Tax Fraud Actions

IRS

August 2016

August 26, 2016 – A federal court in Charleston, South Carolina, has permanently barred two women from preparing federal tax returns for others, the Justice Department announced. According to a civil complaint filed by the United States, Latasha Failey and her sister Latoya Windham prepared federal income returns in North Charleston from 2009 to 2012.  They continually and repeatedly prepared income tax returns that claimed false deductions or credits in order to understate their customers’ tax liabilities, the complaint alleged.  The defendants falsely claimed education credits; child and dependent care credits; itemized deductions on Schedule A; and dependency exemptions, according to the complaint.  In 2013, Failey and Windham each pleaded guilty to two counts of aiding and assisting in the preparation and presentation of a false income tax return and were sentenced to prison and probation, respectively, the complaint states. DOJ

August 23, 2016 – A congressional staffer was charged with five counts of willfully failing to file a tax return, announced the Justice Department’s Tax Division. According to the criminal information and affidavit, Isaac Lanier Avant of Arlington, Virginia, is a staff member employed by the U.S. House of Representatives since approximately 2002.  For tax years 2009 through 2013, Avant earned annual wages of over $170,000, but did not timely file a personal income tax return for any of those years.  In May 2005, Avant filed a form with his employer that falsely claimed he was exempt from federal income taxes.  Avant did not have any federal tax withheld from his paycheck until the Internal Revenue Service (IRS) mandated that his employer begin withholding in January 2013. If convicted, Avant faces a statutory maximum sentence of one year in prison for each count, as well as a term of supervised release and monetary penalties. DOJ

August 19, 2016 – A Germantown, Tennessee, resident and business owner was sentenced to one year in prison and ordered to pay more than $10 million in restitution for failing to pay over employment taxes to the Internal Revenue Service (IRS), announced the Justice Department’s Tax Division and U.S. Attorney Edward L. Stanton III of the Western District of Tennessee. According to court documents, Larry Thornton, 67, was the majority owner, president and chief executive officer (CEO) of Software Earnings, Inc. (SEI), a Memphis company that produced and installed check processing.  Thornton was also the 100 percent owner, CEO and president of First Touch Payment Solutions, LLC (First Touch), a Memphis company that provided merchant services for credit card processing.  Thornton, as CEO and president of SEI and First Touch, had ultimate and final decision-making authority regarding SEI’s and First Touch’s business activities and had authority to exercise significant control over SEI’s financial affairs.  Thornton admitted that he was responsible for collecting, accounting for, and paying over to the IRS federal income taxes and Federal Insurance Contributions Act (FICA) taxes that were withheld from the wages of SEI and First Touch’s employees. DOJ

August 11, 2016 – A federal grand jury in the Southern District of Florida returned an indictment on July 28, charging two Florida income tax return preparers with one count of conspiring to defraud the United States and nine counts each of aiding and assisting in the preparation of false federal income tax returns, announced the Justice Department’s Tax Division. According to allegations in the indictment, Earl Moise and Shahab Shaukat, both of Palm Beach County, Florida, conspired to prepare false and fraudulent individual income tax returns for others for the 2010 through 2012 tax years.  Moise and Shaukat operated the Stuart, Florida branch of Tax R Us, preparing false returns inside that office.  Additionally, Moise is charged with one count of fraudulently filing his own federal income tax return for 2011.  It is alleged that these tax returns included false education and American Opportunity credits, as well as false statements regarding business income or deductions. DOJ

August 9, 2016 – A priest for the Roman Catholic Diocese of San Jose pleaded guilty to four counts of tax evasion, announced the Justice Department’s Tax Division. Father Hien Minh Nguyen, 56, admitted that over a period of four years, he stole money his parishioners donated to the Diocese and willfully evaded paying income taxes on the money he misappropriated each year from 2008 through 2011.  He admitted that he deposited this money into his personal bank account, did not disclose this income to his return preparer, did not keep records of the donations he stole, and filed false income tax returns which did not report this money. DOJ

August 9, 2016 – A Franklin, Tennessee, man was sentenced to 48 months in prison for engaging in an extortion and wire fraud scheme involving former presidential candidate Mitt Romney’s tax returns. Michael Mancil Brown, 37, was found guilty at trial on May 12, 2016 of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion.  U.S. District Judge Billy Roy Wilson of the Eastern District of Arkansas, sitting by designation in the Middle District of Tennessee, imposed the sentence and also ordered Brown to pay $201,836 in restitution to PricewaterhouseCoopers LLP. According to testimony at trial, evidence recovered from a computer seized from Brown’s residence in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010. DOJ

August 4, 2016 – An Austin, Texas, businessman was convicted by a federal jury on four counts of filing false tax returns and corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, announced the Justice Department’s Tax Division. According to the evidence presented at trial, Victor Antolik owned and operated a commercial janitorial business in Austin, San Antonio and Houston, Texas, for which he used a variety of business names, including Diversified Building Services Inc., DBS Services Inc., Partners in Cleaning, PIC Building Services and BSI Industries.  Antolik also earned income as a real estate agent, real estate broker and property manager.  Antolik earned a portion of his real estate income through his companies SGN Realty Inc. and Signature Realty Services.  Antolik submitted to the Internal Revenue Service (IRS) four false individual income tax returns on which he underreported his income for tax years 2004, 2007 and 2008.  In addition, between 1998 and 2014, Antolik attempted to obstruct the IRS by, among other things, attaching altered Forms W-2 and 1099 to his tax returns, providing false information to his accountants that were used to prepare both corporate and individual income tax returns on his behalf and using nominees to conceal income and assets. DOJ

August 2, 2016 – An Atlanta, Georgia, based tax return preparer pleaded guilty to one count of wire fraud, announced the Justice Department’s Tax Division. According to court documents, Cheryl Singleton, 29, owned and operated Advanced Tax Services, a tax preparation business with multiple locations throughout the Atlanta area.  From 2012 through 2015, Singleton and her employees filed false tax returns that fraudulently inflated clients’ refunds.  In addition, Singleton and her employees falsely advised individuals that they could qualify for a $1,000 government stimulus payment.  Singleton and others used these individuals’ personal identification information to electronically file false income tax returns in those individuals’ names, without their knowledge or consent.  Court documents further allege that Singleton used healthcare financing credit cards held in the names of other individuals to fraudulently obtain payment for cosmetic dental care services. DOJ

