Examples of Abusive Return Preparer Investigations - Fiscal Year 2010

The following examples of Abusive Return Preparer investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Tax Preparers Sentenced to Prison for Defrauding the U.S. Government

On September 30, 2010, in Los Angeles, Calif., Christopher Edwards and Asha Lenard were sentenced to prison for conspiracy to defraud the United States by filing tax returns that fraudulently sought tax refunds. Edwards was sentenced to 12 months and one day in prison, three years of supervised release, and was ordered to pay $161,129 in restitution to the Internal Revenue Service.  Lenard was sentenced to three years of probation, to include four months of home confinement, and was also ordered to pay $161,129 in restitution to the Internal Revenue Service. Both had previously pleaded guilty to the charge of conspiracy. According to court papers, Edwards and Lenard worked at Payless Tax Services in Inglewood, California, which was owned by co-conspirator, and former IRS Revenue Officer, Anthony Pendleton. The three conspired to submit tax returns for individuals claiming refunds they were not entitled to receive.  The claims for refunds included, among other things, falsified employment income and dependents.  Pendleton was previously sentenced to 41 months in prison.

Utah Woman Sentenced To Prison for Involvement in $3.1 Million Tax Fraud Scheme

On September 22, 2010, in Denver, Colo., Catherine Senninger, of Ogden, Utah, was sentenced to 36 months in prison, followed by three years of supervised release, and ordered to pay restitution of $128,664 for her participation in a scheme to submit false tax returns to the Internal Revenue Service (IRS) and the Colorado Department of Revenue (CDR).  According to the allegations contained in the indictment, as well as facts presented during the trial, Senninger and others, beginning in February of 2004 and continuing through February 2005, knowingly devised a scheme to defraud the IRS and CDR.  As part of the scheme, Jeffrey Harris owned and controlled a Colorado corporation which operated under the names of Grand Peak Mortgage and Financial Services, Inc. and Olympia Financial and Tax Services, Inc. (“Olympia”), located in Aurora, Colorado, whose primary business was to seek tax refunds.  Senninger prepared amended IRS and CDR tax returns for Olympia customers that would entitle the customers to a refund. Senninger frequently falsified information on the amended returns to ensure payment of a refund. Senninger then sent the falsified amended returns to Olympia’s corporate office in Colorado for signature and filing with the IRS and CDR.  Senninger and others filed, or assisted in the preparation and filing, of over 100 amended returns containing falsified information, resulting in IRS and CDR refunds in excess of $200,000 for tax years 2001 through 2003.  Co-defendants also sentenced in this scheme include: Manivone Saignaphone, sentenced on September 15, 2010, to eight months in prison, three years of supervised release, and to pay $52,868 in restitution; Jeffrey Harris, sentenced on June 30, 2010, to 108 months in prison, three years of supervised release, and to pay $351,920 in restitution; LouAnn Savala, sentenced on April 30, 2010, to 30 months in prison, three years supervised release, and to pay $224,287 in restitution; Annalisa Whittaker, sentenced on May 3, 2010, to five years probation and to pay $52,868 in restitution.  Manikhone Saignaphone (also known as Mani Saignaphone) awaits sentencing.

Former Dallas Tax Preparer Sentenced to 15 Years on Conspiracy and Obstruction of Justice Convictions

On September 16, 2010, in Dallas, Texas Herbert Jena was sentenced to 180 months in prison and ordered to pay more than $485,000 in restitution for conspiracy to defraud the IRS and obstruction of justice.  According to court documents, Jena owned and worked as a tax preparer at two tax preparation business; Monfront and Jackson Hubbert.  From December of 2006 through February 2007, Jena, 33, conspired with others to defraud the U.S. by impeding, impairing, obstructing and defeating the lawful functions of the IRS.  From 2004 through 2006, Jena obtained and used approximately 15 Electronic Filer Identification Numbers (EFINs) to electronically file tax returns.  Jena and his co-conspirators submitted fraudulent income tax returns to the IRS that included false claims for refunds and credits.  Witnesses testified that Jena instructed his employees to “make up” numbers for the Telephone Excise Tax Refund (TETR) and false Fuel Tax Credit (FTC) claims, which resulted in false credits and fraudulent refunds.  The scheme also resulted in refund and credit overpayments by the IRS and unearned and fraudulent tax preparation fees paid to Jena.  Jena directed his co-conspirators and others to hide the portions of the tax returns that showed the true amount of Jena’s tax preparation fees from the taxpayers.  For the 2006 tax season, Jena and his co-conspirators solicited and recruited approximately 1600 individual taxpayers to file returns with Jena’s tax preparation businesses.  Between January 12, 2007, and February 29, 2007, Jena used his multiple EFINs to electronically file a total of approximately 1681 individual tax returns.  Of that amount, approximately 1400 contained fraudulent and false information.  Approximately 1236 contained requests for false TETR credits, totaling more than $1.61 million.  Approximately 774 of the tax returns contained requests for false FTC credits, totaling approximately $1.166 million.  The government also presented evidence that during the conspiracy, Jena earned more than $500,000 in tax return preparation fees.  With regard to the obstruction of justice charge, the government presented evidence that in June 2007, during the pre-trial discovery process, Jena caused his former attorney to produce fraudulent documents to the government.  Trial testimony showed that these documents were fictitious employee termination letters and altered employee training records. 

Houston Tax Return Preparer Sentenced for Falsifying Tax Returns

On September 15, 2010, in Houston, Texas, Veronica Bellamy was sentenced to 30 months in prison, one year of supervised release and ordered to pay restitution of nearly $540,000 for preparing false tax returns for clients. According to court documents, Bellamy, in an effort to build a reputation for generating large federal income tax refunds for her clients, knowingly prepared and filed a number of false federal income tax returns that generated excessive refunds for clients for tax years 2002 through 2005. These returns were based upon false and fraudulently inflated deductions and credits.

Former New York Tax Preparer Sentenced for Preparing False Returns

On September 13, 2010, in Manhattan, N.Y., Robert Pabst, owner and sole operator of Tax Quick LLC, was sentenced to 36 months in prison, one year of supervised release, and ordered to pay $71,000 in restitution to his former clients.  According to court documents, Pabst ran his tax preparation business, out of his apartment. He marketed himself as an expert in preparing taxes for makeup artists and other professionals with side businesses.  While preparing their taxes, Pabst probed extensively into his clients’ personal expenses--including clothing, rent, movies, shows, newspaper, and magazine expenses--and fraudulently induced them to claim those expenses as business expenses related to their freelance businesses. In many instances, Pabst caused his clients to take fraudulent deductions of tens of thousands of dollars. As a result, Pabst’s clients received thousands of dollars worth of refunds to which they were not entitled; subsequently his clients were audited. Pabst directly benefitted from these fraudulent refunds by charging his clients a percentage of their refund as his fee.

Georgia Woman Sentenced for Filing False Tax Returns

On September 8, 2010, in Macon, Ga., Patsy D. Baker was sentenced to 24 months in prison, to be followed by one year of supervised release, and ordered to pay $46,398 in restitution.  Baker pleaded guilty in April 2010 to aiding and assisting the filing of a false return.  According to court documents, Baker, owner and operator of Elite Tax Service, claimed to be a tax preparer and operated her tax preparation business out of a restaurant known as Kazzmo's located in Eatonton, Georgia.  In her plea agreement, Baker admitted that from on or about November 26, 2003, through on or about September 5, 2006, she aided and assisted in the preparation of fifteen income tax returns which were fraudulent and false as to material matters.  The returns represented that taxpayers were entitled to larger income tax refunds than would be the case had the return been truthfully and accurately completed.

Colorado Springs Accountant Sentenced for Preparing False Tax Returns

On September 2, 2010, in Denver, Colo., Steven DeHaven, of Colorado Springs, was sentenced to 36 months in prison for aiding in the preparation of a false tax return. The judge also ordered DeHaven to pay $141,951 in restitution to the Internal Revenue Service (IRS).  DeHaven was charged by Information on April 9, 2010, and pleaded guilty on June 10, 2010.  According to the stipulated facts contained in the Information and subsequent plea agreement, beginning in 2004, DeHaven began operating a tax preparation business, Steven DeHaven CPA, from an office in his home in Colorado Springs.  From 2004 through approximately April 2007, DeHaven assisted a number of his clients with the preparation and filing of false tax returns.  Often, the clients were not aware of the fraudulent nature of these returns.  These returns included some combination of false Schedule A entries, including false or inflated deductions for charitable contributions and un-reimbursed employee business expenses; false Schedule C entries which contained information about non-existent businesses; and false Schedule D entries which contained false information about deductions for non-business bad debts. The purpose and effect of these false or inflated deductions was to increase refunds DeHaven’s clients would receive.  DeHaven assisted in the preparation of at least 84 false returns for the tax years 2003 through 2006.

Arizona Tax Accountant Sentenced for Stealing Almost $600,000

On August 30, 2010, in Phoenix, Ariz., Gregory A. Peters, of Mesa, Ariz., was sentenced to 32 months in prison and five years of supervised release as a result of his guilty plea to one count of mail fraud, one count of bank fraud and one count of filing a false tax return for the year 2002. According to information presented in court, Peters and his wife owned and operated PBS Tax Firm Inc., a bookkeeping and tax return preparation company in Mesa and Scottsdale, Ariz. Through his company, Peters prepared municipal and State of Arizona sales tax returns for several of his clients. He had agreements with at least three of these clients to have them pay Peters their sales taxes along with his accounting fee. Peters would then prepare and submit the required tax returns as well as remit the taxes to the proper authorities. According to his plea agreement, Peters admitted that he stole almost $600,000 in funds remitted to him by clients for his personal use. He admitted that he prepared and filed false sales tax returns for these clients, showing that little or no sales tax was owed, while at the same time collecting the proper amount of tax from the clients. In some instances, Peters failed to file any sales tax returns at all, despite receiving substantial amounts of sales taxes from a client. Peters took approximately $589,366 of the funds remitted to him by clients for payment of their accrued sales tax obligations and admitted to using the stolen funds for his lavish personal living and family expenses. Peters admitted in the plea that in June 2006, he applied for a $600,000 home equity line of credit at Mid First Bank, a federally insured financial institution. Peters’ Mid First loan application contained a financial statement and copies of U.S. income tax returns that show Peters receiving an income greatly in excess of the amount reflected on the tax returns Peters actually filed with the IRS. Peters admitted that he knowingly and willfully provided materially false financial and tax returns to Mid First Bank for the purpose of obtaining the $600,000 line of credit. Peters is currently in default on that loan.

