Tax Fraud Actions

IRS

June 2017

June 21, 2017 – A federal grand jury in Madison, Wisconsin indicted a Johnson Creek, Wisconsin produce vendor corporate officer for tax evasion, failure to file a corporate tax return, and structuring currency transactions, announced the Justice Department’s Tax Division. According to the indictment, during the relevant timeframe, Thomas G. Paine was the Vice President and Treasurer of G.W. Paine Inc., which sold fresh fruit and other produce under the business name Tree Ripe Citrus Company. Paine was allegedly responsible for the finance and tax aspects of the company. The indictment alleges that Paine failed to file corporate tax returns with the Internal Revenue Service (IRS) for 2010 through 2012 and attempted to evade the taxes due and owing by G.W. Paine Inc. According to the indictment, Paine concealed the company’s income by structuring cash deposits so they were made in amounts less than $10,000 in order to evade the bank’s reporting requirements. Banks are required to file reports with the U.S. Treasury for cash deposits exceeding $10,000. These reports include the identity of the person who conducted the transaction. The indictment alleges that from 2012 through 2013, Paine structured more than $400,000. DOJ

June 20, 2017 – A Boynton Beach, Florida resident pleaded guilty to corruptly endeavoring to obstruct the administration of the internal revenue laws and theft of government funds, announced the Justice Department’s Tax Division. According to documents filed with the court, from 2010 to 2015, David R. Andre, 41, filed fraudulent personal tax returns with the Internal Revenue Service (IRS) that sought more than $5.6 million in refunds to which he was not entitled. As a result of these returns, which falsely reported income earned and income tax withheld, the IRS paid Andre more than $485,000 in refunds. He used the funds to purchase his residence and multiple vehicles, including a Jaguar and Mercedes Benz. In late 2012, the IRS began trying to collect the taxes Andre owed and placed a lien on his residence. Days after the lien was recorded, Andre filed a form with the IRS that falsely claimed he was making a substantial payment, and the IRS released the lien. After Andre did not make the payment, the IRS revoked its release and re-filed the lien. In 2015, Andre also made false statements to IRS agents and told them that he purchased his residence with money he inherited, did not recall receiving any large refunds from the IRS and had not filed a tax return since 2008. DOJ

June 16, 2017 – An Allentown, Pennsylvania resident was sentenced to serve 42 months in prison for conspiring to file tax returns using stolen IDs, announced the Justice Department’s Tax Division. According to the indictment and information presented to the court, Jessenia E. Cordero, 37, operated MJ & Associates and Express Tax Services, both located in Allentown. These businesses provided tax preparation, check cashing, and other services to customers. Cordero and her co-conspirators obtained lists of Puerto Rico residents’ names and social security numbers and used these IDs to file fraudulent tax returns seeking refunds with the Internal Revenue Service (IRS). The conspirators directed the IRS to mail the refund checks to addresses they controlled or to deposit the refunds onto pre-paid debit cards. Cordero used her businesses to cash fraudulently obtained refund checks totaling approximately $4,316,103. DOJ

June 15, 2017 – A Pittsburg, California man pleaded guilty to conspiracy to commit theft of government money and wire fraud, announced the Justice Department’s Tax Division. According to documents filed with the court, while employed as a police officer, Gary Bostick, 39, participated in a conspiracy to cash stolen U.S. Treasury checks and file tax returns in the names of deceased individuals to obtain fraudulent refunds. Bostick filed some of the fraudulent returns from his residence and he and his co-conspirators directed the refund checks to addresses they could access. Bostick and his coconspirators, to include Hugh Robinson, also acquired stolen tax refund and social security checks, which they cashed at stores in various areas, including Kentucky. Bostick recruited and directed others who participated in the scheme. He admitted to causing a tax loss of more than $720,530. DOJ

June 14, 2017 – A Canadian man pleaded guilty in Rochester, New York to conspiring to defraud the United States and commit theft of government funds, announced the Justice Department’s Tax Division. According to documents filed with the court, Timothy Johnston, 36, of Calgary, Alberta, Canada, along with other Canadian citizens, participated in a scheme to file fraudulent claims for refund with the Internal Revenue Service (IRS). In March 2009, Johnston filed a fraudulent nonresident alien income tax return seeking a refund of $642,947.26. On this return, Johnston falsely claimed that the requested refund represented the amount of income taxes that had been withheld and paid to the IRS on his behalf. After the IRS issued the refund to Johnston, he entered the United States and opened a bank account in Rochester, New York to deposit the fraudulently obtained check. Between August 2009 and December 2011, Johnston caused funds to be transferred from this account to a bank account in Canada and accounts in the United States in the names of his co-conspirators. DOJ

June 8, 2017 – The former owner of a Las Vegas, Nevada strip club pleaded guilty in U.S. District Court in the District of Nevada to evading employment taxes, announced the Justice Department’s Tax Division. According to documents filed with the court, Frederick John Rizzolo, 58, of Las Vegas, the former owner of The Crazy Horse Too, evaded paying more than $1.7 million in employment taxes that he owed for 2000 through 2002. Rizzolo paid The Crazy Horse Too’s floormen, bouncers, bartenders and shift managers in cash, but failed to provide accurate records of these payments to the Club’s bookkeepers. As a result, Rizzolo caused false employment tax returns to be filed with the Internal Revenue Service (IRS), which underreported wages paid and thus the taxes due. In 2006, Rizzolo admitted this conduct and pleaded guilty to conspiring to defraud the United States. Following his plea, however, Rizzolo took affirmative steps to conceal his assets and income to thwart the IRS from collecting the delinquent taxes that he owed. For example, Rizzolo directed $900,000 that he received from the sale of the Crazy Horse Too to an offshore bank account in the Cook Islands. He also withdrew $50,000 from a bank account, writing a check to a third party, who in turn provided the money back to Rizzolo, thereby avoiding an IRS levy and seizure of the funds. Additionally, Rizzolo lied to an IRS collections attorney, falsely stating that he had no income or assets and no ability to pay the taxes owed. DOJ

June 5, 2017 – An Ohio resident was convicted by a federal jury sitting in Cincinnati, Ohio of conspiracy to commit wire fraud, wire fraud, bank fraud, evasion of employment taxes and failure to pay over employment taxes, announced the Justice Department’s Tax Division. According to the evidence presented at trial, Fesum Ogbazion, 44, was the owner and CEO of ITS Financial LLC, which was the national franchisor of Instant Tax Service (ITS), a tax preparation business. Ogbazion founded ITS in 2004 and at one time it had more than 1,100 franchise locations throughout the United States. From approximately January 2009 through 2012, Ogbazion conspired with others at ITS to generate loan and tax return preparation fees for ITS and its franchises by luring taxpayers into ITS franchises through a fraudulent nationwide advertising campaign. The ITS ads offered tax refund anticipation loans through an independent third party lender, despite the fact that ITS did not have such a lender to fund the promised loans. The evidence introduced at trial established that Ogbazion used the false advertising campaigns to entice customers into coming to ITS locations for a loan and then used their loan applications to prepare and file income tax returns – often without customers’ authorization. ITS charged its customers between $500 to $800 in tax preparation fees. Between 2006 and 2011, ITS collected more than $70 million in fees. DOJ

May 2017

May 26, 2017 – A resident of College Station, Texas, pleaded guilty to conspiring to defraud the United States by using offshore accounts in Panama to conceal more than $1.3 million in royalty income that she earned from oil wells, announced the Justice Department’s Tax Division. According to documents and information provided to the court, Joyce Meads, 73, admitted that she filed false 1997 through 2009 individual income tax returns, omitting more than $1.3 million in royalty income that she received from oil wells. From approximately April 1997 through April 2010, she conspired with offshore promoters to disguise this income, setting up nominee companies in Delaware and Panama in the name of W.G. Holdings Corporation and transferring her interest in the oil wells to the nominee entity in Delaware. Meads’s monthly royalty checks were issued to W.G. Holdings. For approximately a decade, Meads had her royalty checks sent to a Miami post office box where they were picked up, couriered to Panama and deposited into her nominee accounts. Meads repatriated funds by disguising them as scholarships or loans from W.G. Holdings to herself. She later transferred the funds to bank accounts in her own name or her mother’s name. Meads admitted that she caused a tax loss of more than $250,000. Two of the promoters who assisted Meads, Marc Harris of The Harris Organization, Republic of Panama, and Boyce Griffin of Offshore Management Alliance Ltd., Republic of Panama, have also been convicted of conspiracy and other charges and were previously sentenced to prison. DOJ

