Tyree Davis Indicted for Obstruction of Justice and Tax Fraud

Source- http://www.justice.gov/tax/2013/txdv13849.htm

WASHINGTON – The Justice Department announced today that Tyree Davis Sr. of Flossmoor, Ill., was arrested on an eight-count indictment charging him with obstruction of justice and filing fraudulent multi-billion dollar liens against government employees. The indictment was returned on July 24, 2013, by a federal grand jury in Chicago.

According to the indictment, Davis obstructed justice by sending correspondence threatening to arrest two federal judges: the chief judge of the Northern District of Illinois and the judge who presided over the 2010 tax trial of LaShawn Littrice, whom Davis refers to as his wife. Littrice was convicted by a jury in June 2010 and sentenced to 42 months in prison in December 2010. Davis also filed false liens, titled Notice of Maritime Liens, against both judges and notified others that he had filed the liens. In addition to the two judges, Davis filed false liens against the U.S. Attorney and Clerk of Court for the Northern District of Illinois, an Assistant U.S. Attorney and an Internal Revenue Service-Criminal Investigation Special Agent. All the liens were publicly filed with the Cook County Recorder’s Office and claimed that each individual owed $100 billion. The liens were re-recorded two and three times in order to add property descriptions to them.

An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Davis faces a maximum of 80 years in prison and a maximum fine of $2 million dollars.

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Court Bars Stacy Middleton Tax Return Preparer From Preparing Returns for Others

Source- http://www.justice.gov/tax/2013/txdv13836.htm

Charleston Tax Preparer Filed Returns with Fabricated and Inflated Deductions and Credits to Overstate Tax Refunds

WASHINGTON – The Justice Department announced today that a federal district judge in Charleston, S.C. permanently barred Stacy Middleton from preparing federal income tax returns for others.

According to the government's complaint, Middleton and a second defendant, George Jenkins, prepared federal income tax returns in Charleston through a business named MBM Tax and Accounting Services LLC. As alleged, Middleton prepared returns for his clients that unlawfully understated his clients' income tax liabilities and overstated his clients' refunds through a variety of schemes. The complaint alleged that Middleton prepared returns that unlawfully created fictitious deductions and credits as well as overstating and duplicating existing deductions and credits. The complaint further alleged that Middleton created fraudulent copies of Form 1099 on behalf of customers, creating fake income to enable Middleton to claim the Earned Income Tax Credit on behalf of his clients. According to the complaint, the Internal Revenue Service (IRS) examined 842 returns prepared by Middleton and Jenkins, and over 93 percent of those examinations resulted in an adjustment to their client's tax liability. According to the complaint, the IRS estimated that the U.S. Treasury lost as much as $55 million in revenue on account of Middleton's and Jenkins' misconduct.

Middleton consented to the entry of the injunction. The government's claims remain pending against Jenkins and will be addressed in further court proceedings.

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Justice Department Seeks to Shut Down Ronald Manis Tax Preparer

Source- http://www.justice.gov/tax/2013/txdv13829.htm

WASHINGTON – The Justice Department announced today that it has asked a federal court to bar Ronald Manis of Carbondale, Ill., from preparing tax returns for others. The civil injunction suit, filed in the U.S. District Court for the Southern District of Illinois, alleges that Manis routinely prepares federal tax returns for individuals and corporations improperly claiming deductions that result in his customers understating their federal tax liabilities.

The government complaint also alleges that Manis prepares federal tax returns for his customers, claiming as business expenses his customers' non-deductible personal expenses, including the cost of lavish personal vacations. According to the government complaint, Manis engages in this conduct "in a misguided attempt to mint his reputation as a uniquely skilled and knowledgeable tax return preparer."

In September 2011, Manis pleaded guilty to willfully failing to file his own federal income tax returns for 2003, 2004, 2005 and 2006, and was initially sentenced to probation. In May 2012, his probation was revoked and he was sentenced to three months in prison. According to the government complaint, Manis was released from federal prison on July 20, 2013.

The government suit also alleges that Manis falsely represented himself as a fully licensed Certified Public Accountant to customers and the Internal Revenue Service (IRS) and that Manis illegally used an electronic filing number belonging to a friend to electronically file customers’ returns after the IRS denied Manis's application for an electronic filing number.

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Gurmail Singh was Arrested for Tax Fraud

Source- http://www.justice.gov/tax/2013/txdv13822.htm

WASHINGTON – The Justice Department and Internal Revenue Service (IRS) announced that Gurmail Singh, of Richmond Hill, N.Y., was arrested yesterday following his indictment on July 11, 2013, for multiple tax crimes. The indictment was unsealed yesterday following his arrest.