July 2016

July 21, 2016 – A Montgomery County, Alabama, resident was sentenced to 48 months in prison for her role in a stolen identity refund fraud scheme, announced the Justice Department’s Tax Division. Wendy Huff, 32, admitted that between January 2013 and August 2015, she worked at two loan companies in Montgomery, Alabama, and had access to the personal identifying information of customers.  Huff agreed to steal information from her employers and provide it to her co-conspirator James Vernon Battle, 31.  Battle used that information to file over 335 returns claiming more than $400,000 in fraudulent refunds and directed the requested tax refunds to prepaid debit cards and U.S. Treasury checks, which were mailed to addresses in Montgomery, including Huff’s residence.  Battle also brought several U.S. Treasury tax refund checks to Huff’s workplace where she used her position to cash them.  Huff returned half of the proceeds to Battle and kept the balance for herself. DOJ

July 14, 2016 – A Jamaica, New York, resident pleaded guilty in the U.S. District Court for the Eastern District of New York to one count of conspiracy to defraud the United States, announced the Justice Department’s Tax Division. Nafeesah Hines, 46, who worked at the U.S. Food and Drug Administration (FDA), admitted that between 2008 and 2012, she participated in a scheme to submit false tax returns seeking fraudulent income tax refunds in excess of $3.4 million to the Internal Revenue Service (IRS).  According to the indictment, Hines worked with Rodney Chestnut, a retired New York City Department of Correction officer, and Clive Henry, a former IRS employee in the business of preparing tax returns, to recruit clients to this scheme, which involved using fraudulent IRS Forms 1099-OID to falsely claim refunds of taxes that were never paid over to the IRS.  The indictment alleged that Hines, Chestnut, and Henry collected fees from clients based on a percentage of the refunds received, and supplied the clients with correspondence containing false and frivolous claims to send to the IRS in response to IRS warning letters regarding the false tax returns. DOJ

July 8, 2016 – A Subway franchisee and resident of Alexandria, Virginia, was sentenced to more than two years in prison for conspiracy to defraud the United States, announced the Justice Department’s Tax Division. Obayedul Hoque, was sentenced to 30 months in prison followed by two years of supervised release by U.S. District Judge Liam O’Grady.  According to court documents, Hoque owned and operated Skyhill Shell, a gas station in Alexandria and multiple Subway restaurant franchises in Washington, D.C., Arlington, Virginia, and Alexandria.  Hoque admitted that between 2008 and 2014, he and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the IRS in the ascertainment and collection of individual and corporate income taxes.  Hoque and his co-conspirators did not deposit all of the gross receipts of the gas station or the Subway franchises into the corporate or partnership bank accounts.  Instead, Hoque and the managers retained a portion of the gross receipts for their personal benefit and failed to report those funds to the IRS.  DOJ

July 8, 2016 – The Justice Department and Internal Revenue Service announced that Congresswoman Corrine Brown and her chief of staff were indicted for their roles in a conspiracy and fraud scheme involving a fraudulent education charity. The indictment alleges that between late 2012 and early 2016, Brown and Simmons participated in a conspiracy and fraud scheme involving One Door for Education – Amy Anderson Scholarship Fund (One Door) in which the defendants and others acting on their behalf solicited more than $800,000 in charitable donations based on false representations that the donations would be used for college scholarships and school computer drives, among other things.  According to the indictment, Brown and Simmons allegedly solicited donations from individuals and corporate entities that Brown knew by virtue of her position in the U.S. House of Representatives, many of whom the defendants led to believe that One Door was a properly-registered 501(c)(3) non-profit organization, when, in fact, it was not. DOJ

July 7, 2016 – An Oregon, Ohio, psychiatrist pleaded guilty to tax evasion in the U.S. District Court for the Northern District of Ohio, announced the Justice Department’s Tax Division. Sandra Vonderembse admitted that despite earning compensation in excess of $240,000 per year from 2009 through 2011 as a psychiatrist working for multiple businesses and the state of Ohio, she falsely claimed zero taxable income and zero tax owing for each of those years on federal tax returns.  In tax years stretching back to 2005, Vonderembse failed to pay taxes due on her income and filed tax returns falsely claiming taxable income as “None.”  From 2005 to 2011, she also had her earnings paid to nominee entities to conceal income from the Internal Revenue Service (IRS) and sent fake financial instruments to the IRS in purported payment of her taxes. Vonderembse faces a statutory maximum sentence of five years in prison, as well as a term of supervised release.  She has agreed to pay restitution to the IRS in the amount of $565,000. DOJ

June 2016

June 30, 2016 – A Marietta, Georgia, resident pleaded guilty in the U.S. District Court for the Northern District of Georgia to one count of theft of public money and one count of aggravated identity theft, announced the Justice Department’s Tax Division. Peter Isika, 46, admitted using stolen identities to file at least 50 false tax returns for tax years 2013 and 2014 claiming more than $500,000 in fraudulent refunds.  Isika admitted that he purchased the stolen identities over the Internet and used those identities to obtain the fraudulent tax refunds.  Isika directed the refunds to prepaid debit cards or bank accounts that he controlled. DOJ

June 27, 2016 – A Fulshear, Texas, woman was sentenced to 40 months in prison following her conviction on three counts of filing false federal tax returns and one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, announced the Justice Department’s Tax Division. Tamny Denise Westbrooks, 53, was convicted in November 2015 after a four-day jury trial in the U.S. District Court for the Southern District of Texas.  According to the evidence at trial and court documents, Westbrooks was the day-to-day manager of JATS Tax Service, a tax preparation business located in Charlotte, North Carolina.  Westbrooks, who worked for JATS as an independent contractor, underreported her net profits by inflating her business expenses for tax years 2007, 2008 and 2009.  She also obstructed and impeded the Internal Revenue Service (IRS) by filing false tax returns for herself and others and by paying workers in cash while failing to file the required W-2 or 1099 forms reporting their compensation. DOJ

