Thursday, December 29, 2011

Lamar Ellis of Brea Falsely Claimed to Have Billions of Dollars of Tax Credits to Sell


Source-  http://www.justice.gov/tax/txdv111711.htm 

WASHINGTON – A federal court in Los Angeles has permanently barred Lamar Ellis of Brea, Calif., from promoting a scheme involving sales of bogus federal tax credits, the Justice Department announced today. According to the government’s complaint, Ellis fraudulently claimed to have billions of dollars in federal research tax credits that the United States supposedly granted him for purported scientific breakthroughs.

The suit alleged that Ellis advertised the sale of these bogus credits on the Internet and issued phony documents to people purporting to give them credits that could reduce their tax obligations. The government also alleged that Ellis partnered with the Southwest Louisiana Business Development Center, a nonprofit organization in Jennings, La., to try to sell $24 billion of the fictitious credits.

The civil injunction order entered against Ellis bars him from telling prospective customers that he can transfer tax credits to them. He is also required to give the government a list of the names, addresses and social security or tax identification numbers of everyone to whom he purported to distribute tax credits.




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Monday, December 26, 2011

Federal Court Bars Delois Warren From Preparing Federal Tax Returns for Others


Source-  http://www.justice.gov/tax/txdv111676.htm 

WASHINGTON – A federal court in Mobile, Ala., has permanently barred Delois Warren from preparing federal tax returns for others, the Justice Department announced today. Judge Kristi K. DuBose of U.S. District Court for the Southern District of Alabama issued the permanent injunction order.

The government complaint in the case alleged that Warren of Greensboro claimed bogus earned-income tax credits and first-time-homebuyer credits for her customers through her business, Branjalo Tax Service. According to the complaint, Warren prepared income tax returns for some customers falsely claiming that they were engaged in profitable businesses in order to maximize refunds based on the earned-income tax credit. The complaint also states that Warren claimed the first-time-homebuyer credit on at least 190 returns in 2009. In examples cited in the complaint, Warren claimed the credit for as much as $8,000 for customers who did not purchase houses in 2008.

The civil injunction order requires Warren to mail a copy of the order to all persons for whom she has prepared a federal tax return since Jan. 1, 2007, and to give the government a list of those customers.




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Sunday, December 25, 2011

David A. Cusumano of Plymouth Sentenced to Jail for Tax Fraud Scheme


Source-  http://www.justice.gov/tax/txdv111672.htm 

WASHINGTON – David A. Cusumano of Plymouth, Mich., and Henry Nino, a resident of Northville, Mich., were sentenced today following their pleas of guilty to tax evasion, the Justice Department and Internal Revenue Service Criminal Investigation (IRS-CI) announced today. District Court Judge Gerald E. Rosen, presiding in Detroit, sentenced Cusumano to 15 months and Nino to 18 months in prison. Judge Rosen also imposed three years of supervised release for each defendant.

According to court documents, Cusumano was a mechanical engineer who worked at various companies throughout Michigan. Nino was an electrician with an automotive company. Despite earning substantial income in their respective jobs, for multiple years, Cusumano and Nino failed to file income tax returns and failed to pay taxes due and owing to the IRS, Cusumano during the calendar years 2003-2008 and Nino during the calendar years 2004-2008. Both men successfully prevented their employers from withholding federal income taxes from their wages by submitting false IRS Forms W-4 to their employers on which they falsely claimed they were “exempt” from income tax withholding. A Form W-4 is a document that an employee submits to an employer to assist the employer in withholding the correct amount of income taxes from the employee’s pay.

The plea agreements state that in addition to failing to file income tax returns and submitting false Forms W-4 to their employers, the two men also attempted to prevent the IRS from determining their tax liabilities and collecting their unpaid taxes by participating in several obstructive schemes. Both men paid tax fraud promoters, including a Florida-based organization called American Rights Litigators/Guiding Light of God Ministries to submit frivolous and obstructive correspondence to the IRS and to the defendants’ employers, including false complaints that wrongly accused IRS employees of criminal activity. Cusumano and Nino also submitted multiple fake financial instruments to the IRS in a failed attempt to pay off their outstanding tax debts.

