Have a Claim?

Click here for a confidential contact or call:

1-212-350-2774

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.

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 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
1 18 19 20 21 22 23 24 29

Learn about Whistleblower Rewards Programs