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Tax Fraud

This archive displays posts tagged as relevant to tax fraud and underpayment. You may also be interested in the following pages:

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December 3, 2019

The government has reached a settlement agreement with Franchise Group Intermediate L 1 LLC, the national franchisor and owner of Liberty Tax Service, one of the largest tax preparation service providers in the U.S.  The government alleged that Liberty failed to maintain adequate controls over tax returns prepared by its franchisees, and failed to take steps to prevent the filing of potentially false or fraudulent returns.  The proposed judgment bars Liberty from employing certain individuals, including its founder and former CEO John Hewitt, and requires Liberty to implement specific compliance and reporting procedures, including the implementation of an internal whistleblower program.  DOJ

Catch of the Week: B&H Photo Video Sued by NY State for Tax Fraud

Posted  11/15/19
Modern mobile devices
This week’s Catch of the Week brings us back to the Big Apple, where New York Attorney General Letitia James joined a whistleblower lawsuit yesterday accusing the nation’s largest non-chain photo and video equipment retailer, B&H Photo Video, of tax fraud. The suit claims that long-time camera and electronics retailer B&H, which had more than $3 billion in revenue last year, knowingly failed to pay over $7...

November 8, 2019

Two New York City real estate development companies, Mica Gabe Brooklyn LLC and Brooklyn Warehouse 180 LLC, will pay $3 million to resolve claims that they secured a New York tax break, Section 421-a, by falsely stating that building service employees would be paid prevailing wages when, in fact, employees hired at the buildings were paid less than the wages required by law.  The $3 million settlement consists of $2.5 million in damages under Section 421-a and the New York False Claims Act, and $415,000 in back wages.  The investigation was initiated with the filing of a whistleblower complaint under the NY FCA by local union 32BJ SEIU, which will receive a portion of the damages as a whistleblower reward.  NY

November 6, 2019

Winston Shrout, who became a fugitive after being sentenced to 10 years in prison in 2017, has been captured and returned to custody.  Shrout led seminars promoting the use of fraudulent financial instruments as a means to avoid taxes, and sold materials for the preparation of such fraudulent instruments.  In addition, Shrout failed to file tax returns from 2009 through 2014.   DOJ

How to Become an IRS Whistleblower

Posted  10/16/19
IRS Whistleblower

Answers to Common Questions from Prospective IRS Whistleblowers

[caption id="attachment_46025" align="alignright" width="325"]IRS whistleblower lawyers Click for full size image[/caption] Although some state False Claims Acts allow whistleblowers to bring lawsuits based on violations of state and local tax laws, the federal False Claims Act (FCA) specifically excludes tax claims. Fortunately, the Tax Relief and Health Care Act of...

September 20, 2019

Pradyumna Kumar Samal, the former CEO of two Bellevue, Washington IT firms, has been sentenced to more than seven years in prison for his role in a long-running H1-B visa fraud scheme.  Samal's companies, Divensi and Azimetry, were employment agencies in the business of providing IT workers to major corporate clients.  Samal would submit fraudulent applications on behalf of foreign workers, claiming that they were being brought to the U.S. to perform a specific job, and instructing them to lie in their own applications, when, in fact, after being admitted, the employees would be benched and unpaid until Samal's companies were able to place them at actual client jobs.  In addition, Samal's companies failed to pay employment taxes on behalf of the foreign workers, instead diverting those funds to his personal use.  USAO WD WA

September 5, 2019

The owner of two defense contracting firms, Tico Manufacturing Inc. (TICO) and Military and Commercial Spares Inc. (MCS), has been sentenced to 3 years in prison and ordered to pay $8 million in restitution for conspiring to defraud the Department of Defense.  Between 2011 and 2015, Roger Sobrado fraudulently obtained DoD contracts by claiming that conforming parts for critical military equipment, including fighter jets and helicopters, would be supplied through authorized manufacturers.  Instead, Sobrado supplied non-conforming parts through non-authorized manufacturers, recruited family members to commit the same fraud, and collected DoD payments from his family members.  Additionally, he failed to report almost half of his taxable income for three years, causing the United States to lose a total of $509,962.  USAO NJ

August 29, 2019

Following a guilty plea, Treyton Lee Thomas was sentenced to over 21 years in prison and ordered to pay $14.6 million in restitution and forfeiture to the U.S. and victims of his investment fraud ponzi scheme.  Thomas's victims included his own father, his father's company, his wife, and his father-in-law. Thomas also pleaded guilty to income tax evasion, having failed to file returns for two decades, while using sham offshore entities to conceal his income.  USAO EDNC

Promising Changes to IRS Whistleblower Program – Tax Whistleblowers Now Protected Against Retaliation and Improved Communication when Reporting Tax Violations

Posted  08/21/19
By Michael Ronickher
man with red smoke
Recent legislation marks a potential huge step forward for the IRS Whistleblower Program, which offers rewards of 15 to 30% of government recoveries to whistleblowers who report tax avoidance.  The Taxpayer First Act (TFA), which came into force on July 1, 2019 introduced key reforms that should benefit whistleblowers reporting tax evasion and underreporting. A few months ago, the IRS Whistleblower Office released...

August 12, 2019

The CEO of a Colorado-based technology company has been sentenced to over 6 years in prison for defrauding the IRS, impeding the administration of tax laws, and stealing money from his employees’ healthcare and 401(K) plans.  As the head of Touchbase USA (TBUSA) and its successor company Touchbase Global Services, Inc. (TBGSI), Riordan Maynard allegedly stole over $50,000 from his employees’ healthcare plan and $68,000 from their 401(K) plans for use on company expenses.  He also caused TBUSA to be closed and TBGSI to be opened in order to avoid paying more than $2.5 million in unpaid payroll taxes.  After running up another $2.5 million in unpaid payroll taxes, Maynard also conspired to work around IRS levies sent to his customers.  USAO CO
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