Kansas City, Kan.: Preparer Cynthia M. Raymond, 41, formerly of Jackson, Mo., was indicted in a St. Louis court on multiple fraud counts involving preparation of 98 false returns under the names of 36 clients for tax years 2007 through 2010. The indictment alleges that these returns under-reported taxes in cumulative amounts in excess of $300,000, and according to the indictment Raymond included false deduction on the returns that resulted in excessive and unlawful refunds. She also allegedly provided her clients with a different return than what was filed with the IRS, with the refunds listed on the return she provided to her clients matching the refund deposited to their account. She then allegedly e-filed the false returns and directed $103,000 in refunds to her own account.
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The indictment also charges that Raymond used the name and Social Security number of a Jackson-area resident to prepare a completely fabricated return for 2009, and directed the resulting false refund of $1,075 into her own account, according to the indictment. Each of the tax counts carries a maximum penalty of three years in prison and fines up to $100,000, while the identity theft carries a maximum of five years and $250,000 in fines.
Kissimmee, Fla.: The Justice Department has sued preparer Carlos A. Cabrera, seeking to bar him permanently from preparing federal returns for others. The civil injunction suit, filed in Orlando, alleges that Cabrera and his business, Cabrera Financial Group, prepare federal income tax returns for clients that claim improper losses for non-existent businesses and fabricate education credits to unlawfully understate tax liabilities. According to the complaint, Cabrera prepared over 17,000 tax returns for 2009 and 2010, with an average tax understatement of $4,222 per return, with alleged total losses to the government of possibly tens of millions of dollars for those two years alone.
Nashua, N.H.: Preparer Maria M. Ulloa, 51, has been convicted in U.S. District Court of 10 counts of filing false, fictitious and fraudulent claims for refunds, according to published reports. Ulloa, who faces a maximum of three years in federal prison and up to $250,000 in fines per count, operated Main Travel, a Nashua company that provided federal income tax return prep. Authorities said that during 2007 and 2008 she filed 10 false federal income tax returns in the names of her clients, diverting most of the inflated tax refunds to herself. Sentencing is slated for April.
Riverside, Calif.: CPA and preparer Masood Chotani has pleaded guilty to conspiracy to defraud the U.S. after being indicted last June on charges of engaging in a scheme to file false returns with the IRS using the names and Social Security numbers of dead people. According to the indictment and the plea agreement, in 2002 and 2003 Chotani misappropriated employer ID information from his client files and provided the information to his co-conspirator, Haroon Amin. Amin and another co-conspirator, Ather Ali, used the stolen employer data as well as dead people’s Social Security numbers and other identification information obtained from the Internet to prepare and file fraudulent returns that had fake W-2 wage and tax statements as attachments, falsely stating that the dead people earned wages from those employers from which income tax had been withheld. Chotani admitted that he was a knowing participant in this scheme and to filing similar false returns himself, in his parents’ names, also using employer identification information misappropriated from his files.
According to documents filed in two related cases, the scheme resulted in the filing of over 250 false returns claiming an aggregate of more than $2 million in refunds. Although the IRS rejected the bulk of these claims, a number of refund checks were issued and delivered to addresses controlled by Amin, Ali and their co-conspirators. Most of these refund checks then were delivered overseas to be deposited in bank accounts in Armenia and Pakistan. Amin pleaded guilty in January 2010 and is serving a 30-month prison term. Ali pleaded guilty the following month and is serving a 37-month prison term. Chotani’s sentencing is scheduled for April 22; he faces a statutory maximum sentence of five years’ prison and a maximum fine of $250,000. Under the plea agreement, Chotani has also agreed to pay restitution to the IRS.