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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.

				

			

			
						
					
			

	
		
		

			

				
				
January 24, 2018

				 A Las Vegas, Nevada, business owner was sentenced to 12 months and one day in prison for evading payment of employment taxes and penalties. Maria Larkin, 55, was convicted of tax evasion by a federal jury in Las Vegas in June. According to the evidence presented at trial, Larkin owned and operated Five Star Home Health Care Inc. (Five Star). Larkin was responsible for collecting and paying over income, social security, and Medicare tax withheld from her employees’ wages. From 2004 through 2009, Larkin did not pay over to the Internal Revenue Service the employment taxes she withheld. As a result, the IRS assessed trust fund recovery penalties (TFRPs) against Larkin for these years, which made her personally liable for the unpaid employment taxes. Larkin concealed her assets and income to evade paying the TFRPs and to obstruct the IRS’s efforts to collect the outstanding taxes. She lied to the IRS regarding her ability to pay, changed the name of her business, placed her business in the name of a nominee, had her employees cash checks for her, and bought a home in the name of a nominee. In total, Larkin evaded more than $1.6 million in taxes. DOJ				 					 

						
Tagged in:
													  Employment Tax Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 10, 2018

				 A Harvey, Illinois, man was sentenced to 63 months in prison for his role in a stolen identity refund fraud scheme. According to documents filed with the court, from around November 2014 to March 2015, Jonathan Herring, 34, working with at least two others, prepared and filed income tax returns with the Internal Revenue Service (IRS) using stolen names and social security numbers of U.S. Air Force service members, and deposited the fraudulently obtained tax refunds into bank accounts that he controlled. In total, Herring filed approximately 225 fraudulent returns seeking approximately $845,979 in tax refunds. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 19, 2017

				 A Greensboro, North Carolina, business owner pleaded guilty in U.S. District Court for the Western District of Virginia to filing a fraudulent tax return. According to documents and information provided to the court, David A. Crowley, 57, owned and operated Southern Logistics and Environmental LLC (SLE), a waste management and disposal company. From 2006 through 2013, SLE contracted with a television retail company to dispose of cosmetic products that were returned by its customers. Instead of destroying and disposing of the number of products as required under the contract, Crowley provided the returned cosmetics to other individuals, who then sold the products through online marketplaces. In exchange for supplying the merchandise, Crowley received a portion of the sales. Crowley did not report the proceeds he received from the returned cosmetic product sales on his income tax returns for 2006 through 2013; for 2011 he did not file an income tax return at all. For these tax years, Crowley received and did not report $3,331,341 from the returned cosmetic product sales, causing a tax loss to the Internal Revenue Service (IRS) of $895,654. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 13, 2017

				 A Louisiana tax return preparer was sentenced to seven years in prison for filing fraudulent returns. According to documents filed with the court, Shawanda Nevers, aka Shawanda Hawkins, Shawanda Bryant, and Shawanda Johnson, 49, operated a series of businesses in the LaPlace area, including 3LJ’s Café Services & Sports Bar LLC and 3LJ’s Industrial Service Solutions LLC. Between 2011 and 2016, Nevers filed fraudulent income tax returns that included fake business losses, deductions and tax credits and sought refunds to which her clients were not entitled. Despite a federal judge permanently enjoining her from preparing federal tax returns in 2014, Nevers continued to file fraudulent returns. In addition to the term of prison imposed, U.S. District Court Judge Susie Morgan ordered Nevers to serve one year of supervised release and to pay restitution to the IRS for $6,934,764 in losses that she caused. She also was ordered to pay $128,900 to the Deepwater Horizon Oil Spill Trust and $964 to the Social Security Administration. Nevers pleaded guilty to filing fraudulent tax returns in August. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 8, 2017

				 A Tennessee temporary staffing company officer was convicted by a federal jury in Memphis of conspiring to defraud the United States, failing to pay over employment taxes, filing fraudulent employment tax returns, theft of government funds and aggravated identity theft. According to the evidence presented at trial, from 2005 through 2015, Mark Stinson and his wife, 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. In an effort to avoid making payments to the IRS the Stinsons changed the name and structure of the company multiple times after accumulating employment tax liabilities, operating as Jayton Stinson Connex Staffing & Janitorial Service, Connexx Staffing Services LLC, Connexx Staffing Services Inc., and Complete Employment Agency. DOJ				 					 

