Federal Court Bars Milagros Espinal from Preparing Tax Returns for Others

Souce- http://www.justice.gov/opa/pr/2011/February/11-tax-210.html

WASHINGTON – A Florida woman has been permanently barred from preparing federal income tax returns for others, the Department of Justice announced today. The injunction order, to which Milagros Espinal consented, requires her to provide a copy of the order to her customers, publish a copy of the order in The Miami Herald and El Nuevo Herald, and turn over to the government information identifying her customers.

According to the complaint, since at least 2004, Espinal, of Hialeah, Fla., has routinely prepared tax returns containing fabricated or overstated deductions and improper or false claims for tax credits, such as the earned-income tax credit and the child tax credit. The government estimates that her return preparation resulted in an understatement of her customers’ federal income tax liabilities of $10 million or more between 2004 and 2007. She allegedly prepared at least 2,000 returns during that period.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Edward Gurary Charged with Failing to Report Foreign Bank Account at UBS in Switzerland

Source- http://www.justice.gov/opa/pr/2011/February/11-tax-211.html

WASHINGTON - An Ohio man residing in Switzerland was charged by information in the Northern District of Ohio for filing false personal income tax returns for the years 2004 through 2008, the Department of Justice announced today. The announcement was made by John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division , Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio , and Jose A. Gonzalez, Special Agent-in-Charge from the Internal Revenue Service (IRS) Criminal Investigation in Cincinnati.

According to court records, Edward Gurary, 45, lived in Orange Village, Ohio during the prosecution years. From approximately 2002 through 2008, Gurary owned and controlled a financial account at UBS AG (UBS) which was in the name of a Bahamian entity called Demko, Ltd., and which contained balances ranging from $490,000 to $947,000. Gurary controlled transactions in the Demko account by sending faxes using a code name “Vanda” to UBS from an OfficeMax in the Cleveland area, rather than his home or business. UBS would, in turn, send his requests for authorizations to officers of Demko in the Bahamas in order to make it appear that Demko owned and controlled the account. During the prosecution years, interest was paid by UBS into the Demko account in amounts ranging from $3,400 to more than $21,000.

The information charged Gurary with filing false income tax returns for 2004 through 2008 that failed to report interest income earned on his Demko bank account at UBS. In addition, for three of the years (2004, 2006 and 2007) the information charged Gurary with falsely stating on his Schedule B attached to his income tax return that he did not have signature or other authority over a foreign financial account. Finally, the information described that between 2004 and 2008, Gurary did not file any FBARs or otherwise disclose his Demko account at UBS to the IRS. An FBAR form is a form separate from an income tax return that the law requires taxpayers to file with the IRS every June to disclose additional information about foreign financial accounts over which a taxpayer has signature or other control over, and which had an aggregate value exceeding $10,000 at any time during the year.

An information merely alleges that crimes have been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Gurary faces a maximum of 3 years in prison and a fine of $250,000.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Betty J. Foster Barred from Preparing Federal Tax Returns for Others

Source- http://www.justice.gov/tax/txdv11203.htm

WASHINGTON - An Arkansas woman who operates Foster’s Income Tax Service in Knobel, Ark., has been permanently barred from preparing federal tax returns for others, the Justice Department announced today. The injunction order against Betty J. Foster, to which she consented, was entered by Judge J. Leon Holmes of the U.S. District Court for the Eastern District of Arkansas.

The government’s complaint alleges that Foster, through her company, prepares federal income tax returns for her customers that claim losses for non-existent businesses, as well as inflated or fabricated deductions, in order to understate tax liabilities unlawfully. According to the complaint, Foster has been preparing tax returns for a fee for approximately 25 years, and she consistently prepares approximately 450 tax returns per year. The government estimates that Foster’s unlawful return preparation activity has cost the United States $5 million or more for the 2007 through 2009 tax years.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Jon Robertson former president of Infinia Healthcare LLC, Charged with Tax Crimes

Source- http://www.justice.gov/tax/txdv11204.htm

WASHINGTON - The former president of Infinia Healthcare LLC, a company that operated long-term healthcare facilities in several states, was indicted by a federal grand jury in the U.S. District Court in Utah for three counts of tax evasion, the Department of Justice and the Internal Revenue Service (IRS) announced today.

According to the indictment, Jon Robertson, of Bountiful, Utah, attempted to evade taxes he owed in 2003 through 2005 by filing false tax returns, causing money to be transferred to bank accounts he controlled, and by directing others to make false record entries.

