IRS's Most Wanted - Report Tax Fraud

David T. Tufts and Nelida I. Velasco Charged with Tax, Social Security Fraud, and Identity Theft Offenses

2012-02-01T07:40:00.000-08:00

Source- http://www.fbi.gov/cleveland/press-releases/2012/two-chardon-residents-charged-with-tax--social-security-fraud-and-identity-theft-offenses

A 41-count criminal information was filed charging David T. Tufts, age 45, and Nelida I. Velasco, age 37, both of Chardon, Ohio, with conspiracy to file false tax returns, filing false tax returns, misuse of Social Security account numbers, and aggravated identity theft, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

The information charges that from in or about March 2009 to in or about September 2010, Tufts and Velasco, along with other co-conspirators, conspired to file, and did file, at least 35 false 2008 and 2009 federal income tax returns in the names of 35 separate individuals, resulting in a total of at least $155,000 in false claims being filed with the IRS.

“The IRS is aggressively pursuing those who steal others’ identities in order to file false returns,” said Steven Miller, IRS Deputy Commissioner for Services and Enforcement. “Our cooperative work with the U.S. Attorney’s Office will help taxpayers in Northern Ohio from being victimized by identity theft. The IRS is taking additional steps this tax season to prevent, detect, and resolve identity theft as soon as possible.”

“IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority,” stated Darryl Williams, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office. “Filing fraudulent tax returns in the names of other individuals may result in significant harm to those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury.”

The information charges that Tufts and Velasco provided the names, Social Security Account Numbers, and other personal identifiers to a co-conspirator, who then used that information to create false Form W-2s and fraudulent tax returns, which were then filed electronically with the IRS.

The information also chages Tufts with an additional count for filing a fraudulent tax return using his own name, but containing information which he knew to be false and fraudulent. The Information charges that as a result of this fraudulent tax return, Tufts claimed an additional $26,082 in fraudulent refunds from the IRS.

The information further charges that many of the names, Social Security account numbers, and personal identifiers that Tufts, Velasco, and their co-conspirators used to create these fraudulent tax returns were stolen by Velasco from her then employer, a medical billing company.

According to the information, Velasco stole the identifiable health information of at least 35 individuals from her work place, and then provided this information to Tufts and her other co-conspirators, who then used these personal identifiers of real people to prepare and file the fraudulent tax returns.

If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ roles in the offenses and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

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Michelle Torres Charged in $45 Million Tax Refund Scheme

2012-01-31T07:37:00.000-08:00

Source- http://www.fbi.gov/buffalo/press-releases/2012/rochester-woman-charged-in-45-million-tax-refund-scheme

ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that Michelle Torres, 36, of Rochester, N.Y., was arrested and charged by criminal complaint with conspiracy, mail fraud, identity theft, and filing false claims in connection with a large, nationwide tax refund scheme.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that according to the Criminal Complaint, from February 1, 2011 to October 31, 2011, Torres was involved in a scheme to obtain income tax refunds by the filing of fraudulent federal income tax returns with the Internal Revenue Service. Specifically, stolen identities and fabricated wages and tax withholdings were utilized to file the fraudulent federal income tax returns. Most of the returns were filed using the names and Social Security numbers of individuals residing in Puerto Rico who had no knowledge of the filings. Refund checks issued as a result of the fraudulent returns were sent to various addresses in Rochester and other locations in the country.

A total of 8,336 federal returns were filed by a company in Bronx, New York claiming refunds totaling $45,768,391. A total of $3,321,542.00 for 590 of the returns were sent by the IRS to various locations in the Rochester area. Torres participated in the scheme by retrieving refund checks which were sent to Rochester and forwarding the money to individuals in the New York City area who were responsible for filing the false tax returns.

“This office is committed to pursuing those who would seek to defraud taxpayers and the American public,” said United States Attorney Hochul. “We will work with our federal, state, and local partners to bring anyone who engages in such behavior to justice.”

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Channavel “Danny” Kong Sentenced to Two Years in Prison for Bribery and Tax Scheme

2012-01-30T07:32:00.000-08:00

Source- http://www.fbi.gov/philadelphia/press-releases/2012/former-owner-of-temporary-labor-firm-sentenced-to-two-years-in-prison-for-bribery-and-tax-scheme

CAMDEN, NJ—The former owner and operator of Philadelphia temporary labor firm Sunrise Labor was sentenced today to 24 months in prison for bribing a senior investigator with the New Jersey Department of Labor & Workforce Development (LWD) and failing to pay taxes, U.S. Attorney Paul J. Fishman announced.

Channavel “Danny” Kong, 40, of Philadelphia, previously pleaded guilty to an information charging him with one count each of bribery and failing to pay federal payroll taxes. Kong entered his guilty plea before U.S. District Judge Noel L. Hillman, who also imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

From 2006 to 2009, Kong owned and operated Sunrise Labor (Sunrise), which was in the business of providing temporary employees to client businesses, including businesses located in New Jersey. Kong admitted that from 2006 to January 2009, he made illegal cash payments to Joseph Rivera, 55, of Winslow, N.J., a senior investigator with LWD’s Division of Wage and Hour Compliance. Kong admitted he paid Rivera bribes totaling approximately $55,281 with the intent to influence Rivera not to conduct audits and inspections, including inspections and audits examining Sunrise’s compliance with state payroll tax obligations.

Kong also admitted that he was responsible, as the operator of Sunrise, for withholding, collecting, and accounting for and paying to the U.S. all employment taxes imposed by the Internal Revenue Code and that he willfully failed to collect and truthfully account for these taxes, which caused a tax loss to the IRS of between $80,000 and $200,000.

In addition to the prison term, Judge Hillman ordered Kong to serve three years of supervised release and to cooperate fully with the IRS in paying his outstanding federal tax obligations. Additionally, Judge Hillman ordered the defendant to pay the state of New Jersey $15,000 in restitution.

On March 30, 2009, Rivera pleaded guilty before Judge Hillman to an information which charged him with one count each of solicitation and acceptance of a bribe, and tax evasion. At his plea hearing, Rivera admitted that Kong was not the only person from whom he accepted bribes, which totaled more than $1.86 million from owners and operators of temporary labor firms. In exchange for these payments, Rivera refrained from inspecting these firms and falsely certified that they were in compliance with state wage and hourly statutes and regulations. As part of his plea, Rivera forfeited $1.86 million. The forfeitures included $120,400 in cash; two properties in Ocean City, N.J.; a property in Fort Lauderdale, Fla.; a 2008 Lexus ES 350 automobile; eight gold plates; and numerous other gold and silver coins. Rivera awaits sentencing.

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Brandon C. Davis Receives 37-Month Sentence for Selling More Than $1 Million in Counterfeit Financial and Tax Preparation Software

2012-01-29T07:28:00.000-08:00

Source- http://www.fbi.gov/cincinnati/press-releases/2012/cincinnati-man-receives-37-month-sentence-for-selling-more-than-1-million-in-counterfeit-financial-and-tax-preparation-software

CINCINNATI—Brandon C. Davis, 31, of Cincinnati, was sentenced in U.S. District Court to 37 months in federal prison for selling more than $1 million worth of counterfeit financial and tax preparation software through an Internet auction site.

Carter Stewart, U.S. Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS); Dugan T. Wong, Inspector in Charge, U.S. Postal Inspection Service, Pittsburgh Division; and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by Senior U.S. District Judge Herman J. Weber.

Davis pleaded guilty on June 6, 2011 to one count each of mail fraud, copyright infringement, and two counts of filing a false income tax return. His sentence is 37 months for the mail fraud and copyright infringement and 36 months for each of the two counts of filing a false income tax return. Judge Weber ordered the sentences to run concurrently.

According to a court documents, Davis purchased software by download or on a CD, with accompanying label and packaging that was protected by copyright, namely Quicken and Turbo Tax software manufactured by Intuit, Inc. Davis copied each CD of original software multiple times without permission and created counterfeit packaging and labeling for the CDs.

Davis sold the counterfeit Intuit software on eBay, received payment, and then mailed the counterfeit software to the purchaser via the United States Postal Service. Within the packaging, Davis sometimes included a false disclaimer claiming that he was merely acting as a broker for another seller. Davis also falsely represented on the online auctions that he was selling original software, but instead the defendant sold counterfeit software, usually at prices below manufacturer’s suggested retail price.

Davis failed to report the income from the counterfeit software sales when he filed his income tax returns for 2008 and 2009.

“To perpetuate his scheme, [Davis] created 37 different eBay accounts for the illegal sales, typically with false information used to set up the account,” Assistant U.S. Attorney Tim Mangan wrote in a sentencing memorandum filed with the court. “The funds from the sales were processed through… more than 20 different bank accounts controlled by the Defendant. This all stands in contrast to the Defendant’s tax returns, which represented that he made a modest living as an independent photographer.”

Davis was also ordered to pay $80,074.08 in restitution to the IRS, forfeit all computer items used to manufacture and distribute the fake software, as well as forfeiting a 2006 Hummer, and $192,117.31 that U.S. Postal Inspectors seized from his bank accounts. He also has to pay $158,980 in restitution to the software manufacturer.

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Ricky Walter Denton Sentenced for Using Fellow Inmates’ Information to Defraud IRS

2012-01-28T07:25:00.000-08:00

Source- http://www.fbi.gov/birmingham/press-releases/2012/tuscumbia-man-sentenced-for-using-fellow-inmates-information-to-defraud-irs

BIRMINGHAM—A federal judge sentenced a Tuscumbia man Monday to almost six years in prison for a federal tax fraud conspiracy in which he took the Social Security numbers and birth dates of fellow prison inmates and used them to file false tax returns, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Rodney E. Clarke, FBI Special Agent in Charge Patrick Maley, and Colbert County Sheriff Ronnie May.

U.S. District Judge Inge P. Johnson sentenced RICKY WALTER DENTON, 46, to 70 months in prison for conspiracy to defraud the Internal Revenue Service, mail fraud, and conspiracy to commit mail fraud. Denton pleaded guilty to the charges in August.

Police discovered the evidence of tax fraud while investigating the December 2009 robbery of First Southern Bank in Colbert County. A federal jury convicted Denton in July for the First Southern armed bank robbery. He is scheduled for sentencing in that case Feb. 17.

“The cooperative work of law enforcement in these two cases closed the trail on someone who threatened another person’s life to steal money from a bank, and who took the identities of people around him so he could steal money from the taxpayers,” Vance said.

“The IRS is aggressively pursuing those who steal others’ identities in order to file false tax returns,” Clarke said. “Our vigorous enforcement efforts along with the U.S. Attorney’s Office and our law enforcement partners will help protect taxpayers in the Northern Alabama area from being victimized by this tax-refund related identity theft. The IRS is taking additional steps this tax filing season to further prevent, detect and resolve identity theft cases as soon as possible. To learn more about IRS related identity theft, please visit www.irs.gov.

The tax fraud involved a three-year scheme in which Denton and a co-defendant, JOANN SMITH CHOAT, 55, also of Tuscumbia, conspired to obtain $148,685 in false income tax refunds by taking inmates’ identifying information and filing false returns. Judge Johnson sentenced Choat in August to one year and a day in prison for her role in the tax fraud.