Office Manager at Louisiana Jackson Hewitt Tax Service Sentenced for Filing False Tax Returns

On August 26, 2010, in Shreveport, La., Sharay K. Johnson was sentenced to 36 months in prison on charges of aiding and assisting in the preparation or presentation of a fraudulent tax return. According to documents, Johnson, an office manager at Jackson Hewitt Tax Service in Shreveport, prepared false Income Tax Returns in 2003.  The returns contained false and/or inflated Form W-2 income, false dependents, false Schedule A itemized deductions, false deductions, false education credits, false qualified retirement savings contribution credits, and false student loan interest deductions. She filed the tax returns on behalf of taxpayers who had no knowledge of her actions.  In addition, Johnson’s own 2002 tax return contained a false W-2 and, consequently, reported fictitious wages and federal tax withholding.

Detroit Tax Preparer Gets Jail Time for Aiding in the Filing of False Tax Returns

On August 20, 2010, in Detroit Mich., Lateresa Wilson was sentenced to 21 months in prison, one year of supervised release and ordered to pay more than $38,000 in restitution for filing false tax returns.  According to court documents, from December 2004 to April 2005, Wilson worked as a tax preparer for Liberty Tax Service.  Late in the tax season, the owner noticed that several tax returns prepared by Wilson were using the Refund Anticipation Loans (RALs); RALs are more commonly used earlier in the filing season.  It was determined that Wilson’s returns contained fraudulent information.  Wilson’s employment with Liberty Tax Service was terminated and, in December 2005, she opened a tax preparation service in Detroit, Michigan.  Wilson continued to prepare fraudulent tax returns which included inflated wages, federal withholdings, personal property tax, job expenses and charitable donations.  She continued to use RALs which were sent directly to her.  Once the check was received, she would contact the clients and instruct them to cash it at a designated check cashing store.  The clients returned a significant portion of the fraudulent refunds to her.  In January 2007, Wilson electronically filed her own 2006 tax return which contained false wage and withholding information that she was employed at a local hotel. Her employment with the hotel had terminated in 2004, when management discovered that she was involved in a fraudulent scheme involving credit card information.

New Jersey Return Preparer Sentenced for Filing False Tax Returns

On August 18, 2010, in Newark, N.J., Rafael Soriano, of Passaic, was sentenced to 15 months in prison, followed by one year of supervised release, and ordered to pay $34,900 in restitution.  Soriano pleaded guilty on April 7, 2010, to preparing and filing false tax returns for his clients.  According to court documents, Soriano was the owner and operator of I&S Travel and Tax Service, located in Passaic, New Jersey.  I&S was in the business of providing travel-related services, as well as preparing individual income tax returns.  According to the Indictment, between January 1, 2001, and April 15, 2001, Soriano prepared, filed and caused to be filed more than 50 U.S. Individual Federal Income Tax Returns on behalf of clients that included, among other things, fraudulent Forms 1040, 1040A, 1040EZ and W-2.

North Carolina Tax Preparer Sentenced for Filing False Returns

On August 13, 2010, in Greenville, N.C., Angela Fay Williams, of Kenansville, North Carolina, was sentenced to 37 months in prison, followed by three years of supervised release, and ordered to pay $32,377 in restitution.  Williams pleaded guilty on April 1, 2010, to aiding and abetting false, fraudulent and fictitious claims for tax refunds.  According to court documents, in 2005 and 2006, Williams conspired with others in the preparation and filing of 46 false federal income tax returns. The false returns usually included false W-2s and false dependents, as well as an address connected to Williams.  Most of the individuals for whom returns were prepared and filed were in prison and had no taxable income or not enough taxable income to require the filing of a return. These individuals did not know returns had been filed on their behalf and did not provide their personal information in order for the returns to be filed. Other individuals dealt directly with Williams and knew she was preparing a false return for them; selling the individuals “dependent” information for a larger tax return.

California Tax Return Preparer Sentenced for Filing False Claims with the IRS and for Failing to File His Personal Tax Returns

On August 9, 2010, in Los Angeles, Calif., Gene S. Wong, an El Segundo tax return preparer, was sentenced to 24 months in prison, three years of supervised release, and ordered to pay $255,236 in restitution to the Internal Revenue Service (IRS).  Wong operated a tax return preparation and bookkeeping business known variously as TaxLAX, Tax 4 Less, and GW Accounting & Bookkeeping Center.  He pleaded guilty to willfully failing to file his personal income tax return for 2005 and filing false claims for tax refunds on behalf of his clients.  According to his plea agreement, Wong filed at least 92 false claims for tax refunds with the IRS on behalf of third parties from February 2003 through April 2007. The false claims resulted in a tax loss to the government of more than $255,000. The false claims for refunds filed by Wong claimed fraudulent tax credits including general business tax credits, fuel tax credits, and alternative vehicle tax credits. In his plea agreement, Wong admitted that there was no basis for the tax credits claimed on the false returns he prepared. Wong admitted that, for the tax years 2003 through 2006, he willfully failed to file his personal income tax returns.  In an effort to disguise his income and make it difficult for the IRS to identify him as the tax return preparer, Wong used the identifying information of nominees, including that of his own son, to identify the paid return preparer on more than 500 tax returns he personally prepared. Additionally, Wong used different business addresses for the same business location and, on tax returns he prepared for clients, he spelled his name in two different ways.

Texas Tax Return Preparer Sentenced to Prison for Falsifying Tax Returns

On Aug 5, 2010, in Houston, Texas, Kimyosia Byrd was sentenced to 36 months in prison, one year of supervised release and ordered to pay restitution of more than $302,000 for preparing false tax returns for clients.  According to court documents, Byrd tried to build a reputation for generating large federal income tax refunds for her clients, so she knowingly prepared, and filed a number of false federal income tax returns that generated excessive refunds for clients for tax years 2004 through 2006. These returns were based upon false and fraudulently inflated business losses, deductions and credits.  Byrd was also given a special condition upon her release that she not be involved in any business preparing tax returns.

Maryland Tax Preparer Sentenced for Aiding and Assisting in Preparing False Tax Returns

On August 2, 2010, in Greenbelt, Md., Tammy P. Royster, of Upper Marlboro, Maryland, was sentenced to 15 months in prison, to be followed by one year of supervised release, and ordered to pay $201,000 in restitution. The restitution is the balance of tax loss remaining to date, after partial payment was made by Royster’s clients.  According to her plea agreement, Royster owned and operated a tax return preparation business known as Nevets Tax Services.  From 2005 to 2007, Royster helped taxpayers minimize their tax liability by fabricating or inflating expenses, deductions and credits claimed on their individual income tax return, including education credits or tuition fees, charitable contributions, unreimbursed employee expenses and losses associated with a business.  In some cases, when a client did not have business, Royster appended a fraudulent Schedule C to the return and created false income and expenses to allow the client to claim a loss from the purported business on their returns.  These false deductions and expenses lowered his client’s tax liability, resulting in substantially larger refunds than the client was not entitled to receive. From 2005 to 2007, Royster filed fraudulent income tax returns that resulted in a tax loss of $228,343.

South Carolina Woman Sentenced for Preparing False Tax Returns

On July 27, 2010, in Florence, S.C., Jerlene E. McKnight, of Salters, South Carolina, was sentenced to six months in prison and one year supervised release with nine months home detention, and ordered to pay a $5,000 fine.  According to court documents, McKnight prepared false forms W-2 which she sold to individuals so that they could file tax returns and obtain refunds. The W-2 forms were in the name Ausha’s Daycare, a fictitious business, and McKnight Enterprises, a business that existed for a short period of time but employed very few people.  Most of the taxpayers took the fictitious W-2's to Vincenia Brockington, a tax preparer who has already been convicted of tax fraud.  McKnight sold at least 35 false W-2's which were used to file tax returns resulting in losses to the United States of approximately $130,000.

Tax Preparer Sentenced to 41 Months for Fraud and Tax Evasion

On July 20, 2010, in San Diego, Calif., David Canales was sentenced to 41 months in prison and ordered to pay $1,021,063 in restitution. On March 24, 2010, Canales pleaded guilty to one count of mail fraud and one count of tax evasion. According to the plea agreement, between 2001 and 2008, Canales operated a tax preparation and bookkeeping business in Chula Vista, California. Canales admitted that he controlled two bank accounts in the fictitious business names International Recovery Systems/IRS and Freight Transport Brokers/FTB. Canales further admitted that he falsely represented to his clients that they owed substantial amounts of tax to the Internal Revenue Service and California Franchise Tax Board and directed his clients to write checks to “IRS” and “FTB”. Canales admitted that instead of forwarding these checks and the tax returns to the IRS and FTB, Canales deposited the checks into his own “IRS” and “FTB” bank accounts and either did not submit the clients’ returns to the relevant taxing authority or submitted different returns showing little or no tax due and owing. Canales admitted that he caused losses in excess of $1,000,000 and willfully evaded payment of income taxes on $457,653 in income he earned for the years 2003-2007.