An indictment merely allege that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Jon Robertson faces a maximum of 15 years in prison and a fine of $250,000.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Former Vice President of Charlie Brown’s Restaurants Michael Mulligan, Sentenced to Home Confinement and Probation for Fraud Conspiracy and Tax Evasion

Source- http://newark.fbi.gov/dojpressrel/pressrel11/nk021511.htm

TRENTON, NJ—The former vice president of the Charlie Brown’s chain of restaurants was sentenced today to eight months of home confinement and three years of probation for conspiring to defraud the company by accepting more than $1 million in kickbacks in exchange for awarding contracts to vendors, U.S. Attorney Paul J. Fishman announced.

Michael Mulligan, 51, of West Milford, N.J., previously pleaded guilty before U.S. District Judge Mary L. Cooper to an iInformation charging him with one count each of conspiracy to commit mail fraud and tax evasion. Judge Cooper also imposed the sentence today in Trenton federal court.

According to documents filed in this and related cases and statements made in court:

From at least as early as 1999 through 2008, Mulligan was the vice president of Charlie Brown’s Acquisition Corporation. Mulligan and a co-conspirator, Charlie Brown’s president and CEO Russel D’Anton, used their positions as executives at Charlie Brown’s to direct business to vendors who paid them kickbacks in the form of cash, checks, and in-kind payments.

Mulligan admitted that he accepted kickbacks from a variety of vendors, including a construction company and vendors who provided Charlie Brown’s with refrigeration services and bakery products. The kickbacks given to Mulligan and D’Anton included expensive home appliances, checks, and cash.

Mulligan also took steps to conceal the payments, purposely failing to report the value of the kickbacks as income on his personal federal tax returns.

In addition to the term of home confinement and probation, Mulligan will be required to pay restitution in an amount to be determined.

D’Anton pleaded guilty to one count each of conspiracy to commit mail fraud and tax evasion and was recently sentenced to two years in prison. David Slabon, 44, of Sea Girt, N.J., admitted to paying kickbacks while serving as the president and CEO of Designline Construction Services. Slabon pleaded guilty to a criminal information charging him with one count each of conspiracy to commit commercial bribery and conspiracy to commit wire fraud, and awaits sentencing.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Douglas Todd Feller Sentenced for $4 Million Fraud Scheme

Source- http://kansascity.fbi.gov/dojpressrel/pressrel11/kc021111a.htm

SPRINGFIELD, MO—Beth Phillips, United States Attorney for the Western District of Missouri announced today that a Springfield, Missouri man was sentenced for his role in a nearly $4 million fraud scheme.

Douglas Todd Feller, 38, of Springfield, was sentenced on Monday, Feb. 7, 2011, by U.S. District Judge Richard E. Dorr to 28 months in federal prison without parole. The court also ordered Feller to pay $738,941 in restitution to the Internal Revenue Service. Feller will also be required to pay an as-yet-undetermined amount of restitution not to exceed $3,882,987 to Yakima Products, Inc.

On Aug. 4, 2010, Feller pleaded guilty to conspiracy to commit mail fraud, conspiracy to commit money laundering, and two counts of income tax evasion.

The scheme involved submitting fictitious invoices to defraud Yakima Products, Inc., of approximately $3,992,935. Yakima operates a luggage/bicycle rack manufacturing and distribution facility in Beaverton, Ore. During the time of the conspiracies, Yakima also operated a water craft (canoes, kayaks, etc.) manufacturing and distribution facility under the name Watermark Paddlesports, Inc. Watermark changed its name to Yakima in May 2005.

Feller was a transportation consultant and later the director of distribution and logistics for Yakima. He was a contract employee who worked out of his Springfield residence. Feller was responsible for approving invoices submitted by the carriers.

Feller admitted that he created Cooper Enterprises, a fictitious company that Feller used to bill Yakima for freight that was purportedly hauled by Cooper Enterprises, but which in fact, was never hauled. Feller received approximately $3,759,370 from Yakima, which he deposited in Cooper Enterprises bank accounts. Feller was assisted by Christopher Levato, of Simpsonville, S.C. Levato represented himself as an agent or employee of Cooper Enterprises and would field questions from Yakima employees regarding the Cooper Enterprises invoices. Levato received a portion of the scheme proceeds. Levato also pleaded guilty and was sentenced for his role in December 2010.

Feller also received more than $110,000 from fictitious invoices that he approved, and which were paid by Yakima, for freight that was purportedly hauled by Southern Logistics, but in fact was never hauled.

In addition, Feller submitted false inflated invoices under the name of United Transport, to Yakima for payment. Once payment was sent to United Transport, the funds were used to pay legitimate freight charges, and the inflated additional amount was split between Feller and another co-conspirator. Feller's role in all schemes was to approve the invoices for payment and submit them to Yakima. Yakima's accounting department relied on Feller's approval of the invoices as the basis for payment.