Court documents state that Nino also attempted to prevent the IRS from collecting his unpaid taxes for the years 1996, 1997 and 2000-2003 by, among other things, transferring title of his personal residence to a nominee entity called the Michigan Natural Group, using money orders to make mortgage payments and cashing paychecks rather than depositing them in a bank account.

Cusumano caused a tax loss to the government of $390,145. Nino’s conduct resulted in a tax loss of $366,088. Under the terms of their plea agreements, both are required to make restitution to the IRS in the amount of their unpaid taxes.




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Saturday, December 24, 2011

Bruce Gregory Harrison III Pleads Guilty of Failing to Pay Moro Than $15 Million in Payroll Taxes for Temporary Staffing Companies


Source-  http://www.justice.gov/tax/txdv111691.htm 

WASHINGTON – Bruce Gregory Harrison III was convicted yesterday following a jury trial in federal court in Winston-Salem, N.C., announced the Department of Justice. Harrison had been charged in a 63-count indictment with large-scale payroll tax fraud and failure to file individual income tax returns. The evidence at trial proved that Harrison failed to pay over more than $15 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.

“Mr. Harrison not only defrauded his own employees, but he defrauded the American people as well,” said Ripley Rand, U.S. Attorney for the Middle District of North Carolina. “This sort of conduct is intolerable, especially during these difficult economic times, and we will do everything we can to make sure it is punished accordingly.”

“Honest, hard-working taxpayers count on their payroll deductions for Social Security and Medicare being paid over to fund their retirement and health care needs,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division. “They should rest assured that those who would steal those funds will be prosecuted to the fullest extent of the law.”

“The IRS-Criminal Investigation Division takes these violations of law very seriously. Payroll tax fraud results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” said Victor S.O. Song, Chief of the Internal Revenue Service (IRS) – Criminal Investigation.

According to the trial evidence and other documents filed in the case, Harrison, a resident of Greensboro, N.C., did business under various corporate names including U.S.A. Staffing and Compensation Management Inc. He owned or controlled temporary staffing companies operating in at least nine states. Harrison’s staffing companies were headquartered in Guilford County, N.C., and contracted with client businesses to provide temporary workers. Harrison’s companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees. Instead, Harrison failed to account for and pay over in excess of $15 million in federal payroll taxes for the employees of those companies. The evidence at trial showed that Harrison caused false bank statements to be presented to auditors to conceal the nonpayment of the payroll taxes.

Harrison was also convicted of corruptly endeavoring to obstruct the IRS by means of false statements to IRS revenue officers. Evidence established he had used company funds to purchase personal residences, to buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants. Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006. Following the jury verdict, Chief Judge James A. Beaty Jr. ordered Harrison detained. Sentencing is scheduled for April 6, 2012, at 9:30 a.m. in Winston-Salem.




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Friday, December 23, 2011

Indicted for Corruptly Interfering With the IRS and Filing False Tax Returns


Source-  http://www.justice.gov/tax/txdv111662.htm 

WASHINGTON – An indictment was unsealed today charging Jack Ray Carr of Baton Rouge, La., with one count of corruptly interfering with the due administration of the Internal Revenue laws, four counts of filing false income tax returns, and one count of aiding and assisting in the preparation of a false income tax return, the Justice Department, Internal Revenue Service (IRS), and Treasury Inspector General for Tax Administration (TIGTA) announced.

According to the indictment filed against him, Carr corruptly endeavored to obstruct and impede the tax laws by filing false documents and tax returns with the IRS and by attempting to intimidate IRS employees. The indictment also alleges that Carr made and subscribed to false federal income tax returns, IRS Forms 1040, for 2001, 2002, 2003 and 2005. In particular, the tax return Carr filed for 2005 falsely reported $112,142 of federal income tax withholdings based on fictitious IRS Forms 1099-OID (Original Issue Discount) attached to the Form 1040.




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Thursday, December 22, 2011

Sentenced to 94 Months in Prison for Stealing Identities of Student Loan Borrowers


Source-  http://www.justice.gov/tax/txdv111695.htm 

WASHINGTON – Janika Fernae Bates, a resident of Millbrook, Ala., was sentenced today in the Middle District of Alabama to 94 months in federal prison for stealing identities of student loan borrowers and providing them to a co-conspirator, who used them to file false tax returns, the Justice Department and Internal Revenue Service (IRS) announced.