California Tax Return Preparer Sentenced for Tax Fraud

On July 19, 2010, in San Jose, Calif., Lydia Hernandez, the owner of Lydia Hernandez Tax Services, in Salinas, was sentenced to 15 months in prison, to be followed by three years of supervised release, and ordered to pay $35,433 in restitution for tax evasion and aiding and assisting in the preparation of false tax returns. According to the plea agreement, Hernandez prepared 39 income tax returns on behalf of 13 clients for the 2002 through 2005 tax years.  She admitted that she prepared false returns for those clients to reduce their taxable income and obtain a bigger refund for them than they were entitled to receive.  For some clients, Hernandez filed a false Schedule C, deducting items such as gifts, dry cleaning, cell phone expenses, gym membership fees, and union dues, even though she knew those items were not deductible.  Hernandez also falsified the amount of deductions for state and local taxes and filed false depreciation and mileage deductions on behalf of her clients.  Hernandez admitted that, for the 2004 tax year, she underreported her business income by $51,129 on her individual income tax returns.

MichiganTax Return Preparer Sentenced to Two Years in Prison for False and Fraudulent Tax Returns

On July 13, 2010, in Grand Rapids, Mich., Darryl Horton was sentenced to 24 months in federal prison for filing false and fraudulent income tax returns on behalf of himself and others. According to court documents Horton was in the business of preparing tax returns during the years 2004 through 2008, and the aggregate tax loss to the United States from the false and fraudulent tax returns was between $300,000 and $400,000.  The false and fraudulent returns variously claimed false business losses, false itemized deductions, and false refunds, resulting in underpayment of federal income taxes and the receipt of fraudulent tax refunds.

Former IRS Revenue Officer Sentenced to Prison in Scheme to File False Tax Returns

On July 7, 2010, in Los Angeles, Calif., Anthony Pendleton, a former IRS Revenue Officer, was sentenced to 41 months in federal prison, to be followed by three years of supervised release, after being convicted of conspiracy to defraud the United States by filing tax returns that fraudulently sought tax refunds. Pendleton was also ordered to pay restitution totaling $179,037 to the Internal Revenue Service.  According to court papers, Pendleton, along with co-conspirators Christopher Edwards and Asha Lenard, conspired to file false claims for tax refunds with the IRS.  The three, while working at Pendleton’s tax preparation business, Payless Tax Services in Inglewood, California, submitted tax returns for individuals claiming refunds they were not entitled to receive.  The claims for refunds included, among other things, falsified employment income and dependents.  During the execution of a search warrant at Payless Tax Service, investigators recovered various documents and records related to the crime.  Among the documents recovered was one entitled “Payless Tax Fee Schedule 2003,” which detailed how much Payless charged to prepare returns for clients using children that are not dependents ($499 2 kids / $250 1 kid) and prepare returns for clients with no W-2’s (50 percent of refund amount).  Lenard and Edwards are scheduled to be sentenced on September 10, 2010.

Texas Tax Preparer Sentenced to 42 Months for Preparing Fraudulent Tax Returns   

On July 2, 2010, in Dallas, Texas, Delano Watson was sentenced to 42 months in prison for aiding and assisting in the preparation of false and fraudulent tax returns.  According to court documents, Watson, a resident of Mesquite, Texas, did business as Delano Watson Services and had prepared and filed federal income tax returns for individual taxpayers since 1999 from his residences in Garland and Mesquite, Texas. Watson also submitted false and fraudulent returns representing taxpayers were entitled to claim certain deductions, when he well knew they were not entitled to claim the deductions.  Watson fraudulently inflated taxpayers’ deductions and credits, often without their knowledge, to inflate their tax refunds.  According to court documents, Watson did this so that his customers would be happy with their returns and would refer their friends.  Watson’s clients were subsequently audited by the IRS and were required to repay what they owed to the IRS in addition to substantial penalties and interest.  Watson continued this scheme over several years, making at least $40,000 - $60,000 per year through his tax preparation business.

Maryland Tax Return Preparer Sentenced for Preparing False Tax Returns

On June 29, 2010, in Baltimore, Md., Mohamed Babar Sangarie, of Germantown and Gaithersburg, Maryland, was sentenced to 24 months in prison, followed by one year of supervised release, and ordered to pay a $100,000 fine. Sangarie was convicted at trial on March 22, 2010, of 20 counts of filing false income tax returns with the Internal Revenue Service (IRS).  According to testimony presented at trial, between 2002 and 2005, Sangarie operated a tax return preparation business from his home known as MBS Tax Service. For tax years 2002 through 2004, Sangarie prepared individual federal tax returns which contained false information for his clients, inflated and fabricated deductions and credits in order to fraudulently increase the refunds due to his clients, or decrease their tax liability. During this timeframe, Sangarie prepared more than 6,800 tax returns, of which 98 percent reported no tax due or claimed tax refunds.

Owner Of “Twin Tax” - a Tax Preparation Business in Dallas - Sentenced to Nearly Six Years in Prison

On June 18, 2010, in Dallas, Texas, Anthony Barber was sentenced to 70 months in prison for filing false tax returns.  According to court documents, Barber owned and operated a tax preparation business in Dallas, Twin Tax.   Barber operated Twin Tax from 2001 through at least April 2004 and prepared approximately 7,461 tax returns.  Barber had at least three full-time employees. Barber instructed his employees to put false deductions on clients’ tax returns and he also told them to limit the clients’ Schedule C losses to less than $10,000 and false Hope Education Credits to less than $3000.  After the employees prepared the clients’ tax returns, Barber would adjust the returns by increasing these already false and inflated credits, thereby increasing the refund.  Barber would also increase the return preparation fee by a corresponding amount.  Barber also admitted that he failed to file an accurate personal tax return for tax years 2003 and 2004 by failing to report nearly $1.1 million in business income from Twin Tax for each year.  Barber also admitted that in February 2006 he filed an IRS Form 1120, U.S. Corporation Income Tax Return, for Twin Tax for tax year 2004 that showed a tax due and owing of nearly $725,000, however, no tax payment was remitted.

Tennessee Tax Preparer Sentenced in Fraudulent Tax Schemes

On June 16, 2010, in Nashville, Tenn., Susan Sperl, of Kingston Springs, Tennessee, was sentenced to 36 months in prison, followed by three years of supervised release, and ordered to pay $83,339 in restitution. After a bench trial in February 2010, Sperl was found guilty of one count of conspiracy to defraud the United States and four counts of preparing false tax returns.  Evidence presented during the trial showed that Sperl conspired with Michael Ray, a Houston, Texas resident, to evade payment of taxes for his company, Tender Loving Nurses (TLN).  Sperl devised a plan to create the appearance of legitimate business deductions by initiating multiple transfers of money between bank accounts in Texas and Tennessee and by preparing a fictitious invoice.  She prepared a false 2000 tax return for TLN that claimed a fictitious $240,000 deduction and prepared a false personal tax return for Ray, which significantly under reported his partnership income for tax year 2000.  When confronted by IRS Special Agents, Sperl and Ray lied in an attempt to cover up the scheme.  Sperl also prepared two false returns for clients that claimed inflated business income in order to maximize the earned income tax credit.  In addition, in November 2008, a jury convicted Sperl and co-defendant David Michaels of conspiracy to defraud the United States and assisting in the preparation of a false income tax return.  The trial jury found that Sperl and Michaels had conspired with Bryan Wolf and Harold Strong by agreeing to assist Wolf and Strong in transferring income of their corporation, InSite Services, Inc., to offshore accounts and disguising the transfer as a legitimate business deduction on InSite’s tax return. Sperl and Michaels provided false invoices, billing InSite for non-existent research and development work in order to disguise the transfer of the money as a business expense.  When confronted by the IRS, Sperl, Michaels, and Wolf lied in an attempt to cover up the scheme.

New Jersey Return Preparer Sentenced for Preparing Fraudulent Tax Returns for Clients

On June 15, 2010, in Newark, N.J., Washington Perez, of Nutley, was sentenced to 12 months and one day in prison, followed by three years of supervised release, and ordered to pay a $4,000 fine. Perez pleaded guilty in January 2010, to eight counts of aiding and assisting in the preparation of false tax returns. According to court documents, Perez held himself out to be a tax return preparer operating at times out of Maica Tours Travel Agency in Jersey City, New Jersey. Perez met with clients at Maica Tours and elsewhere to prepare their U.S. individual tax returns and charged a fee of up to $150 per return. For the tax years 2003 through 2005, Perez prepared fraudulent returns for his clients by fabricating and inflating purported unreimbursed business expenses on their returns and by failing to report the full amount of rental income received and inflating rental expenses. In doing so, Perez was able to obtain larger refunds for his clients that they were not entitled to receive. The clients are responsible for paying the money back to the IRS.

Sacramento Accountant Sentenced To 234 Months in $13.5 Million Ponzi Scheme

On May 28, 2010, in Sacramento, Calif., William Murray, of Sacramento, was sentenced to 234 months in prison, to be followed by three years of supervised release for mail fraud and interference with tax administration in a Ponzi scheme. He was also ordered to pay $10,375 in restitution to 118 victims of his scheme. According to his March 9, 2010, guilty plea, Murray stole approximately $13,357,133 from more than 50 clients between 2001 and 2009. He told clients to write checks to accounts under his control so that he could pay taxes or invest money on their behalf. In fact, he spent millions of dollars in client money on his own lifestyle. He bought himself houses, a classic car, a fleet of limousines, jewelry, and other luxury items. Murray changed his clients’ addresses to his own, so that they would not receive the IRS’s demands for payment on their delinquent taxes. As demands for payment arrived from clients and the IRS, Murray’s fraud became a Ponzi scheme. He used $3,507,502 in later clients’ money to pay off demands associated with earlier clients.  Murray’s sentence provides for the forfeiture of all of his remaining property, the disclosure of his bank account information to his victims, and a full disclosure of all of his financial affairs.

