prepared fraudulent premium finance agreements that falsely represented that he was seeking to obtain financing for purported clients. Based upon the fraudulent documents, the companies provided the requested financing. The defendant then diverted the financing to his personal use, and did not use it to purchase insurance policies for any clients. In total, McFarland defrauded the IRS and financing companies of $408,651. Kenyatta Hubbard was convicted for her role in the conspiracy to prepare false income tax returns for clients and sentenced to five years of probation.

Former CPA Sentenced for Preparing False Returns

On Nov. 4, 2014, in Oakland, California, Jeffrey Deshon Applewhite, aka Jeffrey Donald Mason, was sentenced to 36 months in prison and ordered to pay $9,249 in restitution. Applewhite was convicted on April 28, 2014, on 20 counts of aiding and assisting in the preparation and presentation of false and fraudulent tax returns.  According to court documents, Applewhite owned and operated Applewhite and Co, CPA, along with Mason Financial Services, located in Inglewood, California. Applewhite also owned and operated his H&R Block franchise in Oakland, California. The fraudulent returns he prepared reported false deductions and credits or false Schedule A expenses such as inflated charitable contributions.

Tax Preparer Sentenced to Prison for Preparing False Tax Returns

On Oct. 30, 2014, in Jacksonville, Florida, Raymond Jones, Jr., of Jacksonville, was sentenced to 16 months and ordered to pay $400,524 in restitution to the Internal Revenue Service. Jones pleaded guilty on July 8, 2014 to preparing and filing false tax returns. According to court documents, Jones worked as a tax return preparer for Express Tax Returns (ETR) from 2008 to 2011. Using taxpayer information provided to ETR, Jones would file tax returns with the IRS. When preparing a Form 1040, he intentionally overstated or falsely claimed, among other items, self-employed retirement plan contribution deductions, education credits and expenses. He did so, knowing that it would increase tax refunds to his clients. Jones prepared 73 and filed fraudulent tax returns at ETR between 2010 and 2011.

Tax Preparer Sentenced for Filing a False Tax Return and Lying On Loan Application

On Oct. 29, 2014, in Charlotte, North Carolina, Nkhenge Shropshire, aka Konjay Shropshire was sentenced to 33 months in prison and five years of supervised release. Shropshire was also ordered to pay $582,933 in restitution to IRS and $14,309 and $25,000 respectively to two credit unions she defrauded. Shropshire pleaded guilty in October 2013 to conspiracy to defraud the IRS and to making false statements on a loan application. According to court documents, Shropshire was the owner of “Tax Connections” a Charlotte tax return preparation business. From 2009 to 2011, Shropshire aided and assisted in the preparation of more than 600 tax returns for clients which were e-filed with the IRS. Many of the tax returns prepared by Shropshire included false losses and credits. Shropshire directed that many of the fraudulent tax refunds be deposited into a business bank account she controlled, and kept a portion of the refund as payment for her services. On some occasions, Shropshire did not provide her clients with copies of their completed tax returns or gave them incomplete copies, so clients would not know their returns contained false information. In October 2011 Shropshire applied for membership with a federal credit union using a different social security number and home address. On the same day, Shropshire also filled out an application for a car loan with the same credit union for the purchase of a 2008 Mercedes CLS 550 vehicle. On that car loan application, a false employer was listed, false annual salary and false job title. Shropshire was approved for a $40,075 car loan but only made two payments totaling $2,508.

Two Alabama Men Sentenced for $900k Tax Refund Scheme

On Oct. 28, 2014, in Montgomery, Alabama, Edmund Lee McCall was sentenced to 108 months in prison for conspiracy to commit wire fraud and 24 months for aggravated identity theft. When combined with his conviction for bank and wire fraud and aggravated identity theft from a prior case, McCall will serve a total of twenty years in prison for his financial fraud crimes. McCall’s co-Defendant, Antonio Devon Harris was sentenced to 87 months in prison for conspiracy to commit wire fraud and 24 months for aggravated identity theft. Both defendants’ sentences will be followed by three years of supervised release and both were ordered to pay $920,872 in restitution to the IRS. According to court documents, from 2010 to 2012, McCall and Harris filed false tax returns by obtaining the personal identifying information of unsuspecting individuals. They would use this information to create W2s with fraudulent employee and wage information and would then file fraudulent income tax returns on-line. McCall and Harris also created a fraudulent tax preparing business. They used this business as a front to order a large number of pre-paid credit cards and had a false tax return proceeds diverted to the cards for their own use.

Arizona Man Sentenced for Filing False Claims for Refunds

On Oct. 20, 2014, in Phoenix, Arizona, Kennith Lee DeFoor was sentenced to 18 months in prison, three years of supervised release and ordered to pay $897,394 in restitution to the IRS. According to court documents, DeFoor and others owned and operated Accurate Consulting, an accounting and tax preparation business located in Heber-Overgaard, Arizona. DeFoor and his co-defendants filled, or caused to be filed, approximately 122 returns on behalf of taxpayers which claimed false refunds. The defendants charged a fee of ten percent of the amount of the refund on these returns. In support of the fraudulent claims, the defendants regularly created false information returns, such as the IRS Form 1099-A.  DeFoor and his co-defendants assured clients the filing were legal and based upon a tax loophole unknown to the general public. DeFoor also claimed to be a former IRS employee.

