Friday, February 21, 2014

The Department of Justice Filed a Civil Lawsuit to Stop Gilberto Cortes and His Business, Mundo Hispano Services, From Preparing Federal Tax Returns


Source- http://www.justice.gov/tax/2014/txdv14183.htm
WASHINGTON – The Department of Justice filed a civil lawsuit today in the federal court in Nashville, Tenn., to stop Gilberto Cortes and his business, Mundo Hispano Services, from preparing federal tax returns. According to the complaint, Cortes and his business have prepared more than 7,000 tax returns since 2010.

The complaint filed with the U.S. District Court in the Middle District of Tennessee alleges that Cortes understates his customers' federal tax liabilities or generates larger than warranted refunds by improperly claiming the additional child tax credit on their income tax returns. According to the complaint, thousands of Cortes' customers have improperly claimed the additional child tax credit. As a result, his customers have received, on average. over $2,300 in improper benefits per return. In total, the complaint alleges that Cortes' activities over the last three years have potentially cost the U.S. Treasury $12.8 million or more in lost income tax revenue.
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Wednesday, February 19, 2014

The Department of Justice Filed a Civil Lawsuit to enjoin Carmen J. Martinez and her Business, CJM Bookkeeping and Taxes LLC, From Preparing Federal Tax Return



Source- http://www.justice.gov/tax/2014/txdv14133.htm

WASHINGTON – The Department of Justice filed a civil lawsuit in the federal court in Delaware today to enjoin Carmen J. Martinez and her business, CJM Bookkeeping and Taxes LLC, from preparing federal tax returns. According to the complaint, Martinez and her business, which is located in Wilmington, Del., have prepared more than 7,800 tax returns since 2010.

The complaint, filed with the U.S. District Court for the District of Delaware, alleges that Martinez understates her customers' federal tax liabilities by preparing returns that contain false deductions, including unqualified dependents, the Child Tax Credit, the Additional Child Tax Credit and tax rate benefits derived from improper filing status as Head of Household or Married Filing Jointly. As a result, Martinez's customers improperly received tax refunds of $5,000 each year on average. The complaint alleges that Martinez's activities between 2010 and 2013 have cost the U.S. Treasury as much as $25 million in lost income tax revenue.


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Monday, February 17, 2014

Bill Melot was Sentenced to Serve 14 years in Prison Today to be Followed by Three Years of Supervised Release for Tax Evasion


Source- http://www.justice.gov/tax/2014/txdv14132.htm

WASHINGTON – Bill Melot, a farmer from Hobbs, N.M., was sentenced to serve 14 years in prison today to be followed by three years of supervised release for tax evasion, program fraud and other crimes, the Justice Department, Internal Revenue Service (IRS) and U.S. Department of Agriculture's (USDA) Office of Inspector General announced. Melot was also ordered to pay $18,469,998 in restitution to the IRS and $226,526 to the USDA.

Melot was previously convicted of tax evasion, failure to file tax returns, making false statements to the USDA and impeding the IRS following a four-day jury trial in Albuquerque, N.M. According to court documents and evidence presented at trial and at sentencing, Melot has not filed a personal income tax return since 1986, and owes the IRS more than $25 million in federal taxes and more than $7 million in taxes to the state of Texas. In addition, Melot has improperly collected more than $225,000 in federal farm subsidies from the USDA by furnishing false information to the agency. Specifically, Melot provided the USDA with a false Social Security number (SSN) and a fictitious employer identification number (EIN) to collect federal farm aid.

According to court documents and evidence presented at trial, Melot took numerous steps to conceal his ownership of 250 acres in Lea County, N.M., including notarizing forged deeds and titling the property in the name of nominees. The evidence also showed that Melot used false SSNs and fictitious EINs to hide his assets from the IRS. Additionally, Melot maintained a bank account with Nordfinanz Zurich, a Swiss financial institution, which he set up in Nassau, Bahamas, in 1992, and failed to report the account to the U.S. Treasury Department as required by law.


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Saturday, November 9, 2013

Gary J. Permanently Barred from Promoting Tax-Fraud Schemes


Source- http://www.justice.gov/tax/2013/txdv131199.htm

WASHINGTON – A federal court has permanently barred Gary J. Stern from promoting tax fraud schemes and from preparing related tax returns, the Justice Department announced today. The civil injunction order, to which Stern consented without admitting the allegations against him, was entered by Judge Robert Gettleman of the U.S. District Court for the Northern District of Illinois. The order permanently bars Stern from preparing various types of tax returns for individuals, estates and trusts, partnerships or corporations (IRS Forms 1040, 1041, 1065, and 1120), among others. The United States alleged that Stern used those returns to facilitate the unlawful schemes identified in the complaint.