May 25, 2017 – A federal court in Minneapolis, Minnesota ruled that Wells Fargo is liable for a 20 percent negligence penalty in connection with $350 million of foreign tax credits that it claimed based on its participation in an abusive tax shelter known as Structured Trust Advantaged Repackaged Securities (STARS). This follows a Minnesota jury’s verdict on Nov. 17, 2016, that ruled Wells Fargo was not entitled to those foreign tax credits because the transaction lacked both economic substance and a non-tax business purpose. After a three-week trial, the jury in this case was asked to determine whether Wells Fargo’s STARS transaction had economic substance, and the jury made some key factual findings. Wells Fargo contended that STARS was a single, integrated transaction that resulted in low-cost funding, but the jury found that in reality, the transaction consisted of two economically distinct and independent transactions: a loan and a trust. The jury found that the trust structure had no reasonable potential for pretax profit and that Wells Fargo entered into the trust structure solely for tax reasons. The jury also found that Wells Fargo entered into the loan solely for tax-related reasons. DOJ

May 24, 2017 – A federal grand jury sitting in the Eastern District of New York returned an indictment charging a former Brooklyn resident, who operated a precious metals brokerage firm with tax evasion and aiding and assisting in the preparation of false tax returns, announced the Justice Department’s Tax Division. According to the indictment, Christopher Wolf operated Rothchild & Associates LLC, in Brooklyn, New York, and was in the business of selling precious metals to investors over the telephone.  Although Wolf controlled all aspects of Rothchild’s operations, it was technically owned by a third party. Wolf allegedly concealed the income he earned from Rothchild by causing his commissions to be paid to shell corporations and diverting the funds from those corporations to his own personal use.  According to the indictment, Wolf filed a false 2010 individual income tax return that did not report the income he earned from selling precious metals and he failed to file a 2011 income tax return, despite earning brokerage commissions.  The indictment further alleges that Wolf caused the shell corporations to file false 2010 and 2011 corporate tax returns that claimed deductions for phony expenses. DOJ

May 16, 2017 – A federal court in McAllen, Texas ordered Idalia Padron and Nino’s Home Care Inc. to timely file the business’s federal employment and unemployment tax returns as they become due and pay in full the reported amounts due. The court also entered a money judgment against Nino’s Home Care for more than $2.7 million, which represents its past unpaid employment taxes. The complaint filed by the government against Padron and Nino’s Home Care alleged that Padron of Edinburg, Texas, operates Nino’s Home Care, a home health care service provider located at 121 W. Samano Street in Edinburg, and that Nino’s Home Care failed to pay its employment taxes for 20 tax quarters between 2005 and 2016. The complaint also alleged that Padron paid herself more than $100,000 in salary in 2015, a year in which Nino’s Home Care failed to pay over to the Internal Revenue Service (IRS) more than $850,000 in employment taxes. DOJ

May 9, 2017 – A former Internal Revenue Service (IRS) revenue officer who is a resident of Greensboro, North Carolina, was sentenced to serve 43 months in prison for tax evasion and corruptly endeavoring to impede the due administration of the internal revenue laws, announced the Justice Department’s Tax Division. According to documents filed with the court, from 1989 through 2014, Henti Lucian Baird operated HL Baird’s Tax Consultants. Baird had previously worked as an IRS revenue officer for 12 years. Although Baird filed tax returns every year, he has not paid taxes since at least 1998. He used his knowledge and experience as a revenue officer to evade paying his own taxes. He hid hundreds of thousands of dollars that he earned from his consulting business in bank accounts that he created in the names of his children and used money orders and cashier’s checks to pay his personal expenses. In response to IRS collection efforts, he submitted a false collection form on which he claimed to have only one bank account and concealed the existence of his nominee accounts. When Baird learned that the IRS had become aware of these accounts and intended to levy them, he withdrew the funds before the IRS could seize them. To stall impending liens and levies and evade paying the taxes he owed, Baird filed, in bad faith, a cash offer in compromise to settle his tax debt, a request to discharge the levies on the nominee accounts and an application to subordinate his federal tax lien. During this time when Baird was refusing to pay over to the IRS the taxes he duly owed, Baird continued to pay the mortgage on his 4,300 square-foot home, annual fees for his timeshare in Florida and car payments on his BMW. DOJ

May 5, 2017 – A Bronx, New York attorney, who ran a tax preparation business, was sentenced to serve 24 months in prison for filing thousands of fraudulent tax returns that claimed more than $6 million in bogus deductions, announced the Justice Department’s Tax Division. Doonan, 69, a New York licensed attorney since 1982, ran a tax preparation business in the Bronx using the firm name, “William Doonan, Esq.” Every year from 2010 through 2013, Doonan prepared and filed between 3,000 and 5,000 federal tax returns with the IRS for taxpayer-clients in exchange for a fee. Several thousand of these returns were fraudulent and reported bogus “consulting” businesses and business losses, while others claimed fake deductions based on false medical and dental expenses, state and local taxes, home mortgage interest, charitable donations and job expenses. In total, Doonan included more than $6 milion in fabricated and inflated items on his clients’ federal tax returns and caused a tax loss of more than $1.8 million. DOJ

May 2, 2017 – A federal grand jury sitting in West Palm Beach, Florida returned an indictment charging a Florida resident with corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, filing false tax returns, theft of government property and money laundering, announced the Justice Department’s Tax Division. According to the indictment, David R. Andre of Boynton Beach, Florida, filed false income tax returns with the Internal Revenue Service (IRS) from 2010 to 2015 that sought more than $5.6 million in fraudulent tax refunds. The indictment further alleges that the IRS paid out approximately $463,920, which was deposited into Andre’s personal bank account. Andre also allegedly attempted to impede the due administration of the internal revenue laws by making false statements to IRS agents during interviews in 2015. According to the indictment, Andre falsely stated to IRS agents that he purchased his residence with inheritance proceeds, when in fact he purchased it with illegal proceeds from the tax refund fraud. DOJ

April 2017

April 26, 2017 – An Indian national pleaded guilty to one count of conspiracy to commit money laundering for his role in liquidating and laundering victim payments generated through various telephone fraud and money laundering schemes via India-based call centers. According to admissions made in connection with the plea, Chaudhari and his co-conspirators perpetrated a complex scheme in which individuals from call centers located in Ahmedabad, India, impersonated officials from the IRS or U.S. Citizenship and Immigration Services in a ruse designed to defraud victims located throughout the United States. Using information obtained from data brokers and other sources, call center operators targeted U.S. victims who were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Victims who agreed to pay the scammers were instructed how to provide payment, including by purchasing stored value cards or wiring money, and upon payment, the call centers would immediately turn to a network of “runners” based in the U.S. to liquidate and launder the fraudulently-obtained funds. DOJ

April 26, 2017 – A High Point, North Carolina businessman, who provided financial services to professional athletes, was sentenced to 65 months in prison for wire fraud and filing a false 2011 tax return. According to the documents filed with the court, Michael Rowan, 46, operated Capital Management Wealth Advisors Inc. (CMG) and APS Management LLC (APS), along with his business partner. Through CMG and APS, Rowan provided financial and investment services to professional athletes, including National Football League (NFL) players. Rowan, through CMG and APS, contacted prospective NFL players in college to offer them financial and wealth management services, including bill payment, investment services and financial guidance. Once players were drafted by the NFL, Rowan agreed to provide his services to them for an annual fee of between $15,000 and $50,000. Rowan directed his clients to sign an agreement that allowed Rowan to access their bank accounts. Rowan represented that he would only make transactions that his clients authorized and that were for their benefit. However, Rowan misused his access and transferred more than $2.9 million into accounts he controlled for his own personal benefit and without his clients’ knowledge or consent. For 2009 through 2013, Rowan failed to report more than $1.4 million of the embezzled funds on his federal tax returns, causing a loss to the Internal Revenue Service (IRS) of more than $479,000. DOJ