June 22, 2016 – A former Credit Suisse AG banker, who has been a fugitive since 2011, pleaded guilty in U.S. District Court in the Eastern District of Virginia to charges related to aiding and assisting U.S. taxpayers in evading their income taxes, announced the Justice Department’s Tax Division. Michele Bergantino admitted that from 2002 to 2009, while working as a relationship manager for Credit Suisse in Switzerland, he participated in a wide-ranging conspiracy to aid and assist U.S. taxpayers in evading their income taxes by concealing assets and income in secret Swiss bank accounts.  Bergantino oversaw a portfolio of accounts, largely owned by U.S. taxpayers residing on the West Coast, which grew to approximately $700 million of assets under management.  Bergantino admitted that the tax loss associated with his criminal conduct was more than $1.5 million but less than or equal to $3.5 million. DOJ

June 21, 2016 – A San Antonio, Texas, artist was sentenced in the U.S. District Court for the Western District of Texas in San Antonio to 12 months in prison, announced the Justice Department’s Tax Division. Carlos Cortes pleaded guilty to one count of failure to file a 2009 tax return on April 21.  According to court documents, Cortes is an artist who works in the medium of “Faux Bois,” an artistic imitation of wood or wood grains in various media.  His work has been commissioned by the city of San Antonio along with several San Antonio businesses. According to Internal Revenue Service (IRS) records, Cortes did not file individual income tax returns for 2006, 2007, 2008 and 2009 despite earning gross income well in excess of the filing requirements.  Cortes admitted that he had gross income of $62,043 in 2006, $66,138 for 2007, $457,192 for 2008 and $781,847 for 2009. DOJ

June 20, 2016 – A College Park, Maryland, man was sentenced to 97 months in prison following his conviction in November 2015 by a federal jury on one count of conspiring to defraud the United States and six counts of filing false income tax returns, announced the Justice Department’s Tax Division. According to the evidence presented at trial, between March and June 2009, Charles W. Parker Jr., 49, recruited clients for co-conspirator Penny Jones, 65, formerly of Rigby, Idaho.  Jones, a tax return preparer in Idaho, prepared tax returns falsely reporting the amount of taxes withheld and purportedly paid to the IRS.  Parker collected financial information from clients and provided it to Jones for the preparation of the false tax returns.  Parker caused the filing of 14 false tax returns in just a six month period that fraudulently claimed $7,753,940 in tax refunds. DOJ

June 16, 2016 – A Pembroke Pines, Florida couple was sentenced to prison for their role in a stolen identity tax refund fraud scheme, announced the Justice Department’s Tax Division. According to court documents and evidence presented at the sentencing hearing, between July 2009 and August 2014, Walther Wilson Godfrey, Rhonda Perry Gittens and others conspired to defraud the United States by filing false federal income tax returns using stolen identities.  Gittens owned and operated 2G, Inc., a tax return preparation business, and G&G Check Cashing Inc., a check cashing business, both of which were located in Pembroke Pines.  Godfrey and Gittens obtained the personal identification information of actual individuals, some deceased, including names, social security numbers, addresses and dates of birth, without the individuals’ authorization, to prepare and file false income tax refund claims for the years 2009 through 2011.  Judge Bloom also ordered Godfrey and Gittens to pay $792,442 in restitution to the IRS.  DOJ

June 15, 2016 – The Justice Department’s Tax Division announced that a Brooklyn, New York, tax return preparer was sentenced to 36 months in prison following her guilty plea on Sept. 21, 2015, to two counts of aiding and assisting in the preparation of false income tax returns. Awilda Rosario, 40, owned and operated a tax preparation business in Brooklyn called Edujas Multiservices Corporation.  Rosario prepared false individual income tax returns for clients for tax years 2008 through 2013.  She attached false schedules that reported business losses the taxpayers did not incur and attached schedules that reported inflated or fictitious deductions.  She also attached forms claiming fictitious education and fuel tax credits that the taxpayers were not entitled to receive. After the Internal Revenue Service (IRS) revoked the Electronic Filing Identification Number (EFIN) for Edujas Multiservices Corporation, Rosario obtained at least two different EFINs and continued to prepare and submit false tax returns for her clients that listed a different paid tax return preparer and tax preparer firm. DOJ

June 8, 2016 – Two Memphis, Tennessee, area residents were sentenced to prison for conspiring to defraud the United States and aiding and assisting in the preparation of false tax returns, announced the Justice Department’s Tax Division. Jeremy Blanchard, 35, and Erik Pittman, 35, both of Memphis, were sentenced to serve 70 and 33 months in prison, respectively, to be followed by three years and one year of supervised release, respectively.  According to court documents, Blanchard and Pittman were partners in a return preparation business, Mo Money Taxes, which operated three locations in the Richmond, Virginia, area.  Blanchard, Pittman and others prepared numerous false tax returns for their customers for the 2011 tax year.  Blanchard and Pittman admitted that they created and inflated fictitious and fraudulent tax credits, including the Earned Income Credit and the American Opportunity Credit, to claim tax refunds that customers were not entitled to receive.  DOJ

June 6, 2016 – A Stillwell, Kansas, man pleaded guilty to one count of aggravated identity theft and one count of theft of government funds, announced the Justice Department’s Tax Division. Richard Drake, 60, admitted that he obtained more than $2 million from the Internal Revenue Service (IRS) by filing false tax returns in the names of his clients.  Those false returns claimed refunds that Drake directed into accounts he controlled.  In his plea agreement, Drake admitted that he used the identities of his clients to perpetrate his fraud without their knowledge.  The tax returns that Drake filed caused the U.S. Department of the Treasury to issue large income tax refunds that Drake then converted to his own use. As part of his plea agreement, Drake has agreed to serve 48 months in prison and to pay $2,432,147 in restitution to the IRS. DOJ