According to the complaint, Stern designed at least three tax-fraud schemes that helped hundreds of customers falsely claim over $16 million in improper tax credits and avoid paying income tax on at least $3.4 million. Stern allegedly promoted the schemes to customers, colleagues, and business associates. The complaint alleges that his customers included lawyers, entrepreneurs and professional football players, and some of the latter, including NFL quarterback Kyle Orton, have sued Stern in connection with the tax scheme, alleging fraud, breach of fiduciary duty and professional malpractice.

Federal law allows an income tax credit with respect to certain sales of fuel from non-conventional sources (FNS), including methane produced from landfills. According to the complaint, beginning in the early 2000's Stern created a web of partnerships, companies and other entities to serve as a conduit for sham transactions designed to funnel false FNS credits to his customers. Stern allegedly funneled over $11.4 million of these bogus FNS credits to customers and used a bogus trust arrangement to fraudulently distribute an additional $5.34 million in FNS credits to his customers.

Finally, according to the complaint, Stern promoted an abusive income-shifting technique to help his wealthiest customers illegally avoid taxes. Stern and his business associates allegedly kept most of the money that customers contributed to this scheme. The court has barred Stern from using any entity to assist others in illegally shifting income for the purpose of avoiding tax.


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Friday, November 8, 2013

Tommy Edward Clack Pleads Guilty to Tax Fraud


Source- http://www.justice.gov/tax/2013/txdv131198.htm

WASHINGTON – Tommy Edward Clack pleaded guilty in federal court in Greensboro, N.C., to one count of willfully filing a false federal income tax return and one count of knowingly making a false statement to a federally-insured bank in order to obtain a mortgage loan, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to filings with the court, for approximately the past 10 years Clack has been an itinerant, self-employed paving contractor doing business in North Carolina, South Carolina, Maryland, and Florida. Clack operated under several different business names, and he changed the names of his paving business frequently in order to avoid scrutiny by state and federal law enforcement agencies. As a result of his business practices, over the years Clack was charged with multiple state criminal violations in Maryland, North Carolina, South Carolina and Florida. Since June 2010, Clack has been under an injunction banning him from operating as a driveway paving contractor in North Carolina. He is also subject to a cease-and-desist order in Maryland banning him from various fraudulent practices.

According to court documents, Clack significantly underreported the income from his paving business on his tax returns. From 2004 to 2007, Clack earned gross income of over $5.7 million, but reported only a fraction of it to the IRS. Clack underreported his income by approximately $294,829 in 2004; $1,178,822 in 2005; $1,868,556 in 2006 and $2,428,710 in 2007. Clack's returns were prepared by an accountant, but Clack knowingly provided her with false information upon which to base Clack's returns, and signed his returns knowing that they significantly understated his income. Altogether, as a result of these false returns Clack underpaid his taxes during this period by approximately $1,350,597. To conceal his tax fraud, Clack employed a number of strategies: he did not maintain books and records, dealt extensively in cash, paid his employees in cash and structured currency transactions with his bank in amounts designed to evade the bank’s requirement to file Currency Transaction Reports with the IRS.

Court documents state that in 2003, Clack submitted a mortgage loan application in the name of his then-wife to a bank in Greensboro. The application sought a $640,000 loan to finance the purchase of a $1.2 million home. As part of the loan application, Clack provided the bank with a 2002 tax return in his wife's name, which reported adjusted gross income of $372,748 and claimed total tax liability of $127,745. Clack represented that this tax return had been filed with the IRS, when in fact it had not been. In fact, Clack and his then-wife had filed a 2002 joint federal income tax return which claimed that the couple had adjusted gross income of $17,656 and total tax liability of $2,685. Had the bank known of the discrepancy, they would not have issued the loan. Clack ultimately defaulted on the loan, and the bank suffered a loss after foreclosing the collateral.

For the false tax return charge, Clack faces a maximum of three years in prison, one year of supervised release and a maximum fine of $250,000. Clack faces a maximum of 30 years in prison, five years of supervised release and a maximum fine of $1,000,000 for the bank fraud count. Sentencing is scheduled for March 7, 2014.


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Thursday, November 7, 2013

Jeffrey Paper Pleads Guilty to Filling False Tax Return


Source- http://www.justice.gov/tax/2013/txdv131193.htm

WASHINGTON – Jeffrey Paper of Potomac, Md., pleaded guilty yesterday to willfully filing a false tax return in the U.S. District Court in Greenbelt, Md., the Justice Department and the Internal Revenue Service (IRS) announced today.

According to court documents, Paper owned and operated a dental practice located in Lanham, Md., between 2008 and 2010. For the 2009 and 2010 tax years, Paper underreported the total gross receipts from his dental practice and overstated his business expenses on his individual income tax returns. As a result of his conduct, the total tax loss to the government was $215,711.