North Carolina Man Sentenced on Tax Charges

On May 27, 2010, in Greensboro, N.C., Julio Spiro Dibbi from Forsyth County, North Carolina, was sentenced to 30 months in prison, to be followed by one year of supervised release, and fined $60,000. Dibbi was indicted on June 30, 2009, on nine counts of willfully aiding the filing of false income tax returns and five counts of interfering with internal revenue laws for the tax years 2005 and 2006. In November 2009, Dibbi pleaded guilty to claiming false Schedule A business deductions and to corruptly endeavoring to obstruct and impede the tax laws.  According to court documents, the false Schedule A business deductions included employee expenses, business travel, work telephone and uniform cleaning.  He also instructed a taxpayer to create a false mileage log to support the false exemption claimed on the 2005 income tax return.

California Tax Return Preparer Sentenced to 18 Months in Prison for Tax Evasion

On May 3, 2010, in Fresno, Calif., Jane Mary Avila, of San Joaquin, was sentenced to 18 months in prison, to be followed by three years of supervised release, for tax evasion. She was also ordered to pay $107,323 in restitution. According to court documents, Avila was the owner and operator of Juanita’s Income Tax located in San Joaquin. She prepared tax returns for individuals and small businesses and offered other financial services. She was also an Employment Representative with the California Employment Development Department (EDD) from 1980 to 2001, working with employers and employees regarding farm labor needs. In 1999, six individuals, all of whom have since been convicted, were involved in a scheme to defraud the EDD by filing a number of false unemployment insurance claims and obtaining large quantities of fraudulent unemployment insurance checks. They used Avila’s business to cash their fraudulent checks. Avila would deposit the funds into her money order account and issue money orders, which she gave to the individuals involved in the scheme. She also deposited some of the money orders into her own bank account for her use. For the tax years 2000 and 2001, Avila willfully failed to report taxable income of $148,632 and $157,811, respectively.

Arkansas Return Preparer Sentenced to Aiding and Assisting the Preparation of False Income Tax Returns

On April 16, 2010, in Fort Smith, Ark., Larry D. Brock, of Fordyce, was sentenced to 15 months in prison, followed by one year of supervised release, and ordered to pay $78,458 in restitution to the Internal Revenue Service (IRS).  Brock was indicted in January 2009. He was charged with 30 counts of aiding and assisting in the preparation of false income tax returns which contained more than $500,000 in false deductions.  In the middle of his trial in August 2009, Brock pleaded guilty to three counts of aiding and assisting in the preparation of false income tax returns.  According to court documents, Brock, employed as a tax preparer at BJS Financial Services, admitted that he prepared three false federal income tax returns for a client for tax years 2002, 2003 and 2004. These returns contained fraudulent Schedule C business expenses, state tax deductions, interest deductions, and charitable contribution deductions.

Tax Preparer Sentenced for Aiding and Assisting in the Preparation of False Tax Returns

On March 29, 2010, San Diego, Calif., Pablo Amesquita, a self-employed tax preparer doing business as “Tax & Weddings,” located in San Ysidro, California, was sentenced to 12 months and one day in prison to be followed by one year of supervised release.  Amesquita pleaded guilty on April 1, 2009, to two counts of aiding and assisting in the preparation and presentation of false tax returns for tax years 2005 and 2006. In addition, the judge ordered Amesquita to pay a $4,000 criminal fine and ordered that he immediately cease from preparing any further tax returns. According to court documents, Amesquita prepared tax returns for his clients for tax years 2005 and 2006 by knowingly and willfully falsifying and exaggerating itemized deductions claimed on the tax returns in an attempt to defeat a total of approximately $65,096 and $80,227 in additional taxes due and owing in 2005 and 2006, respectively. According to court records, during an undercover operation in March 2007, Amesquita advised an undercover agent that he could deduct home improvements and expenses for non-business meals and entertainment, clothing, gasoline, and insurance, even though Amesquita knew that these items were not deductible under the tax law and that the undercover agent had no documentation to justify the numbers that Amesquita entered on the tax return.

Tax Preparer Sentenced To 18 Months Imprisonment for Preparing False Tax Returns

On April 7, 2010, in Boston, Mass., Eddy Ekanem, of Lowell, Mass., was sentenced to 18 months imprisonment, to be followed by one year of supervised release during which time he may not prepare tax returns for third parties. Ekanem pleaded guilty in December 2009 to 22 counts of aiding and assisting in the preparation of false tax returns. At the earlier plea hearing, the prosecutor told the Court that had the case proceeded to trial the Government’s evidence would have proven that from 2001 and continuing through 2005, Ekanem owned and operated a tax preparation service called Ekanem Tax Services located in Boston, Mass. Ekanem held himself out as an experienced tax preparer who, for a fee, could assist taxpayers in obtaining tax refunds that other tax preparers could not obtain. However, in order to obtain greater tax refunds for his clients than they were entitled to receive, Ekanem inserted false and fabricated information into taxpayers Form 1040/1040X returns. This false and fabricated information included various false and/or inflated deductions and credits, including claims for unreimbursed medical/dental expenses, unreimbursed employee expenses, including job travel, charitable contributions and other miscellaneous deductions including deductions for work clothes, uniforms and shoes. As a result, many of Ekanem’s clients not only had to pay back their improper refunds, but also ended up owing back taxes, interest and penalties.

Connecticut Tax Preparer Sentenced for Filing False Tax Return

On April 7, 2010, in New Haven, Conn., Maria Cintron, of East Hartford, was sentenced to 14 months in prison, followed by one year of supervised release.  Cintron pleaded guilty on January 14, 2010, to one count of aiding and assisting in the filing of a false tax return.  According to court documents and statements made in court, between 2005 and 2009, Cintron and employees of her tax preparation business prepared and filed returns for clients that improperly included deductions for nonexistent or inflated expenses, such as uniform costs, and inflated charitable contributions.  Cintron and her employees also prepared false returns claiming improper entitlement to Earned Income Tax Credits.  During these years, Cintron was the principal owner and operator of a tax preparation business known as PR Family LLC aka PR Family Multiservices LLC, and formerly known as Wintax Now LLC, located in East Hartford.  Internal Revenue Service audits revealed that, between 2005 and 2007, Cintron and her employees assisted in the preparation of approximately 183 false tax returns resulting in an overpayment of improper refunds to her customers of approximately $505,339 in income taxes. Cintron has agreed to the entry of a permanent injunction that will bar her from preparing tax returns in the future.  She also must pay to the Internal Revenue Service a sum to be determined as the result of her fraudulently filing of her own and others’ personal income tax returns. Cintron has placed $125,000 in an escrow account to satisfy the judgment.

Tax Preparer Sentenced for Fraud Scheme

On March 19, 2010, in Chicago, Ill., Bertha Steverson was sentenced to 27 months in prison, to be followed by 12 months of supervised release and ordered to pay $25,000 in restitution. A federal grand jury in March 2009 indicted Steverson on 21 counts of preparing and filing false returns on behalf of clients and one count of filing a false personal return. She pleaded guilty to two of those charges in December 2009. According to the indictment, between 2003 and 2006, Steverson operated Bertha's Tax Service located at different times in Hillside, Ill., Lisle, Ill, and Plainfield, Ill. She attracted customers by representing that she would help her clients maximize the refunds they received. Steverson increased certain clients' tax refunds by fraudulently overstating their adjusted gross income or overstating or misrepresenting expenses, thereby improperly qualifying them for tax credits or refunds to which they were not entitled. From 2003 through 2006, Steverson prepared in excess of approximately 121 false and fraudulent federal income tax returns resulting in total refunds issued of approximately $439,477.  The loss to the United States Treasury was in excess of approximately $395,000.  In addition, on or about April 16, 2005, Steverson falsely represented and stated on her Individual Income Tax Return for tax year 2004 that she had an adjusted gross income totaling $11,895, an amount that she knew to be false and fraudulent.  A civil lawsuit filed by the Department of Justice against Steverson ended in a May 2007 court order that permanently enjoined Steverson from preparing tax returns for others. A judge found she had prepared returns containing deductions for bogus expenses that caused a loss of more than $3 million to the U.S. Treasury.

Michigan Return Preparer Sentenced for Preparing False Tax Returns

On March 16, 2010, in Detroit, Mich., Michael Grimshaw was sentenced to 49 months in prison, to be followed by one year of supervised release, and ordered to pay more than $51,000 in restitution.  According to court documents, during 2004 and 2005, Grimshaw prepared 63 income tax returns claiming fictitious business deductions, knowing that these deductions were materially false and that the taxpayers were not entitled to claim them.  Grimshaw claimed car and truck expenses, in one case, claiming over 58,000 in business miles for employment that never occurred.  He also claimed fictitious business depreciation, mortgages and legal expenses, among other items. The tax loss to the Internal Revenue Service totaled over $218,000.

Kentucky Tax Preparer Sentenced for Preparing 60 False Income Tax Returns; Ordered to Pay Restitution to Taxpayer Customers

On March 15, 2010, in Louisville, Ky., Thomas Allen Turner, of Columbia, Kentucky, was sentenced to 18 months in prison, to be followed by one year of supervised release.  Turner was also ordered to pay $24,781 in restitution to various customers of his tax preparation business who were assessed financial penalties by the Internal Revenue Service (IRS) because of false returns prepared by him. In October 2009, Turner pleaded guilty to 60 counts of aiding and assisting the preparation of false tax returns filed with the IRS.  According to court documents, between January 2003 and March 2006, through his tax preparation business, Accu Tax Accounting Service, Turner prepared 60 false tax returns which contained false and fraudulent deductions to which the taxpayers were not legally entitled to claim, including deductions for the costs of vehicles and construction of work buildings purportedly used in 100 percent of the time in qualified businesses operated by the taxpayers.

