Inflating and stealing refunds, three sentenced for faking Scheduled C figures; and other highlights of recent tax cases.
New York: Preparer Cruz D. Acevedo, 49, of the Bronx, has pleaded guilty to felony fourth-degree grand larceny in connection with preparing and filing personal income tax returns that reported fictitious expenses to inflate refunds.
She was also charged with stealing tax refunds.
State investigators uncovered that Acevedo, d.b.a Nostra Tax Services, was asked by two clients to directly deposit the refunds into a bank account. She used both refunds to create prepaid debit cards for herself.
Under the terms of the plea, she will make restitution of nearly $14,500 to the victims of her fraud and to New York State. In addition, Acevedo is no longer allowed to legally prepare and file returns.
Lynchburg, Va.: Preparer Jackie G. Woodson Jr. has been sentenced to 18 months in prison after pleading guilty to one count of conspiracy to commit false claims.
Woodson and two of his employees were sentenced in connection with preparing false returns to claim fictitious EITCs. Co-conspirators Terry R. Rose and Stella Hester-Jenkins were previously sentenced: Rose to 18 months in prison and Hester-Jenkins to three years of probation.
According to case evidence, Woodson owned a Colbert/Ball Tax Service franchise, where he employed Rose and Hester-Jenkins as preparers. IRS investigation determined that Woodson, Rose and Hester-Jenkins were preparing and filing returns that reported fictitious Schedule C income, which increased EITCs and refunds. The claimed income included fictitious or inflated babysitting or child-care earnings.
Houston: Richard Floyd Tatum Jr., 57, owner of Associated Marine & Industrial Staffing Inc., an industrial staffing company that provided temporary labor to businesses in Texas and other states, has pleaded guilty to failing to pay over employment taxes.
According to case documents, Tatum employed approximately 1,000 people who either worked for AMI or whom AMI assigned to work on-site at client locations (external employees). Tatum was responsible for collecting, accounting for and paying over to the IRS payroll taxes withheld from employees’ wages.
Tatum exercised significant control over AMI’s finances, including entering into contracts, signing checks and deciding which creditors to pay. Tatum also signed and filed AMI’s employment tax returns.
From March 2008 through December 2009, he filed false and late employment tax returns for AMI that did not report the company’s external employees. In May 2013, he filed late returns for the quarters ending in March 2010 through December 2012, reporting AMI’s external employees but failing to make any payments.
Tatum withheld approximately $12 million in payroll taxes from March 2008 through December 2012, and failed to pay $6 million of AMI’s contributing share of Social Security and Medicare taxes during the same quarters. Instead, he used the money for his personal benefit, including making payments on his ranch and traveling to Las Vegas, Hawaii and France.
Tatum admitted to causing a tax loss exceeding $18 million.
Sentencing is June 1, when Tatum faces a maximum of five years in prison, a period of supervised release, restitution and monetary penalties.
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