Some of our favorite recent tax fraud cases.
Port St. Lucie, Fla.: Preparer Jean Pedro Jean Baptiste, 55, has been sentenced to 30 months in prison and a year of supervised release and been ordered to pay $558,000 restitution for preparing false returns for himself and his clients.
According to court documents, Baptiste, who previously pleaded guilty, owned and operated JP and Sons Enterprises in Delray Beach, Fla. For tax years 2008 and 2009, Baptiste prepared individual income tax returns for clients using false income and deduction figures, including false Schedule C items and false EITCs, additional child credits and First-Time Homebuyer Credits. He also failed to review the returns in detail with clients before e-filing.
Baptiste also filed false 1040s for himself for tax years 2008 and 2009: The 2008 return falsely claimed a First-Time Homebuyer Credit; the 2009 return falsely claimed an additional child tax credit and an EITC and falsely stated Schedule C income, gross receipts and sales.
The loss to the U.S. totals some $558,000.
Glen Burnie, Md.: Preparer Christine Little, 43, has pleaded guilty to aiding in the preparation of false returns.
According to her plea agreement, Little identified herself as the CEO of TNT Taxes and from February to June 2011 recruited taxpayers to use her services, purporting to specialize in business, individual taxes and “amendments.”
Little admitted that she prepared 29 false federal returns using information that did not reflect the information given by clients, falsely inflated withholdings and real estate taxes and caused the returns to contain false personal property taxes, home mortgage interest and charitable deductions.
In April 2011, an undercover federal agent requested that Little prepare his individual federal return. The return Little prepared did not accurately reflect the information the agent supplied and instead included false deductions and inflated withholding amounts, resulting in a fraudulent refund claim of more than $11,000.
Little admits that the loss resulting from the false tax returns she filed exceeded $330,000. She faces a maximum of three years in prison when sentenced on February 5.
Coral Springs, Fla.: The U.S. has filed to bar preparers Christopher Lawrence and Kenneth Aikens from owning, operating or franchising a tax prep business and from preparing returns for others.
The complaint also asks the court to order Lawrence and Aikens to disgorge the fees that they obtained through the alleged fraudulent preparation.
According to the complaint, Lawrence owns and operates Tax Mon$ter and Aikens owns and operates Tax Pros, prep businesses with locations in southeast Florida. Lawrence was previously a franchisee of LBS Tax Services, the complaint alleges.
The suit is one of nine filed against LBS Tax Services-related individuals, including Walner Gachette, Douglas Mesadieu, Jean Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Tonya Chambers, Jehoakim Victor, Lauri Rodriguez and Milot Odne.
According to the complaint, Lawrence and Aikens target primarily low-income clients with deceptive and misleading advertisements, prepare and file fraudulent returns to inflate clients’ refunds, and profit through “unconscionable, exorbitant and often undisclosed fees.”
The complaint alleges that the prep stores engage in such fraudulent activity as falsely claiming the EITC, claiming improper filing statuses, fabricating businesses and related business income and expenses and fabricating Schedule A deductions, particularly for unreimbursed employee business expenses.
Owings Mills, Md.: Local resident Karen Kimble, 40, has received four years in prison followed by three years of supervised release for six counts of wire fraud, five counts of subscribing to a false tax return, five counts of aiding in the filing of a false tax return, and four counts of aggravated ID theft and visa fraud. She was also ordered to pay $84,411 restitution to the IRS and $26,419.92 in restitution to the State of Maryland.
According to evidence, Kimble falsely held herself out to others as a preparer. From 2007 to 2012, she falsely inflated credits and deductions on her personal and client returns, including as much as doubling the mortgage interest deduction on her and her alleged husband’s returns, and claiming phony education credits inventing tens of thousands of dollars in unreimbursed job expenses.
She provided some clients with returns that did not reflect the false deductions and credits, nor did she inform these clients of the fraudulent deductions and credits. She filed these fake returns using their personal ID information and directed all or part of the refunds to herself. On other occasions, Kimble prepared tax returns for friends and, without their knowledge, falsely inflated the deductions to obtain a larger refund, which she passed directly on to her friends.
Additionally, in 2008 Kimble married a Ghanaian citizen knowing that the marriage was not valid because the Ghanaian was not legally divorced from his first wife. Kimble prepared and filed false documents in state court and elsewhere purporting to show that the Ghanaian citizen divorced before she married him.
Pepper Pike, Ohio: Local resident Ghana Johnson, 46, has been sentenced to seven years in prison for an ID-theft scheme in which she attempted to claim nearly $550,000 in fraudulent refunds. Johnson, previously found guilty on one count of wire fraud, five counts of filing false claims for income tax refunds and five counts of aggravated ID theft, was also ordered to pay $357,119 restitution.
Johnson e-filed 106 false, fictitious and fraudulent returns for tax years 2010 and 2011 in her own name and others’, claiming nearly $550,000 in refunds. She requested that these false refunds be paid by direct deposit to prepaid debit cards, according to court documents.
Johnson used stolen means of ID, including names and Social Security numbers, for the scheme. She obtained these in a variety of ways, including from stolen admission records from a medical and dental assistant school in Cleveland, according to court documents.
She held herself out to be a tax preparer to family, friends and others, even though Johnson did not list herself as a preparer on any of the fraudulent income tax returns she filed. She falsified wage income, federal income tax withholdings, dependents, exemptions and tax credit information to obtain refunds which neither she nor the individuals she prepared the returns for were entitled to receive. Many of the fraudulent income tax returns filed by Johnson shared common characteristics, including addresses, employers, wages, federal income tax withholdings and tax credits, according to court documents.
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