On Sept. 23, 2011, a jury in Montgomery, Ala., convicted Bates of identity theft, wire fraud, aggravated identity theft and conspiracy to make false claims for tax refunds.

According to evidence introduced at the five day trial, Bates obtained the names and Social Security numbers of student loan borrowers from the databases at her former employer and conspired to use the stolen identifying information to steal money from the government and from a bank. Several victims testified that they did not consent to the use of their names and Social Security numbers on tax returns and they testified that they did not receive any money from refunds generated from the false documents filed with the IRS. Evidence also revealed that Bates and her co-conspirator, Keshia Brayboy, fraudulently obtained refund anticipation loans from a bank predicated on the fraudulently filed tax returns. Brayboy pleaded guilty in 2009 to filing a false tax return and served two years in federal prison.




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Wednesday, December 21, 2011

Belinda Cheri McKinney Sentenced on Mortgage Loan Fraud and Tax Fraud Offenses


Source-  http://www.fbi.gov/springfield/press-releases/2011/metro-east-woman-sentenced-on-mortgage-loan-fraud-and-tax-fraud-offenses 

A metro-east resident was sentenced yesterday, December 13, 2011, in the United States District Court in East St. Louis, for participating in a conspiracy to defraud the United States and evade the payment of federal income taxes and for making false statements on a mortgage loan application, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Belinda Cheri McKinney, 43, was sentenced to 37 months’ imprisonment.

Court documents indicate that the McKinney brothers owned and operated McKinney Hauling, a construction business located in East St. Louis, Illinois. In 2003, the Internal Revenue Service (IRS) began pursuing the brothers for unpaid taxes. The McKinney brothers evaded the payment of their tax obligations for the tax years 1999-2000, and 2002-2006, by diverting business income from McKinney Hauling into nominee bank accounts, which were used to pay personal and household expenses. Robert and John McKinney also admitted lying to federal officials about their business income and their home addresses. Belinda and Chamethele McKinney each pled guilty to falsifying mortgage loan documents while purchasing real estate—solely in their own names—so that business income earned by the husbands could be diverted into assets owned exclusively by their wives, thereby avoiding a combined IRS tax lien of $2,465,089.74, including penalties and interest.

On her loan application to purchase a house on Autumn Oaks Drive in Maryville, Belinda McKinney indicated that she was employed at McKinney Hauling, she was a full-time employee there for ten years, and she made $9,500 a month; all of which were false and misled the lender. Knowing that her husband Robert Todd McKinney had tax liens and poor credit, Belinda McKinney submitted the loan applications in her own name only. After closing, Belinda received a kickback of $49,990 from the seller, an amount above the actual cost of the house. The nominee account of Delta Construction, which Belinda McKinney opened, was used to make the mortgage payments. At sentencing, a special agent of the IRS testified that Belinda McKinney also filed tax returns separately from her husband but lied about being the “head of the household,” reserved for unmarried taxpayers, and misled the IRS by minimizing the household income so that she could obtain a tax refund for purported earned income credit.

Belinda Cheri McKinney was also sentenced to three years of supervised release, ordered to pay restitution in the amount of $952,705.52 to the Internal Revenue Service, and ordered to pay $200 as a special assessment to the court.




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Tuesday, December 20, 2011

Igor Purlantov Sentenced to 24 Months in Prison for Wire Fraud, Tax Evasion


Source-  http://www.fbi.gov/sanfrancisco/press-releases/2011/attorney-sentenced-to-24-months-in-prison-for-wire-fraud-tax-evasion 

OAKLAND, CA—A New York attorney pleaded guilty in federal court in Oakland today for fraudulently transferring more than $1 million from the bank accounts of a deceased Contra Costa County resident and then failing to pay taxes on that income, United States Attorney Melinda Haag and Special Agent in Charge, IRS Criminal Investigations, Scott O’Briant announced.