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Financial Advisor Kevin P. Mahoney Convicted of Tax Crimes and Contempt

2012-01-27T07:16:00.000-08:00

Source- http://www.justice.gov/tax/2012/txdv12104.htm

WASHINGTON – A jury convicted Attleboro, Mass., licensed stockbroker, insurance agent and financial advisor Kevin P. Mahoney today on tax and contempt of court charges, the Justice Department and Internal Revenue Service (IRS) announced. Trial began on Jan. 23, 2012, before U.S. District Judge Joseph Tauro, sitting in Boston. Mahoney was charged with one count of corruptly endeavoring to obstruct the administration of the Internal Revenue laws, eight counts of contempt of court and eight counts of filing false tax returns. He was convicted of all counts.

The evidence at trial showed that Mahoney had failed to pay all of his taxes for the years 1996 through 2001, leading the IRS to assess Mahoney for taxes, interest and penalties for some of those years. Mahoney had attempted to pay these tax-related debts by submitting to the IRS more than $2.2 million in fake financial instruments called Bills of Exchange and checks drawn on a closed bank account. In addition, after filing for bankruptcy, Mahoney caused a worthless promissory note made by another individual to be submitted to the IRS as purported payment for approximately $805,000 in taxes that Mahoney owed to the IRS.

The evidence also showed that Mahoney had submitted to the IRS false individual income tax returns for the years 2000 through 2006 that he knew failed to report more than $1.3 million in taxable income received from various financial institutions. Along with his tax returns, Mahoney had submitted altered IRS Forms 1099-MISC on which he changed to zero the amount of non-employee compensation that the financial institutions reported paying him. For instance, Mahoney attached to his 2006 tax return an altered Form 1099-MISC in which he claimed that a life insurance company paid him non-employee compensation of zero when it had actually paid him approximately $73,000. Mahoney also filed a false 2007 Nonresident Alien Tax Return in which he falsely claimed a refund of almost $389,000.

According to evidence at trial, the U.S. District Court for the District of Massachusetts had permanently enjoined Mahoney in July 2002 from, among other things, engaging in conduct that interfered with the administration of the Internal Revenue laws. The injunction proceedings were brought against Mahoney in accordance with a lawsuit filed by the Justice Department’s Tax Division. Mahoney committed criminal contempt by violating the permanent injunction by assisting in the preparation and submission to the IRS of income tax returns for other people that falsely claimed more than $50 million dollars in refunds based on false IRS Forms 1099-OID and an IRS Form 1099-C falsely reporting $300 million in debt purportedly owed to a third party by an IRS employee.

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Marsha Elmore Sentenced to More Than 15 Years in Prison for Identity Theft and Tax Fraud Scheme

2012-01-26T07:04:00.000-08:00

Source- http://www.justice.gov/tax/2012/txdv12094.htm

WASHINGTON – Marsha Elmore of Wetumpka, Ala., the owner of a tax preparation business called Community Tax, was sentenced today to 184 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced. Elmore used her business to run a scheme to steal tax refunds by filing false tax returns with stolen identities. She had been indicted by a federal grand jury on Aug. 31, 2011, and pleaded guilty on Nov. 15, 2011, to one count each of filing false claims, wire fraud and aggravated identity theft. Elmore had previously been sentenced to 60 months in prison for a violation of supervised release, which was based on the conduct for which Elmore was sentenced today. Today’s sentence of 184 months is to run consecutively to her previous sentence of 60 months.

According to court documents, Elmore’s fraudulent activity ran from at least 2009 until July 2011, when she was arrested by the IRS on a criminal complaint. She unlawfully obtained the names, Social Security numbers and dates of birth of various individuals and used them to file false tax returns through Community Tax. Those tax returns claimed refunds that were directed to bank accounts and debit cards that Elmore controlled. Elmore also filed false tax returns using online filing websites. All together, Community Tax and Elmore were linked to almost 1,400 tax returns during this time period.

In her plea agreement, Elmore admitted that she personally filed many of the returns, a number of which were false. In sentencing Elmore, the court found that the intended tax loss was just over $2.5 million.

“This case is an example of how criminals use innocent people’s identities for their own financial gain. To steal these victims’ identities and use them to file false tax returns not only makes the U.S. tax payer a victim, but also victimizes the unsuspecting person whose identity has been stolen. We will continue to do everything possible under the law to protect these unsuspecting victims from these criminals,” stated George L. Beck, U.S. Attorney for the Middle District of Alabama.

“The Justice Department will remain vigilant in protecting Americans’ identities and tax dollars from thieves,” said Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division. “Those who steal identities and use them to commit tax refund fraud will be punished to the full extent of the law.”

“The IRS is aggressively pursuing those who steal others’ identities in order to file false returns,” said Steven Miller, IRS Deputy Commissioner for Services and Enforcement.“Our cooperative work with the U.S. Attorney’s Office and the Tax Division will help protect taxpayers in Alabama from being victimized by identity theft. The IRS is taking additional steps this tax season to further prevent, detect and resolve identity theft cases as soon as possible.”

U.S. District Judge Mark Fuller also ordered Elmore to pay $1,157,241 in restitution.

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Douglas J. Kuester Indicted for Using Stolen Identities to Obtain Tax Refunds

2012-01-25T07:55:00.000-08:00

Source- http://www.justice.gov/tax/2012/txdv12098.htm

WASHINGTON – Douglas J. Kuester of Silver City, N.M., was arrested today on identity theft and tax fraud charges, the Justice Department and the Internal Revenue Service (IRS) announced. A federal grand jury in Las Cruces, N.M., returned an indictment under seal on Jan. 18, 2012, charging Kuester with using stolen identities to file false tax returns. The 41-count indictment, which was unsealed after Kuester’s arrest, charges Kuester with filing false claims, wire fraud and aggravated identity theft.

According to the indictment, between 2007 and 2010, Kuester used stolen identities to file false tax returns that fraudulently claimed refunds. Further, Kuester had the fraudulent refunds delivered to him or deposited into accounts that he controlled.

U.S. Attorney for the District of New Mexico Kenneth J. Gonzales said, “Douglas Kuester is charged with using stolen identities to obtain fraudulent income tax refunds. This criminal conduct results not only in a financial loss to the U.S. Treasury, but also causes harm and hardship to the victims of identity theft. While I am committed to working with the IRS to identify, investigate and vigorously prosecute those who are involved in tax refund related identity theft schemes like the one charged in this case, it is important for each of us to take steps to protect ourselves against identity theft by safeguarding personal information such as our social security numbers and dates of birth.”

“The Justice Department is working closely with the IRS to investigate, prosecute, and punish tax refund crimes committed through the theft of identities,” said Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division. “Now, more than ever, we must remain vigilant against the unauthorized use of identification information to defraud the U.S. government.”

“The IRS is aggressively pursuing those who steal others’ identities in order to file false returns,” said Steven Miller, IRS Deputy Commissioner for Services and Enforcement. “Our cooperative work with the U.S. Attorney’s Office and the Tax Division will help protect taxpayers in New Mexico from being victimized by identity theft. The IRS is taking additional steps this tax season to further prevent, detect and resolve identity theft cases as soon as possible.”

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, he faces a potential maximum penalty of five years in prison for each false claims count, 20 years in prison for each wire fraud count and a mandatory two-year sentence for each aggravated identity theft count, to run consecutive to any other sentence imposed. He is also subject to fines and mandatory restitution if convicted.

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David Newmark Pleads Guilty to Wire Fraud and Tax Evasion

2012-01-24T07:21:00.000-08:00

Source- http://www.fbi.gov/newark/press-releases/2012/former-cfo-of-new-jersey-investment-management-company-pleads-guilty-to-wire-fraud-and-tax-evasion

NEWARK, NJ—The former chief financial officer of Columbus Hill Capital Management LP, an investment management firm based in Short Hills, N.J., today admitted to embezzling more than $10.4 million from his employer, announced U.S. Attorney Paul J. Fishman.

David Newmark, 39, of Towaco, N.J., surrendered to federal authorities today and pleaded guilty to an information charging him with one count of wire fraud and one count of tax evasion. Newmark entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court.

“David Newmark admitted stealing from his own management company, creating a phony account to collect more than $10 million in fraudulent deposits,” said U.S. Attorney Fishman. “Making personal use of company cash, it was only a matter of time before he was caught with his hand in the piggy bank. Now not only will Newmark have to pay back the money he stole, he will have to pay a debt to society as a convicted felon.”

According to documents filed in this case and statements made in court:

Newmark admitted that between February 2008 and March 2011, he embezzled from his former employer by requesting checks and wire transfers from custodians of the investment management company accounts and diverting the funds to bank accounts he controlled. Newmark deposited the checks and wires—including a single wire transfer of more than $2.4 million in April 2010—into a bank account he set up with a name similar to that of his employer. The majority of the $10.4 million that Newmark embezzled came from the management company, rather than investor funds.

For the 2008 tax year, Newmark did not disclose to the Internal Revenue Service (IRS) more than $2.8 million he received in connection with the fraudulent scheme. That failure resulted in a tax loss to the United States of $1,012,441.

The wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine, or twice the pecuniary gain or loss resulting from Newmark’s criminal conduct. The tax evasion charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for April 24, 2012.

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Pamela Natoli Sentenced to 21 Months in Federal Prison for Wire and Tax Fraud

2012-01-23T07:13:00.000-08:00

Source- http://www.fbi.gov/albany/press-releases/2012/benson-woman-sentenced-to-21-months-in-federal-prison-for-wire-and-tax-fraud

The Office of the United States Attorney for the District of Vermont stated that on January 17, 2012, Pamela Natoli, 54, was sentenced to serve 21 months in federal prison after she pled guilty to wire and tax fraud charges. U.S. District Court Judge William K. Sessions III also ordered Natoli, who lived in Benson, Vermont while she was committing the offenses, to serve three years of supervised release following her prison term. Natoli must also pay full restitution to her victims.

Natoli faced a prison sentence of up to 20 years on the wire fraud charge and up to three years on the tax fraud charge. Judge Sessions found that Natoli’s recommended prison term under the federal Sentencing Guidelines was between 27 and 33 months. In sentencing Natoli to a term of imprisonment six months below that range, Judge Sessions considered, among other factors, Natoli’s remorse, her efforts to provide restitution to her victims, and her lack of a criminal record.

According to court records, Natoli was employed as a personal assistant by Ms. Frances Bull from November of 2006 until she was fired in October of 2009. During most of that time, Natoli was, on average, stealing thousands of dollars from Ms. Bull every month. Typically, Natoli would write checks from Ms. Bull’s bank account to pay Natoli’s own credit card bills. Ms. Bull is an artist who was operating a gallery in Brandon, Vermont during the time of the offenses. In all, Natoli stole approximately $230,000 from her employer.

While she was embezzling money, Natoli filed false income tax returns with the Internal Revenue Service. Specifically, Natoli failed to report the proceeds of her criminal conduct as taxable income.

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Richard Bell Pleads Guilty in Fraud Scheme for Filing a False Federal Income Tax Return

2012-01-22T07:08:00.000-08:00

Source- http://www.fbi.gov/philadelphia/press-releases/2012/former-city-sheriffs-department-employee-pleads-guilty-in-fraud-scheme

PHILADELPHIA—Richard Bell, 36, of Philadelphia, pleaded guilty today to his role in a scheme to defraud the Philadelphia Sheriff’s Office. Bell was charged with and pleaded guilty to one count each of wire fraud and of willfully filing a false federal income tax return. U.S. District Court Judge Legrome Davis scheduled sentencing for April 16, 2012.