During the 2004 and 2005 calendar years, Feller had taxable income from the false invoicing schemes in the amount of $1,043,729 and $765,800. Based on the taxable income figures, Feller had an income tax due of $336,824 in 2004 and $250,803 in 2005. Feller attempted to evade and defeat the income tax due by failing to file a 2004 or 2005 income tax return, by failing to pay the IRS the income tax owed, and by concealing and attempting to conceal his true and correct income.

Feller agreed that the total amount of unpaid taxes due and owing the Internal Revenue Service for tax years 2002, 2003, 2004, and 2005, is $738,941.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Joseph Romanello Admits Structuring Cash Withdrawals to Evade Paying Taxes

Source- http://newhaven.fbi.gov/dojpressrel/pressrel11/nh021011.htm

David B. Fein, United States Attorney for the District of Connecticut, announced that JOSEPH ROMANELLO, 45, of Stamford, pleaded guilty today before United States District Judge Christopher F. Droney in Hartford to one count of illegally structuring cash withdrawals to evade reporting income on his federal tax returns for the years 2003 and 2004.

Federal law requires all financial institutions to file a currency transaction report (CTR) for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000. Structuring involves the repeated depositing or withdrawal of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements. Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law.

According to court documents and statements made in court, ROMANELLO earned income by providing masonry and landscaping services to Connecticut residents. Between approximately January 2003 and March 2005, ROMANELLO structured cash transactions of approximately $2 million by routinely withdrawing cash from various bank accounts he maintained in amounts at or slightly below $10,000 to prevent the financial institutions from filing CTRs. For the years 2003 and 2004, ROMANELLO did not file any federal income tax returns, and he failed to pay almost $1 million in income taxes during those two years.

Judge Droney has scheduled sentencing for April 29, 2011, at which time ROMANELLO faces a maximum term of imprisonment of 10 years and a fine of up to $500,000.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Denny Hecker Sentenced for Bankruptcy Fraud and Conspiracy to Commit Wire Fraud

Source- http://minneapolis.fbi.gov/dojpressrel/pressrel11/mp021111.htm

Earlier today in federal court in Minneapolis, local auto-mogul Dennis Earl Hecker, age 58, of Medina, was sentenced to 120 months in prison for crimes committed in connection with his scheme to defraud financial lenders and others out of millions of dollars. United States District Court Judge Joan N. Ericksen specifically sentenced Hecker on one count of conspiracy to commit wire fraud and one count of bankruptcy fraud. He was originally indicted on February 10, 2010, and pleaded guilty on September 7, 2010. In addition, Hecker was ordered to pay more than $31 million in restitution. He will remain in custody.

In imposing the sentence, Judge Ericksen said, "The actions you've taken are not consistent with someone who can be trusted, and you have not been as truthful as you could have been in the court system. Therefore, you do not get a break. You're going to get the full 10 years, which is appropriate and necessary. Behaving like a scoundrel is not tolerated in the court system."

U.S. Attorney B. Todd Jones added, "We are very pleased with today's sentence. It brings closure to a difficult investigation and prosecution. Although the victims in this case were primarily corporate entities and not individuals, and the losses resulting from the scheme were far less than what we have seen in other recent fraud cases, the severity of the sentence should serve notice that we will aggressively pursue those who lie, cheat, and steal and then seek refuge in the bankruptcy court."

Following sentencing, Col. Mark Dunaski of the Minnesota State Patrol, which initiated the investigation into this matter, said, "The sentencing of Mr. Hecker marks the end of a long and complicated investigation involving several law enforcement agencies. Complaints from Minnesotans are what prompted the investigation, and we hope there is a sense of justice for the victims impacted by Mr. Hecker and his criminal associates." The initial complaints were concerning tax, title, and licensing fees that Heckers' dealerships failed to pay when people purchased vehicles, although those complaints quickly led to the fraud investigation that resulted in federal charges being filed against Hecker and several of his business associates.

For many years, Hecker owned and operated numerous Minnesota auto dealerships and businesses that provided fleet vehicles to car rental companies. Those businesses operated under different corporate names but, collectively, were known as the "Hecker organization." In his plea agreement, Hecker admitted that from November of 2006 through June of 2009, he conspired with others to defraud Chrysler Financial Services and other commercial lenders from which he and the Hecker organization borrowed money for business operations.

In particular, in the fall of 2007, he conspired with Steve Leach and others to present fraudulent documents to Chrysler Financial in an effort to obtain $80 million in financing for the purchase of 5,000 vehicles from Hyundai Motor America. Among the documents submitted to Chrysler Financial was a letter from Hyundai Motor America that had been altered to benefit Hecker and the Hecker organization. The altered letter was transmitted via interstate wire transfer to Hecker himself, who then provided it to Chrysler Financial, knowing it was fraudulent.

