Beverly S. Beavers and James E. Beavers Charged with Tax Crimes

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-492.html 

On April 17, 2012, a federal grand jury returned a four count indictment charging Beverly S. Beavers and James E. Beavers of Knoxville, Tenn., with conspiracy to defraud the United States and filing false claims for tax refunds, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to the indictment, Beverly and James Beavers filed a false 2008 personal tax return that was prepared by Penny Jones, a partner in PMDD Services LLC, an Idaho-based tax return preparation firm. Their 2008 return claimed a tax refund of $591,123 to which they were not entitled. Upon receiving the fraudulent refund, the indictment alleges that the Beavers paid $59,405 to Jones and the other principals of PMDD Services. Later, the Beavers allegedly filed amended tax returns for 2006 and 2007, seeking fraudulent tax refunds of $193,056 and $202,625, respectively, for those years.

The Beavers are also alleged to have taken steps to hide their assets from possible IRS collection efforts, including transferring the real estate title to their personal residence and Beverly Beavers’ store to nominee trusts.

Jones, other alleged principals of PMDD Services, and several other persons were charged in the Southern District of Florida in November 2011 with tax crimes, including conspiracy to defraud the United States and filing false claims. That case is scheduled for trial in October 2012. In July 2011, a federal court in Idaho permanently enjoined Penny Jones from filing federal tax returns on behalf of others.

The indictment alleges that Beverly Beavers owned a formalwear store in Knoxville and that James Beavers was previously employed as the research director of an academic engineering institute at the University of Tennessee, and as a private engineering consultant.

If convicted, the defendants each face a maximum potential sentence of 20 years imprisonment and a criminal fine up to $1 million. Both defendants may also be required to pay restitution to the IRS.

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Stephen Murphy Pleads Guilty in Nine-year Scam to Defraud the United States, Is Sentenced to Two-year Prison Term

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-496.html 

Stephen Murphy, a Utah resident, pleaded guilty in federal court in Salt Lake City to one count of conspiracy to defraud the United States, and was sentenced the same day to 24 months in prison, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge Dee Benson presided over the plea hearing and sentencing, which took place yesterday.

According to information disclosed at the hearing, Murphy, with the assistance of several tax defier promoters, filed numerous false income tax returns for the years 2002 through 2009, espousing various false and frivolous tax positions. For example, he filed a false return for 2002 reporting zero income and zero tax due, on the ground that he was “not a U.S. person” subject to tax. He filed several subsequent false returns fraudulently claiming income tax refunds, including a false return for 2008 based on fictitious Forms 1099-OID. Also disclosed at the hearing, Murphy established two fake charities, which were actually just names attached to certain of his personal bank accounts. He fraudulently claimed “charitable contribution” tax deductions for funds siphoned to these accounts. As part of his scheme, Murphy submitted Forms W-4 to his employers vastly overstating his withholding allowances, so as to minimize or eliminate tax withholdings from his wages. Murphy admitted that he intended to cause the U.S. Treasury a loss exceeding $200,000.

After accepting the plea, Judge Benson sentenced Stephen Murphy to two years imprisonment and one year of supervised release. Murphy was also ordered to pay restitution to the IRS in the amount of $83,831.

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Justice Department Asks Federal Court to Shut Down Three Philadelphia-area Tax Preparers

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-498.html 

The United States has asked a federal court to bar three Philadelphia-area tax preparers from preparing federal tax returns for others, the Justice Department announced today. According to the government complaint in the civil injunction suit, defendants Deron Joe, Edmund Dassin and James Tokpawhiea are Liberian nationals who are legal permanent residents of the United States. The suit alleges that most of the customers of their business, Urban Tax Professionals, are also from Liberia and were referred to the defendants by family or friends.

According to the complaint, the defendants have repeatedly prepared fraudulent federal income tax returns that intentionally understate their customers’ tax liabilities. They are alleged to have falsely claimed the first-time-homebuyer credit and the earned-income tax credit in order to claim large tax refunds. According to the complaint, Joe and Dassin told one of their employees to claim the first-time-homebuyer credit on every return he prepared. The complaint also alleges that the defendants claimed false dependents and fabricated deductions for employee business expenses.

