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

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

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

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

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

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

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

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

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

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

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

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

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

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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Mikel D. Jones and Dona Nichols Jones Convicted in Scheme to Defraud Lender

Source- http://www.fbi.gov/philadelphia/press-releases/2011/lawyer-and-wife-convicted-in-scheme-to-defraud-lender?utm_campaign=email-Immediate&utm_medium=email&utm_source=philadelphia-press-releases&utm_content=45056

PHILADELPHIA—Mikel D. Jones, 55, and Dona Nichols Jones, 54, of Boynton Beach, Florida, were convicted today in connection with a scheme to defraud a New York venture capital fund which financed the operation of Mikel Jones’ Philadelphia law firm. Jones, a personal injury lawyer, was convicted of conspiracy, money laundering, 14 counts of wire fraud, and 14 counts of mail fraud. His wife, Dona Nichols Jones, was convicted of conspiracy, money laundering, and 14 counts of wire fraud. Jones was acquitted of several counts of mail and wire fraud involving thefts from the City of Philadelphia. Mrs. Jones was not charged in those counts. U.S. District Court Judge Berle M. Schiller scheduled sentencing for February 7, 2012.

Jones owned and operated a law firm at 1831 Chestnut Street. In February 2006, Jones obtained a multi-million-dollar line of credit from Stillwater, a lender in New York, agreeing that he would only use the proceeds of the line of credit for legitimate expenses related to the operation of his law firm. Jones and his wife then used his a shell company they controlled and the name of another media corporation located in the Philadelphia to steal money from the Lender. They created fraudulent invoices on the letterhead of Strata-Tech, the company they controlled, and Philadelphia-based Comcast-Spectacor, falsely claiming that these companies had provided goods and services to Jones’ law firm. The companies provided no services to the firm. The Joneses used the fraudulently taken business-loan funds to pay off personal credit card debts and to buy 76ers basketball tickets from Comcast-Spectacor. The defendants were also convicted of laundering approximately $160,000 in fraudulently gotten funds through Mrs. Jones’ and their daughter’s Florida bank account, then using the fund to replenish funds Jones took from his law firm trust account. The Joneses obtained more than $350,000 using fraudulent invoices and false representations to the Lender during 2008 through 2009.

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A Federal Court has Ordered Advanced Underground Construction LLC and William David Ward II to Pay Employment Taxes

Source- http://www.justice.gov/tax/txdv111455.htm

WASHINGTON – A federal court has ordered Advanced Underground Construction LLC and William David Ward II to begin paying employment taxes to the United States on a timely basis, the Justice Department announced today. According to the complaint in a government lawsuit, Advanced Underground Construction is a construction company based in Grimes, Iowa, and Ward is its owner.

The preliminary injunction order, entered by Judge Harold D. Vietor of the U.S. District Court for the Southern District of Iowa, remains in effect while the government’s lawsuit is pending. According to the order, the defendants did not oppose the entry of the injunction, which requires them to deposit and pay the employment taxes, make all related tax return filings, and certify to the government that they have done so. Violation of an injunction can result in civil and criminal sanctions, including fines and imprisonment.

The government complaint alleges that, between the third quarter of 2004 and the present, Ward and the company repeatedly failed to make required employment tax deposits to the United States and instead used taxes withheld from employees’ wages as working capital, a practice sometimes referred to as “pyramiding.” The complaint further alleges that the defendants’ misconduct has resulted in a balance due to the government of more than $370,000, for which the government is seeking a judgment against the company.

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Self-Proclaimed “Governor” of Alabama and Wife Monty Ervin and Patricia Ervin, Convicted of Tax Fraud

Source- http://www.justice.gov/opa/pr/2011/November/11-tax-1459.html

WASHINGTON – A federal jury in Montgomery, Ala., today convicted Monty Ervin and Patricia Ervin of conspiracy to defraud the United States and three counts of tax evasion, the Justice Department announced. The jury also convicted Patricia Ervin of one count of structuring transactions to avoid bank reporting requirements. The jury’s verdict culminated a two-week trial that began Oct. 25, 2011, in Dothan, Ala.

Based on the evidence introduced at trial, the Ervins amassed hundreds of investment properties over the last decade, receiving more than $9 million in rental income. Despite receiving this income, the couple paid nothing in federal income taxes. When confronted by the Internal Revenue Service (IRS) in 2006, the Ervins proclaimed that they were not United States citizens, and as “sovereigns,” did not consider themselves subject to federal or state law.

Monty Ervin and Patricia Ervin also filed numerous documents in probate court renouncing their U.S. citizenship. In one such filing, Monty Ervin declared himself the “governor” of Alabama in its “original jurisdiction.” The Ervins had a license plate on their vehicle which law enforcement witnesses testified was associated with a “sovereign citizens” organization.

The Ervins owned and managed Southern Realty, a property management company in Dothan. As the evidence showed at trial, the couple concealed their assets from the IRS by placing investment properties into the names of nominees – “trusts” and “trustees.” The “trustees” named on property deeds testified that they were not involved in the sale or purchase of the properties and that the Ervins “stamped” their signatures onto official property records. Patricia Ervin also structured deposits into Southern Realty’s bank account in an effort to evade federal currency reporting requirements.

