Some of our favorite recent tax fraud cases:
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Santa Fe, N.M.: Preparer Douglas Jeffrey Kuester, 44, of Silver City, N.M., who is already serving prison time for filing false federal claims and aggravated identity theft, has been indicted on 56 counts of fraud and embezzlement, according to published reports. A grand jury returned the indictment on 28 counts of tax fraud and 28 counts of embezzlement. Kuester allegedly stole 18 identities to file fraudulent returns claiming nonexistent withholdings from oil and gas proceeds for the 2009 and 2010 tax years, requesting more than $92,000 in refunds that he then deposited in different bank accounts and prepaid debit cards. He faces 44 counts of third-degree felonies, each carrying a maximum sentence of three years in prison and up to $5,000 in fines. He also has been charged with 12 counts of fourth-degree felonies, each carrying a maximum penalty of 18 months in prison and up to $5,000 in fines. Kuester has also been ordered to pay $911,000 restitution to the federal government.
Bowling Green, Ky.: Preparer Greg P. Denham, 48, of Glasgow, Ky., has been sentenced to 18 months in prison and one year of supervised release for aiding and assisting in the preparation of false income tax returns, according to published reports. Last year, a grand jury returned a 35-count indictment against Denham on the charges, to which he later pled guilty and admitted that between February of 2006 and May of 2009, he prepared individual returns that misrepresented expenses and under-reported taxes owed. Total tax loss resulting from the fraudulent returns exceeded $450,000.
Toledo, Ohio: Former H&R Block preparer Wanda Love, 57, has been convicted of one count of conspiracy in the preparation of false tax returns and 59 counts of helping to prepare false returns, according to published reports. Love reportedly prepared false returns showing clients had self-employed business income to secure refunds under the EITC, the 59 clients receiving some $134,000 in fraudulent refunds between 2007 and 2009. Sentencing is scheduled for June.
Cincinnati: Preparer Tiffany Parish, 30, has been sentenced to 21 months in prison and was ordered to pay more than $1.9 million in restitution to the IRS for filing false claims for income tax refunds, according to published reports. Parish, who had previously pleaded guilty, prepared at least 365 false returns during 2008 and 2009, officials said, resulting in a total tax loss to the IRS of $1,985,136.
Authorities said she prepared fraudulent returns to secure inflated refunds and expected to receive part of those refunds.
Philadelphia: Preparer Shawn Sisco, 48, has been indicted on charges that she falsified returns to increase client refunds, according to published reports. Sisco, who owned Sisco Accounting, a home-based tax prep business, allegedly falsified itemized deductions on clients’ returns to obtain inflated refunds, including bogus medical and dental expenses, charitable contributions, mortgage interest, cell phone expenses, property tax expenses, clothing and shoe expenses, laundry expenses and maintenance expense. Prosecutors allege that between 2006 and 2009, Sisco understated by more than $165,000 the taxes owed for 31 individuals.
Twinsburg, Ohio: A federal grand jury has returned a 31-count indictment charging Brian D. Krantz with crimes related to filing income tax returns netting refunds totaling $8,825,147. Krantz, 45, was indicted on one count of conspiring to make false claims against the U.S. and 30 counts of making false claims for income tax refunds. The U.S. Treasury issued 17 refund checks totaling approximately $3,615,586 payable to Krantz and various corporations controlled by Krantz as a result of the alleged scheme, according to the indictment, which also names Bryan D. McCallum as Krantz’s co-conspirator. McCallum previously pleaded guilty to a two counts charging him with the false claims conspiracy and with making the same 30 false claims.
The indictment claims that Krantz owned and controlled two corporations engaged in financial services and/or real estate investment business activities, in which he employed McCallum as an accountant/bookkeeper, and charges that from approximately April of 2009 through June of 2010, Krantz and McCallum conspired to make false claims for refunds using income tax returns filed in the names of Krantz, companies formed by Krantz and McCallum, and several “shelf” companies purchased by Krantz. The scheme involved the use of fake 2439s that claimed substantial withholding credits, when, in fact, none of the companies listed on the forms were actually RICs or REITs or had any undistributed capital gains or withheld taxes. According to the indictment, Krantz used more than $1 million of the refunds to finance a phony real estate venture.