Tax Fraud Blotter: Dolce & Gabbana on Trial!


Our favorite tax-related criminal activity from the week:

 Los Angeles: Domenico Dolce and Stefano Gabbana, founders of luxe Italian fashion house Dolce & Gabbana, will go on trial in December for tax evasion, according to reports. They are accused of dodging taxes by selling their business in 2004 to a Luxembourg-based holding company, Gado Srl, that they actually created in order to evade higher corporate taxes.

Minneapolis: CPA Michael James Murry, 61, has received 18 months in prison and fined $50,000 for preparing a false corporate tax return for The Wirth Companies, according to reports. The Department of Justice says that Murry, indicted in August 2011 with two other defendants, admitted that in 2006 he helped prepare a false corporate income tax return for The Wirth Companies, a commercial real estate development and management business. Murry also admitted that on the 2005 corporate tax return, he reflected $0 in property distributions to Wirth and his then-wife, even though he knew TWC had provided substantial monetary distributions to the pair.

Montgomery, Ala.: Antoinette Djonret, a former Premier Tax preparer, has pleaded guilty to filing false tax returns using stolen identities, according to reports. In August, a federal grand jury in Montgomery indicted Djonret and five others for conspiring to file false tax returns using stolen identities and various other charges. According to the Department of Justice, Djonret had earlier been charged with making false claims in a criminal complaint that was filed on February 22 and in an indictment filed on March 28. According to court documents, Djonret obtained stolen identities from state of Alabama databases, and she and her sister then filed false tax returns using the stolen identities and directed the false tax returns to prepaid debit cards. In total, the defendants filed over 800 false tax returns and requested over $1.2 million in tax refunds.

Columbus, Miss.: A federal court has permanently barred tax preparer Cynthia Carter from preparing federal tax returns for others, according to the Justice Department. The civil injunction order, to which Carter consented without admitting the allegations against her, alleged that Carter, who does business as Cynthia's Tax Service, prepared returns for customers that reported false income and expenses and falsely claimed several tax credits, including the First-time Homebuyer Credit. The complaint alleged that Carter claimed the credit on her customers' returns even though the customers had not bought new homes and were ineligible for the credit, and that the IRS paid more than $900,000 to Carter's customers. The complaint also alleged that she claimed fabricated employee business expense deductions and EICs on her customers' returns. According to the complaint, the IRS estimates that Carter's fraudulent tax preparation could have resulted in $4.25 million or more in lost revenue to the government.

• Cincinnati: A 29-year-old tax preparer is facing five years of prison and up to $250,000 in fines after pleading guilty to one count of filing false claims for fraudulent income tax refunds with the IRS, according to reports. Authorities say Tiffany Parish trained in 2008 on how to prepare false federal income tax returns so her clients could receive the largest income tax refund possible. Parish allegedly admitted that she prepared false claims for income tax refunds because she expected to receive part of her client's refunds once the checks were cashed. She also allegedly filed false items on her own income tax returns from 2007 through 2010 and requested and often received a portion of the income tax refunds generated from the false returns. She reportedly prepared at least 365 false returns in 2008 and 2009, resulting in nearly a $2 million loss to the IRS. Parish is scheduled to be sentenced in February.

• In the ether: From a tax preparer comes this warning about phone scams: "I received a call from a person claiming he was with the IRS (he did not say 'Internal Revenue Service').  He stated that my husband and I were due a refund in the amount of $2,173.00. This was due supposedly to a mistake I had made on the tax return. Trust me, I never receive a refund. I am self-employed. The number I was called from was (202) 499-1576. The man asked to speak to my husband and after verifying his personal information asked for his bank information so the check could be put in the account. At that time, my husband asked for his phone number and location. My husband was promptly hung up on ... ."#mce_temp_url#

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