Documents provided to Chrysler Financial also failed to specify the true nature and value of the collateral acquired by Hecker and the Hecker organization to secure the financing requested. Specifically, Hecker omitted details of the incentive payments he and the Hecker organization received from Hyundai Motor America, even though those payments totaled more than approximately $17.2 million and were material to the lender, Chrysler Financial. As a result of those false statements and misrepresentations, Chrysler Financial loaned Hecker and the Hecker organization more than $80 million and ultimately lost more than $10 million.

Ralph S. Boelter, Special Agent in Charge of the Federal Bureau of Investigation's Minneapolis Field Office, which also worked on the investigation of this case, said, "The FBI works diligently to investigate individuals and businesses that are not truthful with the representations they make to financial institutions. Fraudulent representations are taken seriously by the FBI because the damage that type of criminal activity causes. As in this case, it negatively impacts those individuals and businesses that legitimately seek financing."

According to Hecker's plea agreement, he also misled Chrysler Financial into financing Suzuki vehicles. Again, Hecker failed to inform the lender that the Hecker organization had received significant incentives from American Suzuki Motor Corporation. This particular fraudulent conduct was accomplished by removing material portions of Suzuki purchase contracts before providing them to Chrysler Financial.

When Chrysler Financial learned about the missing contract addendums, it insisted on receiving the incentive money. Hecker agreed to turn it over but, instead, continued the fraud scheme by providing the altered Suzuki contract to other lenders, including U.S. Bank, in an effort to obtain financing from them. As a result of those actions, the other lenders suffered a collective financial loss of more than $10 million.

Speaking of the efforts of the IRS agents on worked on this case, Kelly R. Jackson, Special Agent in Charge of the IRS Criminal Investigation Division, St. Paul Field Office, said, "High-ranking corporate officials hold positions of trust not only in their companies but also in the eyes of the public. That trust is broken when such officials abuse their power and commit crimes. With both law enforcement and financial investigation expertise, our agents are uniquely qualified to work with state and federal law enforcement agencies on these types of cases by 'following the money.' And we are very pleased with the successful resolution of this investigation due to the cooperative efforts of our law enforcement partners at the FBI and the Minnesota State Patrol."

The purpose of this fraud scheme, at least in part, was to fund Hecker's extravagant lifestyle. In an effort to maintain that fraud, Hecker carried out a cover-up and engaged in communications meant to lull creditors. Moreover, in an effort to avoid paying his debts, Hecker filed personal bankruptcy in June of 2009, seeking to discharge, among other amounts owed, the $10 million debt to Chrysler Financial.

After filing bankruptcy, however, Hecker admittedly concealed assets from the bankruptcy trustee. For example, he transferred $33,057 into someone else's bank account, over which he exercised control. He also transferred approximately $80,000 to that same individual, arranging for that individual to deposit the money, with instructions to return it to him later.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Federal Court Permanently Bars North Carolina Woman Jody S. Ball, from Preparing Federal Tax Returns for Others

Source- http://www.justice.gov/opa/pr/2011/February/11-tax-177.html

WASHINGTON – A federal court has permanently barred Jody S. Ball of Bryson City, N.C., from preparing federal income tax returns for others, the Justice Department announced today. The injunction order, to which Ball consented, was entered by Judge Martin Reidinger of the U.S. District Court for the Western District of North Carolina. The order requires Ball to provide the government with a list of all persons for whom she prepared federal tax returns since January 2007 and to send each person a copy of the court’s order.

According to the government’s complaint, Ball, doing business as The Tax Lady Inc. and Jody Ball Accounting, included false claims for charitable donation deductions, business expense deductions and earned income tax credits on tax returns that she and her businesses prepared. Even after the Internal Revenue Service (IRS) imposed penalties on Ball in 2004, she allegedly prepared more than 1,600 federal income tax returns during and after 2006. According to the complaint, of those returns that the IRS audited, approximately 80 percent understated customers’ tax liabilities.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Thierno M. Diallo Sentenced to 24 Months in Prison for Preparing False Returns

Source- http://www.justice.gov/opa/pr/2011/February/11-tax-172.html

WASHINGTON – Thierno M. Diallo of Cincinnati was sentenced to 24 months in prison by U.S District Court Judge Sandra Beckwith in Cincinnati for aiding and assisting in the preparation of false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today.

On Aug. 6, 2010, a jury found Diallo guilty of seven counts of aiding and assisting the preparation of false tax returns. According to documents and testimony presented during the trial, for the 2005-2007 tax years, Diallo prepared materially false U.S. Individual Income Tax Returns (Forms 1040) for customers of his return preparation business, Madina Consulting Services. These returns caused the IRS to issue refunds that his customers were not entitled to receive. Witnesses testified that Diallo, a U.S. citizen originally from Guinea, used his knowledge of west African culture and language to recruit customers from other west African nations who live in the Cincinnati area. These witnesses testified that Diallo included false items on their returns without their knowledge.

