Archive

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 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 24, 2016

New Jersey announced that a doctor from Middlesex County pleaded guilty to engaging in sophisticated fraud and money laundering schemes by which he hid approximately $3.6 million in income from his medical practices to evade taxes. He also pleaded guilty to using money from the schemes to pay illegal kickbacks to doctors. Dr. Manoj Patharkar, 45, of South Amboy, N.J., pleaded guilty before Superior Court Judge Michael A. Toto in Middlesex County to first-degree conspiracy, first-degree money laundering, seven counts of third-degree filing fraudulent tax returns, and three counts of third-degree failure to pay taxes. He also entered guilty pleas to all of those same counts on behalf of his corporation Pain Management Associates of Central Jersey (PMACJ). Those charges were contained in an Aug. 24, 2015 indictment. In addition, he pleaded guilty to an accusation charging him with second-degree conspiracy and second-degree commercial bribery in connection with the illegal kickback scheme. NJ

October 12, 2016

Fred Witmer and Gary Jury, the owners of Indiana biofuel producers Triton Energy LLC and Gen2 Renewable Diesel LLC, pleaded guilty to conspiracy, fraud and false statements for participating in a scheme that generated over $60 million in fraudulent tax credits and EPA renewable fuels credits at Triton.  Although the credits required that the fuel be used domestically for transportation, Witmer admitted selling it for uses that included the production of fire starter logs and asphalt and also for power generation.  As part of their pleas, Witmer and Jury agreed to serve a sentence of 57 months and 30 months, respectively.  DOJ

September 29, 2016

Chemoil Corporation agreed to retire 65 million renewable fuel credits to resolve alleged violations of the Renewable Fuel Standard program.  The current market value of the credits -- along with an additional 7.7 million renewable identification numbers already retired by Chemoil in the lead up to this settlement -- is more than $71 million.  Chemoil also will pay a $27 million civil penalty under the settlement, the largest in the history of the EPA’s fuel programs.  The RFS program requires exporters to retire RINs for renewable fuel like biodiesel, because the fuel exported is no longer available for blending into United States’ fossil fuel supply and, for that reason, cannot be used to meet the renewable fuel volume mandate established by Congress.  If exporters fail to retire the appropriate number and type of RINs associated with the exported fuel, it artificially inflates the volume of renewable fuel available for blending in this country and the number of RINs available to meet the renewable fuel volume mandate.  According to the government, ensuring exporters comply with the regulations for RIN retirement is critical to the proper functioning and integrity of the RFS program.  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