Igor Purlantov pleaded guilty in front of United States District Court Judge Saundra B. Armstrong. Following the guilty plea, Judge Armstrong sentenced Purlantov to 24 months in prison.

In pleading guilty, Purlantov, 35, of New York, admitted to engaging in a scheme to defraud a deceased family friend by fraudulently adding himself on to the friend’s HSBC bank account in Geneva and then transferring more than $1 million to his own accounts in London before transferring some of the money to his accounts in New York. The scheme occurred from October 2004 through February 2005. The defendant then failed to pay taxes on the stolen income.

In his plea agreement, Purlantov accepted full responsibility and agreed to fully reimburse the beneficiaries of his deceased friend in the amount of $1,175,666 and to pay back taxes to the IRS in the amount of $293,048.25.

Purlantov was charged by information on June 9, 2011, with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of tax evasion, in violation of 26 U.S.C. § 7201. He pleaded guilty to both counts.

Purlantov was ordered by Judge Armstrong to self surrender to begin his sentence on Jan. 27, 2012. The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years in prison and a fine of $250,000, plus restitution. The maximum statutory penalty for tax evasion, in violation of 26 U.S.C. § 7201, is five years in prison and $250,000 and restitution.




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Monday, December 19, 2011

Gary L. Johns Pleads Guilty to Kickback Scheme and Subscribing to a False Tax Return


Source-  http://www.fbi.gov/richmond/press-releases/2011/virginia-contractor-pleads-guilty-to-kickback-scheme-and-subscribing-to-a-false-tax-return 
WASHINGTON—A Virginia contractor pleaded guilty today to participating in a scheme to steer contracts to him for repair, maintenance and renovation work at healthcare and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced.

According to a two-count felony charge filed today in U.S. District Court for the Western District of Virginia, Gary L. Johns, a resident of Salem, Va., conspired with other individuals to steer contracts for repair, maintenance and renovation at MFA healthcare and nursing home facilities throughout Virginia from about March 2006 until at least December 2006. The department said that as part of the conspiracy, an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities steered contracts to Johns’ company, Salem Commercial Design, in return for kickbacks. According to the plea agreement, which is subject to court approval, Johns has agreed to cooperate with the department’s ongoing investigation.

According to the court document, the MFA employee created fictitious competitor bids that were higher than the quotes submitted by Johns and other co-conspirator venders, to create the false appearance of competition. The MFA employee directed subordinates to solicit quotes only from Johns. Johns paid more than $124,000 in kickbacks to the MFA employee and received MFA contracts totaling more than $1 million. The department said that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. Johns was also charged with making and subscribing to a false 2006 tax return, which is the year in which Johns received payment on the MFA contracts.

Johns is charged with conspiracy to commit mail fraud for the kickback scheme, which carries a maximum penalty of 20 years in prison and a $250,000 criminal fine. Johns is also charged with making and subscribing to a false tax return, which carries a maximum penalty of three years in prison and a $250,000 criminal fine, together with the cost of prosecution. The maximum fines for each of these charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximums.




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Friday, December 16, 2011

Richard Stewart Pleads Guilty for Failing to Pay Employment Taxes


Source- http://www.justice.gov/opa/pr/2011/December/11-tax-1649.html

WASHINGTON – Richard Stewart, a resident of Mitchellville, Md., pleaded guilty today for failing to pay over employment taxes in connection with his ownership of Montgomery Mechanical Services, the Justice Department and Internal Revenue Service (IRS) announced today.

According to the plea agreement and criminal information, from at least 2003 through 2008, Stewart owned and operated Montgomery Mechanical Services, a company that installed plumbing, heating and air conditioning in commercial buildings and that had offices in Baltimore and Capitol Heights, Md. From 2003 through at least 2008, Stewart did not collect, truthfully account for and pay over approximately $3,969,337 of Federal Insurance Contribution Act (FICA) taxes and federal income tax withholdings, commonly known as trust fund taxes, from his employees’ wages. According to the terms of the plea agreement, Stewart is required to pay restitution to the IRS in the amount of $5,414,647, which encompasses both the trust fund taxes that he failed to pay and his obligation, as an employer, to pay over a matching portion of FICA taxes.

