A tax preparer in the Bronx has been convicted by a jury on 43 counts, including corruptly impeding the enforcement of the tax laws, filing false tax returns for himself, and preparing numerous false tax returns for others.
Eugene Osuala, 59, allegedly generated over $1 million in bogus refunds for his clients, and his business took in more than $650,000 in fraud proceeds, according to prosecutors. A jury found him guilty on all counts on Tuesday in a federal court in New York after a five-day trial.
Between 2002 and 2005, Osuala ran a tax preparation business in the Bronx called Ogenes Tax Services in which he filed large numbers of returns. Osuala allegedly used a variety of inflated and phony deductions, including gifts to charity, business expenses, education credits for tuition, and business expenses for uniforms and dry cleaning, to increase the refunds claimed by his clients.
Many of his clients took out refund anticipation loans, which were paid through his office, and from which he allegedly skimmed hundreds of thousands of dollars without their knowledge. Osuala provided clients with phony copies of their tax returns, showing a smaller amount of deductions and a lower refund amount than was actually submitted to the IRS, according to prosecutors. He then used the bank’s RAL program to pay himself the difference between the refund his clients were expecting and the refund that the IRS actually paid.
In addition, for tax years 2003 and 2004, Osuala falsely reported on his own tax returns that his tax preparation business was losing money when it was actually making nearly $200,000 a year.
“Eugene Osuala was a serial liar who violated the tax laws with impunity,” said Manhattan U.S. Attorney Preet Bharara in a statement. “This kind of fraud is never acceptable, but it is particularly egregious in these times of tight budgets and federal deficits.”
Osuala faces up to three years in prison for each of the 43 counts. Sentencing is scheduled for December. The case was part of “Operation Brass Tax,” a joint investigation conducted by the U.S. Attorney's Office for the Southern District of New York and the IRS. Operation Brass Tax was the largest coordinated takedown of corrupt tax preparers in recent history.
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