April 25, 2017 – Three Orange County, California residents were sentenced to prison for willfully failing to report their foreign bank accounts in Switzerland and Israel, announced the Justice Department’s Tax Division. Dan Farhad Kalili, 55, a resident of Irvine, California, was sentenced to serve 12 months and one day in prison; his brother, David Ramin Kalili, 52, a resident of Newport Coast, was sentenced to serve eight months in prison; and his brother-in-law, David Shahrokh Azarian, 67, also a resident of Newport Coast, was sentenced to serve eight months in prison. According to documents and information provided to the court, Dan Kalili, David Kalili and Azarian willfully failed to file with the Department of Treasury Reports of Foreign Bank and Financial Accounts (FBARs) regarding secret bank accounts in Switzerland and Israel that each maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars. DOJ

April 18, 2017 – A federal grand jury returned an indictment on Feb. 9, which was unsealed, charging three men in Florida, with conspiracy, wire fraud and aggravated identity theft, announced the Justice Department’s Tax Division. According to the indictment, from approximately 2008 through January 2015, in Broward and Miami-Dade counties, Florida, Israel Tassy, Evens Julien, and Jean Leroy Destine, used stolen IDs, including the personal identifying information of deceased individuals, to file over 2,000 tax returns with the Internal Revenue Service (IRS) claiming more than $6.8 million in fraudulent refunds. The indictment alleges that Tassy, Julien and Destine recruited and paid others to obtain Electronic Filing Identification Numbers (EFINs) from the IRS, in their names and the names of businesses, and used these EFINs to file the fraudulent returns. The indictment also charges that in approximately February 2011, Julien registered A Tax Financial Services Inc., as a for-profit corporation with the state of Florida, and used it to file fraudulent returns as well. DOJ

April 7, 2017 – Television personality Michael “The Situation” Sorrentino and his brother, Marc Sorrentino, were indicted on additional charges including tax evasion, structuring and falsifying records, the Justice Department’s Tax Division announced. In September 2014, the Sorrentino brothers were indicted for tax offenses and conspiring to defraud the United States. The superseding indictment returned includes new charges against both men. Michael is now also charged with tax evasion and structuring funds to evade currency transaction reports and Marc is now also charged with falsifying records to obstruct a grand jury investigation. According to the superseding indictment, Michael was a reality television personality who gained fame on the television show “The Jersey Shore,” which first appeared on the MTV network. Michael and his brother Marc created businesses, such as MPS Entertainment LLC and Situation Nation Inc., to exploit Michael’s celebrity status. The superseding indictment alleges that the brothers conspired to defraud the United States by not paying all federal income tax owed on approximately $8.9 million that Michael earned between 2010 and 2012. DOJ

April 4, 2017 – A Fort Lauderdale, Florida resident was indicted for tax evasion, announced the Justice Department’s Tax Division. According to the indictment, between 2002 and 2015, Thomas Daly earned more than $1.5 million in income working as a salesman for several companies. The indictment alleges that Daly has not filed a federal tax return since 2002, with the exception of the 2007 tax year. In August 2009, the Internal Revenue Service (IRS) notified Daly that it intended to levy his wages to collect his unpaid tax liabilities for 2002 through 2006. Allegedly, in an effort to evade the collection of his back taxes, Daly incorporated South Florida Home Marketing Inc. (SFHM) to serve as his nominee and alter ego. Daly allegedly entered into an agreement with his employer to receive his wages in the name of SFHM. The indictment charges that as a result, the IRS’s levy was unsuccessful. Daly also allegedly directed others to make payments to him in the name of SFHM and used the income deposited into SFHM’s bank account to pay personal expenses, including apartment rent, a boat, international travel, entertainment, his girlfriend’s cosmetic surgery and jewelry. DOJ

March 2017

March 31, 2017 – A Republic of Benin man unlawfully residing in Philadelphia, Pennsylvania was convicted in the Eastern District of Pennsylvania of conspiring to commit access device fraud. According to the indictment and evidence at trial, from February through June 2014, Abdou Koudos Adissa was engaged in a conspiracy in which stolen identities were used to file tax returns claiming refunds with the Internal Revenue Service (IRS). Co-conspirators filed tax returns fraudulently seeking more than $800,000 in refunds, which were loaded onto Green Dot prepaid debit cards and sent via Western Union to Nigeria. In order for the prepaid debit cards to accept direct deposits, they had to be registered using personal identifying information including names, social security numbers and addresses. During a search of the apartment Adissa shared with a co-conspirator, special agents found 106 Green Dot cards in Adissa’s room. Adissa registered the Green Dot cards using stolen IDs and provided his co-conspirators with the direct deposit information related to the cards so that fraudulently obtained refunds could be directed to them. to the evidence produced at trial, he called Western Union 63 times in three months to facilitate transferring these fraudulent refunds to Nigeria. DOJ

March 29, 2017 – A federal grand jury sitting in St. Louis, Missouri, returned a superseding indictment charging a St. Louis resident for his role in a sophisticated stolen identity refund fraud scheme and other federal offenses, announced the Justice Department’s Tax Division. The superseding indictment charges Kevin Kunlay Williams aka Kunlay Sodipo, a Nigerian citizen, with mail fraud, aggravated identity theft, voter fraud, illegal reentry and being a felon in possession of a firearm. According to the indictment, Williams and others stole public school employees’ IDs from a payroll company and used them to electronically file more than 2000 fraudulent federal income tax returns seeking more than $12 million in refunds. He also allegedly stole several Electronic Filing Identification Numbers (EFINs) that he used to secure bank products allowing him to print refund checks and direct the Internal Revenue Service (IRS) to send refunds to prepaid debit cards. The indictment alleges that Williams had refund checks issued in the names of the stolen IDs, and blank check stock and debit cards sent to his residence. DOJ

March 28, 2017 – A federal grand jury sitting in St. Louis, Missouri, returned a superseding indictment charging a St. Louis resident for his role in a sophisticated stolen identity refund fraud scheme and other federal offenses, announced the Justice Department’s Tax Division. The superseding indictment charges Kevin Kunlay Williams aka Kunlay Sodipo, a Nigerian citizen, with mail fraud, aggravated identity theft, voter fraud, illegal reentry and being a felon in possession of a firearm. According to the indictment, Williams and others stole public school employees’ IDs from a payroll company and used them to electronically file more than 2000 fraudulent federal income tax returns seeking more than $12 million in refunds. He also allegedly stole several Electronic Filing Identification Numbers (EFINs) that he used to secure bank products allowing him to print refund checks and direct the Internal Revenue Service (IRS) to send refunds to prepaid debit cards. The indictment alleges that Williams had refund checks issued in the names of the stolen IDs, and blank check stock and debit cards sent to his residence. DOJ

March 28, 2017 – A former U.S. Congressman and one of his associates were indicted for their roles in orchestrating a scheme to steal hundreds of thousands of dollars from charitable foundations and the individuals who ran those foundations.  Some of the funds were allegedly used to illegally finance the politician’s campaigns for public office and to pay for his personal expenses and those of his associates. Former U.S. Representative Stephen E. Stockman, 60, of Clear Lake, Texas, and the former director of special projects in Stockman’s congressional office, Jason Posey, 46, formerly of the Houston, Texas, area, were charged in a 28-count superseding indictment with mail and wire fraud, conspiracy, making false statements to the Federal Election Commission (FEC), making excessive campaign contributions and money laundering.  Stockman is also charged with filing a false tax return that concealed his receipt and personal use of the fraudulent proceeds, while Posey is charged with falsifying an affidavit in order to obstruct an FEC investigation. According to the superseding indictment, from May 2010 to October 2014, Stockman solicited approximately $1,250,000 in donations based on false pretenses.  Specifically, the indictment alleges that in 2010, Stockman diverted a significant portion of $285,000 donated to charitable causes to pay for his and Dodd’s own personal expenses and to further Stockman’s own interests.  The indictment further alleges that in 2011 and 2012, Stockman and Dodd received an additional $165,000 in charitable donations, much of which Stockman used to finance his 2012 congressional campaign. DOJ