At sentencing, Judge Beckwith found that the intended tax loss to the government associated with this scheme was $95,370.

In addition to the prison term, Judge Beckwith ordered Diallo to serve 1-year of supervised release. As a condition of supervised release, Judge Beckwith barred Diallo from engaging in the business of tax return preparation.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

 

Justice Department Announces Indictment and Six Lawsuits Targeting False Claims for First-time Homebuyer and Earned-income Tax Credits

Source- http://www.justice.gov/opa/pr/2011/February/11-tax-165.html

WASHINGTON – The United States has filed six lawsuits in five states to stop tax return preparers from fraudulently claiming the first-time homebuyer tax credit and the earned-income tax credit, the Justice Department announced today. The filings of those civil injunction complaints coincided with the indictment of a Philadelphia man on criminal charges of fraudulently claiming the first-time homebuyer credit. All of these actions are part of the Justice Department’s continuing efforts to halt tax scams involving false claims for tax credits and to prosecute those who fraudulently file tax returns containing those claims.

"We are working hard to ensure that those who try to cheat our country by filing phony claims for tax credits do not get away with it," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "Honest taxpayers will be pleased to see the Internal Revenue Service and the Justice Department continuing to investigate, prevent, and prosecute these types of schemes during the 2011 tax filing season. False claim cases are certainly a nationwide priority for the Tax Division. This kind of tax fraud is an insult to hard-working Americans who legitimately qualify for these tax credits."

First-Time Homebuyer Tax Credit Cases

According to the indictment, Jonathan Brownlee of Philadelphia was charged with 16 counts of filing false federal income tax returns that contained fraudulent claims for the first-time-homebuyer credit. He allegedly obtained personal information about several individuals through false pretenses and used that information to make false claims for the credit to the Internal Revenue Service (IRS), along with requests that refunds be deposited into bank accounts that he controlled or could access. Brownlee allegedly knew the individuals whose names he used were not entitled to the credit because they had neither purchased a home nor signed a contract to do so. If convicted, he faces a maximum prison sentence of 80 years and a maximum fine of $4 million.

The indictment was announced by Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania; Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division; and Special Agent-in-Charge Eric Hylton with the IRS Criminal Investigation Division Field Office in Philadelphia.

In addition, three of the announced injunction complaints involved the first-time homebuyer credit:

A complaint filed in federal court in McAllen, Texas, alleges that tax return preparer Jose Cabrera and his business, JEC Business Consulting of Pharr, Texas, prepare federal income tax returns on which they falsely claim the first-time-homebuyer credit for their customers. The United States seeks a civil injunction order to stop them from improperly claiming the credit. The suit alleges that Cabrera makes no attempt to determine if his customers qualify for the credit and that he repeatedly claimed the credit on his customers’ tax returns even though he knew the customers had not purchased new homes. Cabrera allegedly claimed at least $985,000 in credits in 2009.

The government has asked a federal court in Philadelphia to stop Friday James, a former high school math teacher from Lansdowne, Pa., from preparing any federal tax returns for others. The complaint alleges that James and his business, Frika Tax Services, falsely claim the first-time homebuyer credit and claim false business expense deductions for his customers, many of whom are West African immigrants with little or no knowledge of the credit. The government alleges that James repeatedly claimed the credit on his customers’ returns when he knew they had not purchased homes within the applicable time period and that he fabricated the date of purchase on forms he submitted to the IRS. James allegedly claimed at least $1.2 million in credits in 2009.

The Justice Department sued tax-return preparer Delois Warren of Greensboro, Ala., and her business, Branjalo Tax Service, to stop her from preparing federal tax returns for others. Warren allegedly claimed the first-time homebuyer credit on her customers’ returns even after they told her that they did not purchase homes in the applicable tax years. The suit also alleges that Warren prepared returns containing false information in order to fabricate higher tax refunds through overstated earned-income tax credits.

The first-time homebuyer tax credit was created by the Housing and Economic Recovery Act of 2008, which included a refundable tax credit for first-time homebuyers equal to 10 percent of the purchase price, up to $7,500, for home purchases completed in 2008. The taxpayer was to repay the credit interest free over 15 years. Congress extended the credit in the American Recovery and Reinvestment Act of 2009, increased the maximum allowable amount to $8,000, and eliminated repayment of the credit if the taxpayer retained the residence for more than 36 months. The credit expired in 2010, so eligible taxpayers may still claim it on their 2010 federal income tax returns.

To protect the U.S. Treasury from fraudulent claims for this credit, the Tax Division, the U.S. Attorney’s offices and the IRS have vigorously prosecuted those who have abused the credit.

Examples of these criminal prosecutions in 2010 include:

In December 2010, Kenneth Harris and Lacrecia Ward of Memphis, Tenn., pleaded guilty to conspiring to file false claims against the United States by filing false tax returns claiming the first-time homebuyer credit. Each of them faces a maximum penalty of 10 years in prison and a fine of $250,000 upon sentencing.

