An Alaskan tax preparer has pleaded guilty to three felony charges stemming from a scheme to defraud clients and family members out of close to $1 million.
Frances Yvonne Rowland, a 43-year-old tax preparer, entered guilty pleas Monday before U.S. District Judge Timothy M. Burgess. Rowland pled guilty to one count of obstructing the Internal Revenue Service, one count of credit card fraud, and one count of aggravated identity theft, and the judge accepted her pleas. Rowland has also been known as Yvonne Rowland, Frances Yvonne Carter and Frances Leary.
According to prosecutors, between 2005 and 2008, Rowland owned and operated several businesses in Anchorage and Wasilla, Alaska, including Carter and Associates, LLC; Carter Organization, LLC; Carter Financial Group, LLC; and Carter Tax, Inc. The businesses provided accounting and tax preparation services to individuals and small businesses. Rowland also maintained and controlled bank accounts in the names of her various businesses.
Prosecutors claimed that as part of these businesses, Rowland devised and executed a scheme to fraudulently obtain money from her clients. The scheme followed a general pattern in which she first prepared tax returns on behalf of a client. When her clients owed taxes, Rowland persuaded many of them to pay their tax liabilities to her “trust” account, promising that she would then transfer the funds to the IRS. In all, Rowland persuaded at least nine separate clients to transfer over $700,000 to accounts that she controlled.
But instead of paying her clients’ money to the IRS, she instead transferred the funds to accounts that she controlled and used the money to pay business and personal expenses, including for personal travel, home mortgage payments, payments toward other clients' tax liabilities, and payments of court-ordered restitution.
To conceal the fact that she was falsely obtaining and using other people’s money, Rowland filed false documents with the IRS, including forms requesting extensions of time to file returns, when in fact the clients’ returns had been completed and Rowland had been given the money to pay the taxes owed.
She allegedly also prepared and filed tax returns with the IRS that were different than the returns she had prepared for and provided copies of to her clients. The returns filed with the IRS reported different numbers relating to the amount of taxes owed or the amount of payments made by the clients, thereby concealing from the clients and the IRS the fact that the defendant had kept the money rather than paid it to the IRS.
After her clients became aware of the fact that their payments had not been sent to the IRS, Rowland delinquently paid the taxes, accrued interest, and incurred penalties to the IRS on behalf of the taxpayers, often with funds she had obtained from other taxpayer clients who mistakenly thought that the money was being used to pay their own taxes.
In addition to her tax-related scheme, Rowland also pled guilty to stealing her father-in-law’s identity in a scheme to obtain numerous credit cards in his name without his knowledge. In total, approximately $85,000 was charged to these cards between January 2005 and December 2007.
Judge Burgess has scheduled sentencing for Nov. 18, 2011. The law provides for a maximum of three years in prison on the tax-related charge. Rowland also faces up to 10 years for credit card fraud, and a mandatory two-year consecutive sentence on the aggravated identity theft count. Under federal sentencing statutes, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
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