May 2016

May 25, 2016 – A DeSoto, Texas, resident was indicted on 29 counts of aiding and assisting in the preparation of false income tax returns and three counts of willfully failing to file income tax returns, announced the Justice Department’s Tax Division. According to court documents, Vicki Louise Walker, was a tax preparer doing business under the name Vicki Walker Tax Services LLC in Dallas, Texas.  Walker is alleged to have prepared numerous tax returns for tax years 2010 through 2013 on which she reported false items, including false filing status, false business expenses, false capital losses and false charitable donations.  It is further alleged that Walker willfully failed to file her own tax returns with the Internal Revenue Service (IRS) for tax years 2011 through 2013. DOJ

May 23, 2016 – A San Diego, California, workers’ compensation attorney pleaded guilty in the Western District of Missouri to one count of filing a false tax return, the Justice Department’s Tax Division announced. According to court documents, Ron Mix, 78, entered into an arrangement where he received professional athlete referrals from a non-attorney so Mix and his law firm, the Law Offices of Ron Mix, could file workers’ compensation claims in California on the former athletes’ behalf.  After receiving these referrals, Mix agreed to make donations to Project Contact Africa (PCA), as directed by the non-attorney.  Mix admitted that between 2010 and 2013, he made approximately $155,000 in donations to PCA and that these payments represented illegal referral payments that he falsely claimed on his personal income tax return as charitable deductions. DOJ

May 20, 2016 – An Oregon woman pleaded guilty to one count of conspiracy to defraud the government with respect to claims, one count of wire fraud and one count of aggravated identity theft for running a federal income tax refund fraud scheme, announced the Justice Department’s Tax Division. Danyelle Calcagno, 41, admitted to filing at least 224 false federal income tax returns that fraudulently claimed a total of $1,220,246 in tax refunds, generally between $3,500 and $7,000 per return.  Calcagno filed the fraudulent tax returns using Internet access at Portland-area hotels to disguise the source of filing.  Calcagno filed the false tax returns using the names and social security numbers of other individuals obtained directly and through recruiters, including Latisha L. Simmons, 36, of Phoenix, Arizona. Calcagno directed the IRS to deposit the income tax refunds into bank accounts and onto stored value debit cards that she could access and control in order to divide the proceeds of the fraud and make it more difficult for law enforcement to identify Calcagno as the filer of the false tax returns.  DOJ

May 17, 2016 – Two brothers were sentenced to prison in the U.S. District Court for the District of Maryland after pleading guilty in January for perpetrating a scheme in which they filed 46 fraudulent income tax returns seeking refunds in excess of $224 million, announced the Justice Department’s Tax Division. Sean and Eric Gallman were each ordered to pay restitution to the IRS in the amount of $16,512,492. According to evidence presented by the government, the Gallmans established trusts and business entities and used mailboxes at numerous private commercial postal carrier stores in Maryland and North Carolina as the addresses for the trusts and business entities.  The defendants, acting as trustees and agents, mailed fraudulent tax returns to the IRS in the names of the trusts and businesses requesting refunds. DOJ

May 13, 2016 – Michael Mancil Brown was found guilty by a federal jury sitting in Nashville for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns. Brown, 37, of Franklin, Tennessee, was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion. According to testimony at trial, evidence recovered from a computer seized from the home of Brown in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers LLP and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010. Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns.  The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account. DOJ

May 11, 2016 – A federal grand jury in the District of Nevada returned a superseding indictment charging a Las Vegas woman with two counts of filing false tax returns with the Internal Revenue Service (IRS) and one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws. According to the superseding indictment, from at least 2005 through at least 2009, Judith Woodward, then known as Judith Atwell, was the 99 percent owner and joint operator of a dry cleaning business, Canyon Gate Cleaners, in Las Vegas, Nevada, which she held in the name of a partnership called Canyon Enterprises LLC.  Woodward is alleged to have underreported the gross receipts of Canyon Gate Cleaners on the partnership’s 2005 through 2009 tax returns.  She is also alleged to have underreported her personal income on her 2005 through 2009 individual income tax returns. According to the superseding indictment, between at least 2005 and 2009, Woodward concealed the true gross receipts of the business by depositing hundreds of thousands of dollars of cash receipts into personal bank accounts she controlled or by not depositing the cash receipts into any bank account.  DOJ

May 11, 2016 – A federal court has ordered West Palm Beach-area tax return preparer Paul Jean not to prepare federal tax returns for anyone except himself.  The order was entered after Jean failed to respond to the United States’ civil complaint. According to the complaint, Jean has operated under the business names Whiz Tax and Rejoice Tax Services.  The complaint alleges he has prepared returns that claim fabricated or inflated tax credits including claiming improper earned income tax credits, education credits, or fuel credits.  The Internal Revenue Service (IRS) estimates that Jean, directly or indirectly, has prepared and filed more than 3,000 tax returns since 2012, according to the complaint, and that the harm Jean’s conduct has inflicted on the U.S. Treasury may be in the millions of dollars. DOJ

May 11, 2016 – A federal grand jury sitting in New Orleans, Louisiana, returned an indictment against a LaPlace, Louisiana, woman charging her with 37 counts of aiding and assisting in the preparation of false tax returns, eight counts of contempt of court, one count of bank fraud and one count of forgery of a judge’s signature. According to the indictment, Shawanda Nevers aka Shawanda Hawkins and Shawanda Bryant, operated a tax return preparation business under several names and at various locations in the LaPlace area.  It is alleged that between 2011 and 2016, Nevers filed 37 false tax returns for clients that claimed a variety of fraudulent losses and deductions, including false Schedule C businesses and false unreimbursed employee expenses.  In September 2014, a federal judge permanently enjoined Nevers from preparing federal tax returns.  Nevers is charged with contempt of court for violating that injunction by preparing eight federal income tax returns in 2015 and 2016. Nevers also is charged with forging the signature of a federal bankruptcy judge on a false document purporting to be an order reinstating a bankruptcy petition and with bank fraud for submitting a fraudulent claim for losses supposedly caused by the BP Deepwater Horizon oil spill in 2010. DOJ