Bell was employed in the accounting department of the Philadelphia Sheriff’s Office. Between 2007 and 2010, Bell wrote fraudulent checks drawn on bank accounts of the Philadelphia Sheriff’s Office to unauthorized individuals and companies. Bell forwarded over $400,000 of those checks to Robert Rogers. Rogers cashed the checks made payable to himself and forwarded the other checks to other individuals to cash or deposit. In particular, Rogers forwarded to Jackiem Wright and Reginald Berry over $147,000 in checks made payable to one company. Wright and Berry deposited those checks into the company bank account, and withdrew or attempted to withdraw the proceeds. Rogers, Wright, and Berry pleaded guilty to their roles in the scheme last week and are awaiting sentencing, scheduled in April.

Bell also assisted a person known to the United States Attorney in fraudulently purchasing properties at Sheriff’s sale for only ten percent of the bid price. Bell carried out the scheme by removing the checks that the person submitted to the Philadelphia Sheriff’s Office for the remaining 90 percent before the checks were deposited. For this, Bell charged and received a fee from the person.

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Jessica N. Childers Sentenced to Nine Years in Prison for Receiving Nearly $1 Million in Fraudulent Income Tax Refunds

2012-01-21T07:03:00.000-08:00

Source- http://www.fbi.gov/springfield/press-releases/2012/west-frankfort-woman-sentenced-to-nine-years-in-prison-for-receiving-nearly-1-million-in-fraudulent-income-tax-refunds

Stephen R. Wigginton, the United States Attorney for the Southern District of Illinois, announced that Jessica N. Childers, 38, of West Frankfort, Illinois, was sentenced in United States District Court in Benton today to a term of 108 months’ imprisonment for her role in submitting false income tax returns to the Internal Revenue Service between 2008, and 2010, in which she fraudulently claimed entitlement to $1,532,184 in refunds and from which she actually received $998,614.34. Previously, on August 11, 2011, Childers pled guilty to a three-count information charging her with conspiracy to submit false, fictitious, and fraudulent claims to the United States; receipt of money stolen from the United States; and aggravated identity theft.

Evidence offered in support of the guilty pleas and sentence showed that in January, 2008, Childers began electronically submitting false income tax returns to the IRS using the names, dates of birth, and Social Security numbers of real individuals who were deceased. Between January 2008 and March 2010, Childers submitted 572 such false returns claiming over $1.5 million in fraudulent refunds. After discovering the scam, federal authorities were able to seize $192,512.55 from her bank accounts.

In addition to the nine-year term of imprisonment, Childers was ordered to pay $806,101.79 in restitution to the United States Treasury, a special assessment of $300, and was placed on a term of three years’ supervised release to follow her incarceration.

Under federal law, parole has been abolished meaning that Childers will be required to serve a minimum of 85 percent of her 108-month sentence.

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Philip Butcher Pleads Guilty to Claiming Fraudulent Tax Refunds

2012-01-20T00:57:00.001-08:00

Source- http://www.justice.gov/tax/2012/txdv12071.htm

WASHINGTON – Philip Butcher pleaded guilty today before U.S. District Judge Patricia Seitz in Miami to filing a false claim for a tax refund, the Justice Department and the Internal Revenue Service (IRS) announced.

Butcher, formerly a resident of Rogers, Ark., admitted that he filed a false 2008 individual income tax return which sought a fraudulent tax refund of $672,781. According to court documents, PMDD Services LLC, an Idaho-based tax preparation firm, prepared the return and filed false IRS Forms 1099-OID with the IRS on Butcher’s behalf. In exchange, Butcher agreed to pay 10 percent of any fraudulent tax refund he received to PMDD Services. Butcher received a fraudulent tax refund of $672,781, paid $67,278 to the principals of PMDD Services, and then filed an amended 2008 individual income tax return, also prepared by PMDD Services, claiming a fraudulent tax refund of $1,456,696.

Butcher faces a maximum potential sentence of 5 years in prison and a $250,000 fine, plus restitution to the Internal Revenue Service.

The indictment against Butcher was originally returned by a grand jury in the Western District of Arkansas. Butcher elected to transfer the case to the Southern District of Florida for his guilty plea and sentencing under Federal Rule of Criminal Procedure 20, which allows a defendant, with the consent of the government, to transfer a case to the district where he is “present” if he states in writing that he intends to plead guilty and be sentenced in that district.

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Tracey Fergerson Pleads Guilty to Conspiring to Defraud The United States Government

2012-01-19T07:02:00.000-08:00

Source- http://www.justice.gov/tax/2012/txdv12068.htm

WASHINGTON – The Justice Department and the Internal Revenue Service (IRS) announced that Tracey Fergerson pleaded guilty today before Magistrate Judge Charles S. Coody in Montgomery, Ala., to conspiring to defraud the United States government. Fergerson and a co-defendant were charged by a grand jury in a 22-count indictment that was unsealed on March 30, 2011.

According to the plea agreement, Fergerson participated in a tax fraud scheme that was perpetrated through a tax return preparation business called Fast Tax Cash in Montgomery. From 2005 through 2008, Fergerson recruited customers for Fast Tax Cash and coached them to provide false information in order to fraudulently increase their tax refund amounts. Fergerson also admitted that she improperly obtained personal information, including names and Social Security numbers, and used that personal information to have false tax returns prepared at Fast Tax Cash. Fergerson admitted that she would receive payment for the false refunds that were obtained.

A sentencing date has not yet been set. Fergerson faces a maximum potential sentence of 10 years in prison and fines of up to $250,000.

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Larry Carnell Dixon Sr., Allegedly Files Fraudulent Tax Returns for Customers

2012-01-18T07:53:00.000-08:00

Source- http://www.justice.gov/opa/pr/2012/January/12-tax-056.html

The United States has sued Larry Carnell Dixon Sr., seeking to bar him and his business, Dixon’s Tax Service, from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction complaint, filed in the U.S. District Court for the Middle District of Louisiana, alleges that Dixon, of Zachary, La., prepares federal income tax returns for customers claiming fabricated and inflated business expense deductions for existing or fictitious businesses. The lawsuit alleges that Dixon fraudulently uses these fabricated business expenses to decrease his customers’ tax liabilities or increase their refunds, including refunds arising from the earned income tax credit.

According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 194 of the 198 income tax returns prepared by Dixon’s Tax Service and audited by the IRS resulted in tax deficiencies. The lawsuit alleges that the tax harm caused by Dixon’s misconduct could be as much as $39 million.

The complaint also asks the court to require Dixon to provide the government with a list of all customers for whom Dixon’s Tax Service prepared returns after Jan. 1, 2006.

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Real Estate Investor Deangelo Wade, Sentenced for Tax and Mortgage Fraud

2012-01-17T07:49:00.000-08:00

Source- http://www.fbi.gov/detroit/press-releases/2012/detroit-real-estate-investor-sentenced-for-tax-and-mortgage-fraud

DETROIT, MI—On January 11, 2012, Deangelo Wade, of Detroit, was sentenced to 40 months’ imprisonment and ordered to pay restitution to the IRS and the FDIC. In addition, Abe Beydoun was sentenced to 12 months and one day imprisonment and ordered to pay restitution to the FDIC, United States Attorney Barbara L. McQuade announced today. Ms. McQuade was joined in the announcement by Special Agent in Charge Andrew G. Arena, Federal Bureau of Investigation, and Special Agent in Charge Erick Martinez, Internal Revenue Service-Criminal Investigation.

Deangelo Wade, 41, and Abe Beydoun, 36, were sentenced by United States District Judge Robert H. Cleland. Judge Cleland also ordered Wade pay a special assessment of $200 and restitution to the IRS of $224,000; Beydoun was ordered to pay a special assessment of $100. Both, Beydoun and Wade, were ordered to pay restitution of $1.8 million to the FDIC and received three years of supervised released after jail time. Wade pled guilty in April 2011 to one count of mortgage fraud and one count of filing a false tax return. Beydoun pled guilty in June of 2011 to one count of mortgage fraud.

According to court documents, between 2004 and 2006, Deangelo Wade, Abe Beydoun and others executed a scheme to defraud IndyMac Bank in connection with the purchase of four properties located on Tuscan Hills Dr. in Plymouth, MI. Wade conducted real estate transactions by flipping houses and Abe Beydoun was a loan officer employed by Direct Lending Inc. in Dearborn. Wade used straw buyers and false information to obtain mortgages, from IndyMac Bank, on the properties under his real estate business with the assistance of Beydoun. Wade repaired the properties and sold them at higher values resulting in large gains. At the sales closing, the title company would issue a check to the straw buyer and the straw buyer would sign the check over to Deangelo Wade. At the time of the offense, IndyMac Bank was insured by the FDIC. From 2004 - 2006, Wade failed to report the income he made from his real estate business; Wade knowingly failed to report the commissions and gains he earned from the sale of the properties.

In November of 2006, Wade purchased a home and secured a mortgage for $1.6 million with the assistance of Beydoun. After inflating the value of the property, Wade received over $395K from the loan proceeds of the home. Wade also failed to report this additional income on his 2006 tax returns.

“Mortgage fraud remains a prosecution priority because it is a significant problem in Michigan. Mortgage fraud leads to foreclosed homes, which reduce property values and become havens for criminal activity,” McQuade said.

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Joseph A. Schillace IV Pleads Guilty to Operating an Illegal Gambling Business and Tax Evasion

2012-01-16T07:26:00.000-08:00

Source- http://www.fbi.gov/neworleans/press-releases/2012/hammond-man-pleads-guilty-to-operating-an-illegal-gambling-business-and-tax-evasion

NEW ORLEANS—JOSEPH A. SCHILLACE IV, age 51, a resident of Hammond, Louisiana, pled guilty in federal court today before U.S. District Judge Nannette Jolivette Brown to operating an illegal gambling business and tax evasion, announced U.S. Attorney Jim Letten.

According to court documents, from on or about January, 1999, and continuously thereafter up to and including April 7, 2011, SCHILLACE did conduct, finance, manage, supervise, direct, and own all or part of an illegal gambling business, to wit: a gambling business involving sports betting. Specifically, SCHILLACE established a “call center” in an apartment in Hammond, Louisiana which was outfitted with multiple telephone lines and computer access. Gamblers seeking to place monetary bets with SCHILLACE’S operation called in to the center and placed their bets with one of several individuals within SCHILLACE’S organization whose responsibility it was to answer the calls and record the bets. After the sporting event, SCHILLACE or one of his associates would collect the gambling losses from or pay out the gambling winnings to each gambler. Regardless of the result of the bet, SCHILLACE’S gambling operation would keep a percentage or commission of each bet placed, commonly referred to as the “juice.” The gambling operation involved five or more persons who conducted, financed, managed, supervised, directed, or owned all or part of said illegal gambling business, which remained in substantially continuous operation for a period in excess of thirty days and had a gross revenue of at least $2,000.00 in any single day.

Further, for the calendar years 2004 through and including 2011, SCHILLACE did willfully attempt to evade and defeat a large part of the income and excise tax due and owing by him to the United States of America by concealing and attempting to conceal from the Internal Revenue Service the nature and extent of his income and gross wagers received by intentionally preparing and causing to be prepared, and by signing and causing to be signed, false and fraudulent Forms 1040, U.S. Individual Income Tax Return, and Forms 730, Monthly Tax Return for Wagers, on his behalf, which were filed with the Internal Revenue Service and which said returns reported amounts of his taxable income, income taxes and excise taxes due and owing thereon which the defendant then and there well knew and believed were substantially less than his actual taxable income, income taxes and excise taxes due and owing for the aforementioned months and years.

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Christopher J. Warren Pleads Guilty to $19 Million Fraud Scheme

2012-01-15T07:46:00.000-08:00

Source- http://www.fbi.gov/sacramento/press-releases/2012/folsom-california-man-pleads-guilty-to-19-million-fraud-scheme

SACRAMENTO, CA—Christopher J. Warren, 29, of Folsom, California, pleaded guilty today to one count of wire fraud and one count of aggravated identity theft related to a $19 million fraud scheme, announced Benjamin B. Wagner, U.S. Attorney for the Eastern District of California.