March 23, 2017 – A federal grand jury sitting in the District of Massachusetts returned an indictment charging two Massachusetts residents who operated a temporary employment agency with conspiring to defraud the government, failing to pay over employment taxes and obstructing the internal revenue laws, announced the Justice Department’s Tax Division. According to the indictment, Huong Le and Tien Chau ran an employment agency that provided temporary labor to businesses in Massachusetts and New Hampshire. The agency operated under at least four different names: Central Boston Staffing Services, Metro Boston Staffing Services, General Staffing Inc. and Kim’s Staffing Inc. Le and Chau allegedly used family members and other individuals as nominees to conceal their ownership of the business. The indictment alleges that from 2006 through 2011, Le and Chau conspired to conceal their agency’s total number of employees from the Internal Revenue Service (IRS) to lower their employment tax liabilities. Le and Chau allegedly attempted to hide the size of their workforce from the IRS by paying most of their employees cash under the table and causing the filing of false employment tax returns that both underreported the number of their employees and did not report wages paid in cash. Le and Chau allegedly cashed over $11 million in client checks at a check cashing facility in Worcester and used their staffing agency’s site supervisors, office manager and drivers to pay their employees in cash. DOJ

March 22, 2017 – A Houston, Texas business owner pleaded guilty to one count of failing to pay over employment taxes, announced the Justice Department’s Tax Division. According to documents filed with the court, Richard Floyd Tatum Jr., 57, owned Associated Marine & Industrial Staffing Inc. (AMI), an industrial staffing company that provided temporary labor to businesses in Texas and other states. Tatum employed approximately 1,000 people to include internal employees, who worked for AMI, and external employees, who AMI assigned to work on-site at client locations. Tatum was responsible for collecting, accounting for and paying over to the Internal Revenue Service (IRS) the payroll taxes withheld from AMI’s employees’ wages. Tatum exercised significant control over AMI’s finances to include entering into contracts, signing checks, to include payroll, and deciding which creditors to pay. Tatum also signed and filed AMI’s employment tax returns. From March 2008 through December 2009, Tatum filed false and untimely employment tax returns for AMI that did not report AMI’s external employees. In May 2013, Tatum filed untimely returns for the quarters ending in March 2010 through December 2012, reporting AMI’s external employees but failing to make any payments. Tatum withheld approximately $12 million in payroll taxes from March 2008 through December 2012, which he did not pay over to the IRS. Tatum also failed to pay $6 million of AMI’s contributing share of social security and Medicare taxes during the same quarters. Instead, he used the money for his personal benefit, including making payments on his ranch and traveling to Las Vegas, Hawaii and France. Tatum admitted that he caused a tax loss of more than $18 million. DOJ

March 22, 2017 – A grand jury in Baltimore, Maryland returned an indictment on March 9, charging a chiropractor with one count of corruptly endeavoring to impede the Internal Revenue Service (IRS) and six counts of filing false tax returns, announced the Justice Department’s Tax Division. According to the indictment, Dr. Warren Gregory Belcher, a resident of Salisbury, Maryland, operated a chiropractic business for nearly 20 years. During that time, he received income for chiropractic services from insurance companies, patients and other third parties, including another chiropractor in Baltimore. The indictment alleges that for the years 2009 through 2015, Belcher filed false individual income tax returns on which he failed to report that he operated a chiropractic business and falsely claimed that he had earned $0 in business income. The indictment further alleges that between 2008 and 2015, Belcher submitted approximately 79 letters to insurance companies and other third parties in which he threatened that the companies could be subject to civil and criminal penalties for reporting his income to the IRS on a Form 1099-MISC. A Form 1099-MISC is a tax form that is used to report certain types of income to the IRS, including payments for services performed by someone who is not an employee and medical and health care payments. Belcher also made threatening statements to an accountant to prevent the accountant from reporting his income to the government. DOJ

March 13, 2017 – A Los Angeles, California businessman was sentenced to 24 months in prison for hiding more than $23.5 million in offshore bank accounts. According to court documents, Masud Sarshar, a U.S. citizen, maintained several undeclared bank accounts at Bank Leumi and two other Israeli banks, both in his name and in the names of entities that he created. Sarshar owned and operated Apparel Limited Inc., a business that designed, manufactured and sold clothing and other apparel. For decades, with the assistance of at least two relationship managers from Bank Leumi and a second Israeli bank (Israeli Bank A), Sarshar hid tens of millions of dollars in assets in these accounts in an effort to conceal income and obstruct the Internal Revenue Service (IRS). Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income from the funds. Sarshar reported none of this income on his 2006 through 2012 individual and corporate tax returns. He also filed false Reports of Foreign Bank and Financial Accounts, commonly known as FBARs, with the U.S. Department of Treasury on which he omitted his ownership and control of these offshore accounts. DOJ

March 9, 2017 – A federal court in Spokane, Washington found Dr. James Hood, a dentist, and his wife, Karen Hood, in contempt for violating the Court’s previous permanent injunction requiring them to timely file payroll tax returns and pay payroll taxes, announced the Justice Department’s Tax Division. The Court ordered the Hoods to close their dental care businesses, cease operating as employers, and barred them from opening any new businesses where the Hoods would serve as employers. On March 8, U.S. District Court Judge Rosanna Malouf Peterson for the Eastern District of Washington found James Hood and Karen Hood in contempt after they demonstrated a consistent pattern of disregarding their tax obligations by making incomplete employment tax payments, making dishonored payments, and missing deadlines. The Court had previously entered a permanent injunction requiring James and Karen Hood, and their entities, to comply with the federal employment tax laws. According to the United States’ supplemental filing in the case, the Hoods had failed to show full compliance with the tax laws and the Court’s injunction by Jan. 31, as the Court had ordered. The court found that, the Hoods had failed to pay their taxes for the Fourth Quarter 2016 by the end of January 2017. The court also found that the Hoods had attempted to make payroll tax payments that were dishonored due to insufficient funds in their accounts. DOJ

March 6, 2017 – Two Louisiana attorneys pleaded guilty in the U.S. District Court for the Western District of Louisiana to willfully failing to file federal tax returns. According to documents filed with the court, James Lynden Burton, 48, and his ex-wife, Lucretia Pecantte-Burton, 50, of New Iberia, Louisiana, are licensed attorneys and were partners of the law firm of Pecantte-Burton & Burton (PB&B). PB&B offered general legal services and representation and regularly received cash payments from clients for legal services rendered. They also had a partnership interest in a tax return preparation business. For tax years 2007, 2008 and 2009, Burton and Pecantte-Burton did not file individual income tax returns despite earning income from their law practice and the tax return preparation business. They filed delinquent returns after learning that they were under criminal investigation by the Internal Revenue Service (IRS). DOJ

February 22, 2017 – A Texas resident was sentenced to serve 22 months in prison for preparing false tax returns. According to documents filed with the court, Lourdes Ramirez, a Mexico national unlawfully residing in the United States, operated TX ASAP Tax Services and Fiesta Tax Service located in Greenville. From 2011 through 2014, Ramirez prepared approximately 1,163 federal tax returns that included fraudulent business income, losses, credits and deductions and sought refunds to which her clients were not entitled. Ramirez intended to cause a tax loss of approximately $1,155,383. In addition to the term of prison imposed, Ramirez was ordered to serve one year of supervised release and to pay $128,958.85 in restitution to the Internal Revenue Service (IRS) by District Judge Ed Kinkeade. Judge Kinkeade also ordered Ramirez removed from the United States to Mexico following her sentence. DOJ