May 10, 2016 – A Kentucky man pleaded guilty in the U.S. District Court for the Eastern District of Kentucky to one count of conspiracy to defraud the United States with respect to claims, and one count of wire fraud and one count of aggravated identity theft. Brian Hamilton admitted that during the years 2011 and 2012 he conspired with others, including his brother, Billy Ray Hamilton, Patsy Carnes and Diana Hill to file false tax returns from the Bailey Switch Pawn Shop in Knox County, Kentucky.  According to the plea agreement, the Hamiltons prepared and electronically filed with the Internal Revenue Service (IRS) at least 31 tax returns that contained false and fraudulent information regarding wages, self-employment income, expenses, filing statuses and dependents.  The Hamiltons did not list their names as return preparers on these tax returns.  In some cases, the Hamiltons filed false tax returns without the knowledge or permission of the taxpayers named on the returns. DOJ

May 4, 2016 – A Brooklyn, New York, business owner pleaded guilty to two counts of filing false tax returns. According to court documents and information presented in court, Michael Stern, 48, was the founder and operator of Prestige Optical, a retailer of sunglasses and eyeglasses.  For the 2006 and 2007 tax years, Stern filed false federal income tax returns with the Internal Revenue Service (IRS) on which he failed to report approximately $656,780 of income from online retail sales. Stern faces a statutory maximum sentence of three years in prison and a fine of $250,000 for each count of filing a false tax return.  As part of his plea agreement, Stern also agreed to pay restitution to the IRS in the amount of $190,781. DOJ

May 3, 2016 – A resident of Bowie, Maryland, was sentenced to four years in prison after pleading guilty in January for his involvement in a far-reaching identity theft and tax fraud scheme in which he assisted in the filing of fraudulent federal income tax returns seeking more than $4.4 million in refunds. Marc A. Bell, 49, a former employee of the District of Columbia’s Department of Youth Rehabilitation Services (DYRS), admitted taking part in a massive and sophisticated identity theft and false tax return scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance.  According to court documents, the scheme involved the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million from the U.S. Treasury. DOJ

April 2016

April 28, 2016 – Two men who conspired to file more than 1,200 false tax returns using stolen identities were sentenced to prison. Ernest James Simmons Jr., 29, of Phenix City, Alabama, was sentenced to 24 months and 15 days in prison followed by five months of home detention and Calvin J. Perry, 28, of Atlanta, Georgia, was sentenced to 32 months in prison.  Simons and Perry each pleaded guilty in December 2015 to one count of conspiracy to defraud the government with respect to filing false income tax refund claims and one count of aggravated identity theft. According to court documents and evidence presented at the sentencing hearing, between 2010 and 2012, Simmons and Perry conspired with Perry’s mother, Pamela Ann Smith, to run a large-scale stolen identity refund fraud scheme from Smith’s tax return preparation business, Jaycal Tax Service, in Phenix City.  Simmons was directly connected to false returns claiming more than $700,000 in fraudulent refunds and Perry was directly connected to false returns claiming over $1 million in fraudulent refunds. DOJ

April 22, 2016 – An Austell, Georgia husband and wife pleaded guilty to charges relating to their involvement in a stolen identity income tax refund fraud scheme. Anthony Alika, 42, pleaded guilty to one count of conspiracy to commit money laundering.  His wife Sonia Alika, 27, pleaded guilty to one count of illegally structuring cash withdrawals to evade bank reporting requirements. In January 2016, Anthony Alika and Sonia Alika were charged with laundering the proceeds from a stolen identity refund fraud scheme.  The indictment alleged that Anthony Alika, along with Rapheal Atebefia, 33, of Austell, Georgia, obtained means of identification of actual individuals, including their names and social security numbers, and used this information to access the IRS “Get Transcript” database.  The indictment further alleged that Anthony Alika, Atebefia, and others obtained prepaid debit cards from stores located in multiple states, registered the cards in the names of the stolen identities, filed false income tax returns using the stolen identities and information obtained from the Get Transcript database, and directed the IRS to deposit the tax refunds onto these cards.  DOJ

April 18, 2016 – According to a civil lawsuit filed by the Justice Department, Rose M. Chazulle, a tax return preparer in Miami has prepared fraudulent federal tax returns that claim education and fuel credits to which her clients are not entitled. The suit seeks to bar Chazulle and her company, RMC Professional Services Corporation, from preparing federal tax returns for others. According to the complaint, Chazulle prepared federal income tax returns for customers that falsely claimed refundable credits, including American Opportunity Tax Credit and Lifetime Learning Credit.  Chazulle included the false education credits for customers who did not incur educational costs and otherwise did not qualify for this credit. The complaint estimates that Chazulle’s conduct cost the United States over $14 million for the tax years 2011 to 2013. DOJ

April 15, 2016 – The Department of Justice filed a civil injunction suit seeking to bar Patrick Clarke of Hallandale Beach, Florida, and Ruby Rodriguez of Orlando, Florida, from owning, operating, or franchising a tax return preparation business and preparing tax returns for others. The complaint also requests that the court order Clarke and Rodriguez to disgorge the fees that they obtained through the alleged fraudulent tax return preparation.  According to the complaint, Clarke owns and operates Tax MD, a tax return preparation business with stores in Florida and North Carolina.  Rodriguez allegedly manages one of Clarke’s stores located in Orlando. Clarke’s preparers, including Rodriguez, allegedly target primarily low to moderate income customers with misleading advertisements, prepare and file fraudulent tax returns to improperly increase their customers’ refunds and profit through unconscionable, exorbitant and often undisclosed fees—all at the expense of their customers and the U.S. Treasury. DOJ

April 14, 2016 – A federal grand jury returned an indictment charging a District of Columbia tax return preparer with 35 counts of aiding in the preparation of false tax returns. According to the indictment, Joann Little worked at a tax return preparation business called Instant Tax Service, presently operating under the name Speedy Tax Service, which is located at 1002 H Street, NE, in Washington, D.C.  The indictment alleges that Little prepared false personal income tax returns for clients for tax years 2009 through 2014.  She is alleged to have attached schedules that reported inflated or fictitious deductions, which resulted in fraudulently claimed income tax refunds. DOJ