The complaint states that the Internal Revenue Service (IRS) has disallowed at least $1.4 million in tax credits claimed by the defendants on customer returns.

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Stephen E. Hruby Pleads Guilty to Bid Rigging at Municipal Tax Lien Auctions in New Jersey

Source-  http://www.justice.gov/opa/pr/2012/April/12-at-486.html 

WASHINGTON – A former executive of a New York-based tax liens company who supervised the purchasing of municipal tax liens at auctions in New Jersey pleaded guilty today for his role in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout the state, the Department of Justice announced.

A felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, N.J., against former Vice President Stephen E. Hruby, of Hainesport, N.J. Under the plea agreement, which is subject to court approval, Hruby has agreed to cooperate with the department’s ongoing investigation.

According to the felony charge, from at least as early as December 2002 until approximately February 2009, Hruby participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to, and directing others to, allocate among certain bidders which liens each would bid on. Hruby, and those under his supervision, proceeded to submit bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.

“Today’s guilty plea demonstrates that the Antitrust Division will not tolerate illegal conduct that harms distressed homeowners,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to prosecute the perpetrators of anticompetitive bid rigging schemes at municipal tax lien auctions in New Jersey and elsewhere.”

The department said that the primary purpose of the conspiracy was to suppress and restrain competition, in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Hruby conspired with others not to bid against one another at municipal tax lien auctions in New Jersey. Because the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum.

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Thomas Mitchell Pleads Guilty to Failing to File Income Tax Returns

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-482.html 

Thomas Mitchell of Mansfield, Ohio pleaded guilty before United States District Judge George J. Limbert of the Northern District of Ohio to criminal information charging him with willfully failing to file an income tax return with the Internal Revenue Service (IRS), the Justice Department and IRS announced today.

According to the plea agreement and statements made in court, Mitchell, an independent Aflac insurance salesman, failed to file individual income tax returns and pay taxes for the years 1999-2009, despite earning sufficient income during those years. As part of the plea agreement, Mitchell has agreed to pay restitution to the IRS in the amount of $111,639.

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Stephen A. Favato a Former Partner in BDO Seidman LLP’s Woodbridge, N.J., Sentenced to Prison for Tax Crimes

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-481.html 

Stephen A. Favato, a resident of Point Pleasant Beach, N.J., and a former partner in BDO Seidman LLP’s Woodbridge, N.J., office, was sentenced to 18 months in prison for tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced today. In August 2010, a jury sitting in Newark, N.J., found Favato guilty of one count of corruptly endeavoring to obstruct and impede the Internal Revenue laws and one count of aiding and assisting in the preparation and filing of a false income tax return.

During the trial, evidence presented proved that from late 2001 through April 2005, Favato attempted to obstruct the IRS by, among other conduct, advising his client, Daniel Funsch, on how to include false items on the 2002, 2003 and 2004 joint income tax returns for Funsch and his then-wife. Additionally, the evidence proved that Favato knowingly prepared and signed false joint income tax returns for the Funsches for these years, causing over $114,000 of tax loss to the IRS in connection with the Funsches’ filed 2002 return and attempting to cause over $70,000 of tax loss in connection with tax years 2003 and 2004.

The evidence presented at the trial established that Favato advised Funsch to significantly reduce the salary payments that Funsch was receiving from his corporation and to instead have this compensation paid to Funsch’s limited liability company, Great Escape Yachts LLC, in the form of purported lease payments for Funsch’s yacht. However, his corporation had not leased the yacht. This course of action recommended by Favato enabled Funsch to fraudulently deduct his personal yacht expenses as business expenses. In addition, the evidence presented showed that Favato advised Funsch on how to falsely increase his expenses in order to fraudulently eliminate a portion of the gain on three properties that Funsch sold in 2002 and 2004. Finally, the evidence showed that Favato advised Funsch to report inflated charitable contributions on Funsch’s 2003 tax return. The jury acquitted Favato on one count of tax evasion.