This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation, the FBI, and the Department of State Diplomatic Security Service. Assistant U.S. Attorneys Russell L. Carlberg, Paul A. Hemesath and S. Robert Tice-Raskin are prosecuting the case.

According to court documents, Warren was indicted in 2009 after defrauding lender Taylor, Bean & Whitaker of over $7 million and fleeing to Beirut, Lebanon, on a privately chartered jet. Warren was arrested attempting to reenter the United States under a fraudulently obtained passport with tens of thousands of dollars hidden in his cowboy boots. Warren’s plea today covered both the $7 million fraud against lender Taylor, Bean & Whitaker, and an additional $12 million in fraudulent loans involving his employment at Loomis Wealth Solutions in Roseville, Calif., in 2007 and 2008. He also pleaded guilty to aggravated identity theft in connection with fraudulently obtaining passports in the names of real persons without their approval. Warren used the stolen identities to purchase gold and to flee abroad.

“This is a very significant plea today involving brazen fraud on lenders,” said U.S. Attorney Wagner. “We will continue our relentless drive to bring to justice those who did so much harm to lenders and households in this district.”

Warren is scheduled to be sentenced by U.S. District Judge John A. Mendez on April 24, 2012. The maximum statutory penalty for a violation of wire fraud is 20 years in prison, a fine of $250,000, or twice the loss caused or gain received, and a three-year period of supervised release. Aggravated identity theft carries a mandatory two-year sentence consecutive to any other sentence. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the federal sentencing guidelines, which take into account a number of variables.

A co-defendant, Scott Cavell, remains a fugitive. The charges against him are only allegations, and he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

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Douglas R. Madsen Convicted of Attempted Evasion of Payment of Income Tax

2012-01-13T07:06:00.000-08:00

Source- http://www.justice.gov/opa/pr/2012/January/12-tax-049.html

Douglas R. Madsen, a chiropractor from Ephraim, Utah, was convicted today after a jury trial in the U.S. District Court in Salt Lake City of income tax evasion, the Justice Department announced.

According to court documents, Madsen owed more than $1.3 million in assessed income tax, interest and penalties for the years 1995, 1999, 2000, 2001, 2002, 2003 and 2004. According to court documents, Madsen’s tax debt had grown to more than $1.7 million, after accrued interest. The evidence presented at trial showed that Madsen failed to file a tax return for the last 10 years, and also failed to make any voluntary payments on his tax debt for the past decade.

According to court documents, Madsen used nominee trusts to conceal the ownership of property, ultimately causing the transfer of that property to Grand Scale Inc., a Washington corporation of which he was the president, vice president, secretary, treasurer and chairman of the board. In addition, Madsen used other entities to encumber property and cloud equity in that property, using entities such as Entry Level and Willow Valley Trust. According to court documents, Madsen also attempted to obstruct Internal Revenue Service (IRS) levies, on two occasions sending letters to the purchaser of his chiropractic business, once threatening the possibility of felony charges. Madsen was previously held in civil contempt by the U.S. District Court, for failure to comply with court orders with respect to an IRS summons.

Madsen faces a potential maximum sentence of 5 years in prison and a fine of up to $250,000, or twice the gross gain or loss resulting from the offense.

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Largest Recruiter of Investors to Nevin Shapiro’s $930 Million Ponzi Scheme Sentenced to Prison for Lying to the IRS About Millions in Related Income

2012-01-12T07:20:00.000-08:00

Source- http://www.fbi.gov/newark/press-releases/2012/largest-recruiter-of-investors-to-nevin-shapiros-930-million-ponzi-scheme-sentenced-to-prison-for-lying-to-the-irs-about-millions-in-related-income

NEWARK, NJ—The man who brought more individuals than anyone else to invest in Nevin Shapiro’s $930 million Ponzi scheme was sentenced today to a year and a day in prison for failing to report to the IRS millions of the more than $12 million in related commissions he received, U.S. Attorney Paul J. Fishman announced.

Sydney Jack Williams, 63, of Naples, Fla., previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of subscribing to a false tax return. During that proceeding, Williams admitted he recruited more than 60 individuals to invest in Capitol Investments USA, Inc. (“Capitol”), which Shapiro, 42, of Miami Beach, Fla., has admitted was a fraud.

According to the information to which Williams pleaded guilty and statements made in Newark federal court:

Williams was an investor in Capitol, which Shapiro used to solicit approximately $930 million between January 2005 and November 2009 from individuals who believed they were investing in Shapiro’s grocery distribution business. Shapiro has admitted that Capitol had virtually no income generating business during that time, and that he used new investor funds to make principal and interest payments to existing investors, as well as to fund his own lavish lifestyle—including by giving payments and gifts to student and professional athletes. Williams personally invested more than $100 million. Though Williams received more than $7 million in interest payments, he ultimately suffered an overall $3 million loss on his personal investment when the scheme collapsed.

In return for bringing new investors to Capitol, Williams was paid commissions equal to as much as the interest payments for those investors. Williams received more than $12 million for bringing more than 60 investors to Capitol—more money than any other individual received and for more investors than any other individual recruited. Individuals recruited by Williams invested more than $307 million with Capitol, eventually losing more than $38 million as a result of the scheme. The government does not allege that Williams was aware that Shapiro or Capitol were engaged in fraud.

In pleading guilty to subscribing to a false tax return that failed to report $1.7 million income for 2005, Williams admitted that he also failed to report Capitol related income for all tax years from 2004 through 2007. According to the Information, Williams failed to report more than $6.4 million in income during that time and owed approximately $2.2 million in taxes on that income.

Father and son Roberto Torres, 77, of New York and formerly of Lighthouse Point, Fla., and Alejandro Torres, 40, of Boca Raton, Fla.—the former chief financial officer and an accountant with Capitol, respectively—each pleaded guilty April 4, 2011, to one count of securities fraud, admitting that they assisted Shapiro in the operation of the Ponzi scheme. Roberto and Alejandro Torres were sentenced Oct. 5, 2011, to 48 and 46 months in prison, respectively.

In addition to the prison term, Judge Wigenton sentenced Williams to a year of supervised release and ordered him to pay a $25,000 fine. The judge also ordered Williams to cooperate with the IRS in paying his outstanding tax obligations.

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John J. Gross Sentenced to 33 Months in Prison on Fraud and Tax Charges

2012-01-11T07:57:00.000-08:00

Source- http://www.fbi.gov/buffalo/press-releases/2012/prior-felon-sentenced-on-fraud-and-tax-charges

BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that John J. Gross, 75, of Niagara Falls, New York, who was convicted of mail fraud and filing a false tax return, was sentenced to 33 months in prison and three years’ supervised release by U.S. District Judge Richard J. Arcara. Judge Arcara also ordered Gross to pay restitution in the amount of $161,000.

First Assistant U.S. Attorney James P. Kennedy, Jr., who handled the case, stated that the fraud arose out of a bid rigging scheme involving work performed by a plumbing and general contracting business that Gross ran out of Niagara Falls, N.Y. Specifically, following a December 2008 storm which caused damage to the Summit Mall in Wheatfield, New York, employees of the defendant’s contracting company submitted two false bids which purportedly came from his competitors. One bid was entirely fabricated by a Gross employee using a supply of letterhead from one competitor. The other bid was obtained under false pretenses from another competitor at Gross’ direction. The bids were then given to an employee of the Summit Mall who presented them to management claiming they were independently obtained. Gross had previously done repairs and improvements at the employee’s home at a substantially reduced cost. As a result of the defendant’s conduct, his company, which submitted the lowest bid, was awarded the contract.

Gross also admitted to defrauding Goodyear Tire and Rubber Company on two occasions. In one instance, he utilized a Goodyear employee to obtain bids provided by other contractors to perform work at Goodyear. This allowed Gross to underbid his competitors. Gross did home repairs at substantially reduced costs or at no cost at this employee’s home. The defendant also gave the employee free charter fishing trips. In the other instance, Gross simply prepared and submitted to Goodyear, a fictitious higher-priced bid purportedly made by one of his competitors.

In addition, Gross maintained two sets of books in order to hide income from the Internal Revenue Service which had an outstanding judgment against him as a result of a tax evasion conviction in the late 1990’s.

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Federal Court Bars Richard Gray Sr. From Preparing Federal Tax Returns for Others

2012-01-10T07:05:00.000-08:00

Source- http://www.justice.gov/tax/2012/txdv12026.htm

WASHINGTON – A federal court in St. Louis has permanently barred Richard Gray Sr. from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Gray consented, was signed by Judge Rodney Sippel of the U.S. District Court for the Eastern District of Missouri.

According to the government complaint, Gray, who works periodically at a Chrysler plant in Kokomo, Ind., and resides the remainder of the year in St. Louis, prepared over 130 tax returns in 2009. His customers allegedly included family, friends, neighbors and co-workers. The complaint states that Gray listed fictitious businesses, fake deductions and bogus dependents on his customers’ returns in order to understate their tax liabilities or claim refunds to which they were not entitled.

The suit alleges that Gray has no formal training in tax law or return preparation. The complaint also alleges that Gray fails to report the income he receives from preparing returns on his own income tax returns.

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Wayne A. Mounts Sentenced to More Than 5 Years in Prison in Money Laundering and Tax Scheme

2012-01-09T07:32:00.000-08:00

Source- http://www.justice.gov/tax/2012/txdv12024.htm

WASHINGTON – Wayne A. Mounts, a resident of Mesa, Ariz., was sentenced yesterday to 63 months in prison for his role in conspiracies to commit money laundering and to defraud the Internal Revenue Service (IRS), announced the Justice Department and the IRS today. On July 25, 2011, a federal jury in Phoenix convicted Mounts and his co-defendant, Gino Carlucci, of both conspiracies after an eight-day trial.

According to the evidence presented at trial, Mounts and Carlucci, stole large sums of money from Joseph Flickinger and Flickinger’s clients and associates. Flickinger was a tax return preparer who had himself been sentenced in 2007 to 70 months in prison following a guilty plea to tax fraud conspiracy, as well as mail and wire fraud charges. Flickinger’s mail and wire fraud convictions related to a Ponzi-style investment scheme through which he had defrauded his clients.

After defrauding Flickinger of the money he obtained by fraud, Mounts and Carlucci used the money for their own personal benefit. Mounts withdrew more than $250,000 in cash from a bank account over a two-month period. He withdrew the money in amounts just under $10,000 to avoid having the bank report his withdrawals to authorities. Mounts and Carlucci spent an additional $150,000 of the funds to buy a 43-foot luxury boat which Carlucci concealed from the government for over two years.

Judge Kathryn H. Vratil, Chief Judge of the District of Kansas, sitting in Phoenix by special designation, ordered Mounts to pay $686,841 in restitution to the victims in Flickinger’s case and $80,787.80 in restitution to the IRS. Judge Vratil further entered a forfeiture order against Mounts for a money judgment in the amount of $722,841.00.

Sentencing for Gino Carlucci is set for Feb. 28, 2012, before Judge Vratil in Phoenix. Carlucci faces a maximum sentence of 20 years in prison for conspiracy to commit money laundering; five years in prison for conspiracy to defraud the United States; and three years in prison for filing a false tax return.

