A Bronx tax preparer has been charged with 46 counts for filing tax returns with the Internal Revenue Service and New York State that contained more than $7 million in fraudulent tax deductions and credits, resulting in over $2.5 million in fraudulent tax refunds.
Prosecutors indicted tax preparer Mark Goldberg for participating in a multi-year tax fraud scheme during which he prepared for clients thousands of tax returns that contained millions of dollars in fraudulent, itemized deductions and tax credits. Goldberg, 39, surrendered to the IRS Tuesday morning and was scheduled to appear before Chief U.S. District Judge Loretta A. Preska that afternoon for arraignment.
“As alleged, Mark Goldberg consistently, systematically, and brazenly cheated both the United States and New York State treasuries out of $2.5 million in tax revenue by claiming fraudulent credits and deductions for his clients and himself,” Manhattan U.S. Attorney Preet Bharara said in a statement. “However, thanks to the coordinated efforts of law enforcement, Goldberg’s alleged seven-year tax crime spree has ended, and he will have to answer for his conduct.”
Goldberg carried out his tax preparation business principally through various entities in the Bronx that he owned and controlled, according to prosecutors, including E & M Multi Services, Inc. and MG Business Group, Inc. As part of the alleged scheme, Goldberg typically filed his clients’ tax returns electronically in the names of other people, including his father –who had no involvement in his tax preparation activities—in an effort to avoid having his own name associated with the client tax returns he prepared.
After he procured Electronic Filing Identification Numbers and Preparer Tax Identification Numbers in other people’s names, he allegedly prepared thousands of false and fraudulent income tax returns to be filed with the IRS and the New York State Department of Taxation and Finance, according to prosecutors.
Between 2005 and April 2012, the tax returns Goldberg prepared and filed for his clients allegedly contained numerous fabricated and fraudulently inflated items, including higher education or “tuition” credits, tuition expenses, unreimbursed employee business expenses, medical and dental expenses, gifts to charity, business income and losses, rental real estate losses, and Earned Income Tax Credits.
Goldberg also allegedly prepared and filed tax returns for himself that fraudulently claimed that he had received significant amounts of wage income from which taxes had been withheld, and that he had paid significant amounts of state and local taxes.
Because Goldberg included fabricated and inflated items on the clients’ federal and New York State tax returns, the clients’ tax liabilities were incorrectly reduced and they received IRS and New York State refunds to which they were not entitled, according to prosecutors. In addition, in return for preparing the aforementioned tax returns Goldberg received over $400,000 in fees from clients.
In total, Goldberg allegedly filed tax returns with the IRS and New York State that contained over $7 million in fraudulent deductions, expenses and credits, thereby allowing his clients to receive over $2.5 million in refunds to which they were not entitled, said prosecutors.
To prevent Goldberg from receiving the proceeds of his tax preparation scheme, investigators seized approximately $402,000 that had been contained in a bank account that he utilized to hold the fees he was paid by clients. On Monday, a civil complaint was filed in Manhattan federal court seeking to forfeit these funds, as well as the contents of a bank account containing refunds distributed to clients of Goldberg’s tax preparation business using prepaid cards. The civil forfeiture action has been assigned to Judge Andrew L. Carter, Jr.
Goldberg was previously charged with personal tax offenses in Bronx Supreme Court after an investigation was undertaken by the Department of Taxation and Finance and the Bronx District Attorney’s Office. The investigation and prosecution of Goldberg’s tax preparation fraud was taken over by federal authorities pursuant to an agreement reached between Manhattan federal prosecutors, the Bronx District Attorney’s Office, and DTF.
Goldberg was charged with 40 counts of aiding and assisting the preparation of false and fraudulent tax returns for his clients; four counts of signing and filing fraudulent tax returns for himself, one count of obstructing the IRS, and one count of engaging in a wire fraud scheme to defraud the IRS and DTF. Each of the 44 false return counts carries up to three years in prison, as does the IRS obstruction count. The wire fraud count carries a maximum sentence of 20 years in prison. In total, Goldberg faces a maximum jail term of 155 years.
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