Paper faces a maximum sentence of three years in prison, one year of supervised release and a $250,000 fine. Sentencing is scheduled for March 10, 2014.


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Wednesday, November 6, 2013

Mary Young and Christian Young Plead Guilty to Identity Theft Scheme


Source- http://www.justice.gov/tax/2013/txdv131182.htm

WASHINGTON – Mary Young and Christian Young each pleaded guilty yesterday to one count of conspiracy to defraud the United States and one count of aggravated identity theft for their role in a stolen identity refund fraud (SIRF) scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr.

According to court documents, between January 2010 and June 2012, Mary Young, Christian Young, Octavious Reeves and others obtained stolen identities from individuals and used those stolen identities to file false tax returns. The false tax returns were filed from the Youngs' residence and the conspirators directed the false tax refunds to prepaid debit cards in the names of the identity theft victims. The Youngs and others used the prepaid debit cards to withdraw the fraudulent proceeds, which allegedly totaled over $400,000.

Sentencing has not yet been scheduled. The Youngs each face a minimum sentence of two years imprisonment with a maximum of twelve years, as well as three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense. Reeves previously pleaded guilty and will be sentenced on Feb. 19, 2013.


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Monday, November 4, 2013

David Raminfard Pleads Guilty For Tax Scheme


Source- http://www.justice.gov/tax/2013/txdv131178.htm

WASHINGTON – David Raminfard of Los Angeles pleaded guilty today in the U.S. District Court for the Central District of California to conspiracy to defraud the United States, the Justice Department and Internal Revenue Service-Criminal Investigation (IRS-CI) announced.

According to court documents, Raminfard, a U.S. citizen, maintained undeclared bank accounts at an international bank headquartered in Tel Aviv, Israel, identified in court documents as Bank A. The accounts were held in the names of nominees in order to keep them secret from the U.S. government. One of the accounts was held in the name of Westrose Limited, a nominee entity formed in the Turks and Caicos Islands. To further ensure that his undeclared accounts remained secret, Raminfard placed a mail hold on his accounts. Rather than having his account statements mailed to him, Raminfard would receive them from an international accounts manager with Bank A in Israel, who brought the statements to Los Angeles and reviewed them with Raminfard during meetings at a hotel.

In or about 2000, Raminfard began secretly using the funds in his undeclared accounts as collateral for back-to-back loans obtained from the Los Angeles branch of Bank A. Raminfard used one of the loans to purchase commercial real estate in Los Angeles. By using back-to-back loans, Raminfard was able to access his funds in Israel without the U.S. Government finding out about his undeclared accounts. These loans also enabled Raminfard to claim the interest paid on the loans as a business expense on his companies' business tax returns, while not reporting the interest earned in Israel as income on his individual income tax returns filed with the IRS. For tax years 2005 through 2010, Raminfard failed to report approximately $521,000 in income. The highest balance in Raminfard's undeclared accounts was approximately $3 million.

Raminfard is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with conspiring to defraud the United States in connection with using undeclared bank accounts in Israel to obtain back-to-back loans in the United States.

U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest or over which they have signature or other authority.

Raminfard faces a potential maximum prison term of five years and a maximum fine of $250,000. In addition, Raminfard has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the high balance of his undeclared accounts for failing to file FBARs.


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Sunday, November 3, 2013

Quentin Collick and Deatrice Williams Sent to Prison For Identity Theft Tax Scheme


Source- http://www.justice.gov/tax/2013/txdv131177.htm

WASHINGTON – Quentin Collick of Montgomery, Ala., and Deatrice Williams of Duluth, Ga., were sentenced Nov. 1, 2013, to serve 85 and 51 months in prison, respectively, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr. Collick and Williams were previously found guilty by a jury in the Middle District of Alabama of conspiring to file false claims, wire fraud, and aggravated identity theft. Collick was also convicted of three counts of theft of public funds. Corey Thompson, a co-conspirator, previously pleaded guilty and was sentenced to serve 30 months in jail.

Based on evidence introduced at trial and court filings, Williams worked for a debt collection company located in Norcross, Ga. As an employee, Williams had access to a database that stored names, social security numbers and dates of birth of individuals who owed medical debts. Williams stole the identities of a number of these individuals and provided the stolen information to Collick, her son-in-law.

Collick and Thompson used stolen identities to file false tax returns and fraudulently claim tax refunds. In 2011 and 2012, Thompson worked as an independent contractor for a cable company installing cable and internet access for customers. To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and along with Collick, filed false tax returns using the customers' internet access, making it appear as if the false tax returns were being filed by the customers. Thompson and Collick then directed the tax refunds to be placed on pre-paid debit cards, which were mailed to Montgomery, Ala. However, those cards were intercepted by the U.S. Postal Service. Several tax refund checks were also mailed by the IRS, based upon the fraudulent returns, which Collick retrieved and cashed.