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Lutoyua N. Thompson and Melinda M. Lambert Sentenced to Prison for Preparing False Tax Returns

2012-01-08T07:36:00.000-08:00

Source- http://www.justice.gov/opa/pr/2012/January/12-tax-028.html

Judge Mark Fuller of the U.S. District Court for the Middle District of Alabama sentenced Lutoyua N. Thompson and Melinda M. Lambert to prison today for their involvement in a fraudulent tax return preparation scheme, the Justice Department and Internal Revenue Service (IRS) announced. Thompson was sentenced to 18 months in prison. Lambert was sentenced to six months in prison and six months of home confinement. Both had previously pleaded guilty to aiding and assisting the preparation of a false tax return.

According to the court documents, both Thompson and Lambert were employed by James E. Moss as tax return preparers at a tax return preparation business known as Flash Tax, located in Montgomery, Ala. Thompson was employed at Flash Tax from December 2003 through June 2005 and prepared approximately 600 tax returns. Lambert was employed at Flash Tax from December 2004 through January 2007 and prepared approximately 900 tax returns. The majority of the returns prepared by Lambert and Thompson contained false information designed to illegally obtain higher refunds to which clients were not entitled. Lambert and Thompson admitted that Moss trained them to prepare false tax returns in order to obtain higher tax refunds for Flash Tax customers by inflating or deflating specific numbers and/or by adding totally fictitious numbers to the returns.

On Nov. 2, 2011, Moss was convicted by an Alabama jury of conspiring to defraud the United States and of aiding and assisting the preparation of false tax returns. His sentencing is currently set for March 13, 2012.

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Pleads Guilty to Identity Theft and Tax Charges

2012-01-07T07:43:00.000-08:00

Source- http://www.justice.gov/opa/pr/2012/January/12-tax-025.html

The Justice Department and the Internal Revenue Service (IRS) announced that Loretta Fergerson pleaded guilty today before Magistrate Judge Charles S. Coody in Montgomery, Ala., to conspiring to defraud the United States government, wire fraud and aggravated identity theft. Fergerson and a co-defendant were charged by a grand jury in a 22-count indictment that was unsealed on March 30, 2011.

According to the plea agreement, Fergerson owned and operated a tax return preparation business called Fast Tax Cash in Montgomery. From 2005 through 2008, Fergerson and her employees filed tax returns using stolen identities in order to claim fraudulent tax refunds. Additionally, Fergerson admitted that she and her employees filed tax returns for Fast Tax Cash clients that contained false information on the tax return in order to obtain higher refunds for customers to which they were not entitled. Fergerson further admitted that she created false driver’s licenses and false Social Security cards to be placed in customer files for returns that were prepared using stolen identities.

A sentencing date has not yet been set. Fergerson faces a maximum potential sentence of 32 years in prison and fines of up to $750,000.

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Mark G. Marino was Sentenced Today to 13 Months in Prison for Four Counts of Filing False Income Tax Returns

2012-01-06T07:02:00.000-08:00

Source- http://www.fbi.gov/philadelphia/press-releases/2012/former-skippack-township-official-sentenced-for-tax-fraud

PHILADELPHIA—Mark G. Marino, 41, of Collegeville, PA, was sentenced today to 13 months in prison for four counts of filing false income tax returns for 2003 through 2006. Marino, a former member of the Skippack Township Board of Supervisors. Marino pleaded guilty September 21, 2011. In addition to the prison term, U.S. District Court Judge Eduardo C. Robreno ordered Marino to pay restitution to the IRS in the amount of $76,382, a fine of $3,000 and one year of supervised release. He was ordered to report to prison February 20, 2012.

Marino was a principal with David Kane in a real estate investment company, Kane Core Inc.(“KCI”), and also owned and operated Marino Landscape and Design and Marino Holdings, Inc. Kane was also indicted as were John D. Kane, Gregory M. Kane, and Jamie E.E. Baugher. During 2004, Marino received approximately $48,333 in income from KCI which he did not report on his 2004 income tax return. Marino also had personal bills and obligations paid by both KCI and Marino Landscape & Design from 2003 through 2006, none of which was reported to the government. The payments Marino received included Eagles tickets, gentlemen’s clubs expenditures, golf memberships and expenditures, vacations, a housekeeper, restaurant bills, grocery bills, and credit card expenditures for clothing, jewelry and other personal items.

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New York Return Preparer Howard Levine Pleads Guilty to Preparing False Tax Returns

2012-01-05T07:58:00.000-08:00

Source- http://www.justice.gov/opa/pr/2012/January/12-tax-012.html

WASHINGTON – The owner of a Dix Hill, N.Y., tax preparation business pleaded guilty today in U.S. District Court in the Eastern District of New York in Central Islip, N.Y., to endeavoring to obstruct the internal revenue laws and aiding in the preparation of false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.

According to court documents, Howard Levine owned and operated Milaur Associates, also known as Milaur Inc. Many of the tax returns prepared by Levine for 2004 through 2009 were false and contained fictitious deductions, business expenses and corporate losses created by Levine. Levine admitted to preparing no fewer than 56 false returns, resulting in a tax loss of $620,844.

In order to obstruct and impede the IRS from determining his role in preparing the returns, Levine included false information in the paid preparer section of the return he prepared. Despite the U.S. District Court for the Eastern District of New York issuing an injunction in 2009 that barred Levine from preparing federal tax returns for anyone other than himself, Levine violated the injunction by continuing to prepare false returns.

Levine faces a potential maximum sentence of six years in prison and a fine of up to $500,000. U.S. District Judge Joseph F. Bianco, who is presiding over the matter, set a sentencing date of April 26, 2012.

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Ronald E. Burrell a Former Chief Executive Officer of Caremerica Inc., Pleaded Guilty Today to Conspiring to Defraud the Internal Revenue Service (IRS)

2012-01-04T07:01:00.000-08:00

Source- http://www.justice.gov/opa/pr/2012/January/12-tax-004.html

WASHINGTON - Ronald E. Burrell, former chief executive officer of Caremerica Inc., pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS), the Justice Department announced. His sentencing hearing is scheduled for April 9, 2012. Burrell is a resident of Wilmington, N.C.

According to the charging document, Burrell co-owned and operated a chain of assisted living facilities (ALFs) in North and South Carolina. The ALFs were managed by Caremerica Inc., a company based in Leland, N.C., that Burrell also partly owned and operated. Burrell was the president and CEO for Caremerica, the Caremerica ALFs and other related companies. As a corporate officer, Burrell was responsible for ensuring that the Caremerica companies collected, reported and paid over federal employment taxes to the IRS. However, with Burrell at the helm, the Caremerica companies accrued more than $4.5 million in employment tax liabilities between approximately 2003 and 2006. Among other things, Burrell filed, or caused to be filed, false IRS forms that reported full payment of the employment taxes due, when in fact only a small fraction of the taxes, or none at all, were paid.

The charging document further alleges that in 2003, Burrell acquired partial ownership of Partners Pharmacy Services Inc. (PPS), which provided prescription drug and related services to the Caremerica ALFs. In April 2005, Burrell sold PPS to a subsidiary of Omnicare Inc. At the closing, Burrell received $1.6 million. The PPS sale proceeds were disbursed at a time when the IRS was attempting to collect unpaid employment taxes from the Caremerica companies, as well as from Burrell personally. To prevent the IRS from discovering the PPS proceeds, Burrell took active steps to conceal them.

At his hearing before Judge James C. Fox, sitting in Wilmington, Burrell agreed that he should be ordered to pay restitution of $4.8 million.

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Johnny “Mickey” Brown Sentenced to 130 Months in Ponzi Scheme and Tax Evasion

2012-01-03T07:22:00.000-08:00

Source- http://www.fbi.gov/portland/press-releases/2011/vacuum-cleaner-distributor-sentenced-to-130-months-in-ponzi-scheme

ORTLAND, OR—Today U.S. District Judge Garr M. King sentenced Johnny “Mickey” Brown, 59, of Beaverton, Oregon, to 130 months in federal prison following a jury trial that concluded on May 11, 2011. The federal jury found Brown guilty of all 14 counts in an indictment charging him with wire fraud, false statement to a financial institution, and tax evasion. After release from the Bureau of Prisons, Brown will serve five years on supervised release.

“The office of the United States Attorney will prosecute those who prey on the elderly and other vulnerable victims to the full extent of the law,” stated U.S. Attorney Amanda Marshall. “Brown is a con man who abused the victims in this case, both financially and emotionally. Many of the victims lost their life savings and some lost their homes. All of the victims experienced a loss of dignity and trust. We are pleased that he will be spending the next ten years in prison where he won’t be able to take advantage of anyone for a very long time.”

The evidence presented at trial proved that Johnny “Mickey” Brown fraudulently obtained credit cards from unsuspecting victims, many of whom were elderly or financially naïve, who believed they were investing in vacuum cleaner inventory for a profitable business. Once he secured the victims’ cards through false promises of no-risk dividends based upon the sale of the vacuum inventory, he immediately obtained all the available credit balance from each card. Brown did this by running the cards through a U.S. Bank Merchant Point of Sale terminal and falsely disguised each transaction as a sale of merchandise when, in fact, he didn’t sell anything at all. Each of these pretext or “fake” sales caused U.S. Bank to automatically deposit the amount of the fraudulent sale entered in the credit card machine into defendant Brown’s business bank account.

Brown used the money he obtained from his scheme for personal and business expenses. The largest business expense was the monthly debt service on 596 credit cards and payments of “dividends” to the many victim investors. These payments had to be made in order to extend the life of the Ponzi scheme. While some of the money was used to pay regular business expenses, the vast majority went to fund the scheme and for Brown’s personal use, including an elegant home and wardrobe, private education for his children, high-end vehicles, and large donations to the Living Water Christian Assembly in Albany, Oregon.

U.S. Bank froze Brown’s business accounts in March 2003. The account was frozen, not due to the credit card activity, but in response to U.S. Bank’s recognition that Brown was receiving the proceeds of, and making monthly payments on, U.S. Bank loans in excess of $232,000 to 17 customers. Brown then frantically attempted to run $1,000,000 in fake refunds on many of the hundreds of victim credit card accounts he had improperly charged. U.S. Bank’s credit card processing office detected this activity and reversed the fraudulent refunds.

At that point, Brown orchestrated a massive campaign to dispute over 1,000 prior fake sales by submitting false “credit slip” documents to the various credit card companies. Some victims cooperated with Brown’s credit slip effort, while some did not. Brown succeeded in charging back a total of $4,241,941 in fake sales to U.S. Bank. Ordinarily, merchant charge backs would have been charged against the merchant’s business account. But since Brown’s account had long since been depleted and closed, U.S. Bank was forced to absorb the full loss. Individual victims also lost significant sums of money when their credit card companies refused to credit the victim’s accounts.

While carrying out this scheme, the evidence proved that Brown was also evading the payment of federal taxes due on 1993-1995 tax returns he had signed and filed, self-assessing a total tax due of $130,871. He never paid any part of that tax. In order to evade payment of the tax debt, Brown conducted his business and bought and sold assets through nominees. In order to further hide income from the IRS, Brown ran his credit card fraud scheme by use of a credit card processing agreement and bank accounts set up in the name of an employee. He directed the employee to set up a business entity, open bank accounts and set up a merchant credit card processing agreement for his use. The employee was listed as the owner of defendant Brown’s finance company and those bank accounts as well. All of his business was done through bank accounts in the name of the employee and others.