						
Tagged in:
													  Employment Tax Fraud, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 8, 2017

				 The owner of a Houston home health agency was sentenced to 80 years in prison for his role in a $13 million Medicare fraud scheme and for filing false tax returns. Ebong Tilong, 53, of Sugarland, Texas, was sentenced by U.S. District Judge Melinda Harmon of the Southern District of Texas. According to the evidence presented at trial and Tilong’s admissions in connection with his guilty plea, from February 2006 through June 2015, Tilong and others conspired to defraud Medicare by submitting over $10 million in false and fraudulent claims for home health services to Medicare through Fiango Home Healthcare Inc. (Fiango), owned by Tilong and his wife, Marie Neba, 53, also of Sugarland, Texas. The trial evidence showed that using the money that Medicare paid for such fraudulent claims, Tilong paid illegal kickbacks to patient recruiters for referring Medicare beneficiaries to Fiango for home health services. DOJ				 					 

						
Tagged in:
													  Home Health and Hospice, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 3, 2017

				 A Chicago, Illinois, woman was sentenced to 30 months in prison for conspiring to file fraudulent tax returns using stolen identities, announced the Justice Department’s Tax Division. According to documents filed with the court, from 2012 to 2015 Dominique King, 27, conspired with Roxann Gist, 45, and another co-conspirator to file at least 858 fraudulent income tax returns, using stolen names and social security numbers.  Those fraudulent returns sought more than $2.7 million 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 access direct deposits of such refunds. DOJ

				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 14, 2017

				 A California resident was sentenced to 54 months in prison for conspiring to file false claims for tax refunds, submitting false claims for tax refunds, mail fraud, and aggravated identity theft, announced the Justice Department’s Tax Division. According to documents and information provided to the court, Diep Vo aka Nancy Vo, 71, conspired with codefendant Trong Nguyen aka John Nguyen, to use the IDs of homeless and unemployed individuals in the San Jose, California area to file fraudulent claims for refunds with the Internal Revenue Service (IRS).  Vo went to homeless shelters and halfway houses and falsely represented to individuals that she could get them money from a government program designed to assist people who had not worked in previous years.  Vo convinced people to write down their names and social security numbers and to sign blank income tax returns.  Vo and Nguyen then falsified the signed returns by including bogus income and income tax withheld amounts, and seeking fraudulent tax refunds totaling approximately $3.4 million.  Vo and Nguyen directed the refund checks to private mailboxes they controlled. DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 14, 2017

				 A former Whitman, Massachusetts, police sergeant was sentenced to 48 months in prison for preparing false income tax returns for clients of his tax preparation business, obstructing the internal revenue laws, and misappropriating funds from the accounts of disabled veterans while he was a fiduciary appointed by the U.S. Department of Veterans Affairs (VA). Beginning in 2012, Pearson operated FTS Tax Services, a tax preparation business through which he prepared false tax returns for clients for a fee.  From 2012 through 2015, Pearson prepared numerous tax returns that included false credits and fictitious deductions in an effort to obtain bigger refunds for his clients than they were entitled to receive.  When Pearson’s clients were audited by the Internal Revenue Service (IRS), Pearson took steps to obstruct the IRS—including making false statements to the IRS and preparing false documents for his clients to submit to the IRS during the audits.  Pearson also falsely underreported his own income on his personal federal income tax returns.  Pearson admitted to causing a total tax loss of more than $1.5 million.  DOJ				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 9, 2017

				 A Phenix City, Alabama resident was convicted by a federal jury sitting in Montgomery, Alabama in two stolen identity refund fraud schemes, announced the Justice Department’s Tax Division. William Anthony Gosha III, a/k/a Boo Boo, was convicted 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, 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				 					 

						
Tagged in:
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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