Stewart faces a potential maximum sentence of five years in prison and a fine of up to $250,000.




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Thursday, December 15, 2011

Federal Court Has Permanently Barred Carmen Gonzalez From Preparing Federal Tax Returns for Others


Source- http://www.justice.gov/opa/pr/2011/December/11-tax-1644.html

WASHINGTON - A federal court has permanently barred Carmen Gonzalez from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Gonzalez consented without admitting wrongdoing, was signed by Judge Joel A. Pisano of the U.S. District Court for the District of New Jersey. According to the government complaint, Gonzalez, of Allentown, Pa., operates Carmen Tax Services in New Brunswick, N.J.

The complaint alleged that Gonzalez repeatedly failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on their customers’ returns. According to the complaint, Gonzalez also falsified deductions and listed bogus dependents on her customers’ returns in order to claim the maximum EITC for them.

The court order requires Gonzalez to send a letter to all customers for whom she prepared a federal tax return since Jan. 1, 2005, informing them that she has agreed to the injunction and is no longer permitted to prepare tax returns for others.




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Wednesday, December 14, 2011

Pamela J. Whitson to Serve 30 Months in Prison and Pay $1.2 Million in Restitution for Embezzlement and Not Filing Income Tax Return


Source- http://www.fbi.gov/oklahomacity/press-releases/2011/norman-woman-to-serve-30-months-in-prison-and-pay-1.2-million-in-restitution-for-embezzlement-and-not-filing-income-tax-return?utm_campaign=email-Immediate&utm_medium=email&utm_source=oklahoma-city-press-releases&utm_content=54783

OKLAHOMA CITY—PAMELA J. WHITSON, of Norman, Oklahoma, was sentenced yesterday to serve 30 months in federal prison for forging a check and failing to file a federal income tax return, in connection with her embezzling more than $960,000 from an Oklahoma City oil and gas company, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

At her plea hearing on July 7, 2011, Whitson admitted that she worked for several years as the office manager at an oil and gas company in Oklahoma City. From 2002 through 2008, she forged the signatures of authorized signers on checks drawn on the oil and gas company’s accounts. Whitson admitted she wrote many of the forged checks payable to herself or to cash, and used the embezzled funds mostly for gambling. At the plea hearing, Whitson also admitted that she did not claim any of the embezzled funds as income on tax returns. She pled guilty to forging a check and not filing an income tax return for the 2007 calendar year.

Yesterday, Chief United States District Judge Vicki Miles-LaGrange sentenced Whitson to 30 months in federal prison, followed by three years of supervised release. Whitson was also ordered to pay $965,333.47 in restitution to the local oil and gas company, and $252,293.27 in restitution to the Internal Revenue Service.




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Tuesday, December 13, 2011

Eddye Lovely Pleaded Guilty Today to Three Counts of Aiding and Assisting in The Preparation of False Tax Returns


Source- http://www.justice.gov/tax/txdv111621.htm

WASHINGTON – Eddye Lovely of Tomball, Texas, pleaded guilty today to three counts of aiding and assisting in the preparation of false tax returns, the Justice Department and Internal Revenue Service (IRS) announced. Lovely appeared before U.S. District Judge Nancy F. Atlas in Houston.

According to the plea agreement, Lovely owned and operated a Houston return preparation business, called “The Tax Master,” at which he prepared false income tax returns that included certain false Schedule A itemized deductions that the client did not make and fraudulent Schedule C business losses that the clients did not operate.

After Lovely was indicted in April 2011 on 14 counts of aiding and assisting in the preparation of false tax returns, he persisted in the preparation of false tax returns despite a court order requiring him not to prepare any tax returns while on release in the case. According to the plea agreement, after his release, Lovely aided and assisted in the preparation of materially false 2010 tax returns for two additional clients. These tax returns were materially false in that they featured fabricated Schedule C losses for businesses that the taxpayers did not own or operate, as well as false or inflated Schedule A deductions for charitable contributions and/or job search costs.

The tax loss associated with the three counts to which Lovely pleaded guilty is $74,964. Lovely faces a maximum prison sentence of nine years and a fine of up to $750,000. Judge Atlas set sentencing for Feb. 29, 2012.




