Some of our favorite recent tax fraud cases.
Ewa Beach, Hawaii: Preparer Merla Balubar, 59, has been sentenced to two years of imprisonment for falsifying information on an income tax return she prepared for another person and for falsifying her own return. Balubar must also pay restitution of $326,799 to the federal government.
According to case documents, Balubar provided tax prep as Filcom Tax Services, where she prepared returns for clients for tax years 2006 through 2009 with specific returns being prepared and submitted to the IRS from 2007 through 2010. The returns contained materially false information, including false overstatements of deductions, resulting in undeserved refunds or reduced taxes.
Balubar also prepared a joint 2007 1040 for herself and her husband that under-reported income from business operations, rental property and gambling. The return also contained false itemized deductions. Balubar also admitted to filing false returns for tax years 2008 and 2009.
Jeffersonville, Ga.: Preparer Jackie Elvine, a.k.a. Jackie Young, 39, has pleaded guilty to health care fraud, aiding in the preparation of a false return, and false claims against the government. As a part of her plea, Elvine admitted that she established Young’s Financial Billing Service in 2008 and that from 2008 to 2010 she prepared and submitted hundreds of false returns. At least 61 of the returns included fraudulent credits for first-time home buyers totaling $283,683. Also claimed were numerous credits for higher education costs that Elvine knew were phony. She also defrauded AFLAC and National Reimbursement Group by filing false health care claims totaling almost $266,000.
Sentencing is April 9, when Elvine faces up to 18 years in prison and possible fines totaling $750,000.
Montgomery, Ala.: Preparer Russell Burroughs has been indicted on 33 counts of filing false returns. According to the indictment, Burroughs owned and operated Computer Services, a tax prep business where he allegedly prepared and filed 33 returns that falsified energy and education credits, deductions and other information. If convicted, he faces a maximum of three years in prison for each count.
Dunn, N.C.: Preparer James R. Wynn II, 39, has pleaded guilty to 14 counts of aiding or assisting in the preparation of fraudulent North Carolina individual income tax returns.
Investigation by the North Carolina Department of Revenue found that Wynn, owner and operator of One Stop Financial Center, aided or assisted in the preparation of 14 falsified state returns for tax years 2010 and 2011. Wynn overstated business expenses on the returns to garner larger refunds.
Wynn was put on probation for 60 months, during the first half-year of which he will be on electronic house arrest. He was also ordered to pay restitution of $16,656, perform 100 hours of community service, timely file and pay all of his future personal individual income taxes and not prepare returns of others during his probation.
Lawrenceville, Ga.: Preparer Roberta L. Allen, 49, has been sentenced for filing false returns that claimed over $600,000 in fraudulent refunds.
According to case documents, Allen prepared income tax returns at Refund Now Tax Services from 2009 through 2010, and on the returns claimed fictitious capital losses and taxes paid that resulted in her clients receiving fraudulent tax credits. Allen also charged clients exorbitant fees for preparing the returns.
Allen was sentenced to two years and nine months in prison to be followed by one year of supervised release and 100 hours of community service, and was ordered to pay $641,421 restitution. She was convicted on these charges on October 8 after she pleaded guilty.
Florissant, Mo.: Preparer Ronald Shoniwa faces one count of theft of government funds for filing 15 returns that generated a total of more than $50,000 in improper refunds and two counts of aggravated ID theft for stealing the names and Social Security numbers of unsuspecting citizens and filing fraudulent returns in their names without their consent or knowledge.
If convicted of the theft of government funds, Shoniwa faces a maximum of 10 years or a fine of up to $250,000, or both. The aggravated ID theft counts are punishable by two years in prison and a fine of up to $250,000. The sentence for the latter will run consecutively to any sentence imposed on the theft of government funds. Restitution to the IRS will also be sought.
Cincinnati: Resident Tanisha Riston, 39, has pleaded guilty to one count of conspiracy to file false claims for federal income tax refunds with the IRS and one count of making false statements in bankruptcy. Riston is the third sister to plead guilty in this refund scheme and faces a maximum of 10 years in prison and a fine of up to $250,000.