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Stephen Thomas Arrested for Tax Evasion and Three Counts of Attempted Evasion of his Personal Income Taxes

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-469.html 

Stephen Thomas of York, Pa., was arrested on charges of attempted tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. On April 4, 2012, a federal grand jury in the District of Columbia returned an indictment charging Thomas with three counts of attempted evasion of his personal income taxes. The indictment was unsealed following Thomas’s arrest.

According to the indictment, in 2004, in the District of Columbia, Thomas formed multiple entities whose names contained the acronym ECG, which stood for ESOP Capital Group. ECG purported to provide financial, business and other management services to companies that were interested in creating ESOPs, which are employee stock ownership plans. In or about 2005 and 2006, Thomas, through ECG, contracted to provide such services to two companies in Maine.

The indictment further alleges that, despite earning income, Thomas did not file his 2005 through 2007 individual income tax returns. In addition, he allegedly evaded assessment of his individual income tax liabilities for those years by diverting cash from the two companies he contracted with in Maine, using nominee bank accounts, titling assets in his spouse’s name and withdrawing substantial amounts of cash.

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Bernard Lane Pleads Guilty to Mail Fraud and Tax Evasion

Source-  http://www.fbi.gov/buffalo/press-releases/2012/former-buffalo-man-pleads-guilty-to-mail-fraud-and-tax-evasion 

BUFFALO—U.S. Attorney William J. Hochul, Jr. announced today that Bernard Lane, 50, of Fort Wayne, Indiana, pleaded guilty before U.S. District Court Judge Richard J. Arcara to mail fraud and tax evasion. The charges carry a maximum penalty of 20 years in prison, a $250,000 fine, or both.

Assistant U.S. Attorney Trini E. Ross, who is handling the case, stated that between April 2003 and November 2006, the defendant was employed as the Director of the Information Technology Department at Williams Advanced Materials. During that time, Lane directed the purchase of 251 laptop computers and directed that invoices be submitted to Williams Advanced Materials for payment. After receiving the computers, the defendant then sold them to another individual for approximately $175,000. For the tax years 2005 through 2007, Lane failed to file federal income tax returns, which would have included the money he received for the sale of the laptop computers. As a result, the defendant owes the Internal Revenue Service approximately $58,524 in unpaid taxes.

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Alabama Tax Preparation Business Owner and Five Preparers Indicted for Tax Fraud Scheme

Source-  http://www.justice.gov/tax/2012/txdv12458.htm 

WASHINGTON – Bruce King, the owner of a Montgomery, Ala., tax preparation business, and five tax preparers from Montgomery have been charged with conspiring to defraud the United States and aiding in the filing of false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today. A federal grand jury in Montgomery returned an indictment on March 28, 2012, charging Bruce King, Jenika Williams, Antoinette Djonret, Nakesha Donaldson, Angela Smith and Vonecia Orum with participating in a scheme to file false tax returns. Williams, Djonret, Donaldson and Smith have also been charged with wire fraud and aggravated identity theft. The indictment was unsealed yesterday.

According to the indictment, from July 2007 to October 2010, King owned and operated Premier Tax, a tax preparation business in Montgomery along with four other locations in Alabama and Georgia. King allegedly instructed his employees how to falsify federal income tax returns for the purpose of inflating claimed tax refunds. Williams, Djonret, Donaldson, Smith and Orum then allegedly prepared false returns by reporting figures that they knew were not correct.

The indictment also alleges that Williams, Djonret, Donaldson and Smith used the names and Social Security numbers of individuals without their knowledge or consent. Williams, Djonret, Donaldson and Smith allegedly used these names and Social Security numbers to report the individuals as dependents on a customer’s tax return when, in fact, the individuals were not the legitimate dependents of the customer.

An indictment merely alleges that crimes have been committed, and each defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, King, Williams, Djonret, Donaldson, Smith and Orum face a potential maximum of five years in federal prison for conspiring to defraud the United States and a potential maximum of three years for each count of aiding in the preparation of false tax returns. Williams, Djonret, Donaldson and Smith also face a potential maximum of 20 years for each wire fraud count and a mandatory two-year sentence for the aggravated identity theft counts. They all are also subject to fines and mandatory restitution if convicted.