Mississippi Tax Preparer Sentenced on Tax Fraud Charges

On March 1, 2010, in Oxford, Miss., Irma Santacruze was sentenced to twelve months and one day in prison, followed by three years of supervised release and ordered to pay $33,166 in restitution.  As a condition of her sentencing, Santacruze is prohibited from future preparation of tax returns other than her own. Santacruze pleaded guilty in June 2009 to charges of knowingly preparing and transmitting a fraudulent income tax return and knowingly and unlawfully using the identification of another person to commit tax fraud. According to court documents, Santacruze submitted false returns to the Internal Revenue Service (IRS) through Rapid Tax, Rapid Tax Consulting and Unique Tax Solutions, businesses Santacruze owned and operated in the Tupelo, Mississippi, area. She used the names and social security numbers of unwitting filers, fictitious sources and amounts of income, and dependents.  The false returns resulted in the payment of earned income tax credits to which neither Santacruze nor the filers were entitled to receive.

San Diego Tax Return Preparer Sentenced to Prison for Tax Fraud

On March 1, 2010, in San Diego, Calif., Fe S. Garrett, a resident of National City, Calif., was sentenced to 65 months in prison and ordered to pay $377,468 in restitution. In August 2009, Garrett was convicted of filing false individual tax returns, failure to pay taxes, and multiple counts of aiding and assisting in the preparation of false tax returns following a nine-day trial. According to the evidence presented at trial, for tax years 2001 and 2002, Garrett prepared at least 18 federal income tax returns for her clients that were false as to material matters in that the tax returns claimed fraudulent itemized deductions, child care expenses and Schedule E real estate rental expenses in amounts that she knew her clients were not entitled to claim. Additionally, according to the documents filed in the case and evidence presented at trial, Garrett was a licensed tax return preparer and licensed real estate broker who operated a tax return preparation and bookkeeping business and a real estate financing business. These businesses operated under multiple names, including Fe's Tax Service, Garrett's Tax Service and Garrett's Realty and Mortgage. Garrett failed to report over $300,000 of her business gross receipts from those businesses on her federal income tax returns for tax years 2001, 2002, 2004 and 2005. Additionally, the evidence at trial showed that Garrett willfully failed to pay approximately $279,000 in federal income taxes that she owed for tax years 2001 through 2006. Despite filing tax returns for 2001 and 2006 on which she admitted owing tax each year, Garrett spent hundreds of thousands of dollars at local casinos, wired over $100,000 to the Philippines, and did not respond to numerous attempts by the IRS to contact her. According to the evidence presented at trial, Garrett prepared a false tax return for an undercover IRS agent that included false items similar to those on her client’s returns. In a recording presented at trial, Garrett was heard describing her "style" of preparing tax returns using "loopholes" for claiming deductions on income tax returns.

California Tax Return Preparer Sentenced to Six Years; Helped Clients Evade $2.7 Million in Taxes

On February 22, 2010, in Los Angeles, Calif., James Otis Swift, a Gardena, California tax return preparer, was sentenced to 72 months in federal prison in a scheme that cost the government more than $2.7 million. According to court documents, Swift falsely told clients that he had been employed by the Internal Revenue Service. In September 2009, Swift pleaded guilty to tax charges and admitted that he prepared hundreds of false income tax returns for the tax years 2002 through 2007. The tax returns were fraudulent because they contained inflated deductions for charitable contributions, business expenses, personal property taxes, and home mortgage interest payments. In his plea agreement, Swift specifically admitted that he inflated deductions for home mortgage interest, which his clients claimed on their tax returns, by more than $12.5 million. As a result of the false returns, Swift caused the federal government to incur a loss of more than $2 million, excluding interest and penalties.  When some of Swift's clients received audit notices from the IRS, Swift assisted his clients in evading the payment of their tax liability and in obstructing the audits by fabricating false charitable contribution letters and Forms 1098, which detailed mortgage interest paid.

Inmate Sentenced for Filing False Tax Returns

On February 11, 2010, in Phoenix, Ariz., Veronica Romero De Valencia was sentenced to 16 months in prison, to be followed by one year of supervised release, and ordered to pay $41,005 in restitution to the Internal Revenue Service (IRS).  On August 8, 2009, De Valencia pleaded guilty to submitting false claims to the U.S. Government.  According to the plea agreement, while in prison, De Valencia filed and/or caused to be prepared four income tax returns on her behalf for tax years 2002 through 2006. The returns reported income that she never earned and claimed dependents that she never supported in order to be able to claim the Earned Income Tax Credit.

Wisconsin Man Sentenced to Two Years for Wire Fraud and  Filing False Tax Return

On February 3, 2010, in Madison, Wis, Terry Stewart was sentenced to 24 months in prison for wire fraud and filing a false tax return.  According to court documents, Stewart claimed he was a self-employed tax return preparer doing business as Madison Urban Tax Service.  Stewart inflated the returns of 19 customers by falsely claiming that the customers were entitled to make certain deductions, had dependants or were entitled to the "earned income credit."  Stewart filed the returns electronically and his clients were unaware of the false statements.  Stewart also directed that the return proceeds be sent to him and he stole all or part of his customers' tax refunds.  When Stewart pleaded guilty on October 9, 2009, he agreed to make restitution to his former clients to include any fines, penalties, or interest assessed against the clients as a result of the fraudulent tax returns.

Mississippi Resident Sentenced on Income Tax Fraud Charges

On January 20, 2010, in Oxford, Miss., Vatesta Washington, of Leland, Mississippi, was sentenced to 12 months and one day in prison, to be followed by three years of supervised release, and ordered to pay $134,850 in restitution.  As an additional condition of her sentencing, Washington is prohibited from future preparation of tax returns other than her own.  In March 2009, Washington pleaded guilty to one count of conspiring to defraud the United States by obtaining and aiding to obtain the payment of false, fictitious and fraudulent tax returns. According to court documents, Washington, along with others, submitted false claims to the IRS through her employers, Fast and Easy Tax Service and Fast Tax Service, owned and operated by Frainzonia Alexander. Alexander was sentenced to 50 months in prison for his participation in the fraudulent scheme on February 26, 2009.

Two Miami Residents Sentenced on Tax Preparation Conspiracy Charges

On January 11, 2010, in Miami, Fla., Allen K. Smith, and co-defendant Mark Thomas were each sentenced to 21 months in prison, to be followed by three years of supervised release. Both Smith and Thomas pleaded guilty to conspiring to defraud the United States for the purpose of impeding the Internal Revenue Service (IRS).  As part of their plea agreements, each defendant agreed to pay $380,057 in restitution to the IRS. According to court documents, from approximately 2001 to 2005, Smith and Thomas conspired to defraud the U.S. by preparing fraudulent tax returns that contained fictitious or inflated deductions, often for medical expenses.  The individuals for whom Smith and/or Thomas prepared false returns had legitimate Forms W-2, 1099, 1098 or other documents evidencing income and legitimate deductions.  On virtually every return Smith and/or Thomas prepared, the taxpayer claimed a refund that was exactly equal to the withheld amount.  Smith and Thomas often represented to their clients that the clients could receive refunds equal to the amount of taxes withheld.

Tax Preparer Sentenced to Nearly Seven Years in Federal Prison

On January 7, 2010, in Dallas, Texas, Teddy Gatamba was sentenced to 81 months in prison for conspiring to defraud the government with respect to claims, wire fraud, and aggravated identity theft.  According to court documents, Gatamba obtained the names and social security numbers of numerous individuals and used that personal information to prepare false income tax returns, without the knowledge or consent of the individuals.  He prepared the returns using bogus employer names and making bogus claims of overpayment of taxes, and then filed the returns electronically.  Refund Anticipation Loans, in the form of checks and Refund Anticipation Value Cards, were issued, based on the false income tax returns, in the names of the individuals on the bogus tax returns.  Gatamba and others then cashed the checks and withdrew funds from ATMs using the Refund Anticipation Value Cards.  Evidence presented at trial showed that there was an intended loss to the government of more than $2 million.

Bronx Man Sentenced to 78 Months in Prison for Multi-Million Dollar Tax Fraud Scheme

On January 7, 2010, in Manhattan, N.Y. Jose Franklin Duarte was sentenced to 78 months in prison and was ordered to pay $807,000 in restitution to the Internal Revenue Service (IRS).  According to court documents, Duarte was charged as part of a two-year investigation by law enforcement into a scheme to use stolen Social Security numbers and other identity information to submit fraudulent state and federal tax returns.  In 2008, Duarte recruited a letter carrier employed by the U.S. Postal Service who delivered mail in the Bronx, to participate in the scheme and to give Duarte addresses to which fraudulently obtained tax refund checks could be addressed. From August 2008 to February 2009, the conspirators in this scheme filed over 9,000 U.S. Individual Income Tax Returns for tax years 2007 and 2008. These returns contained information connected to stolen Social Security numbers of Puerto Rican residents. These returns were filed electronically from the Dominican Republic. The false returns sought refunds totaling over $91 million dollars to be sent in the form of U.S. Treasury checks via U.S. mail. The checks were to be sent to addresses on the letter carrier's route. Throughout the later part of 2008, Duarte and/or co-conspirators paid the letter carrier cash in exchange for the mail containing the fraudulently-obtained U.S. Treasury checks.

