A roundup of our favorite recent tax fraud cases.
Denver: A federal court has permanently barred preparer Gerardo Herrera and his business, El Lobo Multiservicios Professionales Inc., from preparing federal returns.
The government contends that Herrera and his business fraudulently reduced clients’ tax liabilities using extra dependents and bogus deductions. According to the complaint, Herrera and his staff repeatedly claimed clients’ extended family members as dependents and improperly claimed deductions for personal expenses such as cell phones and car insurance.
The complaint added that audits showed that Herrera and his staff exaggerated deductions, reported fraudulent charitable contribution deductions and claimed improper head of household filing status.
The IRS allegedly audited more than 200 returns prepared by Herrera’s business and found misrepresentations on almost all of them.
Reading, Pa.: Preparer Carmen Basilis, 52, has pleaded guilty to tax fraud charges, admitting that she had falsified miscellaneous deductions on clients’ returns to inflate refunds.
In lieu of receiving Treasury checks, Basilis’ clients applied for RALs. Using Form 8888 and unknown to her clients, Basilis redirected portions of refunds into her personal bank account then issued the RAL checks to her clients. The IRS then sent the bank the refund that Basilis had requested, to pay off the loans that the filers had been issued.
In addition to taking a portion of the filer’s refund, Basilis also charged clients a prep and filing fee.
According to published reports, after a grand jury indicted her, Basilis dodged an IRS agent and traveled to the Dominican Republic and back to the U.S. undetected despite a warrant for her arrest. She was reportedly arrested in August after authorities tracked her cellphone.
Sentencing is May 5.
Abingdon, Va.: West Virginia State Police have reportedly extradited former preparer Jeremy Evans, 38, who was wanted in connection with tax fraud.
News outlets quoted authorities as saying that the investigation began in February 2015 after Evans, a Jackson Hewitt preparer, allegedly obtained several individuals’ 2013 return information and filed the individuals’ 2014 return in their names. Evans is also reportedly accused of forging the individuals’ signatures to the 2014 returns prior to filing.
Evans allegedly filed the reports in an attempt to obtain a $50 bankcard from Jackson Hewitt, which was then offered as part of a promotion, reports said.
Evans was reportedly charged with 19 felonies and six misdemeanors, including ID theft, forgery, petit larceny, fraudulent schemes and embezzlement. He remains jailed without bond, reports said.
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