According to the indictment, Singh owned Fancy and Vicky Construction Co. Inc., a construction company in Richmond Hill. As alleged in the indictment, Singh used check-cashing services to cash more than $2.9 million of checks paid to his construction company for services between 2006 and 2008. He concealed his check-cashing activities from his tax return preparers, and this income was not included as gross income on the company's tax returns. Singh also diverted cash receipts earned by his companies for his own personal use.

The indictment alleges that Singh filed false 2006 and 2007 corporate income tax returns for Fancy and Vicky Construction, failed to file a 2008 corporate income tax return for Fancy and Vicky Construction and failed to file individual income tax returns for 2007 and 2008. Singh faces a potential maximum sentence of nine years in prison and a potential fine of up to $800,000.

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.

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Angela Myers Sentenced to Federal Prison for Tax Refund Fraud

Source- http://www.justice.gov/tax/2013/txdv13816.htm

WASHINGTON – The Justice Department and Internal Revenue Service (IRS) announced that Angela Myers, a resident of Baton Rouge, La., was sentenced today in the Middle District of Louisiana to 132 months in federal prison for wire fraud, making false claims, subscribing to false tax returns and aggravated identity theft.

Based on the evidence presented during a four-day trial in March 2013, Myers operated "Angie's Tax Service," a tax preparation business located in Baton Rouge Myers electronically filed false claims for tax refunds using the names and Social Security numbers of identity theft victims. Myers filed the identity theft tax returns using a unique preparer identification number assigned to her daughter. Many of the victims were nursing home patients who resided at Port Allen Care Center in Port Allen, La., and who did not have the ability to leave the nursing home.

The evidence also revealed that Myers lied on her own 2007 and 2008 federal income tax returns, failing to report hundreds of thousands of dollars of tax preparation fees that she earned at Angie's Tax Service and used to buy various items, including an RV and a $50,000 investment product.

"This thief victimized vulnerable nursing home patients and stole from all honest taxpayers," said Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division. "The severe prison sentence handed down today demonstrates that such crimes will not be tolerated."

"We are very pleased with the sentencing of Angela Myers, many of whose victims were residents of a nursing home," said Richard Weber, Chief of IRS-Criminal Investigation. "The IRS aggressively pursues those that use stolen social security numbers to file false tax returns. This sentence should serve as a reminder that there is a price to pay for scamming innocent people and defrauding the government. Many taxpayers put their trust in return preparers and when that trust is violated, the taxpayers and the tax system suffer."

In addition to the prison sentence, the court ordered Myers to pay $202,685 in restitution to the IRS in addition to $39,030 that was already forfeited in this case.

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Richard R. Whatley Sentenced to Federal Prison for Failing to pay Payroll Taxes to the IRS

Source- http://www.justice.gov/tax/2013/txdv13811.htm

WASHINGTON – The Justice Department and the Internal Revenue Service (IRS) announced today that Richard R. Whatley, a former owner of Alliance Staffing Management Inc. (ASM), was sentenced to 51 months in prison today for willfully failing to account for and pay over employment taxes. Whatley was also ordered to pay $541,513.61 in restitution to the IRS. Whatley appeared before U.S. District Judge David Nuffer in Salt Lake City.

In January 2010, a federal grand jury charged Whatley with five counts of willfully failing to account for and pay over employment taxes, relating to three different employee leasing companies that he allegedly operated and controlled between the years 2001 and 2006. The employee leasing companies included American Employment Group Inc., ASM and Intermountain Consulting Group Inc. The tax loss associated with Whatley's criminal conduct during these years totaled more than $2.3 million. Whatley pleaded guilty in January 2013 to one of the charged counts.

According to the plea agreement, during the 2002 through 2004 tax years, Whatley held an ownership interest in and had the ability to control the finances of ASM, an employee leasing company. Whatley's control included determining the amount of employment taxes that had to be paid over to the IRS and the authority to decide which bills would be paid and which bills would not be paid. As charged in the superseding indictment, in the fourth tax quarter of 2003, Whatley caused the collection of employment taxes from ASM's employees' wages and then willfully failed to pay over $541,513 for the employees' portion of employment taxes to the IRS.

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Harry Neuhoff Owner of Sportswear Distribution Business Pleads Guilty to Tax Evasion

Source- http://www.justice.gov/tax/2013/txdv13807.htm

WASHINGTON – The Justice Department and Internal Revenue Service (IRS) announced today that Harry Neuhoff, a resident of Brooklyn, N.Y., has pleaded guilty to tax evasion.