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Saturday, November 2, 2013

Justice Department Sues to Stop Lakesia Michelle Mills Tax Return Preparer


Source- http://www.justice.gov/tax/2013/txdv131170.htm

Return Preparer Allegedly Overstated Refunds Through False First-Time Homebuyer Credits

WASHINGTON – The United States filed a complaint today asking a federal court in the Statesboro Division of the Southern District of Georgia, to enjoin Lakesia Michelle Mills, who does business as Willis Tax Service, from preparing federal income tax returns for others, the Justice Department announced.

The complaint alleges that since January 2011, Mills, who resides in and operates her business in Adrian, Ga., has prepared over 455 amended federal income tax returns. According to the complaint, Mills understated her customers' tax liabilities and overstated their refunds by preparing amended tax returns that improperly claimed the maximum First-Time Homebuyer Credit of $8,000. Along with preparing the amended return, Mills provided customers a false settlement statement and proof of insurance to support the credit. Mills prepared the amended returns without signing the returns or including her tax preparer identification number as is required. Altogether, the government’s complaint alleges that the bogus credits claimed on the amended returns exceeded $3.6 million.


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Friday, November 1, 2013

Justice Department Seeks to Shut Down Sergio Fernando Sosa and his Company Sergio Centro Latino


Source- http://www.justice.gov/tax/2013/txdv131168.htm

WASHINGTON – The Justice Department announced that on Nov. 1, 2013, it asked a federal court to bar Sergio Fernando Sosa and his company, Sergio Centro Latino, from preparing tax returns for others. The civil injunction suit, filed in the U.S. District Court for the District of Utah, alleges that Sosa, who has been preparing returns in Orem, Utah since at least 1994, routinely prepares federal tax returns for individuals and corporations that improperly claim deductions and result in understated federal tax liabilities for his customers.

The complaint also alleges that Sosa prepares federal tax returns for his customers that falsely claim unqualified individuals as dependents, and that include false claims or inflated claims related to the Earned Income Tax Credit, false claims or inflated claims related to the Additional Child Tax Credit, false inclusion of expenses and deductions related to fictitious business entities, underreported income and inflated expenses of legitimate business entities, and failure to calculate or incorrect calculation of self-employment tax liabilities. According to the complaint, Sosa has continued to engage in this conduct despite the fact that numerous penalties have been assessed against him for similar violations of the tax code.

The complaint alleges that Sosa’s actions have resulted in an estimated loss of as much as $416 million to the United States for tax returns prepared since 2008.


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Thursday, October 31, 2013

Noemi Rubio Baez Plead Guilty to Tax Fraud


Source- http://www.justice.gov/tax/2013/txdv131165.htm

WASHINGTON – Assistant Attorney General for the Tax Division Kathryn Keneally and U.S. Attorney Melinda Haag for the Northern District of California announced that Noemi Rubio Baez, of Salinas, Calif., pleaded guilty to conspiracy to file false claims for tax refunds with the Internal Revenue Service (IRS) and to aggravated identity theft.

According to the plea agreement, beginning around Feb. 28, 2008 and continuing through April 16, 2012, Baez and a co-conspirator participated in a scheme to obtain and to help others obtain false claims from the IRS by electronically filing in her own name, and in the names of others, false federal income tax returns. Baez and her co-conspirator created false income information in the names and Social Security numbers of multiple individuals, and filed materially false tax returns with the IRS claiming refunds derived from tax credits including the Earned Income Tax Credit, the Additional Child Tax Credit, and the Making Work Pay Credit.

According to court documents, in some instances, the taxpayers requested the returns be prepared, in others the taxpayers did not provide Baez or her co-conspirator with their personal identification information and were unaware that the returns had been filed in their names. Baez and her co-conspirator filed more than 150 false and fraudulent claims unlawfully seeking more than $400,000 in tax refunds.

At the time of her sentencing, scheduled for January 23, 2014, before U.S. District Judge D. Lowell Jensen, Baez faces a maximum penalty of 12 years in prison, three years of supervised release and a fine of $500,000.


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Wednesday, October 30, 2013

Vernon Harrison Sentenced to Prison for Role in Stolen Identity Refund Fraud Scheme


Source- http://www.justice.gov/tax/2013/txdv131164.htm

WASHINGTON – Vernon Harrison, of Montgomery, Ala., was sentenced to serve 111 months in prison and three years supervised release, along with an order to pay $82,791 restitution, for his role in a stolen identity refund fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr. Harrison was convicted on July 3, 2013, following a jury trial in the Middle District of Alabama. He was found guilty of conspiracy to file false claims, as well as numerous counts of mail fraud, aggravated identity theft, and embezzlement from the mail.