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

2011-12-29T07:33:00.000-08:00

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

2011-12-26T07:14:00.000-08:00

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

2011-12-25T07:47:00.000-08:00

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

2011-12-24T07:56:00.000-08:00

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

2011-12-23T07:50:00.000-08:00

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

2011-12-22T07:53:00.000-08:00

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

2011-12-21T07:33:00.000-08:00

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

2011-12-20T07:31:00.000-08:00

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

2011-12-19T07:18:00.000-08:00

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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Richard Stewart Pleads Guilty for Failing to Pay Employment Taxes

2011-12-16T07:46:00.000-08:00

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

2011-12-15T07:49:00.000-08:00

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

2011-12-14T07:53:00.000-08:00

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

2011-12-13T07:23:00.000-08:00

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

2011-12-12T07:39:00.000-08:00

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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Silford Warren Pleaded Guilty to Failing to Pay Over Employment Taxes

2011-12-11T07:36:00.000-08:00

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

2011-12-10T07:50:00.000-08:00

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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Louis Alba Pleads Guilty to Failure to Pay Over Employment Taxes

2011-12-09T07:43:00.000-08:00

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

2011-12-08T07:38:00.000-08:00

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

2011-12-07T07:30:00.000-08:00

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

2011-12-06T07:30:00.000-08:00

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

2011-12-05T07:44:00.000-08:00

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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William A. Herder Arrestested Today on Federal Tax Charges

2011-12-02T07:37:00.000-08:00

Source- http://www.justice.gov/tax/txdv111556.htm

WASHINGTON - William A. Herder of Mifflin Township, Ohio, was arrested today on federal tax charges, the Justice Department and Internal Revenue Service (IRS) announced. On Nov. 9, 2011, a federal grand jury sitting in Cleveland returned an indictment against Herder, charging him with corruptly endeavoring to impair and impede the due administration of the internal revenue laws, tax evasion and failure to file tax returns.

According to the indictment, Herder, an insurance salesman, has not filed a timely or valid tax return in more than a decade. For the 2000 tax year, Herder allegedly filed a tax return on which he falsely claimed that he had not earned any income. Herder failed to file any tax returns for the 2001-2009 tax years, despite receiving numerous warnings and notices from the IRS.

The indictment further alleges that, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2003, Herder allegedly transferred title to his house to a fake foundation he established in Utah called the “Mentor Foundation.” Herder cashed out an Individual Retirement Account and a life insurance policy to further frustrate IRS collections activity. Herder also allegedly attempted to use a fake financial instrument to pay his taxes for the years 2000-2002 as well as a civil penalty that the IRS assessed against him for the year 2000.

In addition to failing to file valid tax returns and hiding his assets from the IRS, the indictment alleges, Herder submitted numerous obstructive letters and documents to the IRS and the companies for whom he sold insurance in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him.

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Ronald James Davenport Convicted of Filing $ 20 Billion in False Liens Against Former US Attorney and Other Federal Officials

2011-12-01T07:49:00.000-08:00

Source- http://www.justice.gov/tax/txdv111555.htm

WASHINGTON—Ronald James Davenport, of Chewelah, Wash., was convicted Tuesday of filing more than $20 billion in false liens against four federal government officials, the Justice Department and the Treasury Inspector General for Tax Administration (TIGTA) announced today. A federal jury in the Eastern District of Washington in Spokane returned guilty verdicts on all four counts of filing false retaliatory liens against government officials. The conviction came after a two-day trial before Judge Garr M. King of the District of Oregon, sitting in Spokane by special designation.

According to the evidence presented at trial, in December 2009, Davenport filed false liens against the then-U.S. Attorney and the Clerk of Court for the Eastern District of Washington, as well as an Assistant U.S. Attorney and an Internal Revenue Service Revenue officer. The liens were filed in the public records of Spokane County and Whatcom County, Wash. The defendant claimed in each lien that the victim owed him $5.184 billion and purported to attach all of the victim’s real and personal property as security for this debt. As proved at trial, the defendant chose these four victims on account of their service as government officials, namely their involvement in a civil lawsuit against Davenport for about $270,000 in unpaid tax liabilities.

Following his conviction, Davenport faces a potential maximum sentence of 40 years in prison and a fine of up to $1 million. Judge King has not set a sentencing date.

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Doctor William Paul Pleads Guilty and Convicted of Tax Fraud

2011-11-30T07:29:00.000-08:00

Source- http://www.justice.gov/tax/txdv111562.htm

WASHINGTON – William Paul, formerly of Montgomery, Ala., was convicted today by a federal jury in Montgomery on four counts of tax evasion for the tax years 2004 through 2007, and of one count of failing to file a tax return, the Justice Department and Internal Revenue Service (IRS) announced. Pauls’ wife, Donna Paul, a board-certified rheumatologist, pleaded guilty to one count of tax evasion and one count of filing a false federal income tax return on Nov. 16, 2011.

According to evidence introduced at trial, Donna and William Paul owned and operated a medical practice in Montgomery. The Pauls attempted to evade the assessment and payment of Donna Paul’s income by falsely characterizing her income as loans, by making false statements to IRS employees, and by deliberately causing the non-profit organizations to not file tax returns. Evidence further showed that Donna Paul did not timely file federal individual income tax returns for the years 2004 through 2007. On April 5, 2011, the day IRS-Criminal Investigation special agents arrested her, Donna Paul filed four false tax returns for tax years 2004 through 2007. She testified at trial that each tax return did not include the money she earned from her medical practice.

Based on testimony at trial, William Paul had not filed a federal income tax return since the 1980s. Donna Paul also testified that William Paul ran the business side of the medical practice, initially called “Rheumatology Specialists of Central Alabama,” then “Rheumatology Specialists Arthritis and Osteoporosis Center,” then “Children and Adult Arthritis and Osteoporosis Center.”

Donna Paul faces a potential maximum of eight years in prison and a fine of up to $500,000. William Paul faces a potential maximum of 21 years in prison and a fine of up to $1.1 million.

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Matthew Rogers Pleads Guilty to Filing a False Federal Income Tax Return

2011-11-29T07:22:00.000-08:00

Source- http://www.fbi.gov/albany/press-releases/2011/former-mcginn-smith-co.-inc.-senior-managing-director-pleads-guilty-to-filing-a-false-federal-income-tax-return

ALBANY, NY—United States Attorney Richard S. Hartunian, Special Agent in Charge Charles R. Pine of the New York Office of the Criminal Investigation Division of the Internal Revenue Service, and Special Agent in Charge Clifford C. Holly of the Albany Division of the Federal Bureau of Investigation, announced that Matthew Rogers, 46, of Vero Beach, Florida, pled guilty today before United States District Court Judge David N. Hurd to one count of filing a false federal income tax teturn, in violation of Title 26, United States Code, Section 7206(1). Sentencing is scheduled for April 21, 2012 in Utica, New York. Rogers faces up to three years in prison and a $250,000 fine.

As part of the guilty plea, Rogers admitted the following:

In 2006, Matthew Rogers, who was working for USBX Advisory Services, LLC, a Santa Monica, California investment bank, began working with McGinn, Smith & Co. Inc. (“the broker-dealer”) on business deals related to the alarm industry. In the fall of 2006, the broker-dealer hired Rogers as a senior managing director, and he began working for the broker-dealer in January 2007.

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Diana Kay Erickson Sentenced for Mail Fraud, False Tax Returns; Embezzled $247,448 from Her Employer

2011-11-28T07:06:00.000-08:00

Source- http://www.fbi.gov/kansascity/press-releases/2011/aurora-woman-sentenced-for-mail-fraud-false-tax-returns-embezzled-247-448-from-her-employer?utm_campaign=email-Immediate&utm_medium=email&utm_source=kansas-city-press-releases&utm_content=49997

SPRINGFIELD, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced today that an Aurora, Mo., woman was sentenced today in federal court for mail fraud and filing false tax returns in a scheme to embezzle $247,448 from her employer.

Diana Kay Erickson, 46, of Aurora, was sentenced by U.S. District Court Judge Gary A. Fenner on Friday, November 18, 2011, to two years and nine months in prison without parole.

In her guilty plea, Erickson admitted that she embezzled $219,606 from Superior Lifts, Inc., between Sept. 7, 2006, and April 2, 2008, and that she embezzled $34,242 from Goolsby Rental Properties between March 14, 2006, and Dec. 18, 2006.

In 2006, Erickson was employed as a bookkeeper at Superior Lifts, which sold automobile lifts and other products. Superior Lifts, which is no longer in business, had its office in Aurora in 2004 and later moved to Nixa, Mo., in 2009. The owners of Superior Lifts also operated Goolsby Rental Properties, a second business that managed rental properties in the Wichita, Kan., area. Erickson also performed bookkeeping duties for Goolsby Rental Properties.

When customers of Superior Lifts mailed bank checks as payments, Erickson repeatedly intercepted those checks and deposited them in her own personal bank account.

Erickson also admitted that she filed false U.S. Individual Tax Returns for tax years 2006, 2007 and 2008. These returns were false because Erickson failed to report income she embezzled from Superior Lifts and Goolsby Rental Properties. As a result, the tax loss to the government (without penalties and interest) was $57,801.

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Walter Allen Johnson, aka Beau Johnson Sentenced to 92 Months in Prision for Filing False Tax Claims for Prison Inmates

2011-11-27T07:40:00.000-08:00

Source- http://www.justice.gov/tax/txdv111517.htm

WASHINGTON – Walter Allen Johnson, aka Beau Johnson, a former Tennessee Department of Correction inmate, was sentenced today by Chief U.S. District Judge Todd J. Campbell of the Middle District of Tennessee to 92 months in prison for his role in a conspiracy to submit false tax returns on behalf of prison inmates, the Department of Justice announced. Johnson was also ordered to pay restitution in the amount of $57,880.80.

During a plea hearing on Feb. 28, 2011, Johnson admitted that, from February 2006 through January 2007, while incarcerated by the Tennessee Department of Correction, he conspired with others to defraud the United States by submitting false tax returns that claimed refunds on behalf of other inmates. To execute the scheme, Johnson collected Social Security numbers from other inmates and recruited other inmates to collect Social Security numbers for him. Johnson and his co-conspirators then used those Social Security numbers to file false income tax forms with the Internal Revenue Service (IRS), in the names of inmates, claiming refunds to which the inmates were not entitled.

The government presented evidence at sentencing that, as a result of the scheme, Johnson and his co-conspirators collected approximately 87 U.S. Treasury checks totaling approximately $57,880.

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Andrew Isaac Chance Convicted of Filing a False Retaliatory Lien Against a Federal Prosecutor and Filing Three False Claims for Income Tax Refund

2011-11-25T07:47:00.000-08:00

Source- http://www.justice.gov/tax/txdv111515.htm

WASHINGTON – Andrew Isaac Chance of Clinton, Md., was convicted of filing a false retaliatory lien against a federal prosecutor and for filing three false claims for income tax refunds, the Justice Department, Internal Revenue Service (IRS) and Treasury Inspector General for Tax Administration (TIGTA) announced today. U.S. District Judge for the District of Maryland Alexander Williams Jr. presided over the federal jury trial in Greenbelt, Md.

According to testimony and evidence presented at trial, Chance was convicted in 2007 for filing a false claim for an income tax refund for the tax year 2005. Shortly after he was released from prison for that crime, he filed a UCC Financing Statement with the Maryland Department of Assessments and Taxation, falsely claiming that the federal prosecutor, who prosecuted the 2007 case, owed him $1.313 billion. The evidence showed that Chance filed a similar lien against a Maryland state prosecutor for her role in prosecuting him for crimes relating to his attempts to cash the fraudulently obtained U.S. Treasury check for the 2005 tax return. According to the evidence, Chance admitted to a federal agent, when arrested in December 2010 in relation to the current indictment, that he had filed the liens because the prosecutors had “done him wrong.”

