Some of our favorite recent tax fraud cases.
Chambersburg, Pa.: Preparer Maria Colvard, 49, has been convicted on two counts of extortion and one count of aiding the impersonation of a federal employee and acquitted of two counts of witness tampering after attempting to shut down a rival tax prep firm.
According to authorities, between February and May of 2013 Colvard convinced an employee at her firm Tax Max to claim to be an IRS criminal investigator to shut down the rival business, Christina’s Tax Service.
The employee, Merarys Paulino, then claimed to be an IRS agent and demanded money and the client list from Christina’s. Paulino previously entered a guilty plea to impersonating an IRS agent and cooperated in Colvard’s prosecution.
Colvard faces up to 24 years in prison, $600,000 in fines and deportation as a non-citizen.
Detroit: Tax prep firm owner Toranio Ingram and another area resident have pleaded guilty to charges of conspiracy to defraud the United States and the Internal Revenue Service.
Ingram pled guilty to one count each of conspiracy to defraud the U.S., mail fraud conspiracy and wire fraud conspiracy. Co-defendant Ingrid Thompson pled guilty to one count of conspiracy to defraud the U.S.
According to court records, Ingram was involved in multiple frauds beginning in August 2010 when he submitted fraudulent claims for Upfront Mortgage Insurance Premiums refunds. Ingram utilized a website maintained by the Department of Housing and Urban Development to learn the names of individuals to whom an UFMIP refund was owed.
Using stolen personal ID information, he and his co-conspirator submitted more than 100 false claims to HUD for UFMIP refunds that they directed into bank accounts they controlled.
In a separate scheme, Ingram and a co-conspirator utilized an online database maintained by the State of California that reported unclaimed property to search for unclaimed corporate dividends. Then, using stolen ID information, they falsely represented themselves to be the individuals to whom the unclaimed dividends were owed and submitted claims. From November 2012 through May 2013, they filed false claims that netted them approximately $137,973.
Ingram also owned Special T Tax, a tax prep business he operated as a partnership with Ingrid Thompson, with each receiving approximately half of the business income. Beginning in 2001 and continuing through 2010, Special T Tax generated more than $1.4 million in revenue. Ingram and Thompson took several steps to conceal this income from the IRS, including providing false Social Security numbers to their bank when opening the business account and to the State of Michigan when registering the business with the Michigan Department of Labor, and failing to file Form 1065. The pair understated their personal income taxes by $420,703.
Ingram and Thompson also submitted false claims for the First-Time Homebuyer Credit to obtain refunds that their clients were not entitled to, these claims totaling $633,546 and using stolen personal IDs. The claims were directed to their personal and business checking accounts.
Sentencing is Oct. 15. Conspiracy to defraud the U.S. carries a maximum of five years in prison, wire fraud conspiracy a maximum of 20 years in prison and mail fraud conspiracy a maximum of 20 years. Each charge also carries a possible $250,000 in lieu of or in addition to jail time.
Jacksonville, Fla.: Preparer Candia V. Williams has been charged with nine counts of aiding in the preparation and filing of false tax returns.
According to the indictment, Williams owns and operates Express Tax Returns, a tax prep business now known as Taxonville. In the course of preparing and filing income tax returns for individuals, Williams allegedly reported such false information as clients’ business income and eligibility for tax credits to inflate refunds.
If convicted, Williams faces a maximum of three years in prison on each count.
St. Louis: Tanya Nichols, 34, has received 57 months in federal prison for orchestrating a four-year-long income tax refund scheme.
Nichols was also ordered to pay $603,898 restitution and a $500 special assessment, and to serve three years of supervised release after she is released from prison.
Nichols and her half-brother Justin Durley, 30, of Hazelwood, Mo., were indicted last summer in the wake of allegations that Nichols functioned as a dishonest tax preparer who filed false returns to claim inflated refundable tax credits for low-income filers.
She pleaded guilty on March 5 to conspiracy to obstruct or impair the IRS in the assessment and collection of income taxes and distribution of refunds, three counts of mail fraud and one count of theft of government property. Durley was not charged with conspiracy but was charged with one count of theft of government property and was separately sentenced to three months in prison.
Authorities said Nichols prepared fraudulent returns for individual filers to generate such credits as the EITC and the Child Tax Credit to inflate refunds. Nichols shared the proceeds with the filers while collecting an excessive prep fee. She also paid finders’ fees to those who recruited tax filers to participate in the scheme.
Evidence revealed that Nichols and her co-conspirators solicited low-income-area residents to participate in the scheme by promising IRS tax refunds, sometimes marketed as “free money.”
Chicago: Area preparer Carlos L. Smith has been arraigned on a 34-count indictment for allegedly using stolen IDs to file false federal income tax returns.
He was charged with 14 counts of wire fraud, nine counts of theft of government funds, six counts of aggravated ID theft and five counts of filing false returns.
According to the allegations, beginning in February 2013 and continuing through last Tax Day, Smith operated CLS Financial Services, a company that assisted with credit repair, business consulting and return prep. He used individuals’ names and Social Security numbers to prepare false returns that each claimed thousands of dollars in refunds. The refund checks were mailed to addresses linked to Smith or directly deposited into bank accounts that he controlled. Smith also allegedly filed fraudulent returns in his own name.
In total, Smith prepared false returns that claimed refunds of more than $400,000.
If convicted, he faces a maximum of 20 years in prison for each wire fraud count, 10 years for each theft of government funds count, a minimum of two years for aggravated ID theft and a maximum of three years in prison for each count of filing false income tax returns. He also faces potential financial penalties, including fines and restitution.