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Monday, December 12, 2011

Sharon Angulo and Claudia Zuloaga Allegedly Helped Customers Seek More Than $3 Million in Fraudulent Tax Refunds


Source- http://www.justice.gov/tax/txdv111611.htm

WASHINGTON - The United States has sued Sharon Angulo and Claudia Zuloaga to bar them from promoting an alleged tax fraud scheme and from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction suit, filed in the Southern District of Florida, alleges that Angulo and Zuloaga, both of Miami, help customers use Internal Revenue Service (IRS) Forms 1099-OID to report fictitious income tax withholding. According to the government complaint, the customers file federal tax returns claiming tax refunds based on the fake withholding. The complaint states that the defendants have prepared or assisted in the preparation of at least 19 tax returns reporting false withholding and claiming fraudulent tax refunds totaling more than $3 million.

The government’s complaint asks the court to require Angulo and Zuloaga to pay the U.S. Treasury the funds they received from customers who paid them a percentage of the tax refunds received through the scheme. The complaint also asks the court to order the defendants to provide the government with a list of all persons who have purchased any products, services or advice from Angulo and Zuloaga in the past three years as part of the scheme.




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Sunday, December 11, 2011

Silford Warren Pleaded Guilty to Failing to Pay Over Employment Taxes


Source- http://www.justice.gov/tax/txdv111616.htm

WASHINGTON – Silford Warren, of Queens, N.Y., pleaded guilty to failing to pay over employment taxes in connection with his ownership of Silford Warren, CPA PC, the Justice Department and Internal Revenue Service (IRS) announced today.

U.S. District Court Judge William F. Kuntz presided over the plea hearing in the U.S. District Court in Brooklyn, N.Y. The plea agreement and filed criminal information indicated that Warren under-reported his employees’ salaries to the IRS from 2006 through 2008. Moreover, Warren did not collect, truthfully account for, and pay over employment taxes of approximately $108,000.

According to the plea agreement, Warren is required to pay restitution to the IRS in the amount of $184,263. The restitution amount includes taxes owed by his failing to pay over the employment taxes due to the IRS and the amount of tax resulting from Warren’s filing of false corporate income tax returns for 2005 through 2008.

Warren faces a potential maximum sentence of five years in prison and a fine of up to $250,000. Sentencing is tentatively scheduled for May 4, 2012.




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Saturday, December 10, 2011

Seven Charged in Florida in $120 Million National Tax Fraud Scheme


Source- http://www.justice.gov/tax/txdv111583.htm

WASHINGTON – Seven individuals have been charged with participating in filing false tax returns that resulted in a $120 million tax fraud scheme, the Justice Department announced today. Penny Jones, a resident of Rigby, Idaho; Christopher Marrero of Davie, Fla.; Michael D. Beiter, Jr., formerly a resident of Coral Springs, Fla.; David Clum Jr. of Whites Creek, Tenn.; Dale Peters, a resident of San Mateo, Calif., Laura Barel, a resident of Lauderhill, Fla.; and John Michael Smith, Jr. of Hidden Hills, Calif., have been charged with participating in the scheme to file false tax returns.

Jones and Marrero appeared in federal court today in Fort Lauderdale, Fla. Both entered not guilty pleas before U.S. Magistrate Judge Lurana S. Snow. Barel had been previously charged by a criminal complaint in May 2011. Arraignments are pending for Beiter, Clum, Peters and Smith.

According to the indictment, the false return scheme was national in scope, causing the filing of tax returns for at least 180 clients from 30 different states, requesting more than $120 million worth of fraudulent tax refunds. The indictment alleges that the defendants and clients of the scheme collectively filed more than 380 tax returns, mostly from tax year 2008 but also for other tax years, reporting the amount of their personal debt obligations as both income and as federal tax withholding.

The indictment also alleges that the defendants held seminars in Florida and Tennessee in which they recruited potential clients. The indictment and other publicly filed documents allege that clients paid $750 to have defendants prepare a tax return reporting this type of “OID” income, and that clients agreed to share 10 percent of their tax refund with defendants.