February 17, 2017 – Three people were found guilty by a jury in the U.S. District Court for the District of Columbia of federal charges for participating in a scheme to file false federal income tax returns in order to fraudulently obtain tax refunds to which they were not entitled. All three defendants were found guilty of one count of conspiracy to commit theft of government funds and to defraud the United States. According to the government’s evidence, members of the conspiracy participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. The conspirators fraudulently claimed refunds for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of, and refunds were issued to, willing participants in the scheme. The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia. DOJ

February 2017

February 22, 2017 – A Texas resident was sentenced to serve 22 months in prison for preparing false tax returns. According to documents filed with the court, Lourdes Ramirez, a Mexico national unlawfully residing in the United States, operated TX ASAP Tax Services and Fiesta Tax Service located in Greenville. From 2011 through 2014, Ramirez prepared approximately 1,163 federal tax returns that included fraudulent business income, losses, credits and deductions and sought refunds to which her clients were not entitled. Ramirez intended to cause a tax loss of approximately $1,155,383. In addition to the term of prison imposed, Ramirez was ordered to serve one year of supervised release and to pay $128,958.85 in restitution to the Internal Revenue Service (IRS) by District Judge Ed Kinkeade. Judge Kinkeade also ordered Ramirez removed from the United States to Mexico following her sentence. DOJ

February 17, 2017 – Three people were found guilty by a jury in the U.S. District Court for the District of Columbia of federal charges for participating in a scheme to file false federal income tax returns in order to fraudulently obtain tax refunds to which they were not entitled. All three defendants were found guilty of one count of conspiracy to commit theft of government funds and to defraud the United States. According to the government’s evidence, members of the conspiracy participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. The conspirators fraudulently claimed refunds for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of, and refunds were issued to, willing participants in the scheme. The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia. DOJ

February 10, 2017 – A now retired business school professor, who amassed a $220 million fortune in secret foreign accounts, was sentenced to seven months in prison for conspiring to defraud the United States and to submit a false expatriation statement to the Internal Revenue Service (IRS). He also has been assessed and paid a $100 million civil penalty for his concealment of these accounts. According to documents filed with the court and statements made during the sentencing hearing, Dan Horsky, 71, formerly of Rochester, New York, is a citizen of the United States, the United Kingdom and Israel who served for more than 30 years as a professor of business administration at a university located in New York. Beginning in approximately 1995, Horsky invested in numerous start-up companies, virtually all of which failed. One investment in a business referred to as Company A, however, succeeded spectacularly. In 2000, Horsky transferred his investments into a nominee account in the name of “Horsky Holdings” at an offshore bank in Zurich, Switzerland (the “Swiss Bank”) to conceal his financial transactions and accounts from the IRS and the U.S. Treasury Department. DOJ

February 9, 2017 – Roxann Gist and Dominique King, both of Chicago, Illinois, pleaded guilty to conspiracy and other charges related to a scheme to obtain fraudulent tax refunds using stolen ID information. According to documents filed with the court, from 2012 to 2015, Gist, 45, and King, 26, along with another co-conspirator filed at least 858 fraudulent income tax returns, using stolen names and social security numbers. Those returns sought approximately $2,780,724 in refunds. As part of the scheme, Gist and King acquired the personal identification information of thousands of unsuspecting individuals, and directed others to receive and collect fraudulent income tax refund checks, and to open up bank accounts to receive direct deposits of such refunds. They also recruited others to provide addresses where refund checks could be delivered. DOJ

February 8, 2017 – Hugh Robinson, a San Pablo, California resident, was sentenced to serve ­­144 months in prison for filing tax returns using the identities of deceased individuals and stealing social security and refund checks destined for other individuals. In October 2016, Robinson, 46, was convicted of conspiring to steal public money, stealing public money, and aggravated identity theft. According to the evidence presented at his trial, from at least August 2013 through April 2015, Robinson and his co-conspirators took names and personal identification information of deceased individuals from California death records and used them to file income tax returns seeking refunds. Robinson and his co-conspirators directed the refunds to addresses and bank accounts that they controlled. Robinson also bought and cashed legitimate refund and social security benefits checks that he knew had been stolen. Robinson and his co-conspirators obtained fraudulent California IDs and used them to cash the refund and social security checks at various stores, including in the Richmond-area. total, Robinson intended to cause a loss of more than $1.5 million. DOJ

January 2017

January 31, 2017 – An Atlanta, Georgia based tax return preparer was sentenced to 150 months in prison today for filing tax returns fraudulently claiming more than $20 million in refunds, announced the Justice Department’s Tax Division. According to documents filed with the court, Cheryl Singleton, 29, owned and operated Advanced Tax Services, a tax preparation business with multiple locations throughout the Atlanta area. Singleton hired and trained employees to prepare fraudulent tax returns and encouraged them to manipulate the numbers to maximize their clients’ refunds. From 2011 through 2016, Singleton and her employees included false dependents and fraudulent Schedule C businesses on their clients’ returns in order to inflate their refunds. Singleton and her employees also manipulated other individuals into providing their personal identification information by telling them they could qualify for an “Obama Stimulus” payment. and others used these individuals’ personal identification information to file fraudulent income tax returns in their names, without their knowledge or consent. DOJ

January 24, 2017 – The government unsealed a plea agreement with the owner and operator of Columbus Southern Medical Center, which provided unlawful prescriptions of controlled substances to addicts throughout the Midwest and who engaged in a series of schemes to evade more than $3.5 million in taxes, announced the Justice Department’s Tax Division. Kevin B. Lake, 50, of New Albany, Ohio, pleaded guilty to drug, tax and fraud charges and agreed to the forfeiture of what remains from the $29 million in seized funds earned from the clinic’s illegal activities, after restitution is paid from the funds. According to court documents, Lake owned and managed Columbus Southern Medical Center through one or more corporate or trust entities which he used to insulate himself from the illegal drug trafficking being conducted at the clinic. In the filed plea document, he admitted that between 2006 and 2013, he knew doctors and staff at the 2912 South High Street clinic prescribed controlled substances to patients without a legitimate medical purpose. During that time, hundreds of patients showed up daily – 85 percent of whom were returning patients – to receive prescriptions of oxycodone, hydrocodone and Xanax. The percentage of patients who were prescribed these controlled substances rose each year, jumping from nearly 60 percent in 2004 to nearly 92 percent in 2009 and 2010. DOJ

January 24, 2017 – A former Poplar Grove, Illinois woman pleaded guilty in federal court in Rockford, Illinois to mail fraud and aggravated identity theft. According to documents filed with the court, from 2012 through 2014, Shameka Carr, 30, used individuals’ names, social security numbers and dates of birth without their knowledge or consent to file fraudulent income tax returns.  Carr directed the fraudulently claimed refunds to prepaid debit cards and refund checks which she had mailed to addresses in Rockford and its surrounding areas.  Carr admitted to an intended tax loss of $1,026,284.  DOJ

January 24, 2017 – A former Queens, New York return preparer pleaded guilty to aiding and assisting in the preparation of false income tax returns. According to documents filed with the court, from in or about 2004 through 2014, Vanya Thompson, 39, ran a tax return preparation business, which operated under a number of names, including Lyn Services, Ricardo Multi-Service and Katie’s Multi-Service.  To generate larger refunds for her clients, Thompson falsified items on their returns such as charitable deductions and business income, expenses, and losses, causing a tax loss of more than $250,000.  DOJ

January 23, 2017 – A Pennsylvania man pleaded guilty to conspiring to defraud the United States and to aiding and abetting the filing of false claims for tax refunds. According to the indictment and information presented to the court, Shamback Francois, 27, engaged in a scheme to fraudulently obtain income tax refunds through the filing of false returns using stolen personal identifying information. At least one of Francois’s co-conspirators electronically filed the false tax returns, which directed that the fraudulently claimed refunds be deposited into a bank account in the name of Shamback Tax Service. Francois did not have a tax preparation service, but had opened up the account in order to facilitate the crime. Francois withdrew funds from this account to pay his co-conspirators. As part of the plea, Francois admitted to causing a loss of $425,841.14.  DOJ

