A New Jersey tax preparer has pleaded guilty to preparing false tax returns for his clients.

Kellar Covington Jr. pleaded guilty Thursday to a one-count information before U. S. Magistrate Judge James B. Clark III in a Newark federal court. Covington owned and operated KCJ Financial Corporation and helped operate DFC Tax Pros, Inc., two tax prep businesses in Irvington, N.J. Covington admitted that he prepared false tax returns for clients by fabricating and inflating Schedule A itemized deductions, Schedule C expenses and Schedule E losses, such as those for gifts to charity, job expenses and real estate losses.

He allegedly defrauded the Internal Revenue Service out of approximately $140,259. Covington faces up to three years in prison and a fine of at least $250,000. Sentencing is scheduled for June 3.

The investigation was conducted by IRS-Criminal Investigation's Newark Field Office, under the direction of special agent-in-charge Shantelle P. Kitchen and the U.S. Attorney’s Office, under the direction of U.S. Attorney Paul J. Fishman. The government’s case was represented by Assistant U.S. Attorney Sharon Ashe.

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