In December 2010, Latricia Ann Williams, Gezelle Helena Amaechi and Shelton DeWayne Tanner were indicted by a federal grand jury in Arizona for conspiracy, wire fraud and aggravated identity theft. According to the indictment, the defendants filed 180 income tax returns falsely claiming more than $1 million in tax refunds based on, among other things, false statements of eligibility for tax credits such as the first-time homebuyer credit.

In November 2010, Jeffrey Leon Ceaser of Montgomery, Ala., pleaded guilty to conspiring to defraud the United States and identity theft for his role in the filing of 158 federal tax returns that falsely claimed the first-time-homebuyer credit and fuel tax credits. Ceaser faces a maximum of 25 years in prison when sentenced. In December 2010, Ora Mae Adamson of Montgomery pleaded guilty to the same charges before the same court.

In November 2010, Mary Singleton pleaded guilty in a South Carolina federal court to one count of assisting an individual in filing a fraudulent claim for the first-time homebuyer credit. She faces a maximum prison sentence of three years upon sentencing.

In November 2010, Georgia Ann Cloud of Tallahassee, Fla., was indicted on 17 counts of assisting individuals in filing fraudulent tax returns with false claims for the first-time homebuyer credit and one count of filing such a tax return herself.

In October 2010, Roderick Smith was sentenced by a federal court in Peoria, Ill., to 24 months in prison after having pleaded guilty to wire fraud and filing a false tax refund claim with the IRS. The indictment alleged that Smith falsely claimed on income tax returns that his clients were entitled to the first-time homebuyer credit. He was also ordered to pay $73,793 in restitution to the IRS.

In October 2010, Gregory Carter of Columbus, Ga., was indicted on 25 counts of assisting in the preparation of fraudulent tax returns that included, among other things, false claims for first-time-homebuyer credits.

In August 2010, Lois Torres of Uvalde, Texas, was indicted on 15 counts of assisting individuals in filing false federal income tax returns falsely claiming the first-time homebuyer credit.

In July 2010, Byron Meeks of Independence, Mo., was indicted on 15 counts of filing false claims against the United States for, among other things, fraudulent first-time homebuyer credits. In December 2010, Meeks agreed to plead guilty to one of those counts. He faces a maximum prison sentence of five years upon sentencing.

In April 2010, Kashawn Monique Savery of Los Angeles pleaded guilty to 10 counts of filing false claims against the United States. She admitted filing more than 200 false tax returns claiming more than $1.3 million in refunds based on fraudulently claimed first-time homebuyer tax credits and earned-income tax credits.

In addition, over the past year, the Justice Department has obtained civil injunctions against tax-return preparers on the basis of false claims for first-time homebuyer credits, including: Dianelys Armengol Guevara of Pembroke Pines, Fla.; Alberto Camejo of Hialeah, Fla.; and DavidSantiago , Paula Olivette Patrice, and Henry Ernesto Medina Jr. of Miami.

Earned-Income Tax Credit Cases

In addition to the lawsuit against Delois Warren discussed above, the Justice Department filed three other civil complaints seeking to stop tax-return preparers from filing false claims for the earned-income tax credit:

The government asked a Texas federal court to bar two Houston-area tax preparers, Christopher Helton and Marcia Johnson, from preparing any more federal tax returns. The pair, who do business as M.C. Tax Service, M.C. Tax Interprise and M.J. Tax Service, allegedly claim false earned-income and fuel tax credits on their customers’ tax returns. The complaint alleges that the defendants routinely prepare tax returns that either claimed the earned-income credit for taxpayers who do not qualify for it or overstate the amount of the credit for eligible taxpayers.

Helton and Johnson allegedly prepared tax returns claiming more than $1.5 million in earned-income tax credits during tax years 2007 through 2009, and the complaint describes fraudulent tax refunds based on false earned-income credits as a "rampant problem" at M.C. Tax Service.
The Justice Department sued Carmen Gonzalez of Allentown, Pa., who does business as Carmen Tax Services in New Brunswick, N.J., to stop her from preparing tax returns for others.

According to the complaint, Gonzalez fails to comply with due diligence requirements imposed by federal law on tax return preparers who claim the earned-income tax credit, and she falsifies her customers’ information in order to maximize their credits. She has allegedly prepared at least 2,500 returns since 2007.

A complaint filed in federal court in Miami seeks to bar Milagros Espinal of Hialeah, Fla., from preparing tax returns for others. The government alleges that Espinal claims improper or false tax credits, including earned-income credits, as well as fabricated or overstated tax deductions. She allegedly prepared at least 2,000 returns for the 2004 through 2007 tax years.

