Tax Fraud

September 22, 2017

Two Broward County, Florida tax return preparers were sentenced to prison for conspiring to file and filing fraudulent tax returns with the Internal Revenue Service (IRS). According to documents and information provided to the court, Fertilien, Joseph and Frantz Petit-Dos owned two tax preparation businesses in Lauderhill, Florida: Imperial Taxation and Multi-Services Corp. and Aleluya Universal Accounting Services Inc. From approximately 2010 through 2016, Fertilien, Joseph and Petit-Dos filed fraudulent returns for their clients seeking refunds to which the clients were not entitled, by reporting fictitious business income, fraudulent education and fuel tax credits and claiming deceased individuals, whose identities were stolen, as dependents. Fertilien, Joseph and Petit-Dos did not report the illegal proceeds they received from this scheme on their personal tax returns. The court found that Fertilien and Joseph caused a tax loss of more than $1 million. DOJ

September 22, 2017

A Reno, Nevada attorney was convicted following a three-week jury trial, of filing false tax returns and obstructing the internal revenue laws. According to the indictment and the evidence presented at trial, from approximately 2009 through 2010, Delmar Hardy, 63, concealed his business partner’s $700,000 investment in XYZ Real Estate. Hardy concealed his partner’s stake in XYZ and obstructed the internal revenue laws by falsely claiming all of XYZ Real Estate’s profits and losses on his own 2009 and 2010 individual tax returns. Hardy also falsified his 2008 through 2010 returns by not reporting more than $400,000 in cash income his law practice received. DOJ

September 22, 2017

Illinois announced a $4.5 million settlement to resolve a lawsuit under the Illinois False Claims Act against 13 Chicago-area gas stations and two gas station owners for sales tax fraud. The lawsuit alleged that since 2002, defendants submitted false monthly sales tax returns to the Illinois Department of Revenue, resulting in millions of dollars of lost tax revenue to the state. The lawsuit alleged defendants operated the scheme by underreporting general merchandise sales and using inaccurate sales tax reporting rates. Ten of the gas stations are currently in operation and are owned by George Nediyakalayil, and Tito Kandarapallil co-owns one of the gas stations with Nediyakalayil. IL

September 15, 2017

Luczor Fertilien, 39, was sentenced to 30 months in prison and David Joseph, 37, was sentenced to 24 months in prison. According to documents and information provided to the court, Fertilien, Joseph and Frantz Petit-Dos owned two tax preparation businesses in Lauderhill, Florida: Imperial Taxation and Multi-Services Corp. and Aleluya Universal Accounting Services Inc. From approximately 2010 through 2016, Fertilien, Joseph and Petit-Dos filed fraudulent returns for their clients seeking refunds to which the clients were not entitled, by reporting fictitious business income, fraudulent education and fuel tax credits and claiming deceased individuals, whose identities were stolen, as dependents. Fertilien, Joseph and Petit-Dos did not report the illegal proceeds they received from this scheme on their personal tax returns. The court found that Fertilien and Joseph caused a tax loss of more than $1 million. DOJ

August 31, 2017

A federal grand jury in Las Vegas, Nevada returned an indictment charging three individuals with stealing more than $1 million in refunds from the Internal Revenue Service (IRS). The indictment charges Chanh V. Trinh, Cannedy Trinh, and Elizabeth Trinh with conspiring to file fraudulent claims for tax refunds and theft of government funds. Chanh V. According to the indictment, Chanh V. Trinh, Cannedy Trinh, and Elizabeth Trinh were residents of Las Vegas, who allegedly conspired to file federal corporate and individual income tax returns reporting fake income and income tax withholdings and as a result, obtained more than $1 million in refunds to which they were not entitled. The indictment alleges that the fraudulent returns were filed in the names of the defendants and others, including a long-deceased family member and fictitious businesses. Months after filing a fraudulent return, the defendants would allegedly file a fraudulent amended return requesting an additional refund. The indictment alleges that Chanh V. Trinh prepared and filed the returns, and that all three defendants deposited or cashed the fraudulently obtained refund checks using multiple bank accounts, brokerage accounts, and check-cashing businesses in Las Vegas. The indictment alleges that the defendants frequently concealed the funds by purchasing cashier’s checks to obtain gambling chips at casinos. DOJ

August 15, 2017

Prime Partners SA ("Prime Partners") entered into a non-prosecution agreement ("NPA") with the U.S. Attorney’s Office and agreed to pay $5 million to the United States for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 through 2010. The NPA was based on Prime Partners’ extraordinary cooperation, including its voluntary production of approximately 175 client files for non-compliant U.S. taxpayer-clients, and provides that Prime Partners will not be criminally prosecuted. The NPA requires Prime Partners to forfeit $4.32 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $680,000 in restitution to the IRS, representing the approximate unpaid taxes arising from the tax evasion by Prime Partners’ U.S. taxpayer-clients. DOJ

August 14, 2017

A Miami-Dade County, Florida resident was sentenced to 70 months in prison for his role in a stolen identity refund fraud scheme. According to documents and information provided to the court, from approximately 2008 through January 2015, in Broward and Miami-Dade counties, Jean Leroy Destine, 36, and others, obtained stolen IDs, to include the personal identifying information of prisoners and deceased individuals. They used this information to prepare and file with the Internal Revenue Service (IRS) approximately 2,000 tax returns seeking more than $2 million in fraudulent refunds. Destine and his co-conspirators covered their tracks by recruiting individuals to obtain Electronic Filing Identification Numbers (EFINs) in their names from the IRS and then used these EFINs to electronically file the fraudulent returns. The conspirators directed the refunds to debit cards as well as treasury checks mailed to various addresses. The refund checks were cashed at different check cashing stores and funds were withdrawn from the debit cards at Western Union locations and ATMs. DOJ

July 19, 2017

Sreedhar Potarazu, an ophthalmic surgeon and founder of VitalSpring Technologies Inc., was sentenced to 10 years in prison for defrauding his former company’s shareholders and for failing to pay employment taxes.  He was also ordered to pay roughly $50 million in restitution to the shareholders and $7.7 million to the IRS, and forfeiture of several homes, vehicles, and bank accounts.  From at least 2008, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $49 million in capital investments in the company.  DOJ

August 3, 2017

A grand jury in the Northern District of California returned an indictment, charging five individuals with conspiring to submit fraudulent claims for tax refunds. Two of the individuals were also indicted for bank fraud. According to the indictment and information provided to the court, Jorge Vissani, Jacqueline Ramos a/k/a Jackie Acosta, Ana Bajo a/k/a Ana Cobraubias, Norma Morfin and Antonio Ahumada filed fraudulent tax returns with the Internal Revenue Service (IRS) that included fake income, false dependents and bogus education expenses. As a result of filing these fraudulent returns, the defendants are alleged to have stolen more than $9 million in tax refunds. The indictment alleges that the defendants directed the IRS to send the refunds to addresses and bank accounts that they controlled. According to the indictment, they forged endorsements and cashed or deposited the refund checks at financial institutions and businesses in Northern California. DOJ

August 3, 2017

A Louisiana woman pleaded guilty to four counts of preparing fraudulent tax 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 on behalf of her clients 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. As part of the plea agreement, Nevers admitted that she owes the Internal Revenue Service (IRS) $6,934,764 in restitution, as well as $128,900 to the Deepwater Horizon Oil Spill Trust and $964 to the Social Security Administration. DOJ