Tax Preparer Sentenced to 30 Months in Prison for Preparing False Tax Returns

On January 5, 2010, in Greenbelt, Md., Joseph D. Edwards was sentenced to 30 months in prison followed by three years of supervised release, for aiding and assisting in the preparation of false tax returns. Edwards pleaded guilty on March 11, 2009, after six days of trial.  According to court documents, Edwards was the owner and sole proprietor of JD Tax and Accounting Services, a tax preparation business located in Oxon Hill, Maryland. During tax years 2001 to 2004, Edwards admitted that he prepared false individual tax returns, claiming deductions to which the taxpayers were not entitled, including: medical and dental expenses that were not incurred; employment expenses, such as mileage and uniform expenses, that were not incurred; gifts to charities that were never made; understated income and inflated expenses for businesses, including for businesses that did not exist; and understated income and inflated expenses for rental property, including property that the taxpayers did not own.

Georgia Tax Preparer Sentenced to Over Eight Years in Prison for Filing False Tax Returns

On December 14, 2009, in Atlanta, Ga., Onessimus M. Govereh, of College Park, Georgia and Zimbabwe, Africa, was sentenced to 100 months in prison, to be followed by three years of supervised release, and ordered to pay approximately $62,000 in restitution.  After a 7-day trial, on January 16, 2008, Govereh was convicted of 14 counts of filing false claims for payment from the United. According to court documents and other information presented in court, Govereh operated “Icon Tax Service” in Norcross for six weeks in January and February 2007.  During that time, the IRS received 107 personal federal income tax returns from Govereh’s business claiming enormous refunds, usually based on fabricated income, expense, and excise tax figures. Govereh obtained half or more of his clients’ refunds by charging preparation and other fees.  The IRS later rejected all 107 returns because they all contained false and fraudulent claims for excise tax expenses.

Houston Return Preparer Sentenced for Falsifying Tax Returns

On December 10, 2009, in Houston, Texas, Nathalene Rice Pickens was sentenced to 27 months in prison for preparing false income tax returns.  According to court documents, Pickens admitted that she prepared false tax returns for clients that inflated their refunds by $234,167; the court ordered her to pay restitution in that amount as part of her sentence.  Following her prison term, Pickens is required to serve a one-year-term of supervised release during which she is prohibited from any involvement in preparing business tax returns. At her pre-arraignment hearing in August 2009, Pickens stipulated that in an effort to build a reputation for generating large federal income tax refunds for her clients, she knowingly prepared, caused to be prepared and filed a number of false federal income tax returns that generated excessive refunds for clients.

Tax Advisor Sentenced to More Than Six Years for Preparing Fraudulent Tax Returns

On December 9, 2009, in Kansas City, Kan., Daniel Joel Gleason, former tax director of Topeka-based Renaissance, The Tax People, Inc., was sentenced to 78 months in prison for tax fraud.  He also was ordered to pay more than $3 million in restitution and barred from preparing tax returns.  Gleason pleaded guilty to one count of conspiracy to defraud the Internal Revenue Service (IRS) and to defraud Renaissance members through mail and wire fraud, and one count of preparing a fraudulent federal income tax return.  According to court documents, Gleason admitted that in March 1998 he signed a contract to work with Renaissance to provide tax advice to the company’s members and to represent them before the IRS in defending their tax returns. He admitted to assisting in the preparation of 56 false income tax returns that either falsely inflated or falsely created business deductions for personal living expenses.

Former Director on Redstone Arsenal Sentenced for $1.6 Million Procurement Fraud and Bribery Scheme

On December 9, 2009, in Birmingham, Ala., Michael L. Cantrell, a former high-level government employee with the U.S. Army Space and Missile Defense Command in Huntsville, was sentenced to 60 months in prison and ordered to pay $2.5 million in restitution to the government. He was also ordered to file amended tax returns for tax years 2001 through 2005 and to pay $352,145 in back taxes to the Internal Revenue Service (IRS). In addition, Cantrell has forfeited his Huntsville home, valued at $960,000 and a $685,060 forfeiture judgment has been filed against Cantrell for the government to recover the remaining value of the property. Cantrell pleaded guilty in 2008 to conspiracy to commit bribery, bribery, and tax evasion arising out of the procurement fraud scheme involving contracts with the Space and Missile Defense Command. As director of the Joint Center for Technology Integration (JCTI) and Integrated Capabilities Management Directorate (ICMD), Cantrell had decision-making authority over certain projects, including the ability to place funding on specific contracts. In his plea agreement, Cantrell admitted receiving about $1.6 million in bribes over six years. According to court documents, Cantrell received kickbacks in exchange for: recommending approval of contracts to certain contractors, applying and designating funding to those contracts, and causing payments to be made on contracts that produced nothing for the government. Cantrell filed a false tax return stating that his joint taxable income was $156,785, when the actual income was $514,838, due to bribes received in 2002.

New Jersey Tax Preparer Sentenced for Preparing False Tax Returns

On December 4, 2009, in Camden, N.J. Janet Ramirez, a tax preparer, was sentenced to 12 months in prison, to be followed by one year of supervised release. Ramirez pleaded guilty in August 2009 to one count of aiding and assisting in the preparation of false and fraudulent tax returns. At her plea hearing, Ramirez stated that from 2004 through 2008, she owned and operated a tax preparation business named Primetax Associates in Vineland. Ramirez admitted that for tax years 2003 through 2007, she operated a scheme to defraud the Internal Revenue Service (IRS) of income tax revenues owed in connection with 18 taxpayers. She admitted submitting false itemized deductions on Schedule A and fraudulent employee business expenses on Form 2106 of her clients’ personal income tax returns to reduce the clients’ tax liabilities. The reduction of tax liability resulted in the clients receiving inflated tax refunds to which they were not entitled. In fact, Ramirez admitted that she prepared and caused to be filed approximately 50 tax returns for the 18 clients for tax years 2003 through 2007 that contained false and fraudulent information and resulted in a total tax loss of more than $121,000.

Former IRS Revenue Officer Sentenced on Charges of Making a False Statement and Obstruction of Justice

On November 30, 2009, in Fort Myers, Fla., Carlton Bryan was sentenced to 12 months and one day in prison, to be followed by two years of supervised release, and ordered to pay a $6,000 fine.  Bryan was indicted in May 2009 on one count of making a false statement and two counts of obstruction of justice.  According to court documents, Bryan was employed by the Internal Revenue Service (IRS) as a Revenue Officer for eight years beginning in 1982. After leaving the IRS, Bryan began a tax consulting service, Bryan Enterprises, Inc., where he represented individuals before the IRS as an enrolled agent. According to the indictment, on April 25, 2007, Bryan made false statements to IRS agents concerning his case narrative notes. He also knowingly altered and concealed his original case file documents that had been subpoenaed by a federal grand jury.  

Michigan Mother and Son Jailed on Tax Charges

On December 1, 2009, in Grand Rapids, Mich., Joyce Stone and her son, Charles Freed, were each sentenced to 37 months imprisonment to be followed by two years of supervised release as the result of their June 2009 guilty pleas to conspiring to defraud the IRS.  The pair was also ordered not to prepare any tax returns for other individuals while under court supervision.   According to court records, during the mid 1990's through August 2006, Stone and Freed operated an income tax preparation service, known as Stone and Associates, from their home.  They prepared false and fraudulent income tax returns, where certain clients received a larger tax refund by significantly lowering the amount of taxable income, by falsely increasing or fraudulently creating itemized deductions reported by their clients, and claiming that ordinary daily activities were businesses that generated little income but incurred deductible expenses.  Both Stone and Freed reassured their clients that should there be an audit, they would have an ample supply of receipts they could use to substantiate their false deductions and expenses.

Georgia Tax Preparer Sentenced for Preparing False Tax Returns

On November 30, 2009, in Atlanta, Ga., Tera Nicole Dixon, of Stone Mountain, Georgia, was sentenced to 30 months in prison, to be followed by one year of supervised release, and ordered to pay $103,523 in restitution.  Dixon pleaded guilty in September 2009 to one count of preparing and filing false tax returns.  According to court documents, between 2006 and 2008, Dixon was a tax preparer for different services in the Atlanta area, including “Icon Tax Service,” “Taxes Done Right,” and “NuWay Taxes.” She filed approximately two dozen tax returns for individuals claiming deductions for which the taxpayer did not qualify, and many were accompanied by false and fraudulent supporting documents. The false returns also claimed exaggerated withholdings, and about half of the returns contained a false Schedule C, which reported “losses” for non-existent companies.

Florida Tax Return Preparer Sentenced for Preparing False Income Tax Returns

On November 30, 2009, in Miami, Fla., Zully M. Cordoba, of Hialeah, Fla., was sentenced to 24 months in prison, to be followed by one year of supervised release and ordered to pay restitution to the Internal Revenue Service (IRS).  Cordoba pleaded guilty in September 2009 to one court of aiding in the preparation of a false federal income tax return. According to court documents and the written factual proffer filed with the Court during her plea, Cordoba admitted to preparing a false federal income tax return for a married couple by falsely claiming that $11,900 in unreimbursed employee business expenses and $3,900 in charitable contributions during tax year 2000.  In fact, no such expenses had been incurred. In her factual proffer, Cordoba admitted that she aided in the preparation of numerous false federal income tax returns for numerous other clients claiming a variety of purported unreimbursed employee business expenses, including falsely claimed overnight business travel costs, costs associated with the non-commuting use of their personally owned cars for purported business purposes, and so-called business lunches and other job-related expenditures. Cordoba ran a tax return preparation business from her residence in Hialeah from January 2001 to April 2003.  Thereafter, through April 2005, Cordoba continued her tax preparation business under the name “Cordoba Tax Services” from storefront offices located in a mall in Hialeah.  Cordoba charged a $10 fee to “review” her clients’ original income tax returns, which they had prepared for themselves or had been prepared by other tax return preparers.  Upon completing her “review” of her client’s returns, Cordoba prepared false Form 1040X amended returns, charging her clients 10 percent of their expected tax refund based upon various alleged “overlooked” deductions.  In addition, Cordoba admitted to filing false personal tax returns that substantially understated her income from the tax preparation business during the years 2002 - 2004.  As revealed in Court during her sentencing hearing, Cordoba avoided approximately $114,000 in personal income taxes through these false returns and received more than $26,154 in tax refunds, income credits and government-subsidized contributions to her own social security account.