Originally enacted by Congress in 1975, the earned-income tax credit benefits low-income working individuals and families. The amount of the credit depends on several facts, including the individual’s filing status, annual wages and number of dependents. It is a "refundable" credit because, if the amount of the credit exceeds the amount of tax owed, the difference may be claimed as a tax refund by eligible persons.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

Kevin Leonard Shaffer Sentenced Today to 51 Months in Prison for Engaging in Mortage and Tax Fraud

Source- http://www.justice.gov/tax/txdv11159.htm

WASHINGTON - Kevin Leonard Shaffer, 40, of Sarasota, Fla., and Washington, D.C., was sentenced today to 51 months in prison, followed by five years of supervised release, for engaging in mortgage and tax fraud, announced John A. DiCicco, Acting Assistant Attorney General for the Justice Department's Tax Division and Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia.

On Nov. 9, 2010, Shaffer pleaded guilty to one count of bank fraud, one count of tax evasion and one count of willful failure to collect and pay over payroll taxes. Schaffer was sentenced today by U.S. District Judge Gerald Bruce Lee.

Shaffer was the president and a co-owner of Matrix-DSS, Inc., a subchapter S corporation, based in Manassas, Va., that offered consulting services in Northern Virginia. The mortgage fraud charge to which Shaffer pleaded guilty related to a fraud he perpetrated upon BB&T Corporation. In connection with a $5.6 million construction loan for a home in McLean, Va., Shaffer signed a loan application that contained false information. To substantiate this false information, Shaffer submitted to BB&T fictitious documents which falsely created the appearance that he and his wife were regular wage earners with overstated assets. Such documents included fictitious Internal Revenue Service (IRS) Forms W-2, pay stubs, bank statements and retirement account statements. BB&T Corporation sustained a loss of $1,815,612 as a result of this fraud. The total bank fraud loss, which included relevant conduct stemming from additional frauds that Shaffer perpetrated upon other banks, was $2,688,571.93.

The tax evasion count to which Shaffer pleaded guilty involved tax year 2005. Shaffer did not file a timely tax return for that year, nor did he pay the associated taxes. However, during an interview with IRS agents in December 2008, he told agents that he had electronically filed an income tax return for that year and paid the associated taxes by credit card. The IRS finally received a delinquent 2005 tax return from Shaffer in January 2009. This return substantially understated the flow-through income that Shaffer received from Matrix-DSS. The government sustained a $211,865.86 tax loss associated with this conduct. Including relevant conduct pertaining to Shaffer's tax evasion for tax years 2004, 2006 and 2007, the total tax loss associated with Shaffer's evasion of taxes was $536,228.77.

Finally, Shaffer willfully failed to collect, account for, and pay over to the IRS employment taxes for Matrix-DSS for the quarters ending Sept. 30, 2006, through Dec. 31, 2007. In June 2006, Shaffer terminated Matrix-DSS's contract with the company's payroll services provider. During the quarters at issue, Shaffer withheld tax payments from the paychecks of Matrix-DSS's employees. However, he failed to file the requisite IRS Forms 941 or pay the withheld tax payments or employer's FICA portions to the IRS. The tax loss associated with the willful failure to collect and pay over payroll taxes count to which Shaffer pleaded guilty was $42,320.66. Including relevant conduct, the total tax loss associated with this conduct was $272,209.14.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

Federal Court Shuts Down Colorado Tax Preparer Curtis L. Morris

Source- http://www.justice.gov/opa/pr/2011/February/11-tax-157.html

WASHINGTON – A federal court in Denver has permanently barred Curtis L. Morris of Elizabeth, Colo., from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, entered by Chief U.S. District Judge Wiley Y. Daniel, approves a magistrate judge’s decision that found that Morris, who operates a business called Numbers & Beyond, prepares federal tax returns claiming large, fraudulent tax refunds.

The court found that Morris prepares various false Internal Revenue Service (IRS) forms, such as Form 1099-OID, to request fraudulent refunds based on phony claims of large income tax withholding. The court order says the scheme is rooted in the long-discredited "redemption" theory which, according to its proponents, allows taxpayers to access secret Treasury accounts to satisfy their tax liabilities. According to the court, proponents of the frivolous scheme claim that phony IRS forms can be used to access these fictitious Treasury accounts. The court found that Morris made fraudulent refund claims exceeding $56 million.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

Former Pastor of North County Church Danny O'Guin, Sentenced on Fraud Charges

Source- http://stlouis.fbi.gov/dojpressrel/pressrel11/sl020411a.htm

ST. LOUIS, MO—The United States Attorney's Office announced today that Danny O'Guin was sentenced to eight months in prison involving a scheme to get loans from church members between April 2006 and March 2009. O'Guin exploited his position as a religious leader to the members of the church who felt compelled to agree to the loans despite their reservations about the transactions. At various times, O'Guin falsely stated that he needed money for a particular purpose and then would use the borrowed money for another purpose. He also used false pretenses to put off or lull members asking for their money back. In addition to his prison sentence, the defendant will be ordered to pay restitution as determined by the court, in an amount in excess of $100,000.