April 14, 2016 – Three tax return preparers based in Minneapolis, Minnesota, were sentenced to prison for their involvement with a fraudulent return-preparation business with multiple storefronts in the Minneapolis area. According to the evidence presented at the trial, Ishmael Kosh, Amadou Sangaray, Francis Saygbay and a fourth individual, Chatonda Khofi, 50, of St. Paul, Minnesota, established a storefront location of Primetime Tax Services Inc. (Primetime), a tax return preparation business in the Minneapolis area.  Along with a fifth individual, David Mwangi, 47, of Arlington, Texas, the defendants prepared over 2,000 fraudulent individual income tax returns on behalf of customers of Primetime for filing with the Internal Revenue Service (IRS) for the years 2006, 2007 and 2008.  The defendants also prepared approximately 1,700 fraudulent state income tax returns for filing with the state of Minnesota for those years.  At the sentencing hearing, Judge Tunheim found that the defendants’ conduct caused a total tax loss of between $1.5 and $3.5 million. DOJ

April 7, 2016 – A Staten Island, New York, tax return preparer and business owner was sentenced to prison for preparing false federal income tax returns. Alabi Gbangbala aka Babatunde Alabi Babaia, 52, was sentenced by U.S. District Court Judge Carol Bagley Amon to serve 18 months in prison, followed by one year of supervised release, and ordered to pay $178,209 in restitution to the Internal Revenue Service (IRS). According to court documents and in-court statements, Gbangbala was the operator of Broadfield, a tax return preparation business located in Staten Island.  For tax years 2008 and 2009, Gbangbala prepared false federal individual income tax returns for Broadfield clients by, among other things, failing to report accurate exemptions, falsifying business receipts and losses on Schedules C, and inflating or fabricating charitable contributions and unreimbursed employee expenses.  He also filed false tax returns for himself by underreporting his income for tax years 2008 through 2010. DOJ

April 5, 2016 – A former resident of Portland, Oregon was sentenced to 37 months in prison for her role in a tax refund fraud scheme. Tataneisha White, 43, admitted to conspiring with multiple individuals, including Jasmine Mason, Shawntina Ware and Brandon Leath, all of Portland, to file more than 227 false income tax returns claiming more than $1 million in fraudulent refunds.  The false information on the tax returns included fictitious W-2 wages and inflated withholding amounts to generate tax refunds ranging from $1,000 to $12,000.  White also admitted that she and her co-conspirators shared personal identifying information and employer information with each other to file the false returns.  In addition to the prison term, U.S. District Judge Robert E. Jones ordered White to serve three years of supervised release and pay restitution to the IRS in the amount of $626,750.  DOJ

April 4, 2016 – The Department of Justice announced a federal indictment charging Diane L. Kroupa, 60, and her husband, Robert E. Fackler, 62, with conspiring with each other to evade assessment of taxes.  Each defendant is charged with conspiracy, tax evasion, making and subscribing false tax returns and obstruction of an Internal Revenue Service (IRS) audit.  According to the indictment and documents filed in court, between 2004 and 2012, Kroupa and Fackler conspired to evade their tax obligations.  Kroupa was appointed to the U.S. Tax Court on June 13, 2003, for a term of 15 years, but she retired on June 16, 2014.  During the same period, Fackler was a self-employed lobbyist and political consultant who owned and operated a business known as Grassroots Consulting.  According to the indictment and documents filed in court, as part of the conspiracy to defraud the United States, Kroupa and Fackler fraudulently claimed personal expenses as Grassroots Consulting business deductions. Additionally, in 2006, Kroupa and Fackler allegedly concealed documents from their tax preparer and an IRS Tax Compliance Officer during an audit.  During a second audit in 2012, Kroupa and Fackler caused misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were actually business expenses of Grassroots Consulting. DOJ

April 1, 2016 – A Montgomery County, Alabama resident pleaded guilty today to one count of wire fraud and one count of aggravated identity theft. According to court documents, James Vernon Battle, 30, used stolen personal identification information to prepare and file at least 335 false federal income tax returns for tax years 2013 and 2014 that fraudulently claimed more than $400,000 in tax refunds.  Battle obtained the stolen personal identification information from Wendy Huff.  Huff worked at two loan companies in Montgomery, Alabama.  Battle directed the Internal Revenue Service (IRS) to issue the requested refunds via prepaid debit cards and U.S. Treasury checks.  Those prepaid debit cards and checks were sent to various addresses in Montgomery, including Huff’s residence.  Battle also brought several U.S. Treasury checks to Huff’s workplace where she used her position to cash them.  Huff returned half of the proceeds to Battle and kept the balance for herself. Battle faces a statutory maximum sentence of 20 years in prison for the wire fraud charge and a mandatory minimum sentence of two years in prison for the aggravated identity theft charge, which will be in addition to any other term of imprisonment he receives.  He also faces substantial monetary penalties and restitution. DOJ

March 2016

March 24, 2016 – A Montgomery County, Alabama, resident pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft. According to court documents, between January 2013 and August 2015, Wendy Huff, worked at two loan companies in Montgomery, Alabama, and had access to the means of identification of customers, including their names, social security numbers and dates of birth. Huff agreed to steal names from her employers and provide them to James Vernon Battle, identified as a co-conspirator in the indictment. The government alleges that Battle used those names to file over 335 returns claiming more than $400,000 in fraudulent refunds and that he directed the Internal Revenue Service (IRS) to issue the anticipated tax refunds in the form of prepaid debit cards and U.S. Treasury checks, which were mailed to addresses in Montgomery including Huff’s residence. Huff subsequently delivered the prepaid debit cards to Battle. DOJ