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Troy A. Beam Convicted Of Tax Evasion, Obstructing and Impeding IRS

Source-  http://www.justice.gov/tax/2012/txdv12453.htm 

WASHINGTON – Troy A. Beam of Shippensburg, Pa., was sentenced today to 74 months in prison by U.S. District Judge Christopher C. Conner, the Justice Department and the Internal Revenue Service (IRS) announced. On May 4, 2011, a federal jury in the Middle District of Pennsylvania convicted Beam of tax evasion, obstructing and impeding the due administration of the Internal Revenue laws, and willful failure to file federal income tax returns.

According to evidence introduced at trial, Beam, a former certified public accountant and state auditor in the Pennsylvania Auditor General’s Office, earned substantial sums of income from 1992 to the date of the indictment while operating a home construction business known as “Sunbeam Builders,” as well as owning and operating two real estate businesses known as “Latrobe Leasing” and “Goldstar Property Management” that purchased, rented and sold real estate. Despite earning substantial income from these businesses, as well as other activities, Beam failed to file any federal income tax returns since April 1996, when he filed his 1995 tax return reporting a loss. In April 1996, Beam also filed false amended federal income tax returns for 1992, 1993 and 1994, seeking tax refunds for taxes he previously had paid for those years.

The evidence at trial proved that from 1999 to 2007, Beam earned more than $10.3 million in gross income from his various home construction and rental property businesses. Beam obstructed the IRS in its attempt to calculate and collect his taxes by using numerous sham trusts and other entities, including North Star Investment Holdings Ltd. to hide his income and assets. He used North Star to set up a bank account in the Cayman Islands into which he deposited nearly $3 million of income derived from his construction business.

“Convictions such as this send a loud and clear message that those who defy our nation's tax laws will be investigated and prosecuted to the fullest extent of the law,” said Kathryn M. Keneally, Assistant Attorney General of the Justice Department's Tax Division.

“The evidence showed beyond a reasonable doubt that Troy Beam is a consummate fraud and hypocrite who evaded his responsibilities as a citizen while participating in a charade to deceive the government, other citizens and himself for his own selfish ends,” said Peter J. Smith, U.S. Attorney for the Middle District of Pennsylvania.

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William S. Bene Charged with Copyright Infringement and Filing a False Tax Return

Source-  http://www.fbi.gov/losangeles/press-releases/2012/lakewood-man-charged-with-trafficking-counterfeit-computer-software 

LOS ANGELES—A former pitcher with the Los Angeles Dodgers has entered into a plea agreement in which he admits to operating a business selling counterfeit karaoke machines for years without paying taxes on the sales. The plea agreement, along with a two-count information, was filed today in federal court here in Los Angeles.

The information charges William S. Bene, 44, with criminal copyright infringement and filing a false tax return in violation of 17 U.S.C. § 506, 18 U.S.C. § 2319, and 26 U.S.C. § 7206(1).

Bene is expected to make his initial appearance in federal court on April 30, 2012.

According to the plea agreement, for several years between 2006 and 2010, Bene, a resident of Pasadena, sold counterfeit karaoke jukeboxes and did not report over $600,000 in sales from the business to the Internal Revenue Service. As part of his plea agreement, Bene admitted that between December 2006 and March 2010, he illegally copied and sold karaoke songs on hard drives. Each drive carried approximately 122,000 songs. Bene also admitted that he did not tell the IRS about the business, even going so far as to ask the IRS in 2008 for relief from back taxes because he claimed that he could not afford to pay.

“Intellectual property crimes are not victimless,” said United States Attorney André Birotte, Jr. “As this federal case shows, these crimes of stealth hurt the small businesses that do play by the rules, and they also deprive the federal government of tax revenue that could be put to beneficial use.”