According to the evidence presented at the trial, Harrison was a corrupt U.S. Postal Service mail carrier who was recruited to join a stolen identity refund fraud conspiracy. Members of the conspiracy used stolen identities to file false tax returns, which claimed fraudulent tax refunds. The returns were filed from various locations, including houses and hotels around Montgomery and Birmingham, Ala. The tax refunds were placed on debit cards that were mailed to addresses along Harrison's postal route in Montgomery. Harrison stole the debit cards from the mail and provided them to a co-conspirator in exchange for cash. During this period Harrison stole over 100 debit cards from the mail for his co-conspirators.

At trial, federal agents showed that they had uncovered substantial evidence of the conspiracy during the execution of search warrants at locations in Montgomery and near Birmingham. This evidence included over 100 envelopes for debit cards that had been mailed to addresses on Harrison's postal route, as well as agents' observation that Harrison failed to deliver Turbo Tax debit cards.


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Friday, September 6, 2013

David Haigler Pleads Guilty to Cashing Fraudlent Tax Refund Checks


Source- http://www.justice.gov/tax/2013/txdv13995.htm

WASHINGTON – David Haigler, of Montgomery County, Ala., pleaded guilty in U.S. District Court for the Middle District of Alabama today to one count of theft of public funds and to one count of passing U.S. Treasury checks with forged endorsements, the Justice Department, the Internal Revenue Service (IRS) and U.S. Secret Service announced today.

According to court documents, between November 2011 and July 2012, Haigler obtained 263 fraudulent U.S. Treasury refund checks and refund anticipation loan checks totaling $606,781.34. The refund checks were in the names of different individuals who had not authorized Haigler to cash them. Haigler cashed the refund checks at a store in Millbrook, Ala., by providing the store with copies of fictitious powers of attorney in the names of the individuals on the checks.

For his involvement in the scheme, Haigler faces a maximum potential sentence of 20 years in jail and a fine of up to $500,000.


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Thursday, September 5, 2013

Federal Court Permanently Bars Nina Thompson Tax Preparer From Preparing Tax Returns for Others


Source- http://www.justice.gov/tax/2013/txdv13990.htm

Texas Tax Preparer Filed Returns Claiming False Federal Fuel Credits and Withholding to Overstate Tax Refunds

WASHINGTON – The Justice Department announced today that a federal court has permanently barred Nina Thompson Price from preparing federal tax returns for others. The civil injunction order, to which Thompson Price consented, was signed Sept. 3, 2013, by Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas.

In the consent order, Thompson Price agreed that she, individually, and doing business as N.M. & T. Tax Service, prepared over 1,500 federal tax returns for customers during tax years 2009, 2010 and 2011 claiming false and exaggerated Schedule C business deductions and education credits, as well as other deductions to understate her clients' tax liabilities and overstate their tax refunds. The complaint alleges the United States suffered a total harm exceeding $100,000.

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Wednesday, September 4, 2013

Angelique Djonret Sentenced to Jail for Role in Identity Theft Tax Scheme


Source- http://www.justice.gov/tax/2013/txdv13983.htm

WASHINGTON – Angelique Djonret of Montgomery, Ala., was sentenced today to serve two years in prison for her involvement in a million dollar identity theft tax fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney for the Middle District of Alabama George L. Beck Jr. Angelique Djonret pleaded guilty to identity theft on April 19, 2013.

According to court documents, between October 2009 and April 2012, Angelique Djonret's sister, Antoinette Djonret, orchestrated a tax refund scheme using stolen identities to file over 1,000 false tax returns that fraudulently claimed over $1.7 million in tax refunds. Antoinette Djonret obtained stolen identities from multiple sources, including Alabama state databases. She also established an elaborate network for laundering the refund money. Antoinette Djonret recruited her sister, Angelique, into the conspiracy, whose role was to obtain prepaid debit cards in her name and others' names for purposes of receiving the fraudulent tax refunds. Antoinette Djonret and her co-conspirators used the cards to obtain the refund proceeds. Angelique Djonret also assisted in the filing of false tax returns using stolen identities. Antoinette Djonret was previously sentenced to 12 years in prison.


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Tuesday, September 3, 2013

Anton Paul Drago Indicted for Multi-Million Dollar Nationwide Fraud Scheme


Source- http://www.justice.gov/tax/2013/txdv13982.htm

WASHINGTON – The Justice Department and the Internal Revenue Service (IRS) announced that an indictment was unsealed in Las Vegas, charging Anton Paul Drago, formerly known as Evan Joseph Fogarty, a resident of Las Vegas, with conspiracy to commit wire fraud, wire fraud, attempting to pass a fictitious obligation, false claims for veteran's benefits, theft of public funds, failing to file a federal income tax return and making false statements to a federal agent. The indictment was returned by a grand jury on Aug.28, 2013 and was unsealed yesterday after Drago's initial appearance following arrest.