March 24, 2016 – Two residents of Kenner, Louisiana, pleaded guilty before Federal District Court Judge Lance M. Africk of the Eastern District of Louisiana for crimes related to the operation of their check cashing business, VJ Discount Inc. According to publicly filed documents, defendants Susantha Wijetunge and Manula Wijetunge owned VJ Discount Inc., a Louisiana corporation that operated a convenience store and check cashing business in Kenner.  Susantha Wijetunge, VJ Discount Inc. and others cashed fraudulently obtained tax refund checks for multiple co-conspirators, for which they charged a higher fee than normal.  Often, these transactions involved multiple checks and tens of thousands of dollars.  In order to conceal this illegal activity, Susantha Wijetunge and others filed false reports with the government, or failed to file them as required by law. As part of their guilty pleas, the defendants and certain corporate entities they control agreed to the forfeiture of approximately $4.12 million dollars. DOJ

March 21, 2016 – A Charlotte, North Carolina, area resident was sentenced to 41 months in prison for his involvement in a fraudulent tax return scheme. According to court documents and statements in court, in early 2011, Daniel Heggins, 44, and Joan Clark operated Guarantor Manufactures Inc. (GMI), a business that purported to help individuals who were in debt.  Heggins and his co-conspirators, including Clark, prepared and filed false tax returns on behalf of GMI’s clients claiming fraudulent tax refunds from the Internal Revenue Service (IRS) in the amount of their clients’ debts.  The intended loss of the conspiracy exceeded $4 million.  Heggins also charged GMI’s clients bogus filing fees of $2,500 to $5,000 in order to prepare and file the fraudulent returns.  Heggins and Clark pleaded guilty to conspiracy to defraud the United States in November 2015. DOJ

March 16, 2016 – The U.S. District Court for the Central District of California has permanently barred Stacy John Sanchez of Orange County, California, from preparing federal tax returns for others. According to the complaint, Sanchez owned and operated 12 Liberty Tax Service franchise locations, primarily in the Los Angeles and Las Vegas areas.  At these locations, Sanchez and his employees prepared federal income tax returns that, among other things, contained bogus Schedules C (Profit or Loss From Business), fake Form W-2 (Wage and Tax Statement) information and falsely claimed dependents, the suit alleged.  In addition, the complaint alleged that Sanchez and his employees prepared fraudulent income tax returns using stolen names and social security numbers and kept the bogus refunds generated by these identity theft returns.  The estimated loss to the U.S. Treasury from Sanchez and his employees’ misconduct is at least $14 million, according to the complaint. DOJ

March 14, 2016 – A New York tax return preparer pleaded guilty in the U.S. District Court for the Eastern District of New York in Central Islip, New York, to one count of aiding and assisting in the preparation of a false tax return. According to court documents, Thelma Rodriguez-Garden, 54, owned and operated a tax preparation business called Garden Insurance Agency Corporation, which was located in Bay Shore, New York.  Rodriguez-Garden prepared false individual income tax returns for clients of Garden Insurance Agency for tax years 2008 through 2011.  On the tax returns, Rodriguez-Garden included grossly inflated or wholly fictitious itemized deductions for unreimbursed employee expenses.  The information to which Rodriguez-Garden pleaded guilty alleges that she filed 47 false tax returns that caused a loss to the government of more than $100,000. DOJ

March 11, 2016 – Two Subway franchise managers and a gas station manager, all residents of Virginia, pleaded guilty to aiding and assisting in the filing of false tax returns. As part of their guilty pleas, the defendants admitted that they did not deposit all of the Subway franchises’ or the gas station’s gross receipts into the corporate or partnership bank accounts.  Instead, they retained a portion of the gross receipts for their personal benefit.  Additionally, two of the defendants admitted that they maintained detailed records of the Subway franchises’ and gas station’s total sales, the amounts deposited into the bank accounts and the amounts distributed to each of them for their personal benefit, and that they later destroyed those records. DOJ

March 9, 2016 – The Justice Department and Internal Revenue Service announced the guilty pleas of Cayman National Securities Ltd. (CNS) and Cayman National Trust Co. Ltd. (CNT), two Cayman Island affiliates of Cayman National Corporation. CNS and CNT pleaded guilty to a criminal Information charging them with conspiring with many of their U.S. taxpayer-clients to hide more than $130 million in offshore accounts from the U.S. Internal Revenue Service and to evade U.S. taxes on the income earned in those accounts. CNS and CNT entered their guilty pleas pursuant to plea agreements requiring the companies to, among other things, produce through the treaty process account files of non-compliant U.S. taxpayers who maintained accounts at CNS and CNT, and pay a total of $6 million in financial penalties.  DOJ

March 3, 2016 – A federal grand jury sitting in Chicago, Illinois returned an indictment on Feb. 11 against a resident of a Chicago suburb, charging him with 10 counts of wire fraud, 10 counts of aggravated identity theft and one count of access device fraud.  Jonathan Herring aka Byron Taylor, Marco Brown and Quang Dang of Harvey, Illinois, participated in a stolen identity refund fraud scheme, according to allegations in the indictment.  Herring is alleged to have obtained stolen identities of members of the U.S. Air Force, among others.  Herring used the stolen identities to electronically file false income tax returns seeking tax refunds with the Internal Revenue Service.  Herring is alleged to have received the fraudulently obtained tax refunds in the form of direct deposits into various bank accounts that he controlled.  DOJ

March 2, 2016 – The Justice Department announced that a former chief deputy auditor for LaPorte County, Indiana, was sentenced to 84 months in prison for embezzling over $150,000 from the LaPorte County government, tax fraud and defrauding her father-in-law out of more than $600,000.  Mary Ray, 68, of LaPorte, was also ordered to forfeit $137,249.59 and pay $801,315.66 in restitution as part of her sentence.  According to evidence presented at trial, from September 2011 through December 2012, while she served as chief deputy auditor for LaPorte County, Ray embezzled more than $150,000 from county coffers and underreported her income on her U.S. Individual Tax Returns by failing to report the embezzled funds.  DOJ

February 2016

February 23, 2016 – The Justice Department announced that the owner of a St. Louis, Missouri, tax return preparation business was arrested on two counts of tax evasion. According to the indictment, from 2005 to 2011, Semere Tsehaye, 38, was the owner and operator of at least 20 Instant Tax Service franchise locations operating in Illinois, Kansas, and Missouri.  Instant Tax Service was a brand name of ITS Financial LLC, a nationwide tax preparation business headquartered in Dayton, Ohio. During the years 2010 and 2011, Tsehaye is alleged to have generated fraudulent financial summaries that understated gross receipts by a total of approximately $506,000 in 2010 and $1.03 million in 2011. DOJ