In addition to hundreds of real estate investment properties, the evidence also showed that the Ervins had amassed beachfront condominium units in their own names including a $1.3 million unit they paid for in cash and, when investigated by the IRS, transferred those properties into the names of bogus “trusts” and “trustees.” Additionally, the government introduced into evidence $350,000 of gold coins apparently buried in their yard.

The Ervins were indicted by a federal grand jury in Montgomery in February 2011. In March, Monty Ervin was arrested by a U.S. Marshal’s Service Fugitive Task Force in Naples, Fla., with a notebook containing the latitude and longitude coordinates of an island off the coast of Honduras.

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James E. Moss and Avada L. Jenkins Were Found Guilty Today of Tax Crimes Relating to “Flash Tax"

Source- http://www.justice.gov/tax/txdv111445.htm

WASHINGTON – James E. Moss and Avada L. Jenkins were found guilty today of tax crimes relating to “Flash Tax,” a Montgomery, Ala., tax preparation business owned by Moss, the Justice Department and Internal Revenue Service (IRS) announced. U.S. District Court Judge for the Middle District of Alabama Mark E. Fuller presided over the jury trial of Moss and Jenkins for conspiring to defraud the United States and for aiding and assisting the preparation of false tax returns.

The evidence at trial proved that both Moss and Jenkins, an employee of Flash Tax, prepared false tax returns for customers that fraudulently inflated the amount of refunds due to the customers. Evidence presented at trial showed that the tax loss affiliated with this scheme was more than $75,000.

A sentencing date has not been set, yet. Moss faces a maximum potential sentence of 80 years in prison and a maximum fine of $6.5 million; Jenkins faces a maximum potential sentence of 65 years in prison and a maximum fine of $5.25 million.

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Federal Court Bars Robert Pendell From Promoting Tax-Fraud Schemes

Source- http://www.justice.gov/tax/txdv111441.htm

WASHINGTON – A federal court has permanently barred Robert Pendell from promoting any scheme that assists or advises customers to attempt to violate the tax laws, the Justice Department announced today. The civil injunction order was entered by Judge Owen M. Panner of the U.S. District Court for the District of Oregon. According to the government complaint, Pendell resides in Ashland, Ore.

The United States sued Pendell, Eugene Casternovia, Robert Hagopian, Mark Lyon and their company, the Southern Oregon Resource Center Educational Services (SORCE) in April 2008 to enjoin them from promoting a scheme to conceal their customers’ assets from the Internal Revenue Service. As the government alleged in its amended complaint, and as the court found, Pendell promoted tax scams that involved the sale and use of sham entities through SORCE and a related multilevel marketing organization called Pinnacle Quest International. The court also found that Pendell organized and marketed these programs as a fraudulent means for customers to evade the reporting and payment of federal taxes.

According to the court, injunctions were previously entered against Casternovia and Lyon. In recommending that Pendell be enjoined, U.S. Magistrate Judge Mark D. Clarke cited a 2005 videotaped interview in which Pendell equated the payment of taxes to slavery and stated that SORCE products enabled customers to “reclaim their sovereign rights.” The court found that SORCE had at least 350 customers and, according to its internal records, made more than $1.6 million in 2005 through the sale of its programs.

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Carlos Brown Allegedly Claimed More Than $13 Million in Fraudulent Tax Refunds

Source- http://www.justice.gov/tax/txdv111434.htm

WASHINGTON – The United States has asked a federal court in Detroit to bar Carlos Brown from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Brown and his business, Express Finance and Processing Services, prepare fraudulent tax returns for customers seeking large refunds based on a frivolous theory called “redemption” or “commercial redemption,” which has been rejected by numerous courts.

The complaint alleges that Brown, a resident of Detroit, prepares returns claiming huge fraudulent refunds based on fabricated income tax withholding reported on false Internal Revenue Service (IRS) Forms 1099-OID. According to the complaint, Brown has allegedly sought more than $13 million in fraudulent refunds on at least 45 tax returns, including a bogus claim on one customer’s return for a refund in excess of $1.75 million.

In the complaint, the government also requests that the court order Brown to provide the government with a list of all persons for whom he has prepared federal tax returns since 2008.

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

www.irsrewards.com

Federal Court Permanently Barred Cynthia Peters and Melissa Edwards From Preparing Federal Tax Returns for Others

Source- http://www.justice.gov/tax/txdv111432.htm

WASHINGTON – A federal court in the Middle District of Louisiana has permanently barred Cynthia Peters and Melissa Edwards from preparing federal tax returns for others, the Justice Department announced today. According to the civil injunction suit, Peters, Edwards and their business, Jasmine’s and Melissa’s Tax Service, prepared tax returns for their customers claiming fraudulent tax refunds based on improperly claimed earned income tax credits.

The suit alleges that Peters and Edwards, both of Baton Rouge, La., prepared tax returns that claimed fraudulent refunds by fabricating their customers’ income and creating bogus losses and expenses so that the customers would supposedly qualify for the earned income credit. The pair also allegedly manufactured bogus losses and expenses for fictitious businesses so that their customers could claim larger refunds. The lawsuit alleges that their misconduct caused over $7 million in harm to the government.

According to the government complaint, the two women previously pleaded guilty to willfully aiding and assisting in the preparation and filing of false tax returns. Peters was sentenced to 27 months in prison and ordered to pay $76,908 in restitution to the Internal Revenue Service (IRS), and Edwards was to 30 months in prison and ordered to pay $56,040 in restitution to the IRS.

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

www.irsrewards.com