January 23, 2017 – The owner of a St. Louis, Missouri tax return preparation business was sentenced to 27 months in prison following his conviction on two counts of tax evasion. According to court records, Semere Tsehaye, 39, was the owner and operator of at least 20 Instant Tax Service (ITS) franchise locations operating in Illinois, Kansas and Missouri from 2005 to 2011. ITS was a brand name of ITS Financial LLC, a nationwide tax preparation business headquartered in Dayton, Ohio. Tsehaye owned and operated his ITS franchise locations using two entities named A&S Tax Service LLC (A&S) and ERI Enterprises LLC (ERI). Court records show that during the years 2010 and 2011, Tsehaye generated fraudulent financial summaries that understated the gross receipts generated by A&S and ERI and provided them to his tax return preparer. Tsehaye’s tax return preparer used these financial summaries to prepare Tsehaye’s individual income tax returns, which Tsehaye then filed with the IRS. These tax returns were false in that they underreported A&S and ERI’s gross receipts by a total of approximately $547,895 in 2010 and $1.03 million in 2011, and resulted in Tsehaye evading a total of approximately $581,264 in tax due and owing. DOJ

January 18, 2017 – Three Orange County, California residents pleaded guilty to willfully failing to report their foreign bank accounts in Switzerland and Israel. Dan Farhad Kalili, 55, a resident of Irvine, California, together with his brother, David Ramin Kalili, 52, and his brother-in-law, David Shahrokh Azarian, 67, residents of Newport Coast, California, admitted that they willfully failed to file Reports of Foreign Bank and Financial Accounts (FBARs) with the Internal Revenue Service (IRS) regarding secret bank accounts in Switzerland and in Israel that each respectively maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars. DOJ

January 17, 2017 –A Northern District of Illinois resident was sentenced to 60 months in prison. From approximately January 2011 through April 2015, Carlos Smith stole personal identifying information obtained from individuals who sought credit repair or credit card processing services through CLS Financial Services Inc. (CLS), a business Smith operated, and used the information to file false individual income tax returns. Smith also stole identities of individuals who worked for Chicago’s Board of Education and used this information to file false individual income tax returns. Smith filed approximately 92 fraudulent income tax returns, claiming more than $1 million in refunds. Smith directed the fraudulently obtained tax refunds to prepaid debit cards, addresses, and bank accounts he controlled, including accounts opened in the names of individuals whose identities he had stolen. Smith also filed his own false individual income tax returns for 2012 through 2014. DOJ

January 17, 2017 – A congressional staffer was sentenced to prison for willfully failing to file an individual income tax return. According to documents filed with the court, Issac Lanier Avant, a resident of Arlington, Virginia, has been employed by the U.S. House of Representatives as a Chief of Staff since 2002. In December 2006, Avant assumed the additional role of Democratic Staff Director for the House Committee on Homeland Security. Despite earning more than $165,000, Avant failed to timely file his 2009 through 2013 individual income tax returns, causing a tax loss of $153,522. Avant had no federal income withheld during those years because in May 2005, he caused a form to be filed 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. Avant did not file tax returns until after he was interviewed by federal agents. DOJ

January 11, 2017 – A Montana couple pleaded guilty in federal court in Missoula, Montana to one count of conspiracy to defraud the United States. According to the government’s offer of proof, Peggy DeYoung and John DeYoung, both 71, have not filed an individual income tax return since 1998. From 2007 through 2011, Peggy DeYoung earned income through her ownership interest in two companies that own Southern California mobile home parks. The DeYoungs also enlisted the services of Joseph Hill of Creative Consulting Group to establish a number of purported trusts. The DeYoungs opened bank accounts in the names of those trusts using fabricated taxpayer identification numbers and paid personal expenses from the accounts. The plea agreement specifies that the DeYoungs caused the U.S. Treasury a tax loss of $376,350. DOJ

December 2016

December 30, 2016 – An El Cajon, California tax return preparer pleaded guilty in the U.S. District Court for the Southern District of California, to three counts of aiding and assisting in the preparation of a false tax return, announced the Justice Department’s Tax Division. According to documents filed with the court, Marla Cunningham, 50, of San Diego, California, owned and operated Cunningham’s Tax Service, a tax preparation business in El Cajon, California.  Cunningham admitted that she prepared false individual income tax returns for her clients for tax years 2008 through 2010 that included false charitable deductions, unreimbursed employee expenses, education credits, medical and dental expenses and business expenses.  Cunningham agreed that she caused a loss of more than $1.2 million. DOJ

December 27, 2016 – The Department of Justice entered into a non-prosecution agreement with Redflex Traffic Systems Inc., a Phoenix-based automated safety company. The agreement was reached in part due to Redflex’s extensive and thorough cooperation over recent years, which is detailed in the agreement.  It included cooperation with the successful prosecutions of several individuals, including a high-ranking city of Chicago official and Redflex’s prior Chief Executive Officer. Among the company’s obligations under the agreement, which shall continue for two years, Redflex will pay restitution and compensatory damages to the City of Chicago, the amount of which will be determined either by a final judgment or a settlement agreement in Chicago’s pending civil lawsuit against Redflex.  Redflex will also pay restitution of $100,000 to the City of Columbus, Ohio. DOJ

December 23, 2016 – The last defendant in a domestic and international, multimillion-dollar cigarette tax fraud scheme has been sentenced, the Department of Justice announced. On Thursday, U.S. District Judge David L. Bunning sentenced Anthony Cosica, 54, of Pinetop, Ariz., to 24 months in federal prison.  Eight other defendants, including three from eastern Kentucky and two from Russia, have already been sentenced, for charges including conspiracy to commit mail fraud, wire fraud and money laundering and violations of the PACT Act. According to court documents and evidence presented at trial, from 2008 to 2013, the defendants devised a scheme that defrauded federal, state and local governments across the country, out of cigarette excise taxes totaling approximately $48 million. Specifically, the defendants operated mail order and internet businesses engaged in the delivery sales of untaxed cigarettes to customers in all 50 states. DOJ

December 20, 2016 – A Maryland man was sentenced to 135 months in prison on federal charges stemming from his role as a key organizer and leader of an identity theft and tax fraud scheme involving the filing of fraudulent returns falsely seeking more than $20 million in refunds, announced the Justice Department’s Tax Division. According to the government’s evidence, Brown, formerly of Capitol Heights, Maryland, and others participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance.  Brown and his co-conspirators fraudulently claimed refunds for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners.  Returns were also filed in the names of, and refunds were issued to, willing participants in the scheme.  The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia. DOJ

December 16, 2016 – A Greensboro, North Carolina couple, who operated an online sales business, was sentenced to prison for tax fraud and bank fraud charges, announced the Justice Department’s Tax Division. Daniel Balson, 51, and Renee Balson, 53, were sentenced to serve 27 months and 16 months in prison, respectively, by U.S. District Court Judge Catherine C. Eagles of the Middle District of North Carolina.  According to court documents, Daniel Balson owned and operated Southern Sales Online (SSO), an online retail business that sold a variety of merchandise through eBay and Amazon, including scrapbooking and art materials, books, inspirational DVDs, pet supplies and tools.  Daniel Balson admitted selling stolen merchandise through SSO.  Although SSO earned over $1 million in gross receipts during tax years 2005 through 2011, the Balsons failed to report the operation of SSO and its gross receipts on their individual income tax returns. The Balsons also failed to report the income from SSO on a bank application for a mortgage loan modification in 2011. DOJ

December 7, 2016 – A Louisiana criminal defense attorney pleaded guilty to tax evasion, announced the Justice Department’s Tax Division. Michael Thiel, 66, a resident of Baton Rouge, Louisiana, pleaded guilty to one count of evading the payment of federal income and employment taxes for 2003 through 2013.  According to documents filed with the court, Thiel operated a criminal defense law practice in Hammond, Louisiana.  Despite earning substantial income through his law practice, Thiel did not timely file income tax or employment tax returns, and did not timely pay tax due and owing to the United States.  Thiel agreed that as of April 30, he owed federal income tax, penalties and interest totaling $736,527, and employment tax, penalties and interest totaling $261,725. DOJ

