Archive

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 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 22, 2016

New York announced a $1.1 million dollar settlement of a whistleblower case alleging that real estate developer Asher Roshanzamir wrongfully deferred payment of New York state and New York City income taxes. Federal law allows a seller of real property to defer paying income taxes on certain capital gains when he exchanges it for ‘like-kind’ real property, under certain conditions. An investigation by the Attorney General’s Office found that Mr. Roshanzamir wrongfully deferred payment of New York State and local income taxes by disguising withdraws of approximately $3.5 million from the like-kind exchange and by disguising approximately $5 million in equity contributions as loans. NY

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.

March 7, 2016

Philip Joseph Rivkin (aka Felipe Poitan Arriaga) was sentenced to 121 months in prison and to pay more than $87 million in restitution and forfeit $51 million for generating and selling fraudulent biodiesel credits in the federal renewable fuel program through his companies Green Diesel LLC, Fuel Streamers Inc. and Petro Constructors LLC.  DOJ