According to documents filed with the court, Neuhoff was president and an owner of EVA TEES Inc., formerly of Long Island City, N.Y. and presently located in Piscataway, N.J. From approximately 2006 to 2008, Neuhoff manipulated EVA TEES accounts through an accounting software program to delete cash sales from the general ledger accounts maintained on the computer accounting system. As a result, Neuhoff filed false corporate tax returns on behalf of EVA-TEES with the IRS that underreported the gross receipts of EVA TEES. Neuhoff's conduct also correspondingly resulted in his filing of false personal income tax returns with the IRS for those years. According to the documents filed with the court, Neuhoff underreported the gross receipts of EVA TEES through computer manipulations by at least $1.5 million. Sentencing is scheduled for Nov. 8, 2013 before U.S. District Court Judge Edward Korman.

Neuhoff faces a maximum sentence of five years in prison, three years of supervised release, a $250,000 fine and a $100 special assessment. He has agreed to pay restitution to the IRS.

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Alexei Iazlovsky Pleads Guilty to Concealing Foreign Bank Account at Israel-Based on his Tax Return

Source- http://www.justice.gov/tax/2013/txdv13747.htm

WASHINGTON – The Justice Department and Internal Revenue Service, Criminal Investigation (IRS-CI) announced that Alexei Iazlovsky of Potomac, Md., pleaded guilty today in the U.S. District Court for the Central District of California to filing a false tax return for tax year 2008.

According to court documents, Iazlovsky, a U.S. citizen, maintained an undeclared bank account held in the name of a foreign corporation at the Luxembourg branch of an Israeli bank. Iazlovsky owned a corporation that produced documentaries for Russian television stations. A tax return preparer suggested to Iazlovsky that he could reduce his taxes by keeping money out of the United States and diverting payments from his Russian clients to a foreign bank account held in the name of a foreign corporation. Iazlovsky met with a banker from the Israeli bank at a New York hotel to open the Luxembourg account.

According to court documents, Iazlovsky diverted a total of $2.6 million in untaxed payments from his Russian clients to his undeclared bank account in Luxembourg. From 2002 through 2009, Iazlovsky filed false individual and corporate tax returns that failed to report his authority over and ownership of the bank account in Luxembourg. He also omitted the income diverted to and generated by the undeclared account in Luxembourg. Iazlovsky has admitted that the tax loss is more than $400,000.

Iazlovsky 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 held at Israeli banks.

"Individuals who evade their tax obligations cheat their country and their fellow citizens," said Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division. "The Department of Justice is committed to using all of the many available tools to find and prosecute those who hide income and assets in offshore bank accounts, and to pursue the taxes and penalties that are due."

"Offshore tax evasion is a top priority for IRS-CI, and the facts in this case are clear. Earned income was placed into foreign bank accounts for the purpose of committing offshore tax fraud," said Richard Weber, Chief, IRS-CI. "Through our 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 stop this abuse."

U.S. citizens and residents who have an interest in, 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.

Iazlovsky has agreed to pay a civil penalty in the amount of 50 percent of the high balance of his undeclared account to resolve his civil liability with the IRS for failing to file FBARs. Iazlovsky faces a maximum prison term of three years and a maximum fine of $250,000.

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Vernon Harrison U.S. Service Mail Carrier Convicted for Involvement With Stolen Identity Refund Fraud Conspiracy

Source- http://www.justice.gov/tax/2013/txdv13760.htm

WASHINGTON – On July 3, 2013, a jury found Vernon Harrison, of Montgomery, Ala., guilty of one count of conspiring to file false claims, eight counts of mail fraud, eight counts of aggravated identity theft and six counts of embezzlement from the U.S. mail, the Justice Department, the Internal Revenue Service (IRS) and the U.S. Postal Service, Office of the Inspector General (OIG), announced today.

According to the evidence presented at the trial, Harrison was a U.S. Postal Service mail carrier who was part of a stolen identity refund fraud conspiracy. Members of the conspiracy used stolen identities to file false tax returns from various locations, including houses and hotels around Birmingham, Ala. and Montgomery. They then had the fraudulently obtained tax refunds generated by those returns sent to debit cards which were subsequently mailed to addresses on Harrison's postal route in Montgomery. In exchange for cash, Harrison stole the debit cards from the mail and provided them to a co-conspirator. Harrison stole, at a minimum, over 100 debit cards from the mail for his co-conspirators.

As was shown at trial, federal agents uncovered substantial evidence of the conspiracy during the execution of search warrants at locations in Montgomery and near Birmingham, including over a hundred envelopes for debit cards that had been mailed to addresses on Harrison's postal route. Soon after, agents also conducted surveillance on Harrison and observed him failing to deliver Turbo Tax cards that were in the mail.

Harrison faces up to 10 years in prison for the conspiracy count, 20 years for each mail fraud count, five years for each mail embezzlement count, and a mandatory two-year sentence for the aggravated identity theft counts. In total, Harrison could be sentenced to up to 216 years in prison. Harrison also could be subject to fines, forfeiture, and mandatory restitution.

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