A roundup of our favorite recent tax fraud cases.
Atlanta: Preparer Cheryl Singleton, 28, has been indicted for 10 counts of wire fraud, 10 counts of aggravated ID theft and 10 counts of filing false claims against the U.S.
Singleton owned and operated Advanced Tax Services, where, beginning in 2012, she allegedly participated in a scheme with others to obtain refunds by filing false federal income tax returns. The indictment states that Singleton falsely advised individuals that they could apply for a government stimulus payment by providing their personal ID information to Advanced.
Singleton and the other participants in the scheme are also accused of using this personal ID information to e-file false returns in those individuals’ names without their knowledge or consent. These returns each claimed fraudulent refunds of at least $1,000.
If convicted, Singleton faces a maximum of 20 years in prison for each wire fraud count, five years for each false claims count and a minimum of two years for the aggravated ID theft counts, which will run consecutively to any other prison term she receives. She also faces monetary penalties and restitution.
Sabinal, Texas: Preparer Mary Davis Reyes, owner and operator of Fast Tax, has been sentenced to 30 months in prison and a year of supervised release and been ordered to pay $87,371.08 restitution for preparing a false return.
In November 2015, Reyes pleaded guilty to one count of aiding and assisting in the preparation of a false return, admitting that in April 2009 she knowingly prepared a false income tax return that claimed a $5,673 refund for a client.
According to court records, during tax years 2007 through 2009, Reyes provided false information under EIC provisions to inflate clients’ refunds.
Pembroke Pines, Fla.: Preparers Walther Wilson Godfrey, 37 and Rhonda Peggy Gittens, 35, have pleaded guilty for conspiring to use stolen IDs to file fraudulent returns with the IRS.
According to court documents, between July 2009 and August 2014, the couple and others conspired to file false federal income tax returns using stolen IDs. Gittens owned and operated 2G Inc., a tax prep business, and G&G Check Cashing Inc. The pair obtained the personal ID information of actual individuals, some deceased, including names, Social Security numbers, addresses and dates of birth, without the individuals’ authorization and used this information to file false refund claims for 2009 through 2011.
Gittens and Godfrey recruited a co-conspirator to obtain EFINs in his name that would be used to file the fraudulent returns. In addition, they directed him to set up companies and bank accounts in his name to negotiate the stolen refund checks.
Godfrey and Gittens filed more than 700 fraudulent returns requesting more than $1.9 million in refunds. They also possessed device-making equipment including an ID card printer, a credit card embosser, hologram stickers for driver’s licenses and credit cards and blank credit cards.
Godfrey and Gittens pleaded guilty to one count of a multi-object conspiracy to defraud the U.S., commit wire fraud and commit aggravated ID theft, one count of aggravated ID theft and one count of access device fraud. Both face a maximum of five years in prison and three years of supervised release for the conspiracy charge, two years in prison and one year of supervised release for the aggravated ID theft charge and a maximum of 15 years of prison and three years of supervised release for the access device fraud charge. Godfrey and Gittens must also serve the two-year sentence for aggravated ID theft in addition to any other sentence. Each charge also carries a maximum fine of $250,000.
Miami: Preparers Roland Alexis, 34, and Jim Joseph, 31, have been sentenced to 42 months in prison followed by three years of supervised release for their role in a stolen-ID tax refund fraud.
According to the indictment and information in court, Joseph and Alexis conspired to file more than 860 false income tax returns claiming more than $1 million in refunds. Alexis’s conduct resulted in a tax loss of $1.8 million, Joseph’s in a tax loss of $1.2 million. They both pleaded guilty in November to one count of a multi-object conspiracy to defraud the IRS, commit wire fraud and commit aggravated ID theft, as well as to one count of aggravated ID theft.
Between 2007 and July 2014, Joseph, Alexis and others filed false federal returns using stolen identities including names, Social Security numbers, addresses and dates of birth without the individuals’ authorization. Much of the stolen information belonged to prisoners and deceased individuals. Joseph, Alexis and others recruited knowing co-conspirators and unknowing victims to obtain EFINs in their names to file phony returns.
In late 2009, Alexis and Joseph, along with a co-conspirator, formed Worldwide Income Tax Multi-Services LLC and North Miami Income Tax Services, companies that were created to file fraudulent returns using stolen IDs.
Joseph was also ordered to pay $1,225,686.12 restitution to the IRS; Alexis was also ordered to pay $1,805,332.71 in restitution, forfeiting two single-family owned properties in Miami and $369,776.18 in proceeds held in a bank account.
Phoenix: Preparer Linda Mary Anderson has been sentenced to eight months in prison and three years of supervised release after pleading guilty last summer to filing false returns. She was also ordered to pay $692,206.47 restitution to the IRS.
Authorities said that from about January 2009 through about November 2010, Anderson prepared and filed federal income tax returns on behalf of more than 100 taxpayers that collectively claimed more than $63 million in false income and withholdings. Anderson prepared and e-filed more than 2,000 false tax documents with the IRS using 1099-As and 1099-0IDs to report false income and withholdings, authorities said in her original charges. She also did not register for or use an e-file account under her own name or her business name, but instead used two accounts registered to others.
Lake Worth, Fla.: A federal court has permanently barred preparer Wilfrid Antoine from preparing federal returns for others and from owning or operating a prep business.
The U.S. filed its civil injunction and disgorgement complaint against Antoine in September 2014, alleging that preparers in Antoine’s businesses targeted primarily low-income clients with deceptive and misleading advertisements, prepared and filed fraudulent returns to inflate refunds, and profited through unconscionable, exorbitant and often undisclosed fees.
The complaint alleged that Antoine’s preparers falsely claimed the EITC, claiming improper filing statuses, fabricated businesses and related business income and expenses, fabricated Schedule A, and falsely claimed fuel tax credits.
According to the complaint, Antoine owned and operated AWA Tax Inc., a corporation that operated seven tax prep stores in Florida. Those stores allegedly operated as LBS Tax Services in 2013 and began operating as AWA Tax Services in 2014.
Since September 2014, the United States has filed nine similar lawsuits in Florida against former LBS franchisor Walner Gachette and 12 former LBS franchisees and managers, many of whom have rebranded and continued to operate prep businesses.
Albuquerque, N.M.: Preparer Flora Mascarenas, 54, has been indicted for filing fraudulent returns using stolen identities.
In 2011 and 2012, Mascarenas allegedly e-filed false state returns with the New Mexico Taxation and Revenue Department utilizing personal identifying information of individuals without their authorization or consent.
She was charged with two counts of ID theft, two counts of forgery and two counts of computer access with intent to defraud or embezzle, all felonies. These charges carry a maximum sentence of nine years in prison and $30,000 in fines.
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