A roundup of our favorite recent tax fraud cases, including the most brazen fake business name in tax fraud history.
Buffalo, N.Y.: Preparer Maung No, 27, of Seattle, has been sentenced to two years in prison and was ordered to pay $2,323,122 in restitution to the IRS after being convicted of filing more than 1,000 false returns.
No was employed as a preparer for VPS Income Tax in 2011 and BTC Income Tax in 2012; the fee charged for income tax preparation was 10 percent of the tax refund amount plus bank fees. For the 2011 tax year, No prepared returns for approximately 565 clients and claimed an education credit of $1,358, an AOC of $2,000 and a Federal Fuel Tax Credit of $183 on each return without the knowledge of the clients. No knew that the credits were false and that the clients were not entitled to claim such credits.
As a result, clients received inflated refunds, resulting in a loss of $3,543 to the IRS. No continued to conduct similar actions for approximately 574 additional taxpayers, costing the IRS $1,129,319. No also prepared returns for the 2012 tax year in the same fashion that cost the IRS $1,202,803.
The total number of fraudulent returns prepared by No was some 1,138, for a total loss to the IRS of $2,332,122.
Fairburn, Ga.: Creshika C. Wise, 31, a former IRS revenue agent who impersonated a taxpayer in order to steal more than $470,000, has pleaded guilty to a charge of aggravated ID theft.
According to authorities, the charges and information presented in court, Wise worked for the IRS from 2008 until the spring of 2016, when she resigned after her arrest in this case. In August 2013, Wise was assigned to audit the 2011 return of two married taxpayers who had significantly underpaid their 2011 federal income tax. That September, Wise and the taxpayers’ accountant met and agreed that the taxpayers owed $758,846, plus interest, to the IRS.
Wise came up with a plan to steal most or all of that money. The day after she met with the accountant, she placed in the IRS file for the audit a fictitious IRS Form 4549, Income Tax Examination Changes, for the taxpayers. Wise falsified the form by reducing tax due to the IRS from $758,846 to $282,363 and by forging the accountant’s signature.
A few days later, Wise opened up a new checking account in the name “Creshika C. Wise sole prop d/b/a U.S. Treasury and Accounting Service.”
In October 2013, she e-mailed the taxpayer from her IRS e-mail account and asked him to wire the funds the taxpayers owed the IRS to her newly opened bank account. Wise’s e-mail provided the routing and account number for the account, which she described as belonging to “U.S. Treasury and Accounting Service.” Wise’s e-mail did not disclose to the taxpayer that she actually owned the account.
The taxpayer never wired the funds as requested by Wise, as he had already mailed a check to the IRS for the full amount due. Wise received the check, and processed it for credit to the taxpayers’ account.
Authorities said that she persisted in her scheme. Wise knew she had altered the IRS’s records to reflect a tax due of $282,363 rather than $758,846. She also knew that when the IRS processed the check, the system would generate a refund check for any excess and mail it to the taxpayers.
Wise turned her attention to getting the large check she knew would be coming to the taxpayers. She opened a new mailbox in her own name at a UPS store and soon afterward caused the taxpayers’ address to be changed in the IRS computer system from their correct address to that of Wise’s new UPS mailbox.
In December 2013, impersonating the taxpayers, Wise filled out an online application for a new joint checking account in their names with a local bank. A few days afterward, she called the bank to see if the account was ready. In the call (recorded by the bank), Wise identified herself by name as one of the taxpayers and provided the taxpayer’s correct Social Security number to confirm that identity. Wise told the bank it was important the account be opened quickly, because she was expecting a large check from the IRS.
Wise’s scheme failed; neither the taxpayers nor the IRS suffered monetary loss. Sentencing is Aug. 3.
Champlin, Minn.: Preparer Rona Griffin has been sentenced to 46 months in prison after pleading guilty in January to 17 counts of preparing fraudulent taxes and failing to pay her own taxes.
She was arrested in Indiana, a fugitive after twice failing to appear in court in early April.
The Minnesota Department of Revenue began investigating her preparation business, which she ran out of her residences, in 2013. Early last year, the Hennepin County Attorney’s Office charged her with 53 counts including failing to file her own returns despite making $150,000 to $200,000 per year.
On the eve of her trial in January, Griffin pleaded guilty to the 17 counts and admitted to a number of aggravating circumstances, including that her scheme required “a higher level of sophistication,” that she abused a position of trust, forged documents to cover up the fraud, had multiple victims over multiple years and sent a letter to the Department of Revenue falsely stating that her only income was from child support and Social Security.
The county attorney’s office received information in late March that Griffin was preparing to flee. Investigators then learned that Griffin had bought a new Jeep in February, after she pleaded guilty. They also tracked her through an old electronic benefits transfer card to a pharmacy in Anderson, Ind., where police obtained video surveillance that showed her car and license plate. She was arrested on April 21.
Investigators also learned that Griffin signed a lease for a house in Anderson on April 4, the day she was supposed to be sentenced in Minnesota. She used the names of the clients she had cheated as proof that she had income to pay rent.
Kettering, Ohio: Preparer Dwain Fansler has pleaded guilty to one count of wire fraud relative to a scheme to defraud his tax prep clients by keeping a portion of their income tax refunds without their knowledge.
According to court documents, between February 2011 and March 2014, Fansler, the sole member and owner of Dwain Fansler BBA ATA, e-filed federal income tax returns on behalf of his clients and directed the IRS to deposit all or a portion of his clients’ refunds, without the knowledge or authorization of his clients, into bank accounts he controlled.
Fansler concealed his scheme by providing copies of the income tax returns to his clients that reflected a lower income tax refund than the actual income tax return that was filed with the IRS.
Fansler filed approximately 657 returns for 421 clients that resulted in a total tax loss of $458,889.
He faces a maximum of 20 years in prison and a fine of up to $250,000.
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