The evidence at trial established that a year after filing the false lien, Chance filed three false claims for tax refunds for tax years 2007, 2008 and 2009, seeking a total of $900,000. These three false tax returns were almost identical to the 2005 return for which he was previously convicted. On the 2005 tax return, Chance claimed he was the Andrew Chance Trust. On the 2007-2009 returns, he claimed he was the Andrew I Chance Trust. On each return in the current case, Chance claimed $300,000 in refunds based on completely false income and withholding amounts. The government introduced evidence that, despite having claimed withholdings on the false returns, Chance had no withholdings and, in fact, had demanded that Metro, from which he retired as a station manager in 1999, not withhold taxes from his retirement pay.

“This verdict is a clear message that filing false retaliatory liens against federal officials, including federal prosecutors who are simply doing their jobs, is illegal and will be punished,” said Deputy Assistant Attorney General Ronald A. Cimino of the Justice Department’s Tax Division.

Chance was on federal supervised release and state probation at the time of the conduct giving rise to this indictment. He still faces court actions related to those release violations.

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Kansas City Lawyer Rosie M. Quinn Sentenced on Tax Charges

2011-11-23T07:18:00.000-08:00

Source- http://www.justice.gov/tax/txdv111514.htm

WASHINGTON – Rosie M. Quinn, 55, a lawyer from Kansas City, Kan., was sentenced to 36 months in prison on tax charges, the Justice Department and Internal Revenue Service (IRS) announced today.

On March 15, 2011, following a jury trial before U.S. District Judge John W. Lungstrum, Quinn was found guilty on seven counts of failure to pay over employment taxes and two counts of failure to pay individual income taxes.

According to the evidence presented during the trial, Quinn was the sole proprietor of Rosie M. Quinn Attorney At Law, where she usually employed three to five people to assist with her practice. For calendar years 1995 through 2008, Quinn withheld more than $235,600 in payroll taxes from employees while submitting only $10,232 in payroll taxes to the IRS. In addition, the evidence at trial proved that Quinn failed to pay $8,435 in personal income taxes in 2002 and $19,905 in personal income taxes in 2003. Altogether, Quinn failed to pay more than $1 million including interest and penalties, for payroll and personal income taxes since 1995.

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Chiquita Q. Broadnax Sentenced to 18 Months for Preparing False Income Tax Returns

2011-11-22T07:29:00.000-08:00

Source- http://www.justice.gov/opa/pr/2011/November/11-tax-1510.html

WASHINGTON - Chiquita Q. Broadnax, a resident of Montgomery County, Ala., was sentenced today to 18 months in prison by Judge Mark Fuller of the Middle District of Alabama for her involvement in a fraudulent tax return perpetration scheme, the Justice Department and the Internal Revenue Service (IRS) announced.

According to the court documents, Broadnax was employed by James E. Moss as a tax return preparer at a tax return preparation business, known as Flash Tax, from December 2004 through January 2007. During her employment at Flash Tax, Broadnax prepared and filed at least 900 tax returns, the majority of which contained false information designed to illegally obtain higher refunds to which her clients were not entitled. Moss trained Broadnax to prepare false tax returns in order to obtain higher tax refunds for Flash Tax clients by inflating or deflating specific numbers and/or by adding totally fictitious numbers to the return. Moss was convicted early this month by an Alabama jury for orchestrating this fraudulent tax return preparation scheme.

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Onuoha “Iggy” Nwokoro Sentenced to Three Years for Preparing False Returns

2011-11-21T07:39:00.000-08:00

Source- http://www.justice.gov/tax/txdv111511.htm

WASHINGTON – Onuoha “Iggy” Nwokoro was sentenced today in federal district court in Washington, D.C., for willfully aiding and assisting in the preparation of a false income tax return for 2004, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Judge Richard J. Leon sentenced Nwokoro to 36 months in prison and ordered him to pay $510,389 in restitution to the IRS.

On Aug. 30, 2011, Nwokoro pleaded guilty to willfully aiding and assisting in the preparation of a false tax return for 2004. According to court documents, from January 2005 through April 2007, Nwokoro operated BBC Tax Services, also known as BBC Tax and Medical Billing Services, a tax preparation business in Washington. For tax years 2004, 2005 and 2006, Nwokoro prepared and electronically filed tax returns for his clients that included fictitious business income and expenses for what purported to be a computer systems business. Nwokoro admitted to preparing at least 41 false returns, causing a tax loss of more than $530,000. According to the plea agreement, Nwokoro also admitted that his own 2004, 2005 and 2006 personal tax returns were false in that they under-reported his income by $585,537.

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Chiquita Q. Broadnax Sentenced to 18 Months for Preparing False Income Tax Returns

2011-11-20T07:42:00.000-08:00

Source- http://www.justice.gov/tax/txdv111510.htm

WASHINGTON – Chiquita Q. Broadnax, a resident of Montgomery County, Ala., was sentenced today to 18 months in prison by Judge Mark Fuller of the Middle District of Alabama for her involvement in a fraudulent tax return perpetration scheme, the Justice Department and the Internal Revenue Service (IRS) announced.

According to the court documents, Broadnax was employed by James E. Moss as a tax return preparer at a tax return preparation business, known as Flash Tax, from December 2004 through January 2007. During her employment at Flash Tax, Broadnax prepared and filed at least 900 tax returns, the majority of which contained false information designed to illegally obtain higher refunds to which her clients were not entitled. Moss trained Broadnax to prepare false tax returns in order to obtain higher tax refunds for Flash Tax clients by inflating or deflating specific numbers and/or by adding totally fictitious numbers to the return. Moss was convicted early this month by an Alabama jury for orchestrating this fraudulent tax return preparation scheme.

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Ashvin Desai Indicted for Tax Evasion and Faling to Report Foreign Bank Accounts

2011-11-19T07:47:00.000-08:00

Source- http://www.justice.gov/tax/txdv111504.htm

WASHINGTON – A federal grand jury in San Jose, Calif., Wednesday indicted Ashvin Desai of San Jose on three counts of tax evasion, two counts of willfully aiding the preparation of materially false tax returns and three counts of failing to file Reports of Foreign Bank and Financial Accounts (FBARs), the Justice Department and Internal Revenue Service (IRS) announced.

According to the indictment, Desai, the owner of a medical device company, his wife and his two adult children maintained millions of dollars in undeclared bank accounts in India at The Hongkong and Shanghai Banking Corporation Ltd. (HSBC). During 2009, Desai maintained approximately $8.8 million in his undeclared accounts at HSBC in India. Desai attempted to evade his income taxes for tax years 2007-2009 by filing false tax returns that failed to report $1,306,810 of interest income, and that falsely reported that he did not have an interest in, or signature authority over, bank accounts located in a foreign country. Desai also prepared false tax returns for his children for tax year 2009 that failed to report approximately $189,000 of interest income paid by HSBC in India, and that falsely reported that the children did not have an interest in bank accounts located in a foreign country.

The indictment further alleges that during 2009 Desai closed an account he maintained at HSBC in England and directed that the funds from that account be transferred to a bank account maintained at HSBC in Dubai in the name of one of his children, and that, for tax years 2007-2009, Desai failed to file FBARs to report his foreign bank accounts to the Department of Treasury.

As alleged in the indictment, U.S. citizens have an obligation to report to the IRS on Schedule B of their U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign county in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further have an obligation to report all income earned from foreign financial accounts on the tax return and to pay the taxes due on that income. Separately, U.S. citizens with a financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file an FBAR form with the Treasury disclosing such an account by June 30 of the following year.

Each tax evasion charge carries a maximum penalty of five years in prison and a $250,000 fine. The false tax return charges each carry a maximum penalty of three years in prison and a $250,000 fine. The failure to file an FBAR charges each carry a maximum penalty of 10 years in prison and a $500,000 fine.

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Scott Keith Voss Pleads Guilty to Bank Fraud and Failure to Pay Payroll Taxes

2011-11-18T07:54:00.000-08:00

Source- http://www.fbi.gov/littlerock/press-releases/2011/jonesboro-man-pleads-guilty-to-bank-fraud-and-failure-to-pay-payroll-taxes

ITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas announced that Scott Keith Voss, 43, of Jonesboro, Arkansas, has pled guilty to one count of bank fraud and one count of willful failure to pay over tax. Voss faces a maximum penalty of 35 years in prison and a fine of $1,250,000 when he is sentenced.

Voss, who served as pastor and president of First Pentecostal Church of Jonesboro, pled guilty to a two count Information filed for the hearing. The information states that from September 2007 until June 26, 2010, Voss devised a scheme to defraud the First Bank of Owasso. As part of the scheme, Voss applied for a loan from the First Bank of Owasso, pledging as collateral the Jonesboro Worship Center real estate. Voss, it states, failed to obtain appropriate Board of Directors’ authorization to so encumber the church real estate. The information charges that Voss used the funds to retire previous unauthorized loans, for his own personal use and to obtain additional funds for expenditures not approved by the Board of Directors of the Jonesboro Worship Center.

Additionally, the information charges that from 2006 through 2010, First Pentecostal Church of Jonesboro withheld tax payments from its employees’ paychecks. However, through this same period, the church failed to make any payments to the Internal Revenue Service (IRS) of these withholdings. The information states that Voss was the person responsible for the collection and pay over of the church’s payroll taxes.

As part of his plea agreement, Voss agreed to an entry of an order of restitution to the First Bank of Owasso of $450,000 and to the IRS of $148,564.94.

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Natalie Wisneski Indicted for Filing False Non-Profit Tax Returns, Making Campaign Contributions in the Names of Others

2011-11-17T07:56:00.000-08:00

Source- http://www.fbi.gov/phoenix/press-releases/2011/former-fiesta-bowl-chief-operating-officer-indicted-for-filing-false-non-profit-tax-returns-making-campaign-contributions-in-the-names-of-others

PHOENIX—A federal grand jury in Phoenix returned a nine-count indictment yesterday against Natalie Wisneski, 47, of Tempe, Ariz., for making campaign contributions in the name of another, causing false statements to be made to the federal election commission, filing false tax returns and conspiring to commit the above offenses.

The indictment alleges that Wisneski, as an officer and high-paid employee of the Fiesta Bowl, solicited campaign contributions from Fiesta Bowl employees for federal, state, and local candidates for elective office, and arranged to reimburse the employees for their contributions with Fiesta Bowl money.

Reimbursement for federal campaign contributions is prohibited under the Federal Election Campaign Act, and it also causes the political campaigns to file false information with the Federal Election Commission as to the identity of the true donor. The federal campaigns identified in the indictment have cooperated in the investigation, and no evidence suggests that the campaigns knew that the Fiesta Bowl reimbursed its employees.

The indictment also alleges that Wisneski filed false tax returns on behalf of the Fiesta Bowl when she denied in the tax returns that the Fiesta Bowl had any lobbying expenses or political expenditures. Wisneski will be summonsed to appear for her arraignment on Nov. 30, 2011, at 10:30 a.m. The overall investigation continues, and the Fiesta Bowl organization continues to cooperate with the investigation.

A conviction for conspiracy carries a maximum penalty of five years, a $250,000 fine or both. A conviction for making campaign contributions in the names of others in an amount greater than $10,000 in a single calendar year is punishable as a felony, and carries a maximum penalty of two years, a $250,000 fine or both; A conviction for making campaign contributions in the names of others in an amount between $2,000 and $10,000 in a single calendar year is punishable as a misdemeanor, and carries a maximum penalty of one year, a $100,000 fine or both.