DANNY O'GUIN, formerly of Florissant, MO, pled guilty in November to one felony count of mail fraud and appeared today for sentencing before United States District Judge Henry Autrey.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

Wilson Nicolas Admits Role in Mortgage Fraud Scheme

Source- http://newhaven.fbi.gov/dojpressrel/pressrel11/nh020411.htm

David B. Fein, United States Attorney for the District of Connecticut, announced that WILSON NICOLAS, 28, of Groton, pleaded guilty today before Chief United States District Judge Alvin W. Thompson in Hartford to one count of conspiracy to commit wire fraud stemming from his participation in a mortgage fraud conspiracy.

According to court documents and statements made in court, NICOLAS, Syed Babar, and others engaged in a scheme to obtain residential real estate loans, including loans insured by the Federal Housing Administration ("FHA"), through the use of sham sales contracts, false loan applications, and fraudulent property appraisals.

As part of the scheme, NICOLAS acted as a straw buyer who allowed his name and identifying information to be used to obtain mortgage loans to purchase two properties in New Haven at fraudulently inflated prices. Specifically, in 2008, NICOLAS worked with Babar and others to obtain FHA-insured loans to buy a house at 243 Starr Street at the fraudulently inflated price of $175,000, and a house at 88 Hazel Street for the fraudulently inflated price of $180,000.

Babar had instructed NICOLAS to open a joint bank account with an individual whom NICOLAS did not know in order to give the appearance NICOLAS had access to more money than he actually had. The loan applications also falsely represented where the defendant worked.

After the closings, NICOLAS received $40,000 in cash from a co-conspirator and later returned $8,000 to the co-conspirator to be used in another real estate transaction. NICOLAS never occupied either of the two houses on which he served as a buyer, and he defaulted on both of them.

The lenders suffered losses of more than $120,000 as a result of these fraudulent transactions.

Judge Thompson has scheduled sentencing for May 6, 2011, at which time NICOLAS faces a maximum term of imprisonment of five years and a fine of up to $250,000.

On February 1, 2011, Babar pleaded guilty to multiple federal charges related to his leadership of this extensive mortgage fraud scheme, which has caused losses in excess of $3.2 million to lenders. He awaits sentencing.

This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development - Office of Inspector General, and is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines.

In July 2009, the U.S. Attorney's Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an e-mail toctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney's Office; Federal Bureau of Investigation; Internal Revenue Service - Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General; and State of Connecticut Department of Banking.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

Guillermo B. Garcia the owner of B. Garcia Income Tax Services in Upland, was Ordered to Stop Preparing Tax Returns for Others

Source- http://www.justice.gov/usao/cac/pressroom/pr2011/014.html

LOS ANGELES – A federal court judge has issued an order that prohibits the operator of an Upland tax service from preparing federal income tax returns and other tax-related documents for clients.

In a permanent injunction filed Monday, Guillermo B. Garcia, the owner of B. Garcia Income Tax Services in Upland, was ordered to stop preparing tax returns for others.

United States District Judge Otis D. Wright II issued the permanent injunction at the request of the United States Attorney’s Office, which had alleged that Garcia prepared income tax returns that contained false or inflated expenses on Schedule A and Schedule C. Additionally, according to the Justice Department’s lawsuit, Garcia filed tax returns for clients that sought refunds that were greater than the tax returns actually signed by his clients, and that Garcia kept the extra money when the Internal Revenue Service issued refund checks.

Garcia submitted thousands of income tax returns over the past four years, and in 183 tax returns that were examined by the government, IRS auditors found that the returns understated taxes due by $784,238 – or approximately $4,300 per return.

“[I]f Guillermo B. Garcia violates this Judgment for Permanent Injunction, he may be subject to civil and criminal sanctions for contempt of court, including imprisonment,” Judge Wright said in his order.

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com

Mark Jackson Charged with Tax Evasion

Source- http://philadelphia.fbi.gov/dojpressrel/pressrel11/ph020311c.htm

Mark Jackson was charged today by Information with a conspiracy to evade taxes on income earned as an independent contractor in 2004, announced United States Attorney Zane David Memeger.

In criminal cases If convicted the defendant faces a maximum possible sentence of five years’ imprisonment, a $250,000 fine, two years’ supervised release and a $100 special assessment.

The case was investigated by the Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, and the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorney Pamela Foa .

************************************************************************

Report IRS Tax Fraud by Calling 1-888-482-6825 or by visiting

www.irsrewards.com