IRS-Criminal investigation Special Agent in Charge Leslie P. DeMarco commented, “The charges in this information serve as an important reminder that IRS-Criminal Investigation will not tolerate those who make up their own rules. Income derived from illegal means is taxable and individuals who choose to participate in illegal schemes will be held accountable.”

The information charges a copyright offense that occurred in November 2009 and a false tax return filed for the year 2007.

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Darain and Cory Atkinson, Indicted on Conspiracy and Tax Fraud Charges

Source-  http://www.fbi.gov/stlouis/press-releases/2012/us-fidelis-brothers-indicted-on-conspiracy-and-tax-fraud-charges 

ST. LOUIS—The United States Attorney’s Office announced today the unsealing of an indictment involving the auto warranty company US Fidelis. The indictment alleges that company founders, Darain and Cory Atkinson, routinely used company funds for personal multi-million-dollar homes in St. Charles County, Lake Tahoe, and the Cayman Islands; numerous luxury vehicles and boats; and other personal living expenses of both themselves and relatives.

Darain Atkinson and Cory Atkinson were indicted on March 29, 2012 by a federal grand jury on one felony count of conspiracy to commit mail and wire fraud and two felony counts of filing false tax returns.

According to the indictment, the brothers jointly owned and operated National Auto Warranty Services Inc., which was structured as a privately held company with each brother owning 50 perent of the business. In January 2009, National Auto Warranty changed its name to US Fidelis Inc. National Auto Warranty/US Fidelis (NAWUS) routinely conducted business using the fictitious name of Dealer Services. The brothers also operated related businesses using some form of the name US Fidelis and owned a direct mail business, which was known as DS Direct.

The primary business of NAWUS was marketing and selling vehicle service contracts (VSCs) throughout the United States. Typically, NAWUS acted as a broker/seller of VSCs on behalf of other VSC administrators. In some cases, NAWUS sold VSCs on behalf of and in connection with one of its affiliated businesses, namely US Fidelis Administration Services. They used a variety of techniques to market and sell VSCs, including direct mail to consumers, media advertisements, and unsolicited telephone calls. A VSC was not a warranty or an extended warranty, and NAWUS had no affiliation with an automobile manufacturer, no authority to provide an automobile manufacturer’s factory warranty and no authority or ability to alter or extend a factory warranty, according to the indictment.

The indictment states that a VSC covered specified types of vehicle repair costs. The VSC administrators were responsible for paying covered claims under a VSC. Typically, a VSC administrator’s obligation to perform under the VSC was insured by a reinsurance group or a risk retention group. The cost and availability of a VSC depended on a number of factors, including the type, age, and mileage of the vehicle in question, as well as the term of the coverage. NAWUS made a profit and attempted to make a profit by marking up the price of the VSC, which was often more than $1,000. The total purchaser cost for a VSC was often greater than $2,000.

Some VSC purchasers financed the cost of the VSC, although some paid in full at the outset. NAWUS had contracts with Mepco Finance Corporation (Mepco), Chicago, Illinois. A typical VSC sale involved at least four parties: NAWUS as the seller, a VSC administrator, Mepco, and a VSC customer/purchaser. NAWUS typically received the largest percentage of the total sales price of a VSC, approximately 60 percent. The VSC administrator received the next largest percentage, about 30 percent, and Mepco received approximately 10 percent. When a VSC purchaser financed its purchase, NAWUS typically received its percentage up front from Mepco after the customer made an initial down payment and the first installment payment. The VSC administrator was also paid its share by Mepco.

The indictment alleges that as part of the conspiracy, Darain Atkinson directed NAWUS personnel to fraudulently withhold substantial portions of refunds due to customers who canceled their VSC and were owed a full or prorated refund. NAWUS routinely fraudulently withheld approximately 40 percent of the total refund due to customers who legitimately canceled and attempted to cancel their VSCs. Often, only customers who complained or threatened action were provided the full refund to which they were entitled. NAWUS personnel routinely made the cancellation and refund process difficult to discourage purchasers from being able to obtain refunds to which they were entitled.