According to the indictment, Drago and Joseph Rizzuti, an unindicted co-conspirator who owned and operated an accounting and bookkeeping business in Florida, solicited investors by falsely representing that investment monies would be used for legal fees and business expenses to fund the production, refinement and shipping of oil from Nigeria to the Bahamas. In fact, Drago used the investment monies for personal expenses.

The indictment further alleges that Drago falsely claimed unemployability compensation benefits from the U.S. Department of Veterans Affairs and of stealing benefits to which he was not entitled. The indictment also alleges that Drago attempted to pass a fictitious financial instrument purportedly worth $10,000,000 at a bank, failed to file a 2007 federal income tax return and made a false statement to federal law enforcement agents by telling them that he did not profit from monies received from investors and that every penny he received from investors went to the Nigerian National Petroleum Corporation.

An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Drago faces a potential maximum potential sentence of 20 years in prison for the conspiracy to commit wire fraud count; 20 years in prison for each of the two wire fraud counts; five years in prison for each of the three false claims counts; 10 years in prison for the theft of public funds count; 25 years in prison for the fictitious obligation count; five years in prison for the false statement count; and one year in prison for the failure to file a federal income tax return count. He is also subject to fines and mandatory restitution if convicted.



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Monday, September 2, 2013

Aaron Cohen Pleads Guilty to Conspiracy to Conceal Israeli Back Accounts


Source- http://www.justice.gov/tax/2013/txdv13978.htm

Encino, Calif., Resident is the Latest in a Series of Defendants Charged with Conspiring with Bankers to Hide Secret Israeli Bank Accounts

WASHINGTON – Aaron Cohen of Encino, Calif., pleaded guilty today in the U.S. District Court for the Central District of California to conspiracy to defraud the United States, the Justice Department and Internal Revenue Service-Criminal Investigation (IRS-CI) announced.

According to court documents, Cohen, a U.S. citizen, maintained undeclared bank accounts at two international banks headquartered in Tel Aviv, Israel, identified in court documents as Bank A and Bank B. One of Cohen's undeclared accounts was maintained at a branch of Bank A located in the Cayman Islands. The accounts were held in the names of nominees in order to keep them secret from the U.S. Government. In or about 2000, Cohen began using the funds in his undeclared account in the Cayman Islands as collateral for back-to-back loans obtained from another branch of Bank A located in Los Angeles. Cohen's ownership of the funds in the Cayman Islands accounts was not identified in the loan records maintained at the Los Angeles branch, thus concealing the fact that he was borrowing his own money, paying tax-deductible interest on the loans and not reporting the interest income he was earning in the Cayman Islands on his U.S. tax returns.

According to the plea agreement, in or about 2009, Cohen transferred approximately $2 million from his Cayman Islands account at Bank A to a new offshore account at Bank B in Israel. Cohen then used the funds in the new account as collateral to obtain a back-to-back loan from the Los Angeles branch of Bank B. Cohen failed to report any income from the accounts on his individual income tax returns that were filed with the IRS. For tax years 2006 through 2009, Cohen failed to report interest income of approximately $238,000. The highest balance in the undeclared accounts was approximately $3,450,000.

"Today's guilty plea is but the latest example that attempting to hide income and assets from the United States in offshore accounts is a bad gamble," said Assistant Attorney General for the Justice Department's Tax Division Kathryn Keneally. "The Internal Revenue Service will find the hiding places and the Department of Justice will criminally prosecute these tax cheats, who face potential jail time, still owe the taxes due and may lose those hidden assets and more to severe civil penalties."

"Mr. Cohen is yet another taxpayer caught using anonymous offshore accounts to avoid paying his fair share of taxes," said IRS Criminal Investigation Chief Richard Weber. "Through IRS-CI's efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax fraud, and you can expect us to use all of our enforcement tools to fight offshore tax evasion."

Cohen is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with failing to report income from undeclared accounts in Israel.

On March 29, 2013, Zvi Sperling of Beverly Hills, Calif., pleaded guilty to conspiring to defraud the United States in connection with back-to-back loans obtained in Los Angeles at branches of Bank A and Bank B that were secured by funds in undeclared bank accounts in Israel. For tax years 2005 through 2008, Sperling failed to report income of approximately $381,563. The highest balance in Sperling's undeclared accounts was approximately $4 million.

On May 21, 2013, Guity Kashfi of Los Angeles, Calif., pleaded guilty to conspiring to defraud the United States in connection with back-to-back loans obtained from branches of Bank A and Bank B in Los Angeles that were secured by funds in undeclared bank accounts in Israel and Luxembourg. For tax years 2005 through 2011, Kashfi failed to report interest income of approximately $221,306. The highest balance in Kashfi's undeclared accounts was approximately $2.5 million.