A conviction for false statements carries a maximum penalty of five years, a $250,000 fine or both, and a conviction for filing false tax returns carries a maximum penalty of three years, a $250,000 fine or both.

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Marsha Elmore Pleads Guilty to Using Stolen Identities to Obtain Tax Refunds

2011-11-16T07:54:00.000-08:00

Source- http://www.justice.gov/opa/pr/2011/November/11-tax-1494.html

MONTGOMERY, Ala. – Marsha Elmore of Wetumpka, Ala., the owner of a tax preparation business called Community Tax, pleaded guilty today to charges related to her use of stolen identities to fraudulently obtain tax refunds, the Justice Department and the Internal Revenue Service (IRS) announced. Elmore pleaded guilty to one count each of filing a false claim, wire fraud and aggravated identity theft. On Aug. 31, 2011, she had been charged with those crimes as part of a 32-count indictment returned by a federal grand jury in Montgomery, Ala.

According to her plea agreement and other court documents, Elmore’s fraudulent activity ran from 2009 until July 2011, when she was arrested by the IRS on a criminal complaint. She unlawfully obtained the names, Social Security numbers and dates of births of various individuals and used them to file false tax returns through Community Tax. Those tax returns claimed refunds that were directed to bank accounts and debit cards that Elmore controlled. Elmore also filed false tax returns using online filing websites. Altogether, Community Tax and Elmore were linked to almost 1,400 tax returns during this time period. In her plea agreement, Elmore admitted that she personally filed many false returns through Community Tax.

Sentencing has not yet been scheduled. Elmore faces a minimum of two years and up to 27 years in prison, as well as up to three years of supervised release, mandatory restitution and a fine of up to $750,000 or twice the loss caused by her offenses.

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Certified Public Accountant Ronald Simons Pleads Guilty to Delivering and Disclosing a False Federal Income Tax Return

2011-11-15T07:50:00.000-08:00

Source- http://www.fbi.gov/albany/press-releases/2011/certified-public-accountant-pleads-guilty-to-delivering-and-disclosing-a-false-federal-income-tax-return

ALBANY, NY—United States Attorney Richard S. Hartunian, Special Agent in Charge Charles R. Pine of the New York Office of the Criminal Investigation Division of the Internal Revenue Service, and Special Agent in Charge Clifford C. Holly of the Albany Division of the Federal Bureau of Investigation announced that Ronald Simons, 58, of Vestal, New York, pled guilty today before United States Magistrate Judge David R. Homer to one count of delivering and disclosing a false federal income tax return, in violation of Title 26, United States Code, Section 7207. Sentencing is scheduled for February 6, 2012 in Albany, New York. Simons faces up to one year in prison and a $100,000 fine.

As part of the guilty plea, Simons admitted the following:

From in or about 1987 through the present, Simons, a certified public accountant, was a partner at the accounting firm of Piaker & Lyons. From in or about 1992 through 2008, he prepared audited financial statements for McGinn, Smith & Co., Inc. (“McGinn Smith”). He also prepared tax returns for David L. Smith and other McGinn Smith entities.

In the fall of 2007, Simons prepared the 2006 U.S. Individual Income Tax Return for David and Lynn Smith (“the 2006 Return”) and, at Smith’s request, caused the return to be filed. The 2006 Return was received by the Internal Revenue Service on or about October 17, 2007 in Andover, Massachusetts.

The 2006 Return did not report $407,000 in fees distributed to David L. Smith from TDM Cable Funding LLC during 2006: $350,000 on October 3, 2006 (the “October Transaction”) and $57,000 on December 21, 2006 (the “December Transaction”). As a result, the 2006 Return, including line 22, “total income,” was not accurate.

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Federal Court Has Permanently Barred Dorthea Alexander From Preparing Federal Tax returns for others

2011-11-14T07:18:00.000-08:00

Source- http://www.justice.gov/opa/pr/2011/November/11-tax-1480.html

WASHINGTON – A federal court in Philadelphia has permanently barred Dorthea Alexander from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Alexander agreed without admitting the government’s allegations, was signed by Judge R. Barclay Surrick of the U.S. District Court of the Eastern District of Pennsylvania.

The government complaint in the case alleged that Alexander, of Leola, Pa., claimed bogus dependent exemptions, charitable donation and other deductions, and tax credits on customers’ tax returns during her employment as tax supervisor at Pawn Plus Inc. in Lancaster, Pa. The injunction order requires Alexander to send a copy of the order to all customers for whom she, or anyone under her direction, prepared a federal tax return since Jan. 1, 2005, and to give the government a list of those customers.

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Immigration Services Provider Kenia Marrero Allegedly Files Fraudulent Tax Returns for Customers

2011-11-13T07:27:00.000-08:00

Source- http://www.justice.gov/opa/pr/2011/November/11-tax-1483.html

WASHINGTON – The United States has sued Kenia Marrero seeking to bar her and her business, Kenia Immigration Services, from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction complaint, filed in U.S. District Court for the Southern District of Florida, alleges that Marrero of Miami prepares federal income tax returns for customers that fraudulently understate their tax liabilities by using fabricated deductions, business expenses and first-time homebuyer tax credits. The lawsuit alleges that Marrero offers immigration services through her business, including assistance in obtaining work permits and visas, and uses that customer base to obtain tax preparation customers.

According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 98 percent of the income tax returns prepared by Marrero and audited by the IRS resulted in tax deficiencies. The lawsuit alleges that the tax harm caused by Marrero’s misconduct could be as much as $1.4 million.

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Ronald Simons Pleads Guilty to Delivering and Disclosing a False Federal Income Tax Return

2011-11-12T06:33:00.000-08:00

Source- http://www.fbi.gov/albany/press-releases/2011/certified-public-accountant-pleads-guilty-to-delivering-and-disclosing-a-false-federal-income-tax-return

ALBANY, NY—United States Attorney Richard S. Hartunian, Special Agent in Charge Charles R. Pine of the New York Office of the Criminal Investigation Division of the Internal Revenue Service, and Special Agent in Charge Clifford C. Holly of the Albany Division of the Federal Bureau of Investigation announced that Ronald Simons, 58, of Vestal, New York, pled guilty today before United States Magistrate Judge David R. Homer to one count of delivering and disclosing a false federal income tax return, in violation of Title 26, United States Code, Section 7207. Sentencing is scheduled for February 6, 2012 in Albany, New York. Simons faces up to one year in prison and a $100,000 fine.

As part of the guilty plea, Simons admitted the following:

From in or about 1987 through the present, Simons, a certified public accountant, was a partner at the accounting firm of Piaker & Lyons. From in or about 1992 through 2008, he prepared audited financial statements for McGinn, Smith & Co., Inc. (“McGinn Smith”). He also prepared tax returns for David L. Smith and other McGinn Smith entities.

In the fall of 2007, Simons prepared the 2006 U.S. Individual Income Tax Return for David and Lynn Smith (“the 2006 Return”) and, at Smith’s request, caused the return to be filed. The 2006 Return was received by the Internal Revenue Service on or about October 17, 2007 in Andover, Massachusetts.

The 2006 Return did not report $407,000 in fees distributed to David L. Smith from TDM Cable Funding LLC during 2006: $350,000 on October 3, 2006 (the “October Transaction”) and $57,000 on December 21, 2006 (the “December Transaction”). As a result, the 2006 Return, including line 22, “total income,” was not accurate.

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Arthur Lee Ong a Hawaiian Firearms Business Owner Convicted of Federal Tax Offenses

2011-11-10T07:50:00.000-08:00

Source- http://www.justice.gov/opa/pr/2011/November/11-tax-1470.html

HONOLULU – Arthur Lee Ong of Honolulu was convicted by a federal jury Monday of conspiracy to defraud the United States and tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. District Judge Leslie Kobayashi presided over the case.

According to evidence introduced at trial, Ong, the owner and operator of Thunder Bug Inc., doing business in the state of Hawaii as Magnum Firearms, failed to report to the IRS millions of dollars of income he earned from the sale of firearms and related products to federal, state, county and military agencies, as well as to the general public. The evidence at trial showed that Ong, with the assistance of others, created multiple sham trusts in 1990 for the purpose of hiding his income and assets.

The evidence further showed that Ong stopped filing personal income tax returns beginning in 1994 and also filed false tax returns on behalf of the sham trusts that fraudulently reported to the IRS that the income from his businesses was attributable to these trusts and not to him. The evidence at trial established that Ong evaded more than $600,000 in federal income taxes from 2000 to 2006.

District Judge Kobayashi set sentencing for March 1, 2012. Ong faces a maximum prison sentence of 35 years and a fine of up to $1.75 million.

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Ronald Simons Pleads Guilty to Delivering and Disclosing a False Federal Income Tax Return

2011-11-09T07:06:00.000-08:00

Source- http://www.fbi.gov/albany/press-releases/2011/certified-public-accountant-pleads-guilty-to-delivering-and-disclosing-a-false-federal-income-tax-return?utm_campaign=email-Immediate&utm_medium=email&utm_source=albany-press-releases&utm_content=45532

ALBANY, NY—United States Attorney Richard S. Hartunian, Special Agent in Charge Charles R. Pine of the New York Office of the Criminal Investigation Division of the Internal Revenue Service, and Special Agent in Charge Clifford C. Holly of the Albany Division of the Federal Bureau of Investigation announced that Ronald Simons, 58, of Vestal, New York, pled guilty today before United States Magistrate Judge David R. Homer to one count of delivering and disclosing a false federal income tax return, in violation of Title 26, United States Code, Section 7207. Sentencing is scheduled for February 6, 2012 in Albany, New York. Simons faces up to one year in prison and a $100,000 fine.

As part of the guilty plea, Simons admitted the following:

From in or about 1987 through the present, Simons, a certified public accountant, was a partner at the accounting firm of Piaker & Lyons. From in or about 1992 through 2008, he prepared audited financial statements for McGinn, Smith & Co., Inc. (“McGinn Smith”). He also prepared tax returns for David L. Smith and other McGinn Smith entities.

In the fall of 2007, Simons prepared the 2006 U.S. Individual Income Tax Return for David and Lynn Smith (“the 2006 Return”) and, at Smith’s request, caused the return to be filed. The 2006 Return was received by the Internal Revenue Service on or about October 17, 2007 in Andover, Massachusetts.

The 2006 Return did not report $407,000 in fees distributed to David L. Smith from TDM Cable Funding LLC during 2006: $350,000 on October 3, 2006 (the “October Transaction”) and $57,000 on December 21, 2006 (the “December Transaction”). As a result, the 2006 Return, including line 22, “total income,” was not accurate.

At the time that Simons prepared the 2006 Return, he knew that:

(1) before in or about April 15, 2007, Smith characterized the October Transaction as income,

(2) both the October and December Transactions were initially booked by the McGinn Smith controller as origination fees,

(3) in October 2007, Smith told Simons that the October Transaction was a “loan,” causing Simons not to include it on the 2006 Return,

(4) in October 2007, the McGinn Smith controller reclassified the October Transaction from origination fees to “Loan-DLS,”

(5) in October 2007, the McGinn Smith controller told Simons that the fees paid to Smith and others should be “loans,” and

(6) before on or about October 11, 2007, Simons reclassified the December Transaction from origination fees to “Loans-other” by making an adjusting journal entry.

As a result of Simons’ reclassification of the December Transaction, as Simons knew, the 2006 Return did not report $407,000 in fees distributed to Smith from TDM Cable Funding LLC during 2006.

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