Previously, in a separate case in Fayetteville, Ark., a client of the scheme, Philip Butcher, formerly of Rogers, Ark., was charged with filing false claims for tax refunds. According to the indictment in that case, Butcher filed two tax returns reporting his loans as OID income and tax withholding, claiming tax refunds totalling $1,456,696. The Internal Revenue Service (IRS) paid Butcher $672,781.

Jones was previously enjoined by a federal court from preparing tax returns.

If convicted, Jones, Beiter, Clum and Peters each face 215 years in prison, Barel faces 25 years, Marrero faces 30 years and Smith faces 75 years. All of the defendants are also subject to fines and mandatory restitution if convicted.




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Friday, December 9, 2011

Louis Alba Pleads Guilty to Failure to Pay Over Employment Taxes


Source- http://www.justice.gov/tax/txdv111592.htm

WASHINGTON – Louis Alba pleaded guilty today in U.S. District Court in Central Islip, N.Y., to failing to pay over to the IRS employment taxes, the Justice Department and Internal Revenue Service (IRS) announced today.

According to court documents, Alba owned and operated CDJ Builders Corporation, a construction business in Melville that operated at construction sites in the New York Metropolitan area. Alba admitted that between 2004 and 2010, CDJ failed to pay over to the IRS approximately $779,387 in Federal Insurance Contributions Act (FICA) taxes and federal income taxes that CDJ withheld from its employees’ paychecks.

Alba faces a potential maximum sentence of five years in prison and a $250,000 fine. Judge Leonard D. Wexler, who is presiding over the matter, has not set a sentencing date.




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Thursday, December 8, 2011

Robert G. Murdock the Operator of Detroit School and Day Care Pleads Guilty to Tax Evasion


Source- http://www.justice.gov/tax/txdv111594.htm

WASHINGTON – Robert G. Murdock, 64, of Southfield, Mich., pleaded guilty today to tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. According to documents filed with the court, Murdock owned and operated a children’s day care center in Detroit called Kids Expectations, a Detroit elementary school called Metropolitan Academy of Detroit, and a payroll company called Metro Teaching Staff at various times from 1997 through 2007. During this period, Murdock accumulated unpaid federal payroll tax liabilities for his three businesses. When the IRS attempted collection actions such as levying on the corporate bank accounts, Murdock would incorporate new entities, often with similar names, obtain new Employer Identification Numbers for them from the IRS, and open new bank accounts, all for the purpose of moving assets out of the reach of the IRS.

According to the plea agreement, Murdock also evaded his personal taxes by filing false documents with the IRS and paying for personal expenditures out of business bank accounts and providing false information to IRS employees.

Murdock faces a potential maximum prison sentence of five years, a fine of up to $250,000 and restitution to the IRS of $200,000. Sentencing was set for Feb. 14, 2012.

Barbara McQuade, U.S. Attorney for the Eastern District of Michigan; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Erick Martinez, Special Agent In-Charge, IRS-Criminal Investigation made the announcement.




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Wednesday, December 7, 2011

Richard Jaensch Convicted for Filing a False Refund Claim Based on Fraudulent IRS Forms


Source- http://www.justice.gov/tax/txdv111594.htm

WASHINGTON – Richard Jaensch, a self-employed plumber residing from Annandale, Va., was found guilty today by a federal jury sitting in Alexandria, Va., of one count of corruptly endeavoring to impede the Internal Revenue Service (IRS), one count of filing a false claim for a refund, and four counts of failing to file tax returns for 2004 through 2007, the Justice Department and the IRS announced today.

Jaensch faces a potential maximum prison sentence of 12 years and a fine of up to $900,000 when he is sentenced on March 2, 2012.

According to evidence introduced at trial, Jaensch failed to file personal income tax returns between 2002 and 2007, despite the fact that he was required to do so by law. The first tax return he filed after 2002 was a false 2008 tax return claiming a $774,052 refund based on false Forms 1099-OID that the defendant submitted to the IRS. Over the years, to obstruct the IRS, Jaensch filed numerous frivolous documents and pleadings in Fairfax County, Va.; provided false information to the IRS; and filed a false 2008 federal income tax return, IRS Form 1040.

