Tax Fraud Blotter: Big Boo-Boo
Stopped for Speedy; hitting the Breaks; Interior motive; and other highlights of recent tax cases.
Phenix City, Ala.: Resident William Anthony Gosha III, a.k.a. “Boo Boo,” has been sentenced to 30 years in prison for his role in masterminding multiple stolen ID refund frauds.
Gosha was convicted in November of one count of conspiracy, 22 counts of mail fraud, three counts of wire fraud and 25 counts of aggravated ID theft.
According to evidence, between 2010 and 2013 Gosha ran an ID-theft ring with co-conspirators Tracy Mitchell, Keshia Lanier and Tamika Floyd, who have all been convicted and sentenced to prison.
Together they filed more than 8,800 federal returns that sought more than $22 million in fraudulent refunds. The IRS paid out some $9 million.
In November 2010, Gosha stole IDs of inmates from the Alabama Department of Corrections and provided the IDs to Lanier, who used the information to scam refunds. Gosha also stole employee records from a company previously located in Columbus, Ga. In 2012, Lanier approached Floyd, who worked at two Alabama state agencies. In both positions Floyd had access to the personal IDs of individuals, including teenagers. Floyd provided thousands of names.
Gosha then recruited Mitchell and her family to help file the fraudulent returns. Mitchell worked at a hospital at Ft. Benning, Ga., where she had access to the personal ID information of military personnel, including soldiers deployed to Afghanistan. She stole soldiers’ IDs and used their information to file fraudulent returns.
To efile the fraudulent returns, Gosha, Lanier and their co-conspirators applied for several EFINs in the names of sham prep businesses. They used these EFINs to file the returns and obtain “refund-related bank products” from various financial institutions that provided them with blank check stock. Gosha and his co-conspirators initially printed out the fraudulently obtained refund checks using the blank check stock.
The financial institutions halted Gosha’s and his co-conspirators’ ability to print checks, so they recruited U.S. Postal Service employees to give Gosha and others addresses on their routes to which the fraudulent refund checks could be directly mailed. In exchange for cash, these postal employees intercepted the refund checks and provided them to Gosha, Lanier, Mitchell and others. Gosha also directed refunds to prepaid debit cards and had those cards sent to addresses he controlled.
Between 2010 and 2013 Gosha also participated in a separate scheme with Pamela Smith and others in which Gosha sold the IDs that he had stolen from the Alabama Department of Corrections. Smith and others used the IDs to file returns that sought approximately $4.8 million in fraudulent refunds, of which the IRS paid out approximately $1.85 million. Smith also has been convicted and sentenced to prison for this conduct.
Gosha was also ordered to serve three years of supervised release and to pay more than $9 million restitution.
Prior to Gosha’s sentencing, 30 of his co-conspirators have been sentenced, including Keshia Lanier, who received 15 years, and Tracy Mitchell, who received more than 13 years.
Killeen, Texas: Preparer Shermin Marshall has pleaded guilty to aiding and assisting in the preparation and filing of a false tax return and aggravated ID theft.
According to court documents, Marshall devised a scheme to file false federal income tax returns on behalf of his clients and admitted that he falsified specific items on his clients’ returns to inflate refunds. He also admitted that he directed clients’ refunds to be deposited into financial accounts that he controlled and that without clients’ knowledge stole a portion of those refunds. Marshall also admitted that to receive some of the fraudulent refunds he opened financial accounts in his clients’ names, without their permission.
He admitted that his actions caused a tax loss of $397,367, and he faces a maximum of up to three years in prison on the aiding and assisting count, plus two years for the aggravated ID theft count. He also faces a period of supervised release, restitution and monetary penalties.
Canoga Park, Calif.: Local resident Arthur Bakunts, 40, who worked with a preparer in a large stolen-ID and refund fraud, has been sentenced to 52 months in federal prison.
Bakunts, who pleaded guilty in November to one count of wire fraud and one count of illegally possessing the means of identification of another person, was also ordered to pay $741,259 restitution and to serve three years on supervised release after he is released from prison.
The case against Bakunts stemmed in part from documents — including ID profiles, refund checks and other trappings of ID theft — found in his car when he was stopped at a sobriety checkpoint in 2014. Subsequent investigation revealed that Bakunts was working with Ashrf Mohammed Aly, former owner of Speedy Tax Service in West Covina, Calif., who used the stolen IDs to prepare fraudulent federal and state income tax returns in the names of the victims, which Bakunts then filed.
The fraudulent returns led to tax authorities issuing refund checks: $612,259 from the U.S. Treasury and $129,000 from the state of California.
Bakunts admitted in his plea agreement that approximately 341 fraudulent returns had been filed as part of the scheme. Aly pleaded guilty in December to one count of wire fraud and is scheduled to be sentenced on April 9.
Durham, N.C.: Preparer Laurean Robinson, 31, has been sentenced to 20 months in prison for aiding and assisting in the preparation of false returns.
According to court documents, from 2012 through 2014 Robinson worked as the office manager and a preparer at Tax Breaks, a local prep business. She admitted that she prepared false returns for her clients that fraudulently claimed the EITC and sought inflated refunds.
To qualify clients for the credit, Robinson falsely reported that they earned income providing household services, such as babysitting and caretaking. She also trained other Tax Breaks employees to similarly prepare false returns.
In addition to fees charged by Tax Breaks, Robinson also often required her clients to pay an additional fee in cash. Her conduct caused a tax loss of approximately $600,737.
Robinson was also ordered to serve a year of supervised release and pay $120,980 in restitution to the IRS.
Mechanicsburg, Pa.: Businessman Nicholas Long, 30, has been sentenced to a year and a day in prison and three years of supervised release for failure to pay federal payroll taxes.
Long pleaded guilty in October to charges that he failed to pay federal payroll taxes owed by his business, Harrisburg Commercial Interiors, during 2013. An IRS investigation revealed that Long did not pay $216,304 in payroll taxes during 2013 and 2014. The investigation began when several HCI employees contacted the IRS because they did not receive their 2013 income tax refunds.
Although he issued payroll checks totaling $730,788 in gross wages during 2013 and 2014, Long did not file the necessary federal forms and did not pay over the $160,399 he withheld from his employees’ paychecks.
Long was also ordered to make full restitution of $216,304; he made $140,000 in payments prior to his sentencing.