The indictment states that between 2006 and 2008, Darain and Cory Atkinson received distributions totaling more than $71 million from NAWUS, a substantial percentage of which funds were used to pay for their personal expenses. Records from NAWUS indicate that in 2006, Darain Atkinson received distributions in excess of $13 million and Cory Atkinson received in excess of $14 million. In 2007, they each received distributions in excess of $8 million; in 2008, in excess of $13 million. For the tax years 2006 and 2007, Darain Atkinson and Cory Atkinson failed to report the taxable distributions as income.

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Enyinnaya Udo Indicted for Preparing False Tax Returns

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-442.html 

A federal grand jury in the District of Columbia returned an indictment charging Enyinnaya Udo with 25 counts of aiding and assisting in the preparation of false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.

According to the indictment, the defendant operated a tax preparation business called Anic and Associates, located in Washington, D.C. The defendant allegedly aided, advised and prepared false individual income tax returns for the tax years 2005 through 2008 for at least seven taxpayers. These individual income tax returns allegedly claimed fraudulent filing statuses and false deductions.

If convicted, the defendant faces a potential maximum sentence of three years in prison and a maximum fine of $250,000 on each count.

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Jacqueline Slaton Indicted for Tax Fraud Using Stolen Identities

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-435.html 

A federal grand jury in Montgomery, Ala., returned an indictment charging Jacqueline Slaton for using stolen identities to file false tax returns, the Justice Department, U.S. Attorney George L. Beck Jr. and the Internal Revenue Service (IRS) announced today. The 12-count indictment, which was unsealed following her arrest, charges Slaton with filing false claims, wire fraud, and aggravated identity theft.

According to the indictment, Slaton used stolen identities to file false tax returns which fraudulently claimed refunds. Slaton directed a portion of the proceeds to be deposited onto prepaid debit cards.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, she faces a potential maximum 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 the aggravated identity theft counts. She is also subject to fines and mandatory restitution if convicted.

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Antoinette Djonret Indicted for Using Stolen Identities and Debit Cards to Obtain Tax Refunds

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-436.html 

A federal grand jury in Montgomery returned an indictment on March 28, 2012, charging Antoinette Djonret for using stolen identities to file false tax returns, the Justice Department, U.S. Attorney George L. Beck Jr. and the Internal Revenue Service (IRS) announced today. The 19-count indictment, which was unsealed today following her arrest, charges Djonret with filing false claims, theft of government funds, access device fraud, aggravated identity theft and possession of unauthorized access devices.

Djonret had earlier been charged with making false claims in a criminal complaint that was filed on February 22, 2012. According to the indictment and other court documents, Djonret used stolen identities to file false tax returns which fraudulently claimed refunds. Djonret had some of the refunds deposited onto a prepaid debit card in her name. Court documents state that nearly 650 tax returns were electronically filed from an IP address assigned to her residence. According to the criminal complaint, on May 22, 2010, Djonret was arrested during a traffic stop and police officers seized from her car several prepaid debit cards in the names of other individuals. The cards were linked to bank accounts that had received federal income tax refunds.

If convicted, she faces a maximum potential sentence of five years in prison for each false claims count and each theft of government funds count, 15 years in prison for the access device fraud count, 10 years in prison for the possession of unauthorized access devices count, and a mandatory two-year sentence for the aggravated identity theft counts. She is also subject to fines and mandatory restitution if convicted.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.

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Steven Kern Arrested on Tax Charges and Failing to File His Individual Tax Returns

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-416.html 

Steven Kern of Marine City, Mich., was arrested today following his indictment on March 27, 2012, on eight counts of failing to file his individual tax returns and eight counts of filing false corporate tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.

The indictment alleges that Kern failed to file individual tax returns for tax years 2003 to 2010, despite earning more $1.2 million in gross income during that time period. The indictment further alleges that Kern filed false corporate tax returns on the behalf of Kern Chiropractic Center, failing to report cash and check payments diverted from the center by Kern from 2003 to 2010.

According to the indictment, Kern has not submitted a tax return to the IRS since tax year 2002. The indictment alleges that Kern used funds diverted from the Kern Chiropractic Center to pay for his own personal expense.

