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Tax Enforcement Actions

					
The Internal Revenue Service (IRS) is the United States agency with primary responsibility for enforcing federal tax laws, working with the Department of Justice. Whistleblowers with knowledge of violations of the federal tax laws can submit a claim to the IRS under the IRS Whistleblower Reward Program, and may be eligible to receive a monetary reward.


Below are summaries of recently-announced settlements or successful prosecutions by the IRS or DOJ. If you believe you have information about fraud or wrongful conduct which could give  rise to a claim under the IRS Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
March 23, 2018

				 Two former executives at a Virginia-based software company pleaded guilty to conspiring to defraud the government by failing to pay over employment taxes to the Internal Revenue Service (IRS), announced the Justice Department’s Tax Division.  According to documents and information provided to the court, Robert Lewis was the Chief Executive Officer and Kristie Lynn McDonald was the Vice President of Finance and Administration of a software company in Sterling, Virginia.  From January 2011 to February 2013, Lewis and McDonald conspired to defraud the United States by failing to pay over to the IRS more than $1.8 million in payroll taxes withheld from employee paychecks.  DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
March 16, 2018

				 A Massachusetts temporary employment agency operator pleaded guilty to willfully failing to collect and pay over employment taxes, announced the Justice Department’s Tax Division. According to information presented in open court and filed documents, Huong Le, also known as Lynn Le, assisted Tien Chau in the operation of an employment agency that provided temporary labor to businesses in Massachusetts and New Hampshire.  The agency operated under at least four different names between 2006 and 2011:  Central Boston Staffing Services, Metro Boston Staffing Services, General Staffing Inc. and Kim’s Staffing Inc.0  Le and Chau used family members and other individuals as nominees to conceal their ownership of the business.  Le also personally cashed over $6 million in checks payable to the employment agency at a check casher, caused others to cash over $4.9 million at the check casher, and caused others to incorporate the employment agency under nominee names and open bank accounts in those names.  DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
March 8, 2018

				 A Phenix City, Alabama, resident was sentenced to 30 years in prison for his role in masterminding multiple stolen identity refund fraud (SIRF) schemes, announced the Justice Department’s Tax Division. William Anthony Gosha III, a/k/a Boo Boo, was convicted, following a jury trial in November 2017, of one count of conspiracy, 22 counts of mail fraud, three counts of wire fraud, and 25 counts of aggravated identity theft. According to the evidence presented at trial and sentencing, between November 2010 and December 2013, Gosha ran a large-scale identity theft ring with his co-conspirators, Tracy Mitchell, Keshia Lanier, and Tamika Floyd, who were all previously convicted and sentenced to prison.  Together they filed over 8,800 tax returns with the Internal Revenue Service (IRS) that sought more than $22 million in fraudulent refunds of which the IRS paid out approximately $9 million. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
March 1, 2018

				 Two former Memphis staffing company owners were sentenced to prison for payroll tax fraud, announced the Justice Department’s Tax Division. Mark Stinson, who was convicted in December 2017 at trial of conspiring to defraud the United States, failing to pay over payroll taxes, filing false tax documents, theft of government funds, and aggravated identity theft, was sentenced to 75 months in prison.  According to court documents and trial testimony, from 2005 through 2015, Mark and Jayton Stinson operated a temporary staffing company in Memphis that provided services to businesses in Tennessee and elsewhere.  The staffing company’s standard contract with its customers provided that the staffing company was responsible for withholding employment tax from its employees’ wages and paying over the amounts withheld to the Internal Revenue Service (IRS). The Stinsons failed to pay over $2.8 million in withholdings and other employment taxes due to IRS, failed to timely file employment tax returns and filed false employment tax returns. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
February 21, 2018

				 An indictment returned by a federal grand jury sitting in Manhattan was unsealed, charging a New York-licensed attorney and partner at a New York law firm, with conspiring to defraud the United States, corruptly endeavoring to impede the internal revenue laws and tax evasion, announced the Justice Department’s Tax Division. According to the indictment, Steven M. Etkind, 57, was the head of a New York law firm’s tax, trusts and estates group and a Certified Public Accountant.  The indictment alleges that Etkind performed legal work for a successful entrepreneur client, who passed away in 2008, naming Etkind as the co-executor of his $35 million estate. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
February 15, 2018

				 A Massachusetts temporary employment agency operator pleaded guilty in Boston federal district court to an indictment charging him with conspiring to defraud the government, failing to pay over employment taxes and obstructing the internal revenue laws. According to the indictment and statements provided in Court, 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. Chau and others used nominees to conceal their ownership of the business. From 2006 through 2011, Chau and others conspired to conceal the agency’s total number of employees from the Internal Revenue Service (IRS) to lower the staffing agencies’ employment tax liabilities. Chau attempted to hide the size of their workforce from the IRS by paying most of the employees cash under the table and filing false employment tax returns that both underreported the number of employees and omitted wages paid in cash. Chau and others in the conspiracy allegedly cashed over $11 million in client checks at a check cashing facility in Worcester and used the staffing agency’s site supervisors, office manager and drivers to pay the employees in cash. DOJ				 					 

						
Tagged in:
													  Employment Tax Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 13, 2018

				 A Las Vegas, Nevada, tax return preparer pleaded guilty to filing fraudulent tax returns. According to documents and information provided to the court, from 2009 through 2015, Ofelia Ronquillo, 62, prepared fraudulent income tax returns for clients through a business known as A.R. Financial LLC and later AJRC Tax Services, in Las Vegas, Nevada. Ronquillo included false items on her clients’ tax returns, including bogus charitable contributions, capital losses, and unreimbursed employee expenses—such as meals and transportation expenses, as well as claimed inflated refunds to which her clients were not entitled. Ronquillo admitted that she caused a tax loss of more than $2.7 million. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 6, 2018

				 Andre Bernard of Mount Kisco, NY was sentenced to 87 months in federal prison for conspiracy to commit wire fraud, making false statements related to the Clean Air Act, and his participation in a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently claiming tax credits. As part of his sentence, the court also entered a money judgment in the amount of $10.5 million, the amount of proceeds of the charged criminal conduct that the defendant personally received. Two accounts already seized from the defendant worth in excess of $1.5 million will be credited against the money judgment. DOJ				 					 

						
Tagged in:
													  Environmental Fraud, 
													  Tax Credit and Deduction Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 1, 2018

				 The Department of Justice announced that it has entered into a settlement with Z Street, a non-profit corporation dedicated to educating the public about various issues related to Israel and the Middle East, pending approval by the United States District Court for the District of Columbia.  Z Street alleged that the Internal Revenue Service (IRS) applied heightened scrutiny to applications for tax-exempt status received from organizations connected in any way to Israel, and applied this policy to Z Street’s application, resulting in delay.  The settlement agreement includes an apology from the IRS to Z Street for the delayed processing of the group’s application for tax-exempt status. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
January 25, 2018

				 A Dover, Massachusetts, insurance broker was sentenced to eight months in prison for filing false tax returns. According to the evidence presented at trial, Anthony J. May, 62, owned and operated Clients First Financial Insurance Agency LLC, through which May sold life insurance products as an insurance broker, and Advantage Life Settlements LLC, through which he served as a broker for insured individuals seeking to sell their personal life insurance policies to third party investors.  May operated his businesses out of an office suite in Hingham, where he also leased office space to other independent insurance agents.  May filed false 2006 through 2009 individual income tax returns that did not report more than $738,000 in income that he received from insurance commissions, brokerage fees, and office rental payments. DOJ

				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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