Some of our favorite recent tax fraud cases.
Worcester, Mass.: Preparer Yaw Aboagye-Marfo has been arrested on 23 counts of tax fraud.
Between 2009 and 2012, Marfo, owner and operator of a tax prep business variously called People’s Choice Tax Service and National Taxpert, filed false returns seeking refunds for individuals not entitled to refunds. Marfo also prepared false returns for clients and falsely reported that those clients owned sole proprietorships.
If convicted, Marfo faces a maximum of five years in prison and a $250,000 fine on each count of filing false claims.
Detroit: Preparer Matthew Bender has been convicted of obstructing the IRS and on nine counts of aiding and assisting in the preparation of false federal income tax returns.
According to court documents and evidence at trial, Bender prepared over 3,000 returns between 2006 and 2011 and earned over $500,000 in tax prep fees. He then failed to report his own income to the IRS, either by filing false returns for himself or by failing to file his tax returns at all. Evidence also showed that Bender inflated clients’ refunds using false deductions.
For each of the 10 counts of conviction, Bender faces a maximum of three years in prison and a maximum fine of $250,000.
Acworth, Ga.: Preparer Andrew R. Heath has been banned from preparing returns for others.
Heath agreed to the order without admitting the allegations. The government’s complaint in the injunction suit was brought against both Andrew Heath and his brother, Larry J. Heath, who previously agreed to a civil injunction order.
The government alleged that Andrew Heath, who operated Excellent Tax Service, repeatedly prepared federal returns that unlawfully understated clients’ federal tax liabilities. The suit also alleged that Andrew Heath concocted bogus losses, expenses, education credits, business expenses and charitable contributions that he falsely reported on clients’ federal income tax returns.
South Windsor, Conn.: Preparer Kenneth Zito, 51, pleaded guilty to one count of tax evasion.
According to court documents and statements, Zito worked at Daniel Zito Financial Services, a commercial financial services firm owned by his father and where he prepared returns. Although Zito and his father worked together, they submitted client returns separately.
Between 2007 and 2009, Zito cashed clients’ payment checks but did not deposit the checks or declare them on his federal income tax return. Zito admitted that he failed to report $219,759.32 in income during those three years and that he owes the IRS $59,621 in back taxes, as well as interest and penalties.
Sentencing is June 10, when Zito faces a maximum of five years in prison and a fine of up to $100,000.
Kansas City, Kan.: Preparer Ahferom Goitom, 34, has been indicted on charges stemming from 14 counts of preparing false returns.
The indictment alleges that Goitom, manager of a franchise business that prepares returns, prepared at least 34 1040s containing false and fraudulent education credits, charitable deductions, medical and dental expenses, home mortgage interest deductions, gross receipts for a sole proprietorship business, expenses for a sole proprietorship business and deductions for rental real estate.
If convicted, he faces a maximum of three years in federal prison and a fine up to $250,000 on each count.
Alexandria, Va.: Preparer Dorothy Anne Beach, 50, has been indicted on multiple charges after police told news outlets she fraudulently filed returns for inmates and her family members and kept nearly $300,000 in refunds for herself.
Capt. Jeff Pearce of the Spotsylvania Sheriff’s Office told reporters that most of the some 40 victims of the scam were inmates Beach offered her tax services to, and about 15 were her own family members.
She is reportedly charged with racketeering, ID theft, grand larceny, money laundering, filing a false tax return, and being a preparer who files a false tax return.