December 2, 2016 – A medical doctor and entrepreneur pleaded guilty to inducing interstate travel to commit a fraud and failing to account for and pay over employment taxes announced the Justice Department’s Tax Division. According to the plea agreement, statement of facts, and other court documents, in or about September 2000, Sreedhar Potarazu, 51, of Potomac, Maryland, an ophthalmic surgeon licensed in Maryland and Virginia, founded VitalSpring Technologies, Inc. (VitalSpring), a Delaware corporation.  From its inception, Potarazu was VitalSpring’s Chief Executive Officer and President, and served on its Board of Directors. As early as 2009, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $30 million in capital investments in the company.  Potarazu represented on numerous occasions that the sale of VitalSpring was imminent, which would have resulted in profits for shareholders, and concealed that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the IRS. For example, in 2014, Potarazu provided shareholders with a written summary of operating results that reflected VitalSpring’s 2013 revenues to be approximately $12.9 million when, in fact, the 2013 revenue was less than $1 million. DOJ

December 2, 2016 – A Cranston, Rhode Island resident was sentenced to serve 36 months in prison for aiding and assisting in the preparation of false tax returns, wire fraud, theft of government funds and aggravated identity theft. Belkis M. Guzman, 48, was a former employee of El Centro Multiservicios LLC, a tax preparation business located in Providence, Rhode Island.  Guzman was involved in two separate and distinct schemes. The first scheme involved the preparation and presentation of false individual income tax returns (Forms 1040) on behalf of El Centro clients for tax years 2009, 2010, and 2011, on which Guzman created, inflated and falsified dependents, exemptions, credits, deductions and expenses. The second scheme involved the deposit of more than 100 U.S. Treasury checks into Guzman’s personal checking account. The Treasury checks were generated by the filing of fraudulent individual income tax returns containing stolen personal identifying information and fraudulent amounts of income, deductions and credits. DOJ

November 2016

November 29, 2016 – A Stillwell, Kansas tax return preparer was sentenced to 48 months in prison for stealing his clients’ identities and federal income tax refunds falsely claimed in their names. According to documents filed with the court, Richard Drake used three of his clients’ personal identities to file false federal income tax returns that claimed inflated refunds.  As part of his scheme, Drake prepared accurate federal income tax returns for these clients, which he provided to them but did not file with the Internal Revenue Service (IRS).  He then had these clients make estimated tax payments to the IRS during the year.  Once it was time to file on behalf of his clients, Drake filed false tax returns with the IRS that underreported his clients’ income and claimed false expenses in order to generate large income tax refunds which he directed to accounts under his control.  In total, Drake stole and converted to his own use $2,432,147. DOJ

November 21, 2016 – Ahmad Sheikhzadeh, 60, a U.S. citizen and resident of New York City, New York, pleaded guilty to filing a false income tax return that substantially understated the amount of cash salary the defendant received from Iran’s Permanent Mission to the United Nations (IMUN) and conspiring to facilitate the transfer of funds to Iran without the required license from the Treasury Department in violation of the International Emergency Economic Powers Act (IEEPA). According to court filings and facts presented during the plea proceeding, beginning in January 2008, Sheikhzadeh was employed as a consultant to the IMUN and received a regular salary, in cash, approximately once per month, through an intermediary who was an official at the IMUN. Sheikhzadeh was not a declared IMUN official. From 2008 through 2012, Sheikhzadeh filed personal income tax returns that substantially understated the amount of income he received from his work for the IMUN. In addition, distinct from his work for the IMUN, Sheikhzadeh provided money remitting (“hawala”) services to co-conspirators in the U.S. to facilitate investments in Iran and to direct disbursements from Iranian bank accounts. Sheikhzadeh engaged in these money transfers without a license from the Treasury Department’s Office of Foreign Assets Control in violation of IEEPA. DOJ

November 21, 2016 – An Oregon, Ohio psychiatrist was sentenced to serve 18 months in prison announced the Justice Department’s Tax Division. According to court records, from as early as 2005, Sandra Vonderembse failed to pay taxes and filed and caused to be filed with the Internal Revenue Service (IRS) false and fraudulent tax returns that included false statements regarding her income and the amount of tax due and owing.  Additionally, from 2009 through 2011, Vonderembse falsely claimed to have no taxable income and to owe no taxes, despite earning more than $240,000 each year while working as a psychiatrist.  Vonderembse used nominee entities to conceal income from the IRS, and sent fake financial instruments to the IRS in purported payment of her taxes.  In total, from 2005 through 2011, she attempted to evade more than $360,000 in income tax liabilities. DOJ

November 17, 2016 – A Kenner, Louisiana couple was sentenced for crimes related to the operation of their check cashing business, VJ Discount Inc., announced the Justice Department’s Tax Division. Susantha Wijetunge, aka VJ, 52, was sentenced by U.S. District Court Judge Lance M. Africk of the Eastern District of Louisiana to serve 44 months in prison and his spouse, Manula Wijetunge, aka Manu, 48, was sentenced by Judge Africk to serve three years of probation.   The Wijetunges 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, for an inflated fee, fraudulently obtained tax refund checks for multiple co-conspirators.  These transactions often involved multiple checks and tens of thousands of dollars.  In an attempt to conceal this illegal activity, Susantha Wijetunge and others failed to file, or filed false, required currency transaction reports with the government. Susantha Wijetunge also filed multiple false individual and corporate income tax returns that underreported income.  The Wijetunges admitted that VJ Discount Inc. had third party check deposits totaling more than $59 million in 2011; $47 million in 2012; and $66 million in 2013.  Despite this large volume of business, the Wijentunges’ individual income tax returns reported total income of less than $100,000 per year. DOJ

November 16, 2016 – A congressional staffer pleaded guilty to willfully failing to file an individual income tax return, announced the Justice Department’s Tax Division. According to court filed documents, Issac Lanier Avant, a resident of Arlington, Virginia, is a staff member who has been employed by the U.S. House of Representatives since approximately 2000.  Despite earning more than $165,000 each year from 2008 through 2013, Avant failed to timely file personal income tax returns for any of those years.  Avant filed returns for tax years 2006 and 2007, but those returns each contained false deductions. In May 2005, Avant caused a form to be filed 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. DOJ

November 15, 2016 – A federal court in Detroit, Michigan has permanently barred a former Liberty Tax Service franchise owner and his operating company from preparing federal tax returns for others, the Justice Department announced. The civil injunction order prohibits Craig M. Comer and Comer Inc. from acting as federal tax return preparers and operating a tax return preparation business. On Jan. 28, the government filed suit against Comer and Comer Inc. and alleged that their five Detroit area Liberty Tax Service stores prepared federal income tax returns that improperly inflated claims for tax refunds and refundable credits for customers during 2013, 2014 and 2015.  According to the government’s complaint, the defendants also altered completed, customer-signed tax returns to increase the fees they charged customers and then forged the customers’ signatures on the returns when re-signing and filing them with the Internal Revenue Service (IRS).  DOJ

November 8, 2016 – A resident of Portland, Oregon pleaded guilty to conspiring to file fraudulent income tax returns with the Internal Revenue Service (IRS) claiming refunds in excess of $1 million, theft of government funds and filing a false claim for refund, announced the Justice Department’s Tax Division. According to the plea agreement, Lori Nicholson, 53, admitted that she conspired with other individuals to prepare and file more than 227 fraudulent income tax returns during 2010. The false information on the tax returns included fictitious wage and withholding information, and fraudulent refundable credits.  Nicholson also admitted that she assisted her co-defendants to prepare and file false income tax returns, including her daughter, Jasmine Mason, Brandon Leath and Shawntina Ware.  Nicholson further admitted that she shared identities and refunds with her co-defendants. DOJ

November 1, 2016 – An attorney who operated a tax preparation business in the Bronx, New York, pleaded guilty in Manhattan federal court to charges related to his participation in filing fraudulent tax returns and falsely claiming more than $6 million in bogus deductions, announced the Justice Department’s Tax Division. William Doonan, 69, of Bronx, New York, pleaded guilty before U.S. Magistrate Judge Andrew J. Peck to one count of aiding and assisting in the preparation of a false tax return, and one count of obstructing and impeding the due administration of the internal revenue laws. DOJ

