Bogus wages; “permission” revoked; and other highlights of recent tax fraud cases.
Fullerton, Calif.: Local resident Michael Raymond Martinez, 48, who prepared returns for clients after falsely claiming to be a CPA and a former IRS agent, has been sentenced to serve 21 months in federal prison for preparing and filing fraudulent federal income tax returns.
Martinez, who operated his tax prep business under the names Your Home Tax Service, Great Tax Services and Great Tax Solutions, and who often met with clients at their homes or at public locations, pleaded guilty in February to one count of aiding and abetting in the preparation of a false income tax return.
In marketing materials provided to clients and potential clients, Martinez claimed he could get them “The Largest Refund … Guaranteed!!!” He admitted that he prepared and filed with the IRS at least 245 false federal income tax returns that resulted in tax losses to the U.S. of approximately $1,155,006.
According to a plea agreement filed in this case, from the beginning of 2009 through April 2015, Martinez had brief meetings with clients to obtain their documents and to receive his payment. He typically prepared and e-filed the returns but would not review the returns with his clients.
According to documents filed with the court, Martinez claimed false deductions and expenses that his clients were not entitled to receive. The returns included fraudulent moving expenses, education expenses and itemized deductions.
Martinez also failed to report his own taxable income from his prep business for the years 2011 and 2012, costing the government some $85,000.
Martinez was also ordered to pay $205,465 restitution to the IRS.
Oklahoma City: Preparer Deangelo Antoine McDaniel and Torie L. Adkins, of Edmond, Okla., have pleaded guilty to preparing and submitting a false income tax return to the IRS.
McDaniel admitted that as a preparer he prepared and submitted to the IRS a fraudulent return for the 2012 calendar year on behalf of Adkins. He also admitted that he submitted two fabricated W-2s: one listing wages of $7,680 from Express Services and another listing wages of $7,800 from OnTrack Staffing. McDaniel further admitted that he knew Adkins never worked at either Express or OnTrack and that she earned no wage income in 2012.
Adkins also pleaded guilty to her role in the offense.
Both McDaniel and Adkins agreed that they caused losses of $40,000 to $100,000 to the IRS, and further agreed to pay restitution in an amount to be determined by the court.
McDaniel and Adkins both face up to three years in prison, a $250,000 fine and a year of supervised release.
Palmetto, Fla.: Preparer Latronda Brooks, 44, has pleaded guilty to theft of government funds and aggravated ID theft in connection with income tax fraud.
According to court documents, Brooks opened a bank account in her name, d.b.a. Magnificent Tax Services, and used it to deposit fraudulent refund checks. Those checks were falsely endorsed with clients’ signatures and deposited with falsely endorsed “permission” forms that purportedly gave Brooks permission to deposit third-party refund checks into her account.
Brooks spent the money on personal expenses, including paying others involved in the fraud, and provided none of the funds to clients.
She faces a maximum of 10 years in prison for the theft charge, followed by an additional two-year consecutive sentence for the aggravated ID theft charge. Brooks also agreed to a forfeiture money judgment of $327,521, the proceeds of the fraud.
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