An indictment is merely a formal charge by the grand jury. Kern is presumed innocent unless and until proven guilty in U.S. District Court. If convicted of all charges, Kern faces a maximum potential sentence of 32 years in prison and maximum fines of up to $2.8 million.

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Wanda Davis Indicted for Tax Fraud Filing False Federal Income Tax Returns

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-417.html 

A federal grand jury in Montgomery, Ala., returned an indictment on March 28, 2012, charging Wanda Davis with filing false federal income tax returns, the Justice Department and the Internal Revenue Service (IRS) announced today. The indictment was unsealed today following Davis’s initial appearance.

Davis is charged with 23 counts of filing false tax returns for clients. According to the indictment, from 2007 to 2011, Davis prepared 23 false tax returns while working at Davis Fast Tax and later her own business, Davis Tax Service. The tax returns claimed false deductions and business, resulting in inflated tax refunds.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Davis faces a maximum of three years in federal prison for each of the 23 false tax return counts. Davis is also subject to fines if convicted.

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William Scott Dion and Catherine Floyd Both Convicted for Promoting and Using Tax Defier Schemes

Source-  http://www.justice.gov/opa/pr/2012/April/12-tax-418.html 

A federal jury in Worcester, Mass., convicted William Scott Dion and Catherine Floyd, both of Sanbornville, N.H., and Charles Adams of Norwood, Mass., for conspiracies to defraud the United States through the promotion and use of multiple tax fraud schemes, the Justice Department and the Internal Revenue Service (IRS) announced today.

Dion and Floyd were released on electronic monitoring bracelets pending sentencing and Adams was released on call in/voice recognition pending sentencing. Dion’s sentencing is scheduled for June 21, 2012, Floyd’s sentencing is scheduled for June 26, 2012 and Adams’s sentencing is scheduled on June 27, 2012, all before U.S. District Judge F. Dennis Saylor.

Dion, Floyd and Adams were convicted of conspiracy to defraud the IRS by promoting an “under the table” payroll scheme. Dion and Floyd were also convicted for conspiracy to defraud the IRS through the use of an “underground warehouse banking” scheme designed to conceal customer income and assets from the IRS. Floyd and Dion were also convicted separately for corruptly endeavoring to obstruct the IRS’s ability to determine their own income. Adams was separately convicted of tax evasion.

According to the evidence presented at trial, Dion, Floyd and Adams ran a payroll tax scheme in order to pay employees “under the table” without properly accounting for, withholding and paying over to the IRS the payroll taxes required by law. The three promoted the payroll scheme to employers and individuals who wanted to avoid payment of employer payroll taxes and individual payroll taxes. The three ran the payroll scheme under three different names: Contract America, Talent Management and New Way Enterprises. Approximately 150 individuals subscribed to the payroll scheme and in excess of $2.5 million in unreported wages and compensation were paid through the system.

The evidence at trial also proved that Dion and Floyd conspired to defraud the United States by promoting and operating an “underground warehouse banking” scheme which helped subscribers conceal income and assets from the IRS. According to the evidence, the warehouse scheme operated under three different names: Your Virtual Office, Office Services and Calico Management. As part of the warehouse banking scheme, the defendants maintained accounts at several banks and used the accounts to deposit and commingle business receipts and other funds received from subscribers in order to mask the true ownership of the funds. According to evidence presented at trial, more than $28 million in deposits were made into the various bank accounts used in the scheme.

In August 2009, the three defendants were indicted with four other individuals relating to the promotion and use of these schemes. On Dec. 9, 2011, prior to trial, Gail and Myron Thorick of West Warwick, R.I., pleaded guilty to conspiring to defraud the United States by helping operate the “warehouse banking” scheme and for filing false tax returns. On that same date, Gary Alcock pleaded guilty to conspiracy by using the payroll scheme, as well as to tax evasion and willful failure to file tax returns. On Jan. 24, 2012, Kenneth Scott Alcock pleaded guilty to conspiracy relating to the payroll scheme and to multiple counts of tax evasion. All four defendants are awaiting sentencing.