 October 2016

 October 27, 2016 – A federal court in Columbia, South Carolina, has permanently barred a Liberty Tax Service franchise owner from preparing federal tax returns for others, the Justice Department announced.  The civil injunction order prohibits Christopher Paul Haynes from acting as a federal tax return preparer and from supervising, managing or employing federal tax return preparers.  In addition, Haynes must provide the government with a list of all customers for whom Haynes or his business prepared a tax return for any tax year from 2010 to present.  Haynes agreed to the civil injunction order entered against him. According to the government’s complaint, Haynes and his employees prepared tax returns that included false or inflated income and expenses on Schedule C (Profit or Loss From Business), bogus dependents, false filing statuses and improper unreimbursed employee business expenses. DOJ

October 20, 2016 – A federal grand jury in Sacramento, California returned an indictment charging a former Internal Revenue Service–Criminal Investigation (IRS-CI) special agent with six counts of filing false income tax returns, one count of corruptly endeavoring to obstruct the internal revenue laws, one count of theft of government money and one count of destroying records during a federal investigation. According to the allegations in the indictment, Alena Aleykina, of Sacramento, a certified public accountant and former IRS-CI special agent, filed false individual income tax returns for the years 2009, 2010 and 2011, on which she claimed false filing statutes, dependents, deductions and losses and tax returns on behalf of two trusts.  DOJ

October 18, 2016 – Two Wayne County, West Virginia business owners pleaded guilty to federal employment tax charges. Michael Taylor, 48, pleaded guilty to one count of conspiracy to defraud the United States in the ascertainment, computation, assessment and collection of employment tax from mid-2007 through 2010.  Jeanette Taylor, 44, pleaded guilty to one count of failing to pay over employment tax for the last quarter of 2009. According to documents filed with the court, from 2000 through 2010, Michael Taylor and Jeanette Taylor owned and operated a construction business in Wayne, West Virginia, that transported steel and sold gravel and concrete throughout West Virginia and Kentucky.  The Taylors changed the name of the business several times, though the operations of the business remained the same.  From 1999 to 2004, the business operated as Taylor Contracting & Taylor Ready-Mix LLC.  In 2004, the name changed again to Taylor Contracting/Taylor Ready-Mix LLC.  In 2010, the name changed a third time to Bluegrass Aggregates. DOJ

October 12, 2016 – Tax R Us, a Detroit-area tax return preparation business, unlawfully understates its customers’ income tax liabilities and overstates refunds by making deliberate misstatements on the returns, according to a new civil lawsuit filed by the Justice Department.  The suit, filed in federal court in Detroit, asks the court to permanently bar Tax R Us, Vannak Long, Rosalind Warnock, Jasmine Jackson and Mary Jackson from preparing tax returns for others.  The suit also asks the court to order each of them to turn over a list of all of the tax returns they have prepared. According to the complaint, Long, the owner of Tax R Us, frequently understated his customers’ gross receipts and overstated their business deductions to minimize their income subject to tax.  The complaint also alleges that Warnock, a past Tax R Us preparer, and current Tax R Us preparers Jasmine Jackson and Mary Jackson prepared returns that fabricate self-employment businesses and business losses to offset their customers’ taxable income from other sources and to increase their customers’ Earned Income Tax Credit. In addition to this improper conduct, Warnock, Jasmine Jackson and Mary Jackson claimed education credits the customers are not entitled to receive, according to the complaint. DOJ

October 5, 2016 – A federal jury sitting in St. Louis, Missouri, found the local owner of a tax return preparation businesses guilty of two counts of tax evasion. According to the evidence at trial, Semere Tsehaye, 39, was the owner and operator of at least 20 Instant Tax Service (ITS) franchise locations operating in and around East St. Louis, Illinois; Kansas City, Kansas; and Kansas City and St. Louis, Missouri, from 2005 to 2011.  ITS was a brand name of ITS Financial LLC, a nationwide tax preparation business headquartered in Dayton, Ohio.  Tsehaye owned and operated his ITS franchise locations using two entities named A&S Tax Service LLC (A&S) and ERI Enterprises LLC (ERI). DOJ

October 4, 2016 – A former Internal Revenue Service (IRS) revenue officer pleaded guilty in the U.S. District Court in the Middle District of North Carolina to one count of tax evasion and one count of corruptly endeavoring to impede the due administration of the internal revenue laws. According to documents filed with the court, Henti Lucian Baird, 60, and a resident of Greensboro, North Carolina, filed tax returns each year but has not paid his self-assessed taxes since at least 1998. During this time, Baird continued to pay the mortgage on his 4,300 square-foot home, annual fees for his timeshare in Florida and car payments on his BMW.  Baird admitted to the revenue officer and the mortgage holder that he did not keep money in bank accounts because he feared a levy or garnishment. DOJ

September 2016

September 22, 2016 – A federal jury in Los Angeles convicted the owner of a medical clinic for his role in a health care fraud scheme and for filing false income tax returns. Evidence introduced at trial showed that Michael Huynh, 66, the office manager and part-owner of a medical clinic, provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed.  Once Sharim received payments from the insurance companies, he paid Huynh for the false prescriptions.  Trial evidence showed that between January 2004 and November 2009, Huynh received 82 checks from Sharim totaling over $1.1 million.   Evidence at trial also demonstrated that Huynh filed false federal tax returns for tax years 2007 through 2011 that underreported the medical clinic’s gross receipts and sales on the corporate tax returns and total income on the individual tax returns.  Trial evidence showed underreported income of over $1.6 million. DOJ

September 20, 2016 – The former executive director of the Armed Forces Foundation was indicted on federal charges stemming from a scheme in which she allegedly stole from the non-profit charity, defrauded donors, and lied to the Internal Revenue Service (IRS) and the public about her salary and benefits. The indictment was announced by the Washington Field Office of the IRS-Criminal Investigation. The indictment also includes a forfeiture allegation seeking all proceeds that can be traced to the alleged fraud scheme. DOJ

September 19, 2016 – A Watertown, New York, food and restaurant entrepreneur and franchisor pleaded guilty to one count of wire fraud and one count of tax evasion announced the Justice Department’s Tax Division. According to the criminal information and plea agreement filed with the U.S. District Court in Utica, New York, between 2005 and 2015, Christopher Swartz, 46, engaged in a promissory note scheme to defraud lenders and investors, as well as a scheme to evade taxes and obstruct the Internal Revenue Service (IRS). DOJ

September 14, 2016 – A Durham, North Carolina, tax return preparer was sentenced to 12 months and one day in prison for aiding in the preparation of false tax returns, announced the Justice Department’s Tax Division. According to documents filed with the court, Reyna Nembiu Montes, operated “Su Manu Amiga,” a tax return preparation business in Durham.  Montes admitted that she prepared multiple false individual income tax returns for clients, claiming false dependents in order to generate fraudulent refunds.  She further admitted that she failed to disclose the existence of her tax return preparation business on her personal income tax returns. DOJ

August 2016

August 31, 2016 – A Pollock Pines, California, woman who owned a tax return preparation business and two of her employees, pleaded guilty to charges related to filing more than 250 false claims for refund, announced the Justice Department’s Tax. Teresa Marty, 56, the owner of Advanced Financial Services (AFS), a Placerville, California, tax return preparation business, pleaded guilty to conspiring to file false claims for refund and conspiring to defraud the Internal Revenue Service (IRS).  On Aug. 24, Pamela Harris, Marty’s office manager, and Rebecca Bandera-Marty, a California certified tax return preparer, also pleaded guilty to one count of conspiring to file false claims.  Marty, Harris and Bandera-Marty were indicted in June 2013 along with two other co-defendant clients, Charles and Victoria Tingler.  The Tinglers pleaded guilty to filing false claims in the spring of 2015 and will be sentenced in November. DOJ

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