A federal grand jury has indicted five individuals for allegedly orchestrating a $14 million tax fraud scheme, the Department of Justice and Internal Revenue Service announced.
The defendants, all from San Bernardino County, Calif., include Matthew Berry, Karen Berry, Carla Berry, Ivan Johnson and Valerie Dixon, are charged with conspiracy to defraud the United States, and with either failure to file an income tax return or filing a false income tax return for their personal taxes during the same years. The five were formerly associated with Rialto, Calif.-based tax preparation firm NCK Services Inc.
With the exception of Matthew Berry, the defendants were also charged with aiding and assisting the filing of false tax returns. The indictment alleges that the four prepared income tax returns containing false "Schedule A" deductions for mortgage interest, real estate taxes, or un-reimbursed expenses -- totaling more than 6,000 fraudulent returns in 2003 alone.
According to the government, the entire scheme resulted in a tax loss of more than $14.4 million to the United States, though documents filed in a civil case against the defendants put the total tax loss at more than $25 million.
The group also failed to report the $1.5 million they earned from the scheme to the IRS.Karen Berry, Carla Berry and Ivan Johnson are also charged with making false statements to a financial institution for submitting mortgage applications that contained false statements about income, and Johnson faces a charge of submitting false documents to the IRS in 2005, during an audit of his own taxes for 2003.
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