February 22, 2016 – The Justice Department filed a lawsuit asking a federal district court in Houston, Texas, to permanently bar two men from preparing false tax returns.  The defendants named in the lawsuit are John E. Carter, individually and doing business as Midwestern Financial Group Inc., and Sulayman Mamadou Jarra, individually and doing business as African Art Appraisal Services. According to the complaint, Carter promoted a tax evasion scheme to his clients, telling them they could reduce their federal tax liability by supposedly donating African tribal art to an educational institution or museum.  The complaint states that Carter provided his clients with an appraisal by Jarra that substantially overvalued the art, and that for many of the returns, the signature was forged on the Internal Revenue Service form where the institution purportedly acknowledged receipt of the art.  DOJ

February 17, 2016 – The Justice Department announced that an Enterprise, Alabama, resident was sentenced to 48 months in prison to be followed by three years of supervised release for accepting unlawful kickbacks and tax evasion. According to court documents and statements made in open court, Victor Villalobos, 47, worked for a federal prime contractor at Fort Rucker, Alabama.  In 2009, Villalobos approached Maxim Silinsky, a Florida-based subcontractor for this company, and solicited illegal kickbacks on the federal subcontracts that Silinsky held in connection with the federal prime contractor.  As part of his plea, Villalobos admitted that from June 2009 to December 2014, he received approximately 57 separate wire transfers totaling more than $1.9 million in kickback payments from various foreign and domestic bank accounts controlled by Silinsky. DOJ

February 16, 2016 – A federal court in Chicago has ordered Servicios Latinos Inc. to close its nationwide tax preparation business.  The order comes after the Justice Department filed a civil lawsuit against the business and its owners, Georgina Lopez, Pamela Miranda and Jorge A. Miranda, alleging that the defendants falsely understated their customers’ tax liabilities or overstated their customers’ entitlement to a tax refund.  According to the complaint, Servicios Latinos operated out of approximately 84 stores in as many as 30 states, with locations including Kennet Square, Pennsylvania; Kansas City, Missouri; and Las Vegas, Nevada. The Internal Revenue Service has estimated that the loss to the U.S. Treasury from the defendants’ conduct exceeds $4.7 million for 2014 alone, according to the complaint. DOJ

February 8, 2016 – According to a civil lawsuit filed by the Justice Department, three South Carolina Liberty Tax Service franchises deliberately prepared false federal income tax returns in order to increase their customers’ refunds. The complaint alleges that the franchisee for the three locations, Christopher Paul Haynes of Irmo, South Carolina, and his employees included a bogus “arts and crafts” business on one customer’s tax return and a bogus “hair care” businesses on another’s. The lawsuit states that Haynes’s Liberty Tax Service offices have prepared more than 9,700 federal income tax returns since 2010.  Based on adjustments the IRS has made to tax returns prepared and filed by Haynes’s Liberty Tax Service offices for 2010 to 2013, the average tax deficiency for tax returns audited in connection with the IRS’s investigation of Haynes is $3,834 per tax return, according to the suit. DOJ

February 4, 2016 – The Justice Department and the Internal Revenue Service announced the filing of criminal charges against Bank Julius Baer & Co. Ltd., a financial institution headquartered in Zurich, Switzerland.  Julius Baer is charged with conspiring with many of its U.S. taxpayer-clients and others to help U.S. taxpayers hide billions of dollars in offshore accounts from the IRS and to evade U.S. taxes on the income earned in those accounts.  The Justice Department also announced a deferred prosecution agreement with Julius Baer under which the company admits that it knowingly assisted many of its U.S. taxpayer-clients in evading their tax obligations under U.S. law.  The agreement requires Julius Baer to pay a total of $547 million by no later than Feb. 9, 2016.  DOJ

February 2, 2016 – A government contractor based in Fort Lauderdale, Florida, was sentenced to 12 months and one day in prison for filing a false income tax return.  According to court documents, Maxim Silinsky, 44, owned an aircraft-leasing and parts-supply company called Simplex Corporation.  Simplex contracted with the federal government to lease Russian aircraft to the U.S. Air Force for training purposes and to supply parts and equipment to U.S. military forces deployed to Afghanistan. Silinsky used a complex web of domestic and foreign corporate entities and financial accounts to facilitate his underpayment of both corporate and individual income tax for the years 2007 through 2010.  DOJ

January 2016

January 20, 2016 – A federal court in Rock Hill, South Carolina, ordered T-N-T of York County Inc. and TM Trucking of the Carolinas LLC, to stop violating their employment tax reporting, deposit and payment obligations. The government’s complaint alleged that T-N-T of York County and TM Trucking of the Carolinas together owed more than $2.7 million in federal employment and unemployment taxes for various periods from 2009 through 2014. DOJ

January 15, 2016 – A resident of the District of Columbia was sentenced to 18 months in prison for his involvement in a far-reaching stolen identity refund fraud scheme in which he worked with others to obtain over $315,000 in income tax refunds through the filing of fraudulent federal income tax returns. Ezekiel Raspberry, 39, is among approximately 16 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia.  The overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million. According to the government’s evidence, Raspberry participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people. DOJ

January 5, 2016 – A resident of Bowie, Maryland, pleaded guilty to federal charges for his involvement in a far-reaching identity theft and tax fraud scheme in which he assisted in the filing of fraudulent federal income tax returns seeking more than $4.4 million in refunds. The false tax returns sought refunds for tax years 2005 through 2013 and were often filed in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. DOJ

January 4, 2016 –According to court documents and testimony at trial, Kevin Cyster, 52, of Burlington, Ontario, was part of a group of Canadian citizens that filed tax returns with the Internal Revenue Service that contained fraudulent Forms 1099-OID. On these tax returns, Cyster and his co-conspirators falsely claimed that nearly $10 million in federal income taxes had been withheld on their behalf by various Canadian financial institutions and paid over to the IRS. DOJ