The defendants face up to five years in prison on each count of conspiracy to defraud the United States and tax evasion, together with fines of up to $250,000 or twice the financial gain to the defendant or loss to the IRS, to be followed by three years of supervised release. The charges for obstructing the IRS carry maximum penalties of three years in prison, fines of $250,000 and one year of supervised release.

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Six Arraigned on Tax Conspiracy in a Corporate Bonus Scheme Based in Western New York

Source-  http://www.justice.gov/tax/2012/txdv12398.htm 

WASHINGTON – Six officials of an Upstate New York firm were arraigned yesterday before Magistrate Judge Leslie G. Foschio. On March 21, a federal grand jury in the Western District of New York indicted the six defendants, Philip R. DeLuca, Alfred R. LaGreca, Frank A. Fracassi, Michael A. Elia, Laurence A Elia and Richard A. Elia, on tax charges, including conspiring to defraud the Internal Revenue Service (IRS).

According to the superseding indictment, between the late 1990s and at least April 2007, the defendants were officers of Sevenson Environmental Services Inc., a Subchapter S corporation (a corporation treated like a partnership for tax purposes) located in Niagara Falls, N.Y., that was involved in remediation of sites contaminated with hazardous waste. During that time, the defendants allegedly conspired to defraud the IRS by developing and managing a scheme whereby they and other Sevenson employees received bonus compensation that was not reported to the IRS.

The superseding indictment also alleges that this compensation permitted certain Sevenson employees to obtain goods and services that were paid for by the corporation, but not reported to the IRS. In order to facilitate Sevenson’s payment for these goods and services, it is alleged that the defendants caused documents to be fabricated, invoices to be falsified and false individual income tax returns to be filed. From the late 1990s through at least April 2007, Sevenson awarded at least 23 employees a total of approximately $1 million in unreported, non-cash bonuses.

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Joseph Rivas Allegedly Files Income Tax Returns With Fraudulent Deductions and Expenses

Source-  http://www.justice.gov/tax/2012/txdv12388.htm 

WASHINGTON – The United States has sued tax preparer Joseph Rivas, seeking to bar him from preparing any federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Rivas of DeSoto, Texas, claimed fraudulent deductions and expenses on his customers’ tax returns.

Rivas allegedly claimed fake mortgage interest deductions, illegally deducted social security taxes as state and local taxes and fabricated employee business expenses, among other fraudulent items, on his customers’ returns. According to the complaint, the harm to the United States from Rivas’s misconduct could be $7.8 million or more.

The government is also seeking a court order requiring Rivas to provide a list of all persons for whom he has prepared federal tax returns since Jan. 1, 2010.

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Robert Jensen Allegedly Worked With Tax Lawyer to Help Clients Evade Income Taxes and Illegally Circumvent Pension Plan Rules

Source-  http://www.justice.gov/tax/2012/txdv12400.htm 

WASHINGTON – A federal court has permanently barred Robert Jensen, a certified public accountant from San Diego, from providing tax advice or preparing federal tax returns that illegally attempt to reduce customers’ taxable income, the Justice Department announced today.

The civil injunction order, to which Jensen agreed without admitting the government’s allegations, prevents Jensen from preparing tax returns that improperly deduct the personal expenses of customers or that attempt to reduce a customer’s taxable income through the unlawful use of pension plans, stock ownership plans or retirement plans. The order also bars Jensen from providing tax advice to, or preparing the federal tax returns of, any individual or entity that Jensen knows is a customer of co-defendant Scott Waage.

The government complaint in the case alleged that Jensen worked with Waage, a San Diego tax lawyer, to help clients evade income taxes and illegally circumvent pension plan rules. According to the civil injunction suit, Waage promoted schemes that helped customers evade taxes through the use of bogus deductions, while Jensen prepared the customers’ tax returns claiming the bogus deductions. The government alleged that the IRS audited more than1,000 tax returns as a result of the pair’s alleged tax schemes, and it estimated that the harm to the U.S. Treasury from the schemes exceeded $10.8 million. The civil injunction case against Waage remains pending.

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