California CPA sentenced to 24 months in prison

On November 16, 2009, in Los Angeles, Calif., Ronald Irving Anson was sentenced to 24 months imprisonment, followed by three years supervised release, and ordered to pay restitution totaling $1,853,282 after pleading guilty to conspiracy to defraud the United States.  According to the Information, Anson, a licensed CPA in California, conspired with others to defraud the United States by impeding the IRS in the ascertainment, assessment and collection of taxes.  From December 1998 to at least December 2002, Anson sold partnership interests in hotels to clients with large amounts of active income by promising a tax loss equal to five times the amount of money they made payable to the partnership.  Anson knew that he and his accounting firm would prepare the clients' federal income tax returns falsely claiming that the clients were material participants in the partnership. At the time he sold the hotel partnership interests to his clients, Anson knew they did not qualify as material participants. Anson’s actions resulted in a tax loss of approximately $9 million.

Miami Tax Return Preparer Sentenced for Filing False Returns and Identity Theft

On November 23, 2009, in Miami, Fla., Gary Bart Rosenfeld was sentenced to 36 months in prison, to be followed by one year of supervised release, and ordered to pay $200,843 in restitution.  Rosenfeld also faces the forfeiture of assets accumulated from his illegal activities.  Rosenfeld pleaded guilty in July 2009 to aiding in the filing of a false tax return and aggravated identity theft.  According to court documents, Rosenfeld operated a tax return preparation business, Taxing Solutions, Inc., in Miami, Florida from 2004 to 2007.  In 2005, Rosenfeld began filing fraudulent income tax returns for others, in which he misrepresented wages, income and withholding amounts, and fabricated tuition payments, education credits and childcare expenses on his clients’ tax returns. Court documents stated that for tax year 2006, Rosenfeld filed numerous tax returns for his clients where he directed the tax refunds to be paid to the taxpayer by refund anticipation loans on access device cards, without the taxpayer’s knowledge and consent. Rosenfeld provided his clients with tax returns showing that the refunds would be deposited into a bank account of their choice via direct deposit, but subsequently altered the tax returns to request refund anticipation loans prior to filing the tax returns with the IRS.  Rosenfeld then withdrew the refund anticipation loan funds from automatic teller machines.  In addition, Rosenfeld prepared and filed tax returns on behalf of other individuals without their permission.

Arkansas Tax Preparer Sentenced for Preparing False Return

On November 20, 2009, in Fort Smith, Ark., Hilda Jarrell was sentenced to 37 months in prison, followed by one year of supervised release. Jarrell was also ordered to pay a $1,000 fine and $6,716 in restitution to the Internal Revenue Service (IRS).  Jarrell pleaded guilty in June 2009 to fourteen counts of aiding and assisting in the preparation of false federal income tax returns for tax years 2003 through 2006. Jarrell worked as a tax preparer for H & R Block in Fort Smith. According to court documents, between March 12, 2004, and March 12, 2007, she prepared returns for others that claimed deductions for false or inflated Schedule A Itemized Deductions, false exemptions, fraudulent Earned Income Tax Credits, and/or false Child Tax Credits.

Maryland Accountant Sentenced for Preparation of False Tax Returns

On November 20, 2009, in Baltimore, Md., Joseph Poole, of Grasonville, Maryland, was sentenced to 24 months in prison, followed by one year of supervised release to be served in home detention with electronic monitoring. Poole was also ordered to pay a $10,000 fine and to pay half the cost for the government’s expert witness, $13,603.  After a seven day bench trial, Poole was convicted on July 24, 2009, of preparing false tax returns in connection with a scheme to underreport the income earned and tax owed by a Baltimore City business owner. According to trial testimony, between 1998 and 2003, Stilianos (Stan) Mavroulis, the President and 100 percent owner of Fidelity Home Mortgage Corporation (FHMC), diverted more than $1,100,000 of FHMC’s funds to pay for personal family expenses. Poole then prepared FHMC’s corporate returns to reflect that the personal expenses were legitimate business deductions. The evidence also showed that between 1998 and 2003 Stan Mavroulis withdrew approximately $700,000 from FHMC as shareholder draws that should have been reported as capital gains on his personal tax returns. Poole, who prepared all of FHMC’s corporate tax returns and Stan Mavroulis’ personal tax returns, willfully prepared false personal tax returns for Stan Mavroulis for tax years 2000 through 2003, failing to report a total of more than $1,438,000 in income for Mavroulis in those years. For 2000 and 2001, Stan Mavroulis’ personal tax returns, as prepared by Poole, claimed the Earned Income Credit, despite the fact that Stan Mavroulis did not qualify for such credit. In addition, the evidence showed that Poole knew that Stan Mavroulis’ children were working at FHMC but were not on FHMC’s payroll and therefore were not reporting their income to the IRS; instead, the payments to the Mavroulis children were disguised within the approximately $700,000 in shareholder draws that were not reported on Stan Mavroulis’ tax returns. Stan Mavroulis and his son, Kirk Mavroulis, pleaded guilty to related charges. Stan Mavroulis was sentenced to 12 months and a day in prison and ordered to pay a $18,000 fine. Kirk Mavroulis, who was the head of FHMC’s accounting department, was sentenced to probation and ordered to pay a $9,000 fine.

Alabama Return Preparer Sentenced for Submitting False Claims for Refunds

On November 19, 2009, in Birmingham, Ala., Charlotte Thompson-Jones was sentenced to 12 months and one day in prison, to be followed by three years of supervised releases, and ordered to pay $43,094 in restitution to the Internal Revenue Service (IRS).  Thompson-Jones pleaded guilty in March 2009 to fourteen counts of submitting false claims. According to court documents, during the filing seasons pertaining to tax years 2003 through 2005, Thompson-Jones prepared and filed false tax returns on behalf of ten individuals which contained false information on Forms W-2 and Schedule C’s.  Additionally, Thompson-Jones filed a false return in her name which generated a false claim for refund.

Alabama Return Preparer Sentenced for Filing False Returns

On November 12, 2009, in Montgomery, Ala., Equanator Cornelius Thomas was sentenced to 36 months in prison and ordered to pay $50,176 in restitution.  Thomas pleaded guilty on August 12, 2009, to charges of aiding and assisting in the filing of false tax returns. According to court documents, Thomas operated a tax preparation business in Auburn, Alabama under the name CK Tax Service. From January 2008 through April 2008, Thomas prepared fraudulent claims for federal income tax refunds. The returns were submitted electronically to the Internal Revenue Service (IRS) under the name of CK Tax Service.  Thomas would manipulate the taxpayer’s income by adding a false Schedule C that falsely contained business losses or income not actually incurred by the taxpayer, in order to render the taxpayer eligible for the earned income tax credit or to entitle the taxpayer to a larger refund.

Maryland Tax Preparer Sentenced for Filing False Tax Returns; Defrauded IRS of Over $500,000 in Taxes Due

On November 12, 2009, in Greenbelt, Md., Lugard A. Edokpayi, of Mitchellville, Maryland, was sentenced to 30 months in prison followed by one year of supervised release.  Edokpayi pleaded guilty in August 2009 to filing false federal individual tax returns and preparing and presenting false federal tax returns for his clients. According to the plea agreement, from 1990 to 2006, Edokpayi owned and operated a tax preparation business known as New Century Tax Services located in Hyattsville, Maryland. From 2003 to 2007, Edokpayi filed individual income tax returns on behalf of his clients falsely reporting deductions for education credits, charitable contributions, child and dependent care expenses and unreimbursed business expenses. Additionally, for tax years 2003 through 2006, Edokpayi filed false personal income tax returns understating his gross income. The total tax loss resulting from Edokpayi’s conduct is over $500,000.

Former Owner of Triad Business Services Sentenced for Tax Fraud Conspiracy

On November 2, 2009, in Washington, D.C., Henderson Joseph, the former owner of Triad Business Services, was sentenced to 36 months in prison, followed by three years of supervised release, and ordered to pay a $50,000 fine.  Joseph pleaded guilty in January 2009, in connection with a massive tax fraud conspiracy in which Triad Business Services sought over $500,000 in fraudulent tax refunds for its clients. Triad Business Services, a local tax preparation service, had offices in the District of Columbia, Richmond, Va., and Baltimore, Md.  According to court documents, Joseph masterminded a scheme to file fraudulent refunds for hundreds of clients by falsifying itemized deductions and credits on the clients’ individual tax returns. The fraudulent income tax returns contained inflated or fabricated itemized deductions, such as charitable contributions, job expenses, and other miscellaneous expenses.  False credits were also claimed for education and child care. As part of the scheme, Joseph instructed other Triad managers to file fraudulent client tax returns; thereby increasing the refunds the clients would receive, increasing Triad’s fees, and increasing repeat customers who would return in successive years. All of the tax returns prepared at the Triad offices were reviewed by Joseph and then electronically transmitted to the Internal Revenue Service (IRS). Triad office managers, Marcelle L. Stephens, Draphet Moody and Nicole Williams, have all pleaded guilty. The IRS has proceeded civilly against the taxpayers whose returns were falsified, seeking repayment of the unlawful refunds, plus interest and penalties.

Virginia Beach Tax Preparer Sentenced for Filing False Tax Returns

On October 23, 2009, in Norfolk, Va., Hinton Huff, Jr. was sentenced to 15 months in prison for filing false and fraudulent federal income tax returns. According to court records and evidence at trial, Huff owned and operated H & H Tax on Wheels, a mobile tax return preparation business located in Virginia Beach, Va.  He prepared federal individual income tax returns for his customers and charged a flat rate which typically was $250 to $300 per return. Huff was convicted of preparing 29 false and fraudulent federal individual income tax returns for the tax years 2002 to 2006 on behalf of his customers.  The materially false and fraudulent items in the returns Huff prepared included false Schedule C businesses, false earned income credits, false education credits, false dependents, false job expenses, false gifts and false child tax credits. 

Former Tax Preparer Sentenced for $1 Million Tax Fraud

On October 16, 2009, in Kansas City, Mo., Donald Bushnell, a former tax preparer, was sentenced to 36 months in prison for fraudulently preparing nearly 300 tax returns that falsely claimed more than $1 million in business losses for his clients. Bushnell was the owner of Bushnell Contract and Labor Service, a sole proprietorship that prepared individual federal income tax returns. On April 14, 2009, Bushnell pleaded guilty to preparing false income tax returns. Bushnell claimed business losses for his clients on forms submitted to the IRS, thereby reducing their taxable income. In reality, Bushnell’s clients did not maintain businesses and did not incur any business losses. Bushnell did not inform his clients of those misrepresentations, nor did he have authority from his clients to engage in those misrepresentations.  Bushnell prepared 272 false and fraudulent federal tax returns from January 9, 2001, to June 6, 2005, for a total tax loss of approximately $1,088,720. Bushnell’s criminal conduct caused dozens of taxpayers to incur substantial costs, ranging between $200 and $400 per return, for interest and penalties.

California CPA Sentenced for Filing False Income Tax Return

On October 9, 2009, in Los Angles, Calif., Arnold C. Libman, a licensed CPA who prepared tax returns in Rosemead, California, was sentenced to 18 months in prison, followed by one year supervised release, and ordered to pay a $250,000 fine.   Libman was also ordered to pay $100,000 in restitution to the Internal Revenue Service (IRS).  In addition, Libman was ordered to no longer prepare tax returns. Libman pleaded guilty to aiding and assisting in the preparation of false income tax returns.  According to Libman’s plea agreement, from 2002 through 2005, he prepared at least 54 false federal and state income tax returns for at least 20 clients for tax years 2001 through 2004. The returns included inflated amounts for charitable contributions, medical expenses, and unreimbursed employee and business expenses, and various other deductible items.  These 20 returns Libman prepared, understated his clients’ tax liability by approximately $173,346. 

Former Jackson Hewitt Return Preparer Sentenced For Tax Preparation Fraud Scheme

On October 9, 2009, in Miami, Fla., Aracelis Llanos, aka Sally, aka Yvonne Rodriguez, was sentenced to 18 months in prison, to be followed by three years of supervised release, and ordered to pay $55,137 in restitution to the Internal Revenue Service (IRS).  Llanos pleaded guilty on June 18, 2009, to making and filing fraudulent tax refund claims against the IRS.  According to court documents and testimony, Llanos was hired at Jackson Hewitt in Miramar, Fla., to prepare tax returns for clients. While working at Jackson Hewitt, Llanos prepared and submitted tax returns to the IRS for herself and her clients, claiming approximately $136,881 in fraudulent tax refunds. Specifically, Llanos submitted tax returns and Forms W-2 s containing false employer information and false income amounts in order to generate fraudulent tax refunds. Some of the clients stated that they gave Llanos a portion of their refund checks upon cashing.

Alabama Woman Sentenced to 46 Months for Preparing False Tax Returns

On October 5, 2009, in Mobile, Ala., Stacy Levette Parker was sentenced to 46 months in prison, to be followed by three years of supervised release, and ordered to pay $220,957 in restitution to the Internal Revenue Service (IRS). Parker pleaded guilty in June 2009 to charges of conspiracy to submit false claims against the Government and identity theft.  According to court documents, from 2005 through 2007, Parker prepared and filed approximately 36 fraudulent tax returns with the IRS. Those tax returns involved the theft of the identity of others. Parker admitted that she submitted a fraudulent return in a client name, using his social security number, and depositing the refund into a bank account that Parker controlled. The tax return contained false employment and dependant information. The refund was used by Parker for her personal use.

Maryland Tax Preparer Sentenced to 70 Months for Preparing False Tax Returns

On October 13, 2009, in Greenbelt, Md., Marcel J. Toto-Ngosso of Silver Spring, Md., was sentenced to 70 months in prison and ordered to pay $238,788 in restitution for his role in a scheme to generate fraudulent tax refunds for his clients. In June 2009, Toto-Ngosso was convicted of 17 counts of aiding and assisting in the preparation and filing of false tax returns. According to the indictment and evidence introduced during trial, Toto-Ngosso ran a tax preparation business from his home. From at least 1998 through 2007, Toto-Ngosso prepared false tax returns claiming fraudulent deductions and adjustments, including false dependents, inflated charitable contributions, and false unreimbursed employee expenses, such as vehicle expenses, which he knew his clients were not entitled to claim. Toto-Ngosso obtained the names and social security numbers of individuals, which he later sold to his clients as dependents and qualifying persons for $500 to $800 each. Toto-Ngosso then used these names and social security numbers on his clients’ tax returns to secure larger refunds. According to evidence introduced at trial, after Toto-Ngosso learned he was under investigation by the IRS, he attempted to obstruct the investigation by telling his clients to lie about the information that he reported on their tax returns. Two associates of Toto-Ngosso, Maude H. Veney and Francois B. Zame, testified for the government at trial were sentenced in September 2009. Veney was sentenced to 18 months probation and Zame was sentenced to five months in prison.

Daughters of California Return Preparer Each Sentenced to 72 Months in Federal Prison

On October 5, 2009, in Riverside, Calif., Karen Denise Berry, of San Bernardino, California, and Carla Denine Berry, of Rialto, California, the daughters of a patriarch of an income tax preparation business, were each sentenced to serve 72 months in federal prison and three years of supervised release. They were also ordered to pay $14,000,000 in restitution to the IRS.  Their father, Matthew Carl Berry, a Rialto tax return preparer, was previously sentenced to serve 108 months in federal prison, 36 months on supervised release, and ordered to pay over $15 million in restitution to the IRS, after having been previously convicted at trial on charges that he conspired with others to defraud the Internal Revenue Service and filed false personal income tax returns for the years 2001, 2002, and 2004.  Karen Denise Berry and Carla Denine Berry, along with their father, Matthew Berry, were found guilty of conspiring with Ivan Taylor Johnson, of San Bernardino, California, and Valerie Madel Dixon, of Rialto to impede and obstruct the lawful functions of the Internal Revenue Service.  Karen Berry and Carla Berry pleaded guilty before trial to various charges including conspiracy to defraud the IRS, aiding and assisting in the preparation of false tax returns, and subscribing to a false tax return. According to court papers, the false returns Berry prepared for clients, in conjunction with the returns prepared by Karen Berry, Carla Berry, Johnson and Dixon, caused losses of more than $45,000,000 in tax revenue to the IRS. Johnson and Dixon previously pleaded guilty to charges contained in the indictment.  Johnson was sentenced to 35 months imprisonment followed by three years of supervised release and ordered to pay restitution to the IRS in the amount of $19,034,901.  Dixon was sentenced to five years probation, including 10 months home detention, and ordered to pay restitution to the IRS of $19,034,901. 

Fort Worth Tax Preparer Sentenced To 18 Years in Federal Prison Without Parole

On October 2, 2009, in Fort Worth, Texas, Joyce M. Simmons, who did business as Diamond Notary and Tax Service, was sentenced to 216 months (18 years) in federal prison. In addition, the judge ordered Simmons to pay $28,261,295 in restitution to the Internal Revenue Service (IRS). In June 2009, Simmons pleaded guilty to six counts of preparing and presenting a materially false tax return to the IRS.  Simmons admitted that six of the returns she submitted were false and fraudulent as to material matters, in that each tax return represented that the taxpayers were entitled, under the provisions of the IRS laws, to claim exemptions, deductions, credits, or refunds, to which she well knew they were not entitled.  During the sentencing hearing, the judge concluded that Simmons had also obstructed justice by lying under oath on a number of occasions and by fraudulently transferring over $1 million worth of property after she became aware that the IRS was investigating her.

Tax Preparer Sentenced To 42 Months For Defrauding The IRS

On October 1, 2009 in Philadelphia, PA, Eugene DiNatale of Trumbauersville, PA was sentenced to 42 months in prison and ordered to pay a fine of $3,000 and restitution of $4.3 million for conspiring to defraud the government and filing false tax returns on behalf of clients.  According to court documents, DiNatale, owner of DiNatale & Associates, Ltd provided bookkeeping, accounting and tax return preparation services.  DiNatale promoted a massive tax fraud scheme where numerous, profitable businesses were able to avoid payment of millions of dollars of employment taxes and corporate income taxes. His co-defendant, Chakawarn Sirirathasuk, Senior Accountant at D&A  provided tax preparation services to clients.  Sirirathasuk pleaded guilty and is awaiting sentencing. The schemes resulted in estimated tax losses to the IRS of more than $4.3 million in unpaid employment taxes and more than $75,000 in unpaid corporate income taxes.  Between 2001 and 2004, DiNatale and Sirirathasuk filed Quarterly Federal Tax Returns, Form 941, for labor leasing agency clients of D&A that overstated the amount of business expenses and under reported the amount of taxable income earned by the clients.

Fiscal Year 2011 - Abusive Return Preparer Investigations

Fiscal Year 2012 - Abusive Return Preparer Investigations

---

Table of Contents - Abusive Return Preparer Investigations

Criminal Investigation (CI) Home Page

How to Report Suspected Tax Fraud Activities?