Tax Preparer Sentenced for Filing False Claims

On Oct. 16, 2014, in Tacoma, Washington, Kyle Baxter, an Olympia, Washington tax preparer, was sentenced to 24 months in prison and ordered to pay $255,033 in restitution to the IRS. Baxter pleaded guilty in July 2014 for the scheme that netted him more than $250,000 over three years. According to court documents, from 2010 through 2013, Baxter represented himself to be a provider of tax preparation services operating under the name “Baxtax.” During a three-year period, Baxter, a firefighter, filed at least 280 tax returns. Many of his clients were fellow firefighters, as well as emergency medical technicians and paramedics. In many filings, Baxter claimed deductions and credits for which his clients were plainly ineligible, such as child tax credits for clients without children. The false filings increased the refunds paid by the IRS to the clients. Although Baxter provided clients with paper copies of tax returns, the returns were not what he provided to the IRS. Baxter actually filed returns with distorted numbers that yielded even larger refunds, and he secretly diverted significant portions of these refunds to himself.

Three Sentenced for Roles in Fraudulent Income Tax Return Scheme

On Oct. 15, 2014, in Waco, Texas, Patricia “Sissy” Foley, of “A-Kind Bookkeeping and Tax,” was sentenced to 24 months in prison, three years of supervised release and ordered to pay $842,815 restitution to the IRS. Foley pleaded guilty in June 2014 to one count of conspiracy to commit tax fraud. Her daughter, Cassandra Renee Egbert (aka Cassandra Renee Foley), was sentenced to 18 months in prison, three years of supervised release and ordered to jointly pay the same amount of restitution. Egbert pleaded guilty in June 2014 to conspiracy to commit tax fraud. The third defendant, Lana Renee Catalena (aka Lana Rene Venable) was sentenced to three years’ probation and ordered to pay a $4,000 fine. Catalena pleaded guilty in August 2014 to aiding or assisting false or fraudulent tax returns. A fourth defendant in this case pleaded guilty in August 2014, but later filed a motion to withdraw his plea. According to court records, from January 2007 until April 15, 2010, Foley, Egbert and Catalena were involved in preparing and filing fraudulent income tax returns with the IRS in which they falsely claimed deductions and credits they knew the filer was not entitled to receive.

Ohio Tax Preparer Sentenced In Income Tax Refund Fraud Conspiracy

On Oct. 7, 2014 in Cincinnati, Ohio, Ruth Benton was sentenced to 27 months in prison, three years supervised release and ordered to pay $748,843 in restitution. Benton pleaded guilty to conspiring to submit false claims for federal income tax refunds with IRS. According to court documents, between January 2011 and March 2011, Benton conspired with Shacretta Williams and others to prepare and file false claims for income tax refunds with the IRS for the 2010 income tax year. Benton and Williams worked together at several income tax preparation businesses in Cincinnati, Ohio, including Your Tax Service which Benton owned and opened in January 2011. Although the conspiracy is limited to the 2010 income tax year, Benton prepared false income tax returns during the 2005 through 2009 income tax years as well. Benton prepared false claims for income tax refunds because she expected, and often received, a part of her client’s income tax refund once the income tax refund check was cashed.

Tax Return Preparer Sentenced for Fraudulent Tax Returns

On Oct. 2, 2014, in Dallas, Texas, Ousmane Sow was sentenced to 30 months in prison and one year of supervised release. Sow, a Dallas-area tax return preparer, pleaded guilty on April 29, 2014 to aiding and assisting in the preparation of a fraudulent tax return. According to court documents, from 2003 to 2005, Sow and co-defendant Tichafara Mpariwa provided tax preparation services through a business they jointly owned and operated under the name of DSL Tax Services, LLC. From 2003 to 2005, Sow knowingly prepared and caused to be filed U.S. individual tax returns which contained materially false credits and deductions to fraudulently increase the taxpayer clients’ refunds.

Former Louisiana Tax Return Preparer Sentenced for Refund Fraud

On Oct. 1, 2014, in New Orleans, Louisiana, Cathy Vinnett was sentenced to 41 months in prison, three years of supervised release and ordered to pay restitution of $1,092,681. Vinnett pleaded guilty on June 16, 2014 to conspiracy to defraud the United States. According to court documents, in December 2008, Vinnett established River Parish Tax Professionals ("River Parish"). From this time until about June 1, 2009, Vinnett and her daughter, Lashanda Vinnett, conspired with each other to defraud the Internal Revenue Service. The Vinnetts used recruiters to locate potential clients who were told that the President and federal government were giving out stimulus funds and to visit the River Parish tax office to claim their money. Instead, the Vinnetts used their clients’ personal information to file fraudulent income tax returns. The two women filed approximately 300 individual income tax returns that fraudulently claimed credits and false dependents. Lashanda Vinnett used the identity of an acquaintance to apply for an Electronic Filing Identification Number in an attempt to conceal and shield Cathy’s identity with the IRS, knowing the IRS previously suspended her Electronic Filing as a result of a fraudulent tax scheme involving D&C Tax Service. In addition, Cathy Vinnett instructed her brother to open up bank accounts for River Parish in order to receive the fraudulent refunds. Cathy Vinnett then had these funds withdrawn for her personal use. On about May 15, 2009, Cathy Vinnett knowingly made false statements to IRS agents when she claimed she had no knowledge about false tax returns being prepared at River Parish, she did not own a tax business, and that her brother was the owner of River Parish. Lashanda Vinnett will be sentenced at a later date.

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