A roundup of our favorite recent tax fraud cases.
Baltimore: Preparer Charles Imariagbe has received 20 months in prison and three years of supervised release after being convicted of 15 counts of aiding and assisting in the preparation of false income tax returns.
According to court documents and evidence at trial, between 2008 and 2012 Imariagbe operated JC Tax Service and prepared false federal individual returns for at least seven clients. These returns claimed false and fraudulent income and expenses from Schedule C businesses and grossly inflated or wholly fictitious mileage expenses, all to inflate undeserved refunds.
Imariagbe must also pay $151,927 restitution to the IRS.
Oakland Park, Fla.: A federal court has permanently barred preparer Eli St. Phard from preparing federal returns for others.
The complaint alleges that he prepared income tax returns that fraudulently understated clients’ tax liabilities by falsely claiming deductions for business expenses and fraudulently overstating clients’ claims for refunds by falsely claiming undeserved education or fuel tax credits.
According to the complaint, the IRS audited 340 of the returns St. Phard prepared and found that he understated the tax owed on all but five of the returns, a total of more than $1.8 million in understatements.
In addition to barring St. Phard from preparing federal returns, the court ordered him to hand over a list of his clients.
St. Phard consented to entry of the order and admitted, for purposes of this case, that he had engaged in conduct subject to penalty under the federal tax laws, but he did not admit to civil or criminal wrongdoing or to the specific allegations in the complaint.
Stockton, Calif.: Preparer Vivian Marie Williams, 51, has pleaded guilty to a conspiracy to submit false claims for income tax refunds and to ID theft.
According to court documents, Williams prepared taxes out of her home under the business name Williams Financial Service. Between January 2010 and March 2011, she submitted returns for both legitimate clients and in the names of victims of ID theft.
The returns for legitimate clients reported inflated business and wage income to inflate refunds under the EITC and the Child Tax Credit. The returns for victims of ID theft were submitted without the knowledge of the taxpayers and allowed Williams to collect refunds on their behalf.
During the scheme, Williams submitted at least $61,531 in false claims to the IRS, she later admitted.
Co-defendant Darrell Lemont Morris, 45, also of Stockton, allegedly conspired with Williams and allowed her to use his bank accounts for the deposit of refunds of victims of ID theft and then shared in the proceeds with Williams. The case against Morris is still pending.
Chicago: Preparer Gerrie Cokenour, 42, has been sentenced to 18 months in prison after pleading guilty to falsifying data on returns, according to published reports. Cokenour and another woman were reportedly accused of preparing 764 state income tax returns that included inflated property-tax data and other fraudulent deductions while working for Cokenour’s company, Tax Advocators Inc. The falsified returns cost the state more than $400,000, according to prosecutors cited by news outlets.
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