U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.

Cohen faces a potential maximum prison term of five years and a maximum fine of $250,000. In addition, Cohen has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the high balance of his undeclared accounts for failing to file FBARs.


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Sunday, September 1, 2013

Justice Department Sues to Shut Down Jessica Geddis Tax Return Preparer


Source- http://www.justice.gov/tax/2013/txdv13966.htm

Summerville Tax Preparer Allegedly Overstates Refunds by Improperly Claiming Refundable Tax Credits and Directs the IRS to Deposit Refunds into her Bank Accounts

WASHINGTON – The United States has requested the federal district court in Charleston, S.C. to permanently bar Jessica Geddis of Summerville, S.C., from preparing federal income tax returns for others, the Justice Department announced today.

According to the complaint, Geddis prepared federal income tax returns from her home and as a tax preparer at MBM Tax and Accounting Services LLC. The complaint alleges that Geddis prepared returns for herself and others that overstate income by reporting fictitious household help income. Geddis overstated her customers' income in order to increase the amount of her customers' refundable tax credits, including the Earned Income Tax Credit, Child Tax Credit and Making Work Pay Credit.

The complaint further alleges that Geddis directed the Internal Revenue Service (IRS) to deposit all, or a portion of, her customers' overstated refunds into bank accounts that she controls. According to the complaint, the IRS has reviewed Geddis' bank records and determined that she has received at least 148 fraudulent tax refunds totaling $281,678 between January 2008 and May 2012.


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Saturday, August 31, 2013

Douglas R. Madsen Chiropactor Sentenced to Prison for Tax Evasion


Source- http://www.justice.gov/tax/2013/txdv13961.htm

WASHINGTON – The Justice Department and the Internal Revenue Service (IRS) announced that today Douglas R. Madsen, a former chiropractor from Ephraim, Utah, was sentenced by the U.S. District Judge Clark Waddoups to 33 months in prison and resitutition of over $500,000 following a conviction for attempted evasion of payment of income tax in the District of Utah.

On Jan. 12, 2012, a jury convicted Madsen of one count of tax evasion. According to court documents, Madsen owed approximately $1.3 million in assessed income tax, interest and penalties for the years 1995 and 1999 to 2004. Madsen’s tax debt had grown, by the trial date, to over $1.7 million, after accrued interest.

The evidence presented at trial established that Madsen used nominee trusts to conceal the ownership of numerous acres of property, ultimately causing the transfer of that property to Grand Scale Inc., a Washington state corporation of which he was the president, vice president, secretary, treasurer and chairman of the board. In addition, the evidence showed that Madsen used other entities to encumber property and cloud equity in that property through use of mortgages and Uniform Commercial Code financing statements. Madsen was previously held in civil contempt by the U.S. District Court for the District of Utah for failure to comply with court orders with respect to an IRS summons.


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Friday, August 30, 2013

Antoine Green Alabama Postal Employee Pleads Guilty for his Involvement in a Fraudulent Tax Refund Scheme



Source- http://www.justice.gov/tax/2013/txdv13959.htm

WASHINGTON – Antoine Green, a former U.S. Postal Service (USPS) employee, pleaded guilty today in U.S. District Court for the Middle District of Alabama to crimes related to his involvement in a stolen identity tax refund fraud scheme, the Justice Department announced.

According to court documents, between November 2011 and October 2012, Green, who was employed as a postal carrier with the USPS in Montgomery, Ala., stole at least 61 U.S. Treasury tax refund checks from his mail route. The checks, which totaled approximately $145,952, were issued by the Internal Revenue Service (IRS) in connection with fraudulent tax returns filed in the names of identity theft victims.

For his involvement in the scheme, Green pleaded guilty to one count of theft of government money and one count of theft of mail by a postal employee. He faces a maximum potential sentence of 15 years in prison and a fine of up to $500,000.

Thursday, August 29, 2013

Karena Mondrianh is Permanently Barred From Tax Preparation and Impeding Audits


Source- http://www.justice.gov/tax/2013/txdv13955.htm

Many customers of a Southlake Woman Allegedly Worked Overseas for Defense Contractors

WASHINGTON – The Justice Department announced that yesterday a federal court in Ft. Worth, Texas permanently barred Karena Mondrianh, of Southlake, Texas, from preparing tax returns and from operating a tax-preparation business. Mondrianh consented to entry of the preliminary injunctions without admitting the allegations against her.

In its complaint, the government alleged that Mondrianh prepared fraudulent tax returns understating customers' income by inventing – sometimes without customers' knowledge – false business expenses and by falsely claiming that customers' income was exempt from tax. According to the complaint most of Mondrianh’s customers work overseas for defense contractors. The permanent injunction order was signed by Judge John H. McBryde of the U.S. District Court for the Northern District of Texas.

