Some of our favorite recent tax fraud cases.
Meridian, Miss.: Preparer Kendrick Williams, 36, has been sentenced to 21 months in prison followed by one year of supervised release for aiding and assisting in the preparation of fraudulent federal income tax returns.
Williams prepared phony returns for clients for the 2007 and 2008 tax years using the business name TaxPro415. Without clients’ knowledge, he prepared returns with falsely inflated federal withholdings, overstated and understated wages, false filing statuses, false education credits and tuition and fees deductions, and false itemized deductions. The false returns claimed $99,329.51 in refunds.
A restitution hearing on March 3 will determine the amount that Williams will have to pay back to the IRS.
Providence, R.I.: Preparer Leon F. Tejada, 50, operator of the tax prep service El Centro Multiservicios, has pleaded guilty to federal tax fraud and wire fraud charges.
Tejada admitted that during tax years 2009 through 2012, without the knowledge of his clients, he created and falsified clients’ dependents, exemptions, credits, deductions and expenses to inflate refunds. The loss to the U.S. was $54,440.
Tejada admitted that he also devised a scheme to divert some of his clients’ refunds through a bank clearing house by which a portion of the funds were diverted into his own bank account. Investigation determined that Tejada diverted $24,987 into his own account.
Tejada, released on unsecured bond, will be sentenced on March 10.
Palm Coast, Fla.: Local resident Michael Kolodin, 59, has been jailed on charges stemming from being what authorities called “a phony IRS agent.”
Authorities began the investigation in August after a victim told sheriff’s deputies that someone claiming to be a collection agent for the IRS had called to say that he owed back taxes and would be arrested if he didn’t pay; the victim did actually have an outstanding IRS debt.
Concerned that the call was legitimate, the victim loaded money onto multiple pre-paid debit cards as instructed and then turned over the card numbers to the scammer. In total, the victim paid $1,330. Afterwards, he was told he owed another $500. But this time, when the victim went to the bank to get another pre-paid debit card a bank staffer told the man of the suspected scam.
Investigators tracked the victim’s payments to a company called Exceptional Process Management, a supposed call center. The address turned out to be a UPS box in Palm Coast rented by Kolodin.
Financial records showed that in about eight months, Kolodin received up to $300,000.
New Orleans: Former preparer Donald Stewart, 59, has pleaded guilty to one count of theft of public funds and one count of aggravated ID theft.
Stewart, who prepared returns under the business names Stewart’s Tax Service and Stewart LTD from approximately 2001 through 2008 before the IRS suspended his EFIN, admitted that he used the individuals’ ID, including their names and Social Security numbers, to e-file false federal returns that claimed refunds.
From January 2011 through February 2012, Stewart caused approximately $37,809 in federal and state refunds in the names of others to be e-deposited into bank accounts under his control. He also admitted to cashing or depositing U.S. Treasury checks totaling approximately $539,393 and payable to other individuals.
Sentencing is March 17, when Stewart faces a maximum of 10 years in prison for the theft of public money charge and a mandatory term of two years in prison for the aggravated ID theft charge. Stewart also faces a fine of $250,000, or twice the gross gain or loss caused by the offense and terms of supervised release.
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