The evidence also showed that Jaensch caused his wife to present letters to her employer directing them to stop withholding federal income taxes from her salary. The IRS began levying his wife’s paycheck and bank accounts to satisfy her outstanding tax liability and Jaensch continued his obstructive conduct by filing or causing his wife to file correspondence with the IRS claiming that the IRS could not instruct her employer to withhold taxes from her paycheck.

Jaensch’s wife, Janet Jaensch, was a former high-level civilian employee in the Department of the Navy during the time that she was not filing tax returns at her husband’s direction. She pleaded guilty to willfully failing to file a tax return and will be sentenced on Dec. 13, 2011.




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Tuesday, December 6, 2011

Robert Todd McKinney and his brother John Quinn McKinney both Sentenced on Tax Fraud and False Statement Offenses


Source- http://www.fbi.gov/springfield/press-releases/2011/metro-east-men-sentenced-on-tax-fraud-and-false-statement-offenses

Two Metro-East residents were sentenced today in the United States District Court in East St. Louis, for participating in a conspiracy to defraud the United States and evade the payment of federal income taxes, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced. Robert Todd McKinney, 43, and his brother John Quinn McKinney, 40, were both sentenced to 57 months’ imprisonment.

Court documents indicate that the McKinney brothers owned and operated McKinney Hauling, a construction business located in East St. Louis, Illinois. In 2003, the Internal Revenue Service (IRS) began pursuing the brothers for unpaid taxes. The McKinney brothers evaded the payment of their tax obligations for the tax years 1999-2000, and 2002-2006, by diverting business income from McKinney Hauling into nominee bank accounts, which were used to pay personal and household expenses. Robert and John McKinney also admitted lying to federal officials about their business income and their home addresses. Belinda and Chamethele McKinney each pled guilty to falsifying mortgage loan documents while purchasing real estate—solely in their own names—so that business income earned by the husbands could be diverted into assets owned exclusively by their wives, thereby avoiding a combined IRS tax lien of $2,465,089.74, including penalties and interest. The home owned by John and Chamethele McKinney was featured in a Belleville News-Democrat feature dated October 28, 2007, entitled “The McKinneys of Autumn Oaks: Living in a Dream Home.”

Robert Todd McKinney was also sentenced to three years of supervised release, ordered to pay restitution in the amount of $952,705.52 to the Internal Revenue Service, and ordered to pay $300 as a special assessment to the court.

John Quinn McKinney was further sentenced to three years of supervised release, ordered to pay restitution in the amount of $1,512,384.22 to the Internal Revenue Service, and ordered to pay $500 as a special assessment to the court.




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Monday, December 5, 2011

Shelton DeWayne Tanner Pleads Guilty to Tax Return Scheme That Victimized Disability Recipients


Source- http://www.justice.gov/usao/az/press_releases/2011/PR_10262011_Tanner.html

PHOENIX, Ariz. – Shelton DeWayne Tanner, 40, of Tucson, Ariz., pleaded guilty yesterday to conspiracy in connection with a tax return scheme that relied on stolen identities of disabled individuals.

As part of his guilty plea, Tanner admitted that he and others used the identities of individual taxpayers receiving disability benefits to file more than 150 tax returns and falsely claim more than $800,000 in bogus tax refunds. Tanner also admitted that he and others concealed their fraud by filing the tax returns electronically using their neighbors’ unsecured wireless networks, directing the refunds to prepaid debit card accounts they had obtained under false identities, and recruiting friends and associates to receive the prepaid debit cards by mail at various addresses.

Tanner and two others, Latricia Williams and Gezelle Amaechi, were charged by indictment on December 28, 2010. The indictment alleges that Amaechi worked during 2008 for an organization that provided services to disabled people, and that the identities of some of the organization’s clients were used in the scheme. A trial date of November 29, 2011, is set for Williams and Amaechi.

A conviction for conspiracy carries a maximum penalty of five years of imprisonment and a maximum fine of $250,000. In determining an actual sentence, Judge Frederick J. Martone will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.

Sentencing for Shelton DeWayne Tanner is set for set before Judge Martone on February 6, 2012.




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