The complaint further alleged that Mondrianh provided false information to the Internal Revenue Service (IRS) in improper attempts to delay IRS audits of customers. She also allegedly urged a customer to lie to an IRS agent in order to forestall an IRS audit. For more information about this complaint visit www.justice.gov/tax/2013/txdv13690.htm.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2013, which can be viewed at www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013.


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Saturday, August 10, 2013

Justice Department Files Suit to Stop Michael I. Turner From Preparing Tax Returns



WASHINGTON – The Justice Department announced today that the United States has filed a civil injunction suit against Michael I. Turner, of San Diego to stop him from preparing federal tax returns.

The government complaint, filed in the U.S. District Court for the Southern District of California, alleges that Turner, who has prepared returns since at least 2004, has failed to sign or affix a Preparer Tax Identification Number (PTIN) to many of the returns that he has prepared. In addition and according to the government, Turner takes bogus deductions on his customers' returns in order to claim larger refunds for his customers. His customers then recommend Turner as a tax preparer to their friends, which helps Turner to expand his customer base and further increase his own profits. Specifically, the government alleges that Turner claims inflated or fabricated deductions on the Schedule A of his customers' Form 1040 tax returns, claiming that his customers have large non-cash charitable contributions and unreimbursed employee expenses. The complaint also alleges that when Turner's customers are audited, Turner has provided false documents to those customers in an attempt to assist them in substantiating charitable contributions and employee expenses that they did not incur. According to the complaint, however, Turner has instructed his customers not to identify him as their tax return preparer in communications with the Internal Revenue Service (IRS).

The government alleges that Turner continues to prepare tax returns. According to the complaint, Turner applied for a PTIN in 2010, and has prepared at least 68 tax returns for the 2012 tax year using that PTIN.

The government seeks, among other things, that the court bar Turner from acting as a tax return preparer or assisting others in preparing or filing federal tax returns or other tax forms or documents. The government also requests that the court bar Turner from appearing as a representative on behalf of any person or entity before the IRS, and from owning, managing, controlling, working for or volunteering for a tax-return preparation business.


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Friday, August 9, 2013

Tomas Olazabal Owner of New York Construction Company Indicted for Tax Fraud


Source- http://www.justice.gov/tax/2013/txdv13906.htm

WASHINGTON – The Justice Department and Internal Revenue Service (IRS) announced that Tomas Olazabal, of Fresh Meadows, N.Y., was arrested today following his indictment in the U.S. District Court for the Eastern District of New York on Aug. 8, 2013, on multiple tax crimes.

According to the indictment, Olazabal owned Tupac Construction Corp., a construction company in Fresh Meadows. As alleged in the indictment, Olazabal used check cashing services to cash a substantial number of checks paid to his construction company for services between 2007 and 2008. He concealed his check cashing activities from his tax return preparers. Accordingly, the gross receipts represented by the checks negotiated at the check cashers were not included as gross receipts on the company's tax returns.

The indictment alleges that Olazabal filed false 2007 and 2008 corporate income tax returns for Tupac. Olazabal faces a potential maximum sentence of six years in prison and a potential fine of up to $500,000.

A trial date has not been scheduled. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

The case was investigated by IRS - Criminal Investigation and is being prosecuted by Trial Attorneys Mark Kotila and Steve Descano of the Justice Department's Tax Division.


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Thursday, August 8, 2013

Greene Wylie Sheppard, Sabrina Johnson-Lavant and Chandra Henderson Sentenced for Tax Fraud


Source- http://www.justice.gov/tax/2013/txdv13902.htm

WASHINGTON – The Justice Department and the Internal Revenue Service (IRS) announced that former professional tax return preparers Greene Wylie Sheppard, Sabrina Johnson-Lavant and Chandra Henderson were sentenced this month to serve 56 months, 18 months, and 8 months in prison, respectively, for conspiring to defraud the United States by filing false tax returns in order to receive fraudulently-inflated refunds for their clients. In addition to conspiracy, Sheppard was also sentenced for aggravated identity theft. Sheppard was sentenced on July 11, 2013, and Johnson-Lavant and Henderson were sentenced yesterday.

According to court documents, Sheppard owned and operated Quick Tax, a tax preparation business in Cordele, Ga. He conspired with his employees Johnson-Lavant and Henderson to obtain higher refunds on clients' returns by falsely inflating clients' wages in order to exploit certain tax credits. The co-conspirators sold other people's identifying information to their clients, and these other identities would then be claimed as dependents on their tax returns in order to manipulate the size of the refund. The three return preparers acquired dozens of identities by purchasing them. They maintained notebooks that kept track of the identities and how much clients owed them for the false dependents. Over the course of the conspiracy, which spanned four years, Quick Tax claimed over $400,000 in fraudulent refunds.


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