Tax Fraud

February 8, 2016

According to a civil lawsuit filed by the Justice Department, three South Carolina Liberty Tax Service franchises deliberately prepared false federal income tax returns in order to increase their customers’ refunds. The complaint alleges that the franchisee for the three locations, Christopher Paul Haynes of Irmo, South Carolina, and his employees included a bogus “arts and crafts” business on one customer’s tax return and a bogus “hair care” businesses on another’s. The lawsuit states that Haynes’s Liberty Tax Service offices have prepared more than 9,700 federal income tax returns since 2010. Based on adjustments the IRS has made to tax returns prepared and filed by Haynes’s Liberty Tax Service offices for 2010 to 2013, the average tax deficiency for tax returns audited in connection with the IRS’s investigation of Haynes is $3,834 per tax return, according to the suit. DOJ

February 4, 2016

The Justice Department and the Internal Revenue Service announced the filing of criminal charges against Bank Julius Baer & Co. Ltd., a financial institution headquartered in Zurich, Switzerland. Julius Baer is charged with conspiring with many of its U.S. taxpayer-clients and others to help U.S. taxpayers hide billions of dollars in offshore accounts from the IRS and to evade U.S. taxes on the income earned in those accounts. The Justice Department also announced a deferred prosecution agreement with Julius Baer under which the company admits that it knowingly assisted many of its U.S. taxpayer-clients in evading their tax obligations under U.S. law. The agreement requires Julius Baer to pay a total of $547 million by no later than Feb. 9, 2016. DOJ

February 2, 2016

A government contractor based in Fort Lauderdale, Florida, was sentenced to 12 months and one day in prison for filing a false income tax return. According to court documents, Maxim Silinsky, 44, owned an aircraft-leasing and parts-supply company called Simplex Corporation. Simplex contracted with the federal government to lease Russian aircraft to the U.S. Air Force for training purposes and to supply parts and equipment to U.S. military forces deployed to Afghanistan. Silinsky used a complex web of domestic and foreign corporate entities and financial accounts to facilitate his underpayment of both corporate and individual income tax for the years 2007 through 2010. DOJ

October 14, 2015

Michael J. Mitrow Jr., former CEO and president of pharmaceutical marketing company Access Communications, was sentenced to three and one half years in prison and to pay $83,219 in restitution to the IRS and $1,468,259.43 to his former company for participating in a scheme in which he obtained more than $2 million in fraud and kickback proceeds.  DOJ

December 23, 2014

US Congressman Michael Grimm pleaded guilty to aiding and assisting the preparation of a false tax return by fraudulently underreporting $900,000 in restaurant gross receipts and lowering payroll taxes through ‘off-the-book’ payments in connection with the Manhattan restaurant he owned called Healthalicious. DOJ

December 22, 2014

Bank Leumi, a major Israeli international bank, admitted that it conspired to assist US taxpayers to prepare and present false tax returns to the Internal Revenue Service (IRS) by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world. The criminal conduct spanned over a 10 year period and included an array of services and products designed to keep US taxpayer accounts concealed at Bank Leumi Group’s locations in Israel, Switzerland, Luxembourg and the US. The bank agreed to pay a total of $270 million in fines and penalties and to cease to provide banking and investment services for all accounts held by US taxpayers. DOJ

November 21, 2014

Credit Suisse AG was sentenced today for conspiring to assist US taxpayers file false income tax returns the IRS. Credit Suisse pleaded guilty to conspiracy on May 19. The plea agreement, along with agreements made with state and federal agencies, provides that Credit Suisse will pay a total of approximately $2.6B: approximately $1.8B in a criminal fine and restitution, $100M to the Federal Reserve and $715M to the New York State Department of Financial Services. As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS. DOJ

January 20, 2016

A federal court in Rock Hill, South Carolina, ordered T-N-T of York County Inc. and TM Trucking of the Carolinas LLC, to stop violating their employment tax reporting, deposit and payment obligations. The government’s complaint alleged that T-N-T of York County and TM Trucking of the Carolinas together owed more than $2.7 million in federal employment and unemployment taxes for various periods from 2009 through 2014. DOJ

January 15, 2016

A resident of the District of Columbia was sentenced to 18 months in prison for his involvement in a far-reaching stolen identity refund fraud scheme in which he worked with others to obtain over $315,000 in income tax refunds through the filing of fraudulent federal income tax returns. Ezekiel Raspberry, 39, is among approximately 16 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. The overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million. According to the government’s evidence, Raspberry participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people. DOJ