On July 23, Kimberly Riston, 48, of Cincinnati, pleaded guilty to conspiracy to file false claims for federal refunds with the IRS; she also faces a maximum of 10 years in prison and is scheduled to be sentenced on April 16. On December 3, Danita Riston, 47, of Cincinnati, also pleaded guilty to conspiracy to file false claims for refunds and likewise faces a maximum 10 years in prison and a fine of up to $250,000. Her sentencing is April 8.
According to court documents, between January 2007 and February 2011 Tanisha Riston conspired in the preparation and e-filing of false claims for federal refunds for the 2006 through 2010 income tax years. As part of this scheme, she included wholly false information on returns with the exception of the taxpayers’ names and SSNs. She agreed with the individuals, including family members, to prepare their returns and collected the name, SSN, date of birth and address for a person filers could claim as a dependent, but collected no income information. In return, she promised the taxpayers a large refund. Riston, as well as all of the taxpayers, knew the returns were false and the refunds fraudulent.
In approximately January 2008, Riston allowed Kimberly Riston to join the conspiracy as a recruiter of both taxpayers and bank account owners. Kimberly Riston acquired the same information and provided it for return preparation, fabricating income information. The refunds were direct-deposited into the bank accounts of the taxpayers or a bank account identified by Kimberly Riston.
Tanisha Riston’s scheme cost the IRS $102,987.
In addition, on Sept. 2, 2010, Tanisha Riston filed a voluntary petition for Chapter 7 and failed to disclose some five prior bankruptcy cases filed within eight years. She also failed to disclose income from preparing returns.
Tanisha Riston’s sentencing is May 14.
Shreveport, La.: Preparer Latrisha Beaudoin, 39, has been arrested and charged with ID theft, accused of trying to collect a client’s refund, according to published reports. Beaudoin allegedly changed bank account information on an individual’s return in an effort to steal the refund of $4,382, which the IRS sent, reports said.
Beaudoin is also reportedly charged with violating probation: She was charged in 2012 with three counts of bank fraud, theft and issuing worthless checks and in 2010 with four counts of bank fraud and two counts of theft, according to reports.
Cincinnati: Local resident Bertha Walker, 45, has pleaded guilty to one count of conspiracy to file false claims for federal income tax refunds with the IRS and to one count of ID theft.
According to court documents, between January 2008 and May 2010 Walker e-filed false claims for refunds for the 2007, 2008 and 2009 income tax years through online tax prep sites using computers at the Cincinnati Public Library and on her own laptop.
She submitted W-2s that reported fictitious wages and federal withholdings from legitimate businesses without the businesses’ knowledge; the W-2s contained income and federal withholdings that qualified the taxpayers to claim the EITC and the Making Work Pay Credit. Without the fictitious W-2s, the taxpayers would not be entitled to claim these credits.
In addition, for a fee Walker allowed others to use her laptop computer to prepare and file fraudulent returns.
Tax refund anticipation loan checks, refund checks and prepaid debit cards containing the fraudulent refunds were mailed to addresses controlled by Walker and others. Walker collected a large portion of the fraudulent refunds, and some of the taxpayers received no portion of the refund because Walker kept the entire amount without their knowledge or consent.
She faces a maximum of 15 years in prison and a fine of up to $250,000.
Palmdale, Calif.: Local resident Jerry Anthony Gregoire Jr., 47, has been sentenced to 65 months in prison for using stolen IDs in a refund fraud scheme. Gregoire was also ordered to pay $140,205 in restitution to the IRS and to serve a year of supervised release following his prison sentence.
Gregoire was convicted in October of six counts of making false claims to the government, six counts of theft of government property and one count of aggravated ID theft after using others’ identities to file fraudulent returns and stealing refunds. Gregoire’s scheme cost the government $57,756. Authorities identified 62 additional false returns filed by Gregoire, resulting in an additional loss of $236,731, for a total attempted loss of $294,487.
Evidence showed that Gregoire filed fraudulent 2009 and 2010 federal income tax returns in the names of others using the victim taxpayers’ true names and Social Security numbers without the victim taxpayers’ knowledge or consent.