A roundup of some of our favorite recent tax fraud cases.
Latham, N.Y.: Preparer Gnoan Pierre Kablan, 52, has pleaded guilty to preparation of false returns.
Kablan admitted that for tax years 2008 through 2011 he prepared 16 returns that contained false deductions for charitable gifts, false deductions for unreimbursed employee expenses, and false solar property and energy efficiency credits.
Kablan faces up to three years in prison, a maximum fine of $100,000 and a maximum of one year supervised release when he is sentenced on May 23.
Columbia, S.C.: Three local Liberty Tax Service franchises are alleged to deliberately prepare false federal income tax returns in order to increase clients’ refunds, and the Justice Department has asked a federal court to permanently bar the alleged franchisee for all three locations, Christopher Paul Haynes of Irmo, S.C., from preparing federal returns for others.
According to the suit, Haynes and his employees prepare returns that include such misstatements as false or inflated Schedule C income and expenses, bogus dependents, false filing statuses and improper unreimbursed employee business expenses.
For example, the complaint alleges that Haynes’s employees included a bogus “arts and crafts” business on one client’s return and a bogus “hair care” businesses on another’s. In each case, according to the complaint, the false statements purported to qualify the client for a larger EITC and inflated refunds.
The lawsuit states that Haynes’ Liberty Tax Service offices prepared more than 9,700 federal income tax returns since 2010. Based on IRS adjustments to returns prepared and filed by Haynes’ offices for 2010 to 2013, the average tax deficiency for returns audited in connection with the investigation is $3,834 per return, according to the suit.
The complaint also alleges that Haynes does not report to the IRS the wages he pays some of his employees, and fails to withhold and pay over to the IRS federal employment taxes for those same employees.
Syracuse, N.Y.: Preparer Patique Donerlson, 34, has been sentenced to 78 months in prison and three years of supervised release following her conviction for three counts of aggravated ID theft and three counts of misuse of a Social Security number.
Donerlson’s sentence stemmed from her scheme to obtain federal income tax refunds by preparing and e-filing fraudulent returns using other people’s personal information (names, dates of birth and Social Security numbers). In the commission of these crimes, she obtained the information in various ways, including some from persons whose taxes she had prepared in the past, without obtaining their permission and without their knowledge for the current filings.
In each instance, Donerlson fraudulently claimed these individuals had self-employment income and were eligible for an EITC from the IRS in the form of a refund, which was false. She then directed the IRS to issue the refunds for these individuals on a prepaid debit card in the taxpayer’s name, and requested they be mailed to an address belonging or accessible to Donerlson.
She was also ordered to pay $12,239 restitution to the IRS.
Denver: Preparer Austin Ray, 48, has been convicted on one count of conspiracy to defraud the U.S., two counts of assisting in the preparation of false income tax returns and two counts of signing and submitting his own false returns.
Ray and co-conspirator Anne Rasamee were first indicted in April 2014. Rasamee pled guilty in January 2015 to one count of conspiracy to defraud the U.S.
Ray and Rasamee owned and operated Cheapertaxes LLC, a tax prep business. From March 2006 through April 2010, they conspired to defraud the IRS by preparing fraudulent returns containing false income and deductions to inflate refunds for their clients. They falsified itemized deductions, business losses and personal exemptions.
They usually charged their clients a flat fee of $200 to $250 for the return preparation. If clients could not pay the fee at the time of the return preparation, they would take the fee out of the taxpayer's refund. To do so, they caused the refund to be deposited into the Cheapertaxes bank account. To further conceal the scheme, they would list a third party as the preparer on the client’s return.
Ray and Rasamee shared the proceeds from their business and spent the funds on living expenses for their family as well as luxury items. For example, in 2009, Rasamee and Ray purchased a used Bentley and a used Maserati for $140,000 cash.
Conspiracy to defraud the U.S. carries a penalty of not more than five years in federal prison and a fine of up to $250,000. A false statement to the IRS carries a penalty of not more than three years in federal prison and a fine of up to $250,000.
Baton Rouge, La.: Preparer Aros Comeaux, 45, has been sentenced in two years of imprisonment and a year of supervised release, and was ordered to pay $227,486 restitution to the IRS for filing a false personal income tax return and preparing false returns for others.
Comeaux owned and operated ACI Computer and Tax Services and was paid to prepare and file 2009 and 2010 returns on behalf of his clients. He prepared false returns for his clients without their knowledge by creating and attaching false and totally fictitious business losses. He also underreported his own income earned from ACI.
Joliet, Ill.: Preparers Gerrie Cokenour, 42, and Nycole Simms-Stevens, 43, have been indicted for allegedly filing fraudulent returns and defrauding Illinois out of more than $400,000.
Cokenour and Simms-Stevens worked for Tax Advocators Inc., a tax prep business owned by Cokenour. Over several years, the two allegedly prepared 764 fraudulent state income tax returns using inflated and fraudulent property tax data and other fraudulent deductions, authorities said.
Investigation began after the state attorney general’s consumer fraud bureau received complaints from consumers related to undisclosed tax preparation fees and stolen income tax refunds.
The two were charged with two felony counts, including theft of government property over $100,000, punishable by up to six to 30 non-probational years in jail; and entering false information on hundreds of Illinois income tax returns, a felony punishable by up to three years in jail